As China’s Thirst For Coal Grows: A Bohai Sea Pipeline Could Open Northern Coal Fields

Courtesy of Circle of Blue, a detailed look at disputed “watergy” project seen as a must for China’s modernization, namely a first-of-its-kind transcontinental pipeline believed to be a potential breakthrough in developing more fossil energy from Xinjiang and China’s other northern coal-rich provinces, while conserving the region’s scarce freshwater reserves.

The Bohai Pipeline would bring 340,000 cubic meters (90 million  gallons) of desalinated seawater a day to the coal mines of Xilinhot,  Inner Mongolia. 

Of all the threats over the next decade to China’s rapid modernization, assuring adequate supplies of coal is among the most significant. Coal accounts for 70 percent of the nation’s total energy production and consumption.

Last November, as government leaders considered energy goals for China’s upcoming 12th Five-Year Plan—which was adopted last month—60-year-old geographer Huo Youguang took the podium at an academic meeting about water scarcity and coal production in Xinjiang Uyghur Autonomous Region, one of the driest inhabited areas on the planet.

Over the next half-hour or so, Huo described a first-of-its-kind transcontinental pipeline that he believed could be a breakthrough in developing more fossil energy from Xinjiang and China’s other northern coal-rich provinces, while conserving the region’s scarce freshwater reserves.


His proposal: drop a pipe into the Bohai Sea in China’s east, draw more than 340,000 cubic meters (90 million gallons) of seawater a day into a complex of coastal desalination plants, and then pump this water 1,400 meters uphill for more than 600 kilometers (nearly 400 miles) to Xilinhot, where it will be used for coal mining operations.


By the time Huo finished his presentation, he’d ignited a national engineering debate surrounding the cost, practicality, and feasibility of using vast amounts of purified seawater to produce more coal for China’s modernization, while simultaneously easing northern China’s water shortage. By suggesting a giant project that some authorities considered daffy, Huo also confirmed just how vulnerable China’s powerful engine of growth is to deepening water scarcity, particularly in the energy-rich northern and western provinces, now the primary focus of China’s development and modernization.


Xilinhot, an Inner Mongolia city of 177,000, lies atop a mammoth and, so far, untouchable coal reserve. Chinese authorities estimate Xilinhot’s proven and unproven coal reserves to contain 1.4 trillion metric tons. At China’s current rate of coal consumption—more than 3 billion metric tons annually—the Xilinhot reserves alone could power the country for the next 425 years.


If the first $US 6 billion stretch of the Bohai Pipeline were to perform as Huo anticipates, it could be expanded and sent an additional 2,800 kilometers (1,850 miles) from Xilinhot—crossing the rest of Inner Mongolia and through northern Gansu Province—all the way to the western province of Xinjiang, where Chinese geologists say even larger coal reserves exist. Leaders are pressing the region to double current coal production capacity to 200 million metric tons of coal per year by 2015.


Collision Approaches
As China rushes deeper into the second decade of the 21st century, the nation’s energy production and consumption trend is a steep, increasing line. It is that vector— fast-rising energy demand confronting water scarcity—that is proving so difficult to resolve.


Huo Youguang, a professor in the Center for Environment and Modern Agriculture Engineering at Xi’an Jiaotong University in Shanxi Province, is convinced a transcontinental pipeline will help.


China Water Energy Bohai Sea Pipeline Inner Mongolia Beijing  Xilinhot Desalination Desert Coal

Roads and rails cross the rugged terrain of Inner Mongolia on the route between Beijing and Xilinhot, a likely path for the proposed 600km-long pipeline that will transfer desalinated water from the Bohai Sea.



Back in December, Huo told Circle of Blue that the rapid transformation of the growing and modern desert cities of Inner Mongolia, Gansu, Xinjiang, Ningxia, and Shanxi provinces are endangered by their diminishing freshwater reserves.


These regions contain the nation’s largest proven and unproven coal reserves. But developing coal reserves, along with the power and processing infrastructure to consume coal, uses tens of billions of gallons of water each year—water that isn’t available in a region that receives just a few inches of rain annually and where climate change is reducing snow pack.



“We need water, and the sea can provide it,” Huo said, noting that he had first proposed an across-the-north route for a pipeline from the Bohai Sea back in 1997.


In 2002, a separate academic team from Beijing University proposed a similar route, but further to the north. However, both pipelines—which would transport water more than 3,400 kilometers (2,100 miles) to Xinjiang—are seen by a number of Chinese engineers as impractical.


And even if the pipeline were built, say critics, would it really be capable of slaking the big thirst of northern China’s coal sector?


Evading Water-Energy Choke Point, For Now
Of all the threats over the next decade to China’s rapid modernization, arguably none is more significant than assuring adequate supplies of coal, which accounts for 70 percent of the nation’s total energy production and consumption. In the previous chapters of Choke Point: China, Circle of Blue has reported the essential outlines of a potentially ruinous and fast-approaching confrontation between rising demand for coal and steadily diminishing freshwater reserves.


To date, China has managed to largely evade the water-energy collision. Once regarded as one of the world’s worst water wasters, since the mid-1990s, China has enacted and enforced water-efficiency and water-conservation measures for industries, cities, and agricultural lands.


Proposed industrial plants are required to assess the availability of water in the surrounding region and prove there is enough for plant operations and processing prior to construction—and then they must recycle water used during manufacturing and processing.


China’s big cities, led by Beijing, are erecting new buildings that include a “gray water” plumbing system—kept separate from potable tap water supply—that delivers recycled wastewater for washing clothes and flushing toilets. In 2009, there were about 200 Beijing communities receiving gray water; most of these were economically affordable housing units, since the price of gray water is reduced by government subsidies and is therefore much cheaper than tap water.


Since 1998, according to national records, China has taken 8.5 million hectares (21 million acres) of farmland out of production, while also improving irrigation practices on millions of additional hectares of cropland. In 2010, according to China’s Ministry of Water Resources, agriculture used 359 billion cubic meters of water, or 60 percent of all water used in China last year. As recently as 1990, China’s farmers used 83 percent, of all water used nationally.


China is nearing completion of a mammoth water-transport project from the south to the dry north, along with launching the world’s most-aggressive programs for building water-sipping wind and solar power plants in its northern deserts, seawater-cooled nuclear plants along its coast, and hydropower dams in its southwest—all of which provide more power, while reducing coal consumption and water use.


All of these water-saving measures helped keep the increase in water use to just 16 percent—or about one percent annually—from 1995 to 2010. During the same period, China’s GDP grew almost eight-fold and industrial water use increased by close to 50 percent.


In China, Coal is King
Over the last decade, China’s economy—the world’s second largest—has grown about 10 percent annually, fueled primarily by soaring coal production.


As China's thirst for coal continues to grow, deeper and deeper  seams are being explored. This mine, operated by Shenhua Group, has a  modern hydraulic coal face, operated by a smaller workforce.   Photo ©  Toby Smith / Reportage by Getty Images for Circle of Blue 

As China’s thirst for coal continues to grow, deeper and deeper seams are being explored. This mine, operated by Shenhua Group, has a modern hydraulic coal face, operated by a smaller workforce.


Last year, China consumed 3.15 billion metric tons of coal—three times more than in 2000—much of it mined and processed in six northern China provinces. Inner Mongolia alone produced 782 million metric tons, ahead of the 741 million metric tons produced in neighboring Shanxi Province. Chinese energy experts and academics anticipate that, at current levels of growth, the country will need to produce over 4 billion metric tons annually by 2020 to keep up with demand.


But the driest regions in the nation are the very same northern provinces where much of the coal lies.


From 2004 to 2009, according to the National Bureau of Statistics, Inner Mongolia lost 46.8 million cubic meters (12.3 billion gallons) from its total freshwater reserve, or a drop of 15 percent. During the same period, Xinjiang lost 95.5 million cubic meters (25.2 billion gallons).


China’s goal is to meet energy demands, save water, and use the one fossil fuel that it has in abundance. The nation is pursuing multiple paths for assuring its coal supply—generally from existing mines—with the water it has. But new northern coal reserves can’t be developed without more water, coal industry executives and academic experts told Circle of Blue.


In the mountains and deserts of Inner Mongolia, the deep mines of Ningxia and Shanxi provinces, the buckled roads of Shanxi, and the jammed railroad lines of Hebei, China is pursuing its coal-based economic strategy with a fervor unmatched by any other nation.


China Water Energy Baotou Coal Truck Traffic Jam Inner Mongolia

Thousands of trucks haul coal 24 hours a day from the mines outside Baotou, Inner Mongolia. In China, more than 1 billion metric tons of coal a year is shipped by truck.


North of Baotou—an Inner Mongolia city of 1.5 million—a double-tracked rail line lies along the northern shore of the Kunlin Reservoir. Every six minutes or so, the low whistle of a single diesel locomotive sounds across the lake, and a long train of 40 coal-loaded railcars rattles into view. All day long, seven days a week, loaded trains pass the reservoir, hauling coal from nearby mines to power plants, steel mills, and coal-to-chemical refineries.


China transports two-thirds of its coal by rail, according to national figures. The rail system is clogged with traffic and close to reaching capacity.


The other third—more than 1 billion metric tons a year—is shipped by truck.



China’s truck manufacturing industry is soaring, as is the price of diesel fuel, pushed by rising demand and languishing supplies. Outside Baotou, the two-lane road to the Daqing Shan open pit coal mine is being ground to pulverized asphalt under the wheels of thousands of coal trucks, hauling 80-tonne loads. China’s heavy truck dealers sold 1 million vehicles in 2010, a 60 percent increase from 2009, according to China Truck. In 2000, according to, an American Web site that follows China trends, heavy truck sales totaled 83,000 vehicles.


In northern China, coal truck traffic produces huge tie-ups that can take hours to clear. Last August, for example, traffic heading to Beijing on Hebei Province’s Dongyanhe Highway was so heavy that it caused a 100-kilometer (62-mile) traffic jam that took two weeks to clear.


At the Shenhua Group’s underground mine near Ordos in Inner Mongolia, miners manage machines that claw nearly 14 million metric tons of coal annually from a seam beneath the desert. Much of the coal is processed and then sent down the road to supply one of China’s four new coal-to-liquids refineries that produce diesel fuel.


Omnipresent candy-cane-striped smoke stacks, rising in clusters, pour clouds of eye-stinging and lung-clogging pollution into the air of nearly every major Chinese city.


Across the northern provinces, Chinese energy companies and utilities are constructing state-of-the-art coal-fired power plants. More than 20 “supercritical” and “ultra-supercritical” coal-fired power plants—which produce 10 to 20 percent more electricity per ton of coal consumed and which use 15 to 20 percent less water by burning hotter and at higher pressure—have been built. In the Ningxia Hui Autonomous Region, several other coal-fired power plants have been built, each one saving 70 to 80 percent of the water needed to cool a conventional coal-fired plant by using an air-cooling system instead.


In the city of Tianjin, south of Beijing, a consortium of coal companies and utilities is building the $US 1 billion, 650-megawatt GreenGen Power Plant. The coal-fired gasification plant—which has the capacity to be cooled by freshwater or seawater—is a demonstration project to produce energy more efficiently, as well as to capture and permanently dispose of climate-changing carbon emissions.


Inside the control room of the Ordos mine, operated by Shenhua  Group. Photo ©Toby Smith, Reportage by Getty Images  

Photo © Toby Smith, Reportage by Getty Images
Inside the control room of the Ordos mine, operated by Shenhua Group.


“The freshwater and seawater systems are in parallel,” said S. Ming Sung, an engineer and the chief representative in Asia for the Clean Air Task Force. “Obviously that costs more; but China is smart enough to test both systems. As they build more, the costs will come down.”


More Water Needed
Still, underlying northern China’s expanding coal sector is a growing need for more water in a region where access to freshwater is getting steadily more difficult.


By 2020, according to government projections, total national water use will rise to 670 billion cubic meters (177 trillion gallons) annually—up from 599 billion cubic meters (158 trillion gallons) in 2010—and the coal sector’s share of national water use will rise to 27 percent from 22 percent in 2010.


Much of the increase is due to the growing need for more coal—and more power plants to burn it.


China’s Coal Imports
Although China’s coal imports are on the rise, they made up only a fraction of the more than 3 billion metric tons that the nation consumed last year.
Coal Imports
(million metric tons)
Percent Rise
Over Previous Year
Percent of
Total Coal Consumption
2009 126 315.0% 0.040%
2010 165 31.0% 0.051%
2011* 233 41.2% 0.071%

*November 2010 prediction by Citigroup.

China became a net importer of coal for the first time in 2009, and demand for foreign sources has since risen steadily as market prices favor imports and energy use outpaces domestic production. In the last few years, foreign coal suppliers have been able to more easily compete, in part because Chinese authorities have undertaken a consolidation program to close small and inefficient mines, focusing on larger operations and avoiding transport bottlenecks from the northern mining zones to the industrial southern coast.
China’s coastal economic zones receive direct shipments from top suppliers in the western Pacific Rim—Indonesia, Australia, and Vietnam—but also from as far away as Colombia, South Africa, and the United States. In turn, new mines and export infrastructure in several countries are being developed with the Chinese market in mind:

  • Queensland, Australia: An $8 billion project has been dubbed China First by its developer, Waratah Coal, which last summer signed a $60 billion export deal with one of China’s largest power companies.
  • Washington, United States: Two export terminals—one on the Columbia River in Cowlitz County and the other north of Puget Sound in Whatcom County—are in the early planning stages and are being contested on numerous fronts by residents and environmentalists. The intent is to ship low-sulfur coal, which is desirable to China because it burns cleaner than the nation’s domestic sources, from Wyoming’s Powder River Basin.
China’s energy outlook is for continued growth in coal imports, even as coal’s share in electrical production drops with increased investment in plants powered by natural gas. Although coal imports are expected to rise this year, imports during the first month of the 2011 were minimal, Reuters reported in February, due to weather:
  • Rains in Indonesia and South Africa hampered mining operations.
  • Record floods in Australia’s coal region pushed short-term prices well above China’s domestic rates.
  • Mild weather in China, along with government efforts to suppress demand, averted a winter supply crunch.
The U.S. Energy Information Administration estimates that coal use in China’s energy sector will almost triple from 2007 to 2035.


Next to agriculture, the production and consumption of coal is the largest industrial user of fresh water. Last year, the coal sector used 132 billion cubic meters, or more than a fifth of the 599 billion cubic meters of water that China used nationally, according to the Ministry of Water Resources. All that water was devoted to mining and processing coal, cooling power plants, powering cement and steel plants, and turning an estimated 470 million metric tons of coal into fuels, chemicals, synthetic gas, and other products.


China’s big 1,000-MW coal-fired power plants use upwards of 3,800 cubic meters (1 million gallons) of water per hour for operations and cooling. This equates to 76,000 cubic meters (20 million gallons) a day, or 26 million cubic meters (7 billion gallons) a year.


China’s electrical generating capacity from coal was 750 GW in 2010, and is heading toward 1,250 GW in 2020, according to government projections. In other words, even with the new fleet of efficient plants, China’s coal-fired power plants alone will use roughly 34 billion cubic meters (9 trillion gallons) of water annually by 2020.


The growing coal-conversion sector will also increase water use. Depending on the product—diesel fuel, chemicals, natural gas—for every metric ton of coal converted, three to 15 metric tons (three to 15 cubic meters; 790 to 4,000 gallons) of water is used. China’s coal conversion program is currently consuming more than 5 billion cubic meters (1.3 trillion gallons) of water annually, according to engineers, and will continue to expand.


Lastly, the increasing level of technology and sophistication of China’s power plants are requiring a higher quality fuel. More coal than ever before, as a result, is being washed with water to remove impurities.


Wu Ying—the senior engineer at Beijing Huayu Engineering Company, which supplies the industry with technical advice—told Circle of Blue that 55 percent of all coal is now washed, up from 30 percent a decade ago. Washing coal takes 0.11 to 0.15 cubic meters (30 to 40 gallons) of water per metric ton of coal, or 178 million to 238 million cubic meters (47 billion to 63 billion gallons) of water annually.


Wu and other authorities say China is intent on providing energy with its own domestic supplies, which is why China is counting on ever-increasing coal production from the dry north.


Last week, Chinese officials bolstered that point when they announced that the provincial government of Inner Mongolia is following the trend already set by Shanxi Province, the country’s second-largest coal producer. Inner Mongolia will, over the next three years, shift the scale of mining operations from many smaller mines to a small number of large mines. Inner Mongolia counts 353 mines currently. That number could be reduced to 20 large-scale coal mining companies by 2013.


Experts said the restructuring would benefit the regional coal industry because the larger companies will be more efficient in using financial and water resources. Additionally, the Inner Mongolia government said that a number of the new and larger coal companies will have the capacity to produce more than 100 million metric tons annually, which makes access to water essential to the government’s plan.


In Xi’an, geographer Huo Youguang considered these new coal production trends in laying out the case for the Bohai Pipeline, which he argues is essential to China’s modernization. Huo said he is working with a desalination company and the Xilinhot government on a feasibility study for just the first 600-kilometer section.


“The project is technically feasible and necessary,” Huo told Circle of Blue. “I’ve thought about China’s water problems for a long time; building this pipeline solves that problem for this century.”

Train lines haul coal across the grasslands of Inner Mongolia,  which produced 782 metric tons of coal in 2010, ahead of the 741 million  metric tons produced in neighboring Shanxi Province.  Copyright J. Carl  Ganter / Circle of Blue 

Train lines haul coal across the grasslands of Inner Mongolia, which produced 782 metric tons of coal in 2010, ahead of the 741 million metric tons produced in neighboring Shanxi Province.

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About This Blog And Its Author
As the scarcity of water and energy continues to grow, the linkage between these two critical resources will become more defined and even more acute in the months ahead.  This blog is committed to analyzing and referencing articles, reports, and interviews that can help unlock the nascent, complex and expanding linkages between water and energy -- The Watergy Nexus -- and will endeavor to provide a central clearinghouse for insightful articles and comments for all to consider.

Educated at Yale University (Bachelor of Arts - History) and Harvard (Master in Public Policy - International Development), Monty Simus has held a lifelong interest in environmental and conservation issues, primarily as they relate to freshwater scarcity, renewable energy, and national park policy.  Working from a water-scarce base in Las Vegas with his wife and son, he is the founder of Water Politics, an organization dedicated to the identification and analysis of geopolitical water issues arising from the world’s growing and vast water deficits, and is also a co-founder of SmartMarkets, an eco-preneurial venture that applies web 2.0 technology and online social networking innovations to motivate energy & water conservation.  He previously worked for an independent power producer in Central Asia; co-authored an article appearing in the Summer 2010 issue of the Tulane Environmental Law Journal, titled: “The Water Ethic: The Inexorable Birth Of A Certain Alienable Right”; and authored an article appearing in the inaugural issue of Johns Hopkins University's Global Water Magazine in July 2010 titled: “H2Own: The Water Ethic and an Equitable Market for the Exchange of Individual Water Efficiency Credits.”