Despite the sand dunes surrounding it, the township of Xiaohaotu in Shaanxi province, in central China, had always been blessed with plentiful water aquifers that allowed local farmers to grow corn and raise sheep famed for their taste across the country’s plains.
But now, the water has become a source of distrust, even anger, among the township’s 17,000 residents, who allege that almost a decade of unregulated natural gas extraction by state-owned giant Sinopec has heavily polluted their underground water reserves.
“The water is beyond repair,” said a resident surnamed Li, pointing to patches of darkened, lifeless scrub where toxic drilling mud — a byproduct of gas well construction — had been buried only a few metres below the surface.
To reverse decades of heavy smog because of coal-fired heating during the winter, China has shifted towards natural gas, which releases less pollution when burnt. As the US-China trade war escalates, China has threatened further tariffs on American liquefied natural gas, adding more pressure to develop domestic reserves rather than rely on imports.
However, the extraction of natural gas generates large amounts of hazardous byproducts that may inflict environmental damage to rural communities that are already struggling economically.
State-owned companies including Sinopec, China National Petroleum and PetroChina must drill up to several thousand metres deep, then pump in chemically-laced water in a technique popularly known as hydraulic fracturing, or fracking.
The fracking of shale rock is highly contentious in North America and Europe, because of its role in causing water pollution and minor earthquakes. As China shifts towards cleaner sources of energy, those environmental impacts may be replicated on a far greater scale because of the country’s accelerating LNG appetite and a historical lack of regulatory oversight.
China’s estimated LNG demand is expected to rise from 237bn cubic metres in 2017 to 317bn by 2020, according to SIA Energy, a consultancy. This demand was mostly met by imports, which were up to 5bn cubic metres a day in 2017, according to IHS Markit, a data research company.
The country is keen to develop gas reserves of its own. But this past winter, a blanket ban on home coal heaters intended to promote the use of LNG led to a severe gas shortage that left communities in China’s frigid north-east without heating for weeks.
The Ordos Basin, a 250,000 square kilometre area in northern China encompassing Xiaohaotu, is foremost in China’s ambitions. It contains one of the world’s five largest reserves of so-called tight gas — pockets of natural gas trapped in sandstone.
“Of all the different items — offshore deepwater, shale gas, coal bed methane and tight gas — the biggest production [of gas] in China will come from tight gas,” said Angus Rodger, a research director at Wood Mackenzie, an energy consultancy.
To meet rising demand, China risks contradicting its plan to combat rural water pollution announced in late July.
As companies bore increasingly deeper wells to access larger reserves, they must also use drilling mud, a viscous fluid that is used to cool and stabilise drilling equipment.
It appears from studies on US and Nigerian gasfields that such drilling mud typically contains everything from metals such as iron and lead to carcinogens such as benzene. If buried untreated, the mud can seep into soil and groundwater, where the potential impact is amplified because gas reserves are often located in water-scarce regions, such as Xiaohaotu or Xinjiang in China’s west.
Sinopec did not respond to queries on the presence of such toxins in the drilling mud it produces in Xiaohaotu.
Waste disposal and treatment best practices “will vary by operator quite significantly”, said Mr Rodger. “How they deal with it in Ordos is a bit of an unknown, to be honest.”
In Xiaohaotu, residents said Sinopec drilled wells from 2005 to 2010, then restarted again in 2013. Altogether, villagers estimated more than 600 well openings were drilled so far in their township.
Sinopec, the villagers said, paid individual villagers subsidies averaging Rmb30,000 ($4,400) to bury untreated drilling mud and fracking wastewater on their land, often without even a protective tarp lining the pit to prevent seepage.
Villagers quickly began to notice a high rate of skin and gastrointestinal ailments. Residents say the township also has elevated cases of stomach cancer, although no formal survey has been undertaken.
“The sheep and pigs often get diarrhoea,” said one farmer who was treated for cancer in Beijing last year. “They will be fine one morning and then die in the afternoon.” The farmer estimated that about 70 per cent of long-term residents of Xiaohaotu have “some sort of skin rash or illness”.
Neither Sinopec nor local government authorities responded to requests for comment.
Over the past decade, residents have lodged numerous complaints with environmental officials, who say they have never proved a conclusive link between Xiaohaotu’s water quality and Sinopec’s gasfields.
Earlier this year, a resident was detained and was still living under de facto house arrest because of his involvement in collecting evidence of pollution and sending water samples to Beijing, according to township residents.
In July, Sinopec was ordered to halt the drilling of four wells pending an investigation by the local environmental bureau, which had found toxic levels of iron and manganese in groundwater in a village 10km from Xiaohaotu. Earlier this year, the government hired contractors to drill deeper drinking wells in Xiaohaotu to bypass contaminated aquifers, but residents were sceptical.
“You can treat the surface-level issues but when you are drilling [gas wells] so deeply, you are not addressing the underlying problems,” said one resident, adding that a few years ago Sinopec had begun excavating old drilling mud pits and hauling the waste away, over their objections.
“We do not want to let them remove the evidence,” the resident said.
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