Traditional OPEC organizations began to decline.

Many OPEC countries, led by Saudi Arabia, have tried to compete fiercely with shale oil. The final result is that crude oil prices fell below $30 a barrel in early 2016, and then OPEC crude oil producers conceded. With their foreign exchange reserves in short supply, a vigorous production reduction campaign pushed oil prices back to $80 a barrel once again. In this OPEC strategic counterattack, it can be said that shale oil with its flexible production and low cost reflects the enormous resilience of emerging market forces. In the traditional form of contest, OPEC can not really shake the foundation of shale oil, but shale oil can take advantage of its own advantages, “boiling frogs in warm water”, bit by bit to disrupt the offensive of OPEC.

Saudi Arabia is the substantial leader of OPEC, and other oil-producing countries follow Saudi Arabia’s footsteps. Saudi Arabia is the biggest variable in both production reduction and production increase. Therefore, to pay attention to OPEC’s overall demand, it is necessary to analyze Saudi Arabia’s demand for oil price first.

In the reform plan of Saudi Crown Prince Salman Jr., capital is the important foundation of his plan. It put forward the “Vision 2030″ plan, the core purpose of which is to rebuild Saudi Arabia’s economic system, reduce its domestic dependence on the crude oil industry, and establish three long-term goals for Saudi Arabia: the heart of the Arab and Islamic world, the global investment power, and the Asia-Europe-Africa hub. However, the vision is ultimately the vision, whether it can be achieved depends on whether Saudi funds can support the ambition of small Salman, so Saudi Amy’s IPO project is an important means to raise funds quickly. In addition, the level of oil prices will also greatly affect Saudi Arabia’s income and foreign exchange reserves.

As can be seen from the trend chart of Saudi Arabia’s foreign reserves and oil prices, Saudi Arabia’s foreign reserves shrank dramatically in 2015 after the sharp drop in oil prices, and have shrunk by nearly 35% from the peak so far. After the OPEC countries led by Saudi Arabia implemented production reduction actions, Saudi Arabia’s foreign reserves declined significantly, but with the sharp fall in oil prices in the fourth quarter of 2018, Saudi Arabia’s foreign exchange reserves turned downward again, which is the main reason why Saudi Arabia spared no effort to exceed the expected production reduction.

This situation can be seen more clearly from the chart of Saudi Arabia’s foreign reserves and oil prices. From 2015 to 2017, Saudi Arabia’s foreign reserves have been in a downward trend. Until 2018, there is no sign that this trend will stop. Saudi Arabia’s financial cost is expected to be between $70 and $75 per barrel. Saudi Arabia’s demand for crude oil price is about $80 per barrel. Only in this way can Saudi Arabia’s foreign reserves keep growing, and the small Salman’s reform plan has surplus funds to supplement.

This is true of Saudi Arabia, especially other oil-producing countries. The strong demand for high oil prices is almost a common feature of every OPEC member country. At the same time, OPEC has no advantage in cost. There are signs that with the intensification of international crude oil market game, the internal problems of OPEC are becoming more and more serious.

The first problem is the transformation of OPEC organization to OPEC+. This change is that OPEC has absorbed Russia as a production reduction coalition. For various reasons, Russia tends to follow the mentality of “private interests outweigh public interests” in reducing production. It is “quiet as a virgin” when reducing production and “moving as a rabbit” when increasing production. Moreover, Russia’s power is second only to Saudi Arabia’s in the influence of OPEC’s overall decision-making. The power of OPEC has caused many OPEC Member States to complain. The most direct impact is that cartel announced its withdrawal from OPEC in early 2019.

The second issue is U.S. intervention in OPEC countries. This is reflected in the sanctions imposed by the United States on Iran and Venezuela. Through sanctions and exemptions, the United States can easily influence oil prices and realize its political interests. The task of OPEC to stabilize the market and maintain oil prices in an ideal range is even more difficult. On the other hand, it is reflected in the formulation of the NOPEC Act in the United States, which aims to limit OPEC countries’manipulation of the crude oil market and strengthen the influence of the United States on the crude oil market. If the bill is passed, the United States will probably restrict OPEC member countries’exports through the bill, or use the bill to form a huge deterrent to OPEC when OPEC oil price demands are contrary to the United States.

In the struggle with the United States, OPEC countries are not only confronted with the problem of inadequate comprehensive strength, but also do not have any advantages in cost. In this disparity of power, the voice of the United States is getting bigger and bigger, and the voice of OPEC is getting smaller and smaller. The original OPEC organization, which spoke boldly about the “crude oil embargo” against the United States, has become history. It is in this recession of influence that the sense of existence and mission of OPEC members is becoming weak, and the voice of OPEC members on the crude oil market is gradually weakening.

The emerging United States is about to take control of the market

The advantage of the United States in the crude oil market is that it is not only the world’s largest crude oil demand country, but also the world’s largest crude oil producer. Since 2018, U.S. crude oil production has surged by 2.5 million barrels per day, reaching a record 12.1 million barrels per day. It is widely expected that U.S. crude oil production will exceed 13 million barrels per day by the end of 2019. Its crude oil producers’low operating costs are hard to compete with traditional crude oil. In addition, the comprehensive strength of the United States determines that the United States has a stronger voice in the international market. With the hegemony of the United States dollar, the United States can easily control a country’s international business, thereby affecting the development of the crude oil market.

In terms of cost advantage, American shale oil companies have been cutting back after a crude oil slump from 2015 to 2016. According to the trend of the WTI forward curve, the full cost is about $50 per barrel. According to Bloomberg’s estimates, the lower cost of shale oil is only about $40-45 per barrel. If calculated according to the current Brent-WIT crude oil futures price gap of $8, the cost of Brent is equivalent to less than $60. That is to say, the cost of shale oil producers in the United States is 15-20 dollars less than the balanced demand of Saudi Arabia. Therefore, we calculate that shale oil producers will start to make profits when Brent price is above 60 US dollars per barrel, while Saudi Arabia needs to maintain oil price at 75 US dollars per barrel or even 80 US dollars per barrel in order to truly meet the sound development of the national revenue and expenditure. This gap is the passivity between OPEC member countries and the US shale oil volume: it is difficult to improve without reducing oil prices, and domestic contradictions increase; Production cuts will be forced to cede market share.

With such low costs and high output, the United States is bound to transform itself from a former oil importer into an exporter. According to IEA’s forecast, crude oil production in the United States will continue to develop at a relatively fast rate until 2021, and by 2023, the United States will become the second largest exporter of crude oil in the world after Saudi Arabia.

Then behind the high export, it must be the competition for market share. As long as OPEC insists on reducing production, its declining market share will be filled by the United States, which is the purpose behind the U.S. strategy. Low oil prices prompted OPEC to reduce production, while the United States imposed sanctions on oil producing countries forced them to passively cede market share. Ultimately, U.S. crude oil will appear in those OPEC “territory”, in this no-win battle, OPEC will lose.

Therefore, from the strategic point of view of the United States, WTI crude oil futures will be a comfortable range of $50-60 per barrel, which will not allow traditional OPEC countries to substantially increase production, but will also keep the United States’crude oil production more vigorous. Only in this way can the United States continue to encroach on the market from traditional regions and expand its market share.

The smoke of international crude oil market is never over, and we are witnessing the transfer of power from old crude oil producers to emerging crude oil producers.

On March 26, the PX Commodity Index was 72.00, unchanged from yesterday, down 29.69% from its peak of 102.40 points in the cycle (2013-02-28), and up 58.07% from its low of 45.55 points on February 15, 2016. (Note: Period refers to 2013-02-01 to date).

Recently, the domestic market price trend of p-xylene has been temporarily stable. Pengzhou Petrochemical Plant has been running steadily. Urumqi Petrochemical Plant has started 50% of its operation. Fuhaichuang Aromatic Hydrocarbon Plant has started a line. CNOOC Huizhou Refinery and Chemical Plant has been overhauled. Other units have been running steadily for the time being. The domestic market supply of p-xylene is normal. The market price trend of p-xylene is temporarily stable. The opening rate of PX plant in Asia is about 80%. On March 26, the closing price of p-xylene in Asia rose by US$1/ton. The closing price was US$1017-1019/ton FOB in Korea and US$1036-1038/ton CFR in China. More than 50% of the domestic units need to be imported. The decline of foreign prices has a positive and negative impact on the domestic market price of p-xylene, and the price of p-xylene in the market fluctuates.

On March 26, the price of WTI crude oil in May rose to $59.94 per barrel, an increase of $1.12. The price of Brent crude oil in May rose to $67.97 per barrel, an increase of $0.76. The fluctuation of crude oil price has little impact on the price of downstream petrochemical products, and the price of xylene market has been stable for a while. Recent textile industry market shocks, PTA price trend shocks on the 26th, the average price of East China bid in the vicinity of 6500-6650 yuan/ton, as of 27 domestic PTA start-up rate is about 84%, polyester industry start-up rate is about 80%, downstream production and sales rate has risen, but PTA market prices rose slightly, it is expected that PX market prices will remain volatile in the later period.

On March 25, the PX Commodity Index was 72.00, unchanged from yesterday, down 29.69% from its peak of 102.40 points in the cycle (2013-02-28), and up 58.07% from its low of 45.55 points on February 15, 2016. (Note: Period refers to 2013-02-01 to date).

Recently, the domestic market price trend of p-xylene has been temporarily stable. Pengzhou Petrochemical Plant has been running steadily. Urumqi Petrochemical Plant has started 50% of its operation. Fuhaichuang Aromatic Hydrocarbon Plant has started a line. CNOOC Huizhou Refinery and Chemical Plant has been overhauled. Other units have been running steadily for the time being. The domestic market supply of p-xylene is normal. The market price trend of p-xylene is temporarily stable. The opening rate of PX plant in Asia is about 80%. On March 25, the closing price of p-xylene in Asia dropped by 11 US dollars per ton. The closing price is US$1016-1018 per ton FOB Korea and US$1035-1037 per ton CFR in China. More than 50% of the domestic units need to be imported. The decline of foreign prices has a positive and negative impact on the domestic market price of p-xylene, and the price of p-xylene in the market fluctuates.

On March 25, the price of WTI crude oil in May fell to 58.82 U.S. dollars per barrel, a decline of 0.22 U.S. dollars, and Brent crude oil in May rose to 67.21 U.S. dollars per barrel, a rise of 0.18 U.S. dollars. Crude oil price volatility, has little impact on the price of downstream petrochemical products, while the price of xylene market is temporarily stable. Recent textile industry market shocks, PTA price trend shocks on the 26th, the average price of East China bid in the vicinity of 6500-6650 yuan/ton, as of the 26th domestic PTA start-up rate is about 84%, polyester industry start-up rate is about 80%, downstream production and sales rate has risen, but PTA market prices have risen slightly, it is expected that the price of PX market will remain volatile in the later period.

In the bull market, the planting area is hard to quit quickly in the bear market. According to the industry, although the price of natural rubber has rebounded this year, the producers will struggle for 10 years in the low price quagmire.

Although the price of international rubber futures has risen by 16% this year, it is still a long way from the bear market for rubber to really break away from.

From March 2009 to February 2011, rubber prices experienced a surge of 240%. Over a two-year price rise period, producers are also ramping up their planting areas. Now, as these rubber trees enter the tapping cycle from the growth cycle, excess supply becomes a problem that is difficult to eliminate in the short term. Although rubber prices have risen this year, they are still down as much as 70% from their 2011 high.

Bloomberg cited David Shaw, CEO of Tire Industry Research, which has focused on the rubber industry for 30 years, as saying that global rubber production will continue to exceed tyre demand by 2027-2028, and that countries will remain mired in low prices for another 10 years. With the reduction of planting area caused by low prices, it is possible that prices will rise sharply in 10 years.

Shaw believes that if rubber producers used 10 years as a cycle in their early years to predict future demand and decide on the planting area accordingly, there would be no current consequences and prices would be relatively stable. He pointed out that governments in rubber-producing countries should be more cautious in controlling planting areas in order to achieve a future supply-demand balance.

After 5-7 years of planting, the high yield period is 10-15 years, and the cutting and renovation period is 25-35 years. It is a relatively special commodity, the upstream is agricultural products, the downstream is industrial products, but also has a strong financial attribute.

Previous data from Hongyuan Futures Research Institute show that Thailand is the world’s largest producer, accounting for 36% of global production. China accounts for nearly 40% of global natural rubber consumption, more than 70% of which is used for tire manufacturing, but the growth rate of tire production in China has fallen from 20% in 2010 to 5.4% in 17 years.

Faced with the mismatch between supply and demand, it is difficult for natural rubber to reduce production on a large scale like crude oil. Salvatore Pinizzotto, secretary-general of the International Rubber Research Group, said that for rubber producers, because they lack other sources of income, they need to continue production even at low prices, which will further aggravate the oversupply.

Zhu Ziyue of Hongyuan Futures Research Institute has also pointed out that planting often flocked to the top in bull market and planting area was difficult to quit quickly in bear market, which made rubber inventory pressure difficult to ease. He mentioned:

First of all, the natural rubber growth cycle and tapping cycle are longer, the existence of a long cycle leads to the production and inventory can not be timely adjusted, planting in the bull market is often crowded up, planting area in the bear market is difficult to quickly withdraw.

Secondly, 90% of the global rubber production areas are located in Southeast Asia, which is operated in the form of small farms and distributed dispersedly. Moreover, the policy implementation in this area is weak, and it is difficult to achieve a unified and compulsory supply-side reform similar to that in China.

Finally, rubber cutting is the economic source for rubber farmers to survive, and the maintenance cost of rubber plantations is low. Although there is a phenomenon of replacing planting or choosing other occupations, there is still no other way to provide stable cash flow for rubber farmers, so rubber farmers will not easily choose to abandon or cut down.

The U.S. Energy Information Agency (EIA) recently reported that its crude oil production in 2019 is expected to increase by 1.18 million barrels from 2018 to 12.26 million barrels a day, surpassing Russia and Saudi Arabia as the largest oil producers. And that number will reach 13.2 million barrels a day by 2020, and even 15 million barrels to 20 million barrels in the future. It is worth mentioning that EIA data show that oil production in the United States is growing much faster than predicted a few months ago.

The rapid increase in U.S. oil production is closely related to the progress of U.S. oil companies and oil extraction technology. On March 5, Chevron, the US oil giant, released information that it planned to produce 600,000 barrels of oil and gas per day in Permian, Texas and New Mexico, by 2020, and 900,000 barrels by the end of 2023, an increase of nearly 40% over the previous expectation of 650,000 barrels per day in the next five years. On the same day, Exxon Mobil, another American oil giant, also announced plans to increase Permian Basin’s oil and gas production by 80% to 1 million barrels a day as early as 2024. By then, the combined daily output of the two companies will be close to 2 million barrels, even higher than that of many OPEC countries.

American oil giants introduced increasingly low-cost shale oil extraction technology to exploit oil fields with full horsepower, which increased crude oil production by 100,000 barrels per day to 12.1 million barrels per day at the end of February, a record one-week high. While significantly increasing shale oil production, the United States further reduced its oil imports, which have now fallen to the lowest level since 1996. Over the same period, U.S. crude oil exports reached an all-time high of 3.67 million barrels per day. This data even broke the record of 32.03 million barrels set in the last week of November 2018.

With the continuous progress of shale oil extraction technology, it is imminent for the United States to change from a net oil importer to a net exporter. EIA predicts that the United States will become a net exporter of energy such as crude oil by 2020. This will also give the United States a greater voice in the international oil market. Michael Lynch, president of the U.S. Energy Economic Strategic Research Consulting Corporation, said that the United States is becoming a dominant energy power in the world. And in the case of a huge increase in oil production, the United States has raised oil exports to the height of reducing the trade deficit.

In trade negotiations with China, the United States hopes that China will increase the amount of energy imported from the United States, including oil, in order to help narrow the huge trade deficit between the United States and China, and partly ease the current tensions in bilateral trade relations. Before the outbreak of Sino-US trade frictions in 2017, China imported crude oil from the United States averaged about 20% of the total U.S. crude oil exports, equivalent to more than 11 million barrels per month. But since July 2018, China has almost stopped importing oil from the United States. However, with the progress of Sino-US trade negotiations, China began to gradually relax its imports of American petroleum products. It is reported that on March 1, an oil tanker carrying U.S. crude oil unloaded at Chinese ports, which is the first time that China has imported crude oil from the United States since the end of November last year. As the world’s largest oil importer, China imported 400 million tons of oil in 2018, and its dependence on foreign countries rose to 69.8%. It is a market that the world’s major oil producers must compete for. I believe the United States will not give up easily.

The shale oil revolution has led to an explosive increase in oil production in the United States. The United States will not only continue to reduce oil imports, but also gradually transform into a net oil exporter. The transformation of the role of the United States has further strengthened the voice of the United States in international oil prices and will reshape the global energy structure. In the past, the world oil market led by Saudi Arabia’s OPEC oil producers and Russia’s non-OPEC oil exporters will present a tripartite situation led by Saudi Arabia, Russia and the United States. From the perspective of triangle as the most stable structure, the fluctuation of international oil market is expected to narrow when oil importing countries reduce their dependence on Middle East oil, which has been in a turbulent situation, and the United States proceeds from the demand of “American priority” and does not want too high or too low oil prices to damage its stable economic development.

Recently, the International Energy Agency (IEA) issued a report entitled “Oil 2019″, pointing out that the global oil market is undergoing profound changes. Between 2019 and 2024, upstream oil and gas investment will gradually recover, and the United States will gradually become the main oil supply. At the same time, the growth rate of oil demand has slowed down gradually, the demand for petrochemical industry has increased, and the supply of heavy oil for ships has declined sharply.

The IEA points out that in 2018, the U.S. oil supply increased by 2.2 million barrels per day, a record. By 2024, U.S. oil production will increase by 4 million barrels a day, accounting for 70% of global oil production. Because of the significant increase in oil production, the United States will become a net oil exporter in 2021. According to the IEA, by 2024, total U.S. oil exports will reach 9 million barrels per day, surpassing Russia and next only to Saudi Arabia.

In addition to the United States, the IEA points out that Brazil, Canada, Norway and Guyana will increase oil production by 2.6 million barrels per day in the next five years. Overall, oil production in non-OPEC oil-producing countries will increase by 6.1 million barrels per day by 2024. By contrast, OPEC’s oil production will be reduced by 400,000 barrels a day by 2024.

The IEA also said that a substantial increase in oil production required further upstream investment in the oil and gas industry. Upstream investment will continue to grow for three consecutive years. Of these, 450 billion dollars were invested in 2017 and 475 billion dollars in 2018. In 2019, the global upstream investment in oil and gas will reach 497 billion US dollars, an increase of 4% year on year.

The IEA also pointed out that the growth of global oil demand remained stable and the growth rate was slowing down. However, oil demand in developing countries is growing significantly. The IEA estimates that by 2024, 44% of the growth in global oil demand will come from China and India, with about 7.1 million barrels per day.

It is noteworthy that with the significant increase in plastic demand, petrochemical industry will promote the increase of global oil demand, among which the demand for chemical oil in the United States and China is larger. According to the IEA report, by 2024, about 50 large-scale petrochemical projects will be put into operation worldwide, boosting oil consumption by 2.2 million barrels per day, accounting for 30% of the increase in global oil demand.

In addition, as stipulated by the International Maritime Organization (IMO), global ship fuel oil with sulfur content of no more than 0.5% will be used on January 1, 2020. The IEA points out that the demand for heavy oil for ships has fallen sharply. Compared with 2019, the demand for marine heavy oil will decrease from 3.5 million barrels per day to 1.4 million barrels per day in 2020.

According to the IEA, global production of low-sulfur fuel is about 1 million barrels per day at the beginning of 2020, and the price is on the high side. Shipowners may not be very active in using low-sulfur fuel, but the supply of low-sulfur fuel will gradually increase after that. At the same time, the demand for marine desulfurization devices is increasing. By 2020, about 4,000 desulfurization devices will be used in large ships all over the world.

Depending on the unique core technology, important progress has been made in deep and medium rank CBM exploration in North China Oilfield. Daping 7 well, designed for 1950m to 2045m coal seam in Dacheng block of North China Oilfield, has produced up to 11,000 cubic meters per day since the first 10,000 cubic meters on March 7 and up to March 18.

This is the first time that domestic CBM wells have made breakthroughs in this depth, filling the gap of economic exploitation of deep CBM in the world at 1800 meters.

Coalbed methane resources are abundant in China, which is comparable to conventional natural gas resources. However, due to the strong heterogeneity of coal reservoirs, poor reformability and great influence by burial depth, commercial exploitation of CBM in Qinshui high-rank coal and low-rank coal in eastern edge of Ordos is only realized at present, and the coal seams are all below 800 meters shallow, and the deep area is regarded as the development forbidden zone.

Huabei Oilfield aims at basic theory research and core technology tackling. With the support of major special funds from the state and China Petroleum, it innovatively puts forward the geological theory understanding of “four-element reservoir formation, three-element production control and dredging development” and develops and forms the exploration of “area selection evaluation, reservoir transformation, quantitative drainage, low-cost controllable horizontal well drilling”. Explore and develop key technologies. Relying on new theory and technology, Qinshui breaks through the undeveloped “red line” of 800 meters high rank coal.

In 2014, Huabei Oilfield decided to restart the exploration of Dacheng CBM block located at the junction of Tianjin and Hebei. Scientific researchers and technicians have continuously deployed four vertical wells, two of which have achieved nearly 3,000 cubic meters of high production at 1,750 meters and 2,000 meters, respectively. However, because the wells are too deep, they do not have economic exploitation value. How to realize the benefit development of deep coal-bed methane has become a difficult problem in North China Oilfield.

In 2018, Daping 7 well was designed and implemented scientifically in Huabei Oilfield on the basis of a new theoretical understanding of CBM. With casing pressure of 2.7 MPa and flow pressure of 7.4 MPa, the output per day exceeds 10,000 cubic meters and has great potential for stable production.

The person in charge of Huabei Oilfield believes that the success of well Daping 7 indicates that the exploitable range of CBM in China has increased from 800 meters to about 2000 meters, which is a milestone for the scientific development of CBM in China.

Oil production cuts may be prolonged, so international oil prices rose on the 18th. Prospects for a possible extension of OPEC-led production cuts and signs of a decline in U.S. crude oil inventories.

By the end of the day, the price of light crude oil futures for April delivery on the New York Mercantile Exchange had risen by $0.57, or 0.97%, to $59.09 a barrel. London Brent crude oil futures for May delivery rose $0.38, or 0.57%, to $67.54 a barrel.

The OPEC and its allies’supervisory committee met in Azerbaijani to assess the implementation of the agreement. The Commission said it would exceed its commitment to cut production in the coming months.

“As long as inventory levels are rising and far below normal levels, we will stick to them and guide the market towards equilibrium,” said Saudi Energy Minister Farih.

Marketers said that signs of falling inventories of crude oil in Cushing, Oklahoma, also supported oil prices.

Traders quoted data from Genscape, a market intelligence firm, as saying that Kuxin, the U.S. crude oil delivery company, had lost 1.08 million barrels of inventory as of Friday. Rising oil prices

On March 17, the PX Commodity Index was 72.00, unchanged from yesterday, down 29.69% from its peak of 102.40 points in the cycle (2013-02-28), and up 58.07% from its low of 45.55 points on February 15, 2016. (Note: Period refers to 2013-02-01 to date).

Recently, the domestic market price trend of p-xylene has been temporarily stable. Pengzhou Petrochemical Plant has been running steadily. Urumqi Petrochemical Plant has started 50% of its operation. Fuhaichuang Aromatic Hydrocarbon Plant has started a line. CNOOC Huizhou Refinery and Chemical Plant has been overhauled. Other units have been running steadily for the time being. The domestic market supply of p-xylene is normal. The market price trend of p-xylene is temporarily stable. The opening rate of PX plant in Asia is about 80%. On March 15, the closing price of p-xylene in Asia dropped by 10 US dollars per ton. The closing price was US$1084-1086 per ton FOB in Korea and US$103-1105 per ton CFR in China. More than 50% of the domestic units need to be imported. The decline of foreign prices has a negative impact on the domestic market price of p-xylene, and the price of p-xylene in the market fluctuates.

On March 15, the price of WTI crude oil in May fell to 58.52 U.S. dollars per barrel, or 0.09 U.S. dollars. Brent crude oil in May fell to 67.16 U.S. dollars per barrel, or 0.07 U.S. dollars. crude oil price slightly declined, which had little impact on the price of downstream petrochemical products, while the price trend of xylene market was temporarily stable. Recent textile industry volatility, PTA price trend temporarily stable 18 days, the average price of East China bid in the vicinity of 6500-6700 yuan/ton, as of 18 days domestic PTA start-up rate is about 84%, polyester industry start-up rate is about 80%, downstream production and sales rate has risen, but PTA market price is lower, it is expected that the later PX market price will remain volatile.

According to the latest data from the National Bureau of Statistics, from January to February 2019, more than 1.34 billion cubic meters of coalbed methane were produced by industrial enterprises of national scale, an increase of 11.9% over the same period last year, and an absolute increment of 160 million cubic meters.

Among them, the cumulative production of coal-bed methane in Shanxi Province is 950 million cubic meters, an increase of 8.7% over the previous year, and the absolute value increment is 0.9 billion cubic meters.

According to Bloomberg, the proportion of natural gas in China’s energy structure will double to 14% by 2030. With the increasing proportion of natural gas in energy consumption, unconventional oil and gas resources such as coalbed methane have great potential to supplement.

The 13th Five-Year Plan for the Development and Utilization of Coal-bed Methane (Coal Mine Gas) published earlier proposed that by 2020, two or three industrial bases for coalbed methane should be built; the extraction capacity of coalbed methane will reach 24 billion cubic meters, of which the surface production of coalbed methane is 10 billion cubic meters and the utilization rate is more than 90%; the extraction rate of coalbed methane is 14 billion cubic meters and the utilization rate is more than 50%; the installed capacity of coal-bed methane power generation is 2.8 million kilowatts. More than 1.68 million households are for civilian use.

Shanxi is rich in coalbed methane resources. In order to further accelerate the development of coalbed methane industry, Shanxi will fully implement the withdrawal mechanism of coal-bed methane mining rights in 2019. At the same time, it is decided that, on this basis, enterprises with insufficient investment in long-term exploration after acquisition of CBM blocks will be punished by raising the minimum exploration investment standard and the holding cost of blocks, and blocks with development conditions will complete production capacity construction within a time limit.