Natural Gas Shortages Hit China as Temperatures Plunge

The problem is particularly acute in populous Hebei Province near Beijing. Many local gas companies have been at least partly privatized in recent years.

“They don’t have deep pockets when the gas price is swinging,” Ms. Zhang said.

And local governments in places like Hebei are under severe financial strain.

Their main source of revenue, sales of land leases to developers, dried up last year as the pandemic costs skyrocketed. The acreage leased to developers plummeted 53 percent last year as the real estate sector ran into financial difficulties.

Hebei Province, which wraps around three sides of Beijing and has 74.5 million people, has fared worst of all. The national government has been particularly insistent over the past five years that Hebei homes and businesses switch to gas because air pollution from their use of coal quickly wafts into Beijing. Many residents, including Mr. Li, the grocer, no longer have coal or coal-burning stoves.

Shijiazhuang, the provincial capital, was then among the first cities to run low on money for Covid testing last autumn. It moved quickly to abandon testing late last year as soon as Beijing began signaling flexibility on the “zero Covid” policy, only to end up with an immediate wave of cases. Now temperatures in the mountainous province are falling far below freezing.

With revenue dwindling and costs rising, local governments in Hebei have little financial muscle to resume subsidizing gas quickly for their customers.

“If they would be able to subsidize,” Ms. Qin, the China energy specialist, said, “we would not have this shortage.”

Research was contributed by Li You, John Liu, Olivia Wang and Claire Fu.

Article source: https://www.nytimes.com/2023/01/25/business/china-natural-gas-shortages.html