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Gas and ethanol to replace coal in many areas as fuel-change transformation heats up

Stable natural gas supplies will benefit urban residents and tackle coal-led pollution as the winter approaches.

A slew of policies were announced to promote clean energy by improving natural gas supplies and the use of ethanol as a renewable biofuel after a State Council executive meeting, presided over by Premier Li Keqiang on Wednesday.

The meeting decided to build a diversified natural gas supply system by expanding domestic production and international cooperation that can better coordinate energy sources in and outside the country, according to a statement released after the meeting. In addition, infrastructure for the storage and transfer of natural gas will be improved to ensure a balance between supply and demand, it said.

The most eye-catching measure is an emergency response mechanism to ensure supplies for the coming winter and spring. Increases in natural gas supplies will be online for urban residential use and to replace coal in heavily-polluted areas in winter. New measures will be promulgated to encourage investment in exploring natural gas and support the transfer in a market-oriented manner.

Meanwhile, ethanol fuel will also be developed to consume excess grain stock. Another 15 provincial regions, including the Beijing-Tianjin-Hebei cluster, will take part in a pilot program on ethanol gasoline this year, following programs in 11 other regions, the statement said.

The meeting was the latest move by the central government to prepare for the winter, following severe natural gas supply shortages in northern China when local governments wanted to replace coal with cleaner energy.

Natural gas consumption has apparent seasonal differences, which were aggravated by the governments encouraging industrial enterprises and residential heating to use such energy last year, according to the China Energy Development Report 2017, released by the China Electric Planning and Engineering Institute.

The report suggested the supply-side management be prioritized to achieve an orderly and stable shift from coal to natural gas.

In the first half of this year, China's natural gas consumption went up by 16.8 percent, compared with the same period last year, according to figures by the National Energy Administration.

The coming winter is expected to see a surge in demand for natural gas as the country strives to improve air quality in some heavily-polluted areas, including the Beijing-Tianjin-Hebei cluster, experts said.

Last year's shortage of natural gas in northern China showed the country's shortcomings in production, supply, storage and sales of such energy, Yan Pengcheng, spokesman of the National Development and Reform Commission, said at a news conference in April.

A secure and stable supply of natural gas is closely related to the interests of the public and enterprises, and also a stable national economy, he said.

Many people who were affected by the natural gas shortage last year, spoke highly of the State Council decision. "Last year, my family had a tough winter as the new heating system was installed but did not have enough natural gas to run. We had to find other ways to warm our house," said Wei Lei, a 30-year-old saleswoman in suburban Baoding, Hebei province.

Wei said many of her neighbors supported the government in using cleaner energy to replace coal, which can help reduce heavy smog, but preparations should be made to ensure the supply.

She was echoed by Zhu Lijia, a professor of public management at the Chinese Academy of Governance. To tackle smog, more cities will join the current pilot program in 28 cities in northern China in replacing coal with natural gas and electricity, he said.

Wednesday's meeting was to make in-advance plans for peak time to avoid shortages of natural gas similar to last winter's and improve residents' lives in the chilly heating season, Zhu added.