Taxis queue up to fill their tanks on an overpass in Chongqing, China, Wednesday, November 18, 2009. Central and eastern Chinese provinces faced the worst natural gas shortage in years as supplies were diverted to snowstorm-hit northern China, while producers lacked incentives to expand output because of poor margins. Photo by Imaginechina: AP

Taxis queue up to fill their tanks on an overpass in Chongqing, China, Wednesday, November 18, 2009. Central and eastern Chinese provinces faced the worst natural gas shortage in years as supplies were diverted to snowstorm-hit northern China, while producers lacked incentives to expand output because of poor margins. Photo by Imaginechina: AP China has a new energy headache: natural gas shortages and price spikes. And those shortages are likely to persist for the foreseeable future. Unseasonably cold weather, including heavy snow in northern China, has resulted in natural gas shortfalls of as much as 40 percent. Industrial facilities, office buildings, and even hotels have been closed to save gas and those closures have occurred in cities in the south — Changsha, Nanjing, Hefei — as well as in northern cities like Beijing, Harbin and Xian. Rather than close, some industrial users have begun using diesel fuel to keep their factories running. In Wuhan, industrial gas supply has been curtailed in order to assure adequate supplies to the residential sector. Taxis using natural gas as fuel, a proud accomplishment of the city, have been directed to start using gasoline, with about $15 per day of government subsidies. In gas-producing Chongqing in Sichuan Province, the waiting time to re-fuel natural gas tanks for cars has been more than 3 hours with the queues for fuel stretching nearly 1 kilometer. In Hanzhou, the famous “entertainment” businesses were closed to save gas and for the rest of the city, the suggested indoor air temperature was no higher than 18 C (64 F). The shortages began nearly two weeks ago. On November 13, PetroChina which produces 70 percent of domestic gas in China, issued an emergency announcement to its gas distributors saying that it would limit supplies. Sinopec also started to apply similar gas supply restrictions on the same day. Today, China Petroleum Daily, a publication of CNPC, the parent of PetroChina, predicted that the gas shortages will continue through December and January, with shortages reaching about 300 million cubic feet per day in the north, and about 200 MMcf/d in the south. …

China Faces Nat. Gas Shortages, Price Hikes via The Oil Drum