Wall Street Journal: Energy-Hungry China Struggles to Join Shale-Gas Revolution

When Royal Dutch Shell PLC began a multibillion-dollar effort to tap China shale gas a few years ago, it seemed like a can't-miss wager. China has the world's most extensive shale gas reserves, biggest energy market, and a government pushing for expanded gas production.

But for Shell and its state-controlled partner, China National Petroleum Corp. the reality on the ground makes its bet look riskier.

The region's rough terrain, poor infrastructure and deeply buried gas formations present tough technical challenges. The area is so densely populated and intensely farmed that drilling sites are being built within 360 feet of homes in villages like Maoba—upsetting residents who complain of noise, dust and environmental concerns. To ease the way, Shell and its partners are compensating local residents and local government officials for using their land and roads and other inconveniences.

Shell's experience in China, where it is charging ahead faster than competitors, shows how replicating the U.S. shale boom won't be easy. While other countries have shale gas—China, Argentina and Algeria have bigger reserves than the U.S., according to the U.S. Energy Information Administration—a range of obstacles make tapping those resources far tougher than in places like Texas and Pennsylvania. MORE