Water Scarcity and Energy Demand in China

China - Confronting Water Scarcity and Energy Demand in the World's Largest Country

By any measure, conventional and otherwise, China's tireless advance to international economic prominence has been nothing less than astonishing.

Over the last decade alone, 70 million new jobs emerged from an economy that this year, according to the World Bank and other authorities, generated the world's largest markets for cars, steel, cement, glass, housing, energy, power plants, wind turbines, solar panels, highways, high-speed rail systems, airports, and other basic supplies and civic equipment to support a modern economy.

Yet, like a tectonic fault line, underlying China's new standing in the world is an increasingly fierce competition between energy and water that threatens to upend China's progress. Simply put, according to Chinese authorities and government reports, China's demand for energy, particularly for coal, is outpacing its freshwater supply.

Students of Chinese history and geography, of course, understand that tight supplies of fresh water are nothing new in a nation where 80 percent of the rainfall and snowmelt occurs in the south, while just 20 percent of the moisture occurs in the mostly desert regions of the north and west. What's new is that China's surging economic growth is prompting the expanding industrial sector, which consumes 70 percent of the nation's energy, to call on the government to tap new energy supplies, particularly the enormous reserves of coal in the dry north.

The problem, say government officials, is that there is not enough water to mine, process, and consume those reserves, and still develop the modern cities and manufacturing centers that China envisions for the region.

"Water shortage is the most important challenge to China right now, the biggest problem for future growth," said Wang Yahua, deputy director of the Center for China Study at Tsinghua University in Beijing. "It's a puzzle that the country has to solve."

The consequences of diminishing water reserves and rising energy demand have been a special focus of Circle of Blue's attention for more than a year. In 2010, in our Choke Point: U.S.series , Circle of Blue found that rising energy demand and diminishing freshwater reserves are two trends moving in opposing direction across America. Moreover, the speed and force of the confrontation is occurring in the places where growth is highest and water resources are under the most stress—California, the Southwest, the Rocky Mountain West, and the Southeast.

Modernization vs. Water Resources

In December, we expanded our reporting to China. Circle of Blue—in collaboration with the China Environment Forum (CEF) at the Washington-based Woodrow Wilson International Center for Scholars—dispatched four teams of researchers and photographers to 10 Chinese provinces.

Their assignment: to report on how the world's largest nation and second-largest economy is achieving its swift modernization, despite scarce and declining reserves of clean fresh water. In essence, Circle of Blue and CEF completed a national tour of the extensive water circulatory system and vast energy production musculature that makes China go.

Eastern Inner Mongolia, outside of Xilinhot, is a center of coal production in China. But much more coal lies below the surface, untapped because of water scarcity.

In a dozen chapters—starting today and posted weekly online through April— Choke Point: China will report in text, photographs, and interactive graphics the powerful evidence of a potentially ruinous confrontation between growth, water, and fuel that is already visible across China and is virtually certain to grow more dire over the next decade.

Choke Point: China, though, is not a narrative of doom. Rather, our journalists and photographers found a powerful narrative in two parts and never before told.

The first important finding—left largely unsaid in and outside China—is how effectively the national and provincial governments enacted and enforced a range of water conservation and efficiency measures.

Circle of Blue met the engineers, plant managers, and workers who operate China's robust and often state-of-the-art energy and water installations. We interviewed the academics and government executives who oversee the globally significant water conservation policies and practices that have been essential to China's new prosperity. Those policies, we found, sharply reduced waste, shifted water from agriculture to industry, and slowed the growth in national water consumption.

Though China's economy has grown almost eight-fold since the mid-1990s, water consumption has increased 15 percent, or 1 percent annually. China's major cities, including Beijing, are retrofitting their sewage treatment systems to recycle wastewater for use in washing clothes, flushing toilets, and other grey-water applications.

Here in Baotou, a desert city of 1.5 million in Inner Mongolia, the giant Baotou Iron and Steel Company plant, one of the world's largest, produces 10 million metric tons of steel annually in a region that receives mere inches of rainfall a year. The plant—which is 49 square kilometers and employs 50,000 workers—recycles 98 percent of its water, a requirement of a 1997 law that prompted owners of industrial plants to conserve water.

Three Trends Converging

We also discovered a second vital narrative that most industrial executives and government authorities we interviewed were either not fully aware of or were reluctant to acknowledge: the tightening choke point between rising energy demand and declining freshwater reserves that forms the central story line of the next era of China's unfolding development.

Stripped to its essence, China's globally significant choke point is caused by three converging trends:

• Production of coal has tripled since 2000 to 3.15 billion metric tons a year. Government analysts project that China's energy companies will need to produce an additional billion metric tons of coal annually by 2020, representing a 30 percent increase. Fresh water needed for mining, processing, and consuming coal accounts for the largest share of industrial water use in China, or roughly 120 billion cubic meters a year, a fifth of all the water consumed nationally.
• Though national conservation policies have helped to limit increases, water consumption nevertheless has climbed to a record 599 billion cubic meters annually, which is 50 billion cubic meters (13 trillion gallons) more than in 2000. Over the next decade, according to government projections, China's water consumption, driven in large part by increasing coal-fired power production, may reach 670 billion cubic meters annually — 71 billion cubic meters a year more than today.
• China's total water resource, according to the National Bureau of Statistics, has dropped 13 percent since the start of the century. In other words China's water supply is 350 billion cubic meters (93 trillion gallons) less than it was at the start of the century. That's as much water lost to China each year as flows through the mouth of the Mississippi River in nine months. Chinese climatologists and hydrologists attribute much of the drop to climate change, which is disrupting patterns of rain and snowfall.

"It's just impossible, if you haven't lived it or experienced it, to understand change in China over the past 25 years, and especially since 1992," said Kang Wu, a senior fellow and China energy scholar at East-West Center in Hawaii.

"It's a new world. It's a new country. The worry in China and in the rest of the world is can they sustain it? They want to double the size of the economy again in 10 years. How can they do that? It's a paradox from an economic point of view. They need a resource balance to meet demand, short-term and long-term. If you look out 10, 20, 30 years, it just looks like it's not possible."

Rapid GDP Growth Will Continue

In interviews, national and provincial government leaders, as well as energy industry executives, said China has every intention of continuing its 10 percent annual economic growth.

"We believe that this is possible and we can do this with new technology, new ways to use water and energy," said Xiangkun Ren, who oversees the coal-to-liquids program for Shenhua Group, the largest coal company in the world.

Xiangkun acknowledged that avoiding the looming choke point will not be easy. The tightening loop is already visible in the jammed rail lines, huge coal truck traffic jams, and buckling roads that Circle of Blue encountered in Inner Mongolia—the country's largest coal producer—and which are responsible for transporting billions of tons of coal from existing mines to market.

Energy prices are steadily rising, putting new inflationary pressure on the economy. Even as China has launched enormous new programs of solar, wind, hydro, and seawater-cooled nuclear power, all of which use much less fresh water, energy market conditions will get worse without new supplies of coal, the source of 70 percent of the nation's energy. China's economy and the new social contract with its citizens, who have come to expect rising incomes and improving opportunities, is at risk, say some authorities.

That's why, as China's economic and environmental experts sort through various scenarios to evade the approaching collision, big proposals once thought preposterous are taking hold. The idea of transporting water long distances to the arid north and west is gaining fresh credence.

A Pipeline from the Sea

For instance, one such project has stirred a national debate about costs, engineering know-how, and China's capacity to sustain the breakneck pace of modernization. Huo Youguang—a geographer at Xi'an Jiaotong University in Shaanxi Province to the west of Beijing—has proposed a first-of-its kind seawater pipeline to supply water to Inner Mongolia's giant coalfields.

One end of the pipe would be dropped into the Bohai Sea in China's east. The other end, 600 kilometers to the north, would pour 340 million liters (90 million gallons) of water a day into a desalination plant in Xilinhot, a coal mining city in eastern Inner Mongolia. In between would be miles of rock tunnels cut through several mountain ranges, along with enough pumps and holding ponds to lift the water 1,300 meters.

The proposal has a single objective critical to China's modernization, Huo said in an interview with Circle of Blue in December. The $6 billion project could provide enough water to develop some of the planet's largest coal reserves, which otherwise cannot be tapped due to shortages of water.

He explained that the two most important natural resources that are needed to support China's development in this decade—water and energy—are defined by what he called a "geographic mismatch." The new energy reserves are in the dry north. The available water to develop them is in the rainy south.

"The solution to this challenge," Huo said, "is very easy to understand. The water must be transported to where it's needed. I am confident China will reach the same conclusion. It really doesn't have another choice."

A Second Big Water Transport Project in the West

Not only is the Bohai pipeline in play in provincial and national government councils, but a second big water transport project also appears to be gaining new momentum. An important researcher at the Chinese Academy of Sciences told Circle of Blue that the go-ahead for a western canal—which would transport water from the Yangtze River in the south to the headwaters of the Yellow River in the north—is likely to be included in China's 12th Five-year Plan, the master economic development blueprint that is expected to be made public in March.

Circle of Blue learned about the revival of the western canal (once thought dead because of its cost) while reporting on two big sister canals that are under construction and will transport fresh water to Beijing, Tianjin, and other northern China cities when they are completed by 2014. The western canal finding, and its implications for northern energy development, is among the dozens of exclusive details about energy and water that will be featured in Choke Point: China.

Source: Circle Of Blue

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• Environment
• Energy
• Water Supply