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Subsidized profitability: an economic assessment of Chinese shale gas
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DOI：10.1080/15567249.2026.2650383.png)
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Abstract
En 中文
Given the tremendous success of the shale gas revolution in the U.S. and the global impact it has had, whether shale gas production is economically sustainable in China, the second-largest shale gas producer after the U.S., is an important question both domestically and globally. Yet, the existing research on this question has been inconclusive. This study applies a rigorous statistical model, based on decline curve analysis, of shale gas production on unique and rich production data to explore the economic viability of shale gas in China. Using our estimated model and the economic data drawn from the literature, we calculate the break-even price and find that economic viability currently depends on continued government subsidies or significant cost reductions. At the commonly used 10% discount rate, Chinese shale gas is not economically viable without subsidies, as the break-even price exceeds the unsubsidized wellhead price. Our results highlight the economic challenges facing shale gas development in China and underscore that viability is conditional on either sustained policy support or substantial improvements in cost competitiveness.
Keywords:
Shale gas
Economic analysis
Arps model
Break-even price
Government support
Q40
C53
H23
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2.2
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1.1K
Citations:
1.5K
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