International environmental group Greenpeace is accusing China’s largest state-run coal company of massively exploiting water resources in the country's arid Inner Mongolia region. In a newly released investigative report
, the group says wells have dried up, lakes have shrunk and desert dunes are expanding near the company's plant.
According to Greenpeace, since state-owned Shenhua Group began extracting water for its plant to process coal into liquid fuels, groundwater levels have dropped by nearly 100 meters.
One lake where the plant extracts its water has also shrunk by two-thirds since operations began in 2006. The group says the plant is not only drying up water resources, but illegally dumping toxic industrial wastewater as well.
Local farmers and herders are finding it difficult to maintain their livelihoods, sparking social unrest. But the company is in the midst of plans to massively expand the project.
Li Yan, the head of the environmental group’s climate and energy campaign in China, said Shenhua needs to put an end to the destruction.
“We also want to warn the current ambitious development plans in the local and central governments for more coal chemical projects to take this as an example and to please give water resource limits priority," Li said.
China relies heavily on coal to power its massive economy, the world’s second largest, but its leaders are also facing growing demands to address environmental concerns.
Earlier this month, China cancelled a six-billion-dollar uranium-processing plant following protests against the facility. Other petrochemical projects have recently been halted as well.
The release of the report is the first time that Greenpeace has taken on a single state-owned enterprise with such scrutiny and focus.
Greenpeace is not publishing the findings to make the company look bad, said Li, but to make sure that unchecked expansion of the coal industry does not come at the cost of water and ecological security.
“This is definitely not risk free and we have tried our best to make sure that our evidence and findings are very solid. And we have also tried to bring evidence and show what is happening to different ministries and policy makers,” said Li.
Greenpeace has delivered copies of the report to China’s Environmental Ministry, Water Resources Ministry and a government body that oversees state-owned enterprises, said Li. The group has not yet received a response.
Another copy was sent to the company Tuesday, just before the group held a news conference in Beijing to announce its findings. Shenhua has yet to comment on the report. Its liquid to coal plant in Inner Mongolia is one of three such pilot projects in China.
The Greenpeace investigation was based on 11 field trips to the project between March and July of this year. Although the company says the plant is a low water-consumption project that has zero discharge, Greenpeace said, its findings prove those claims are false.
The group said it found high-levels of toxic chemicals in discharge wastewater and other cancer causing compounds in sediment samples.
The process of converting coal to liquid fuels widens the possible uses of China’s plentiful energy source beyond just producing electricity.
As China’s reliance on coal power generation slows, coal companies are looking for other alternatives. Local governments in the northwest are eager to allow such industries to operate because they contribute badly needed tax revenues, said Li.
“Right now there are only less than a handful of coal liquefaction projects because it is really controversial for its water intensity, for its energy intensity. This is why these projects are very important, not only for Shenhua, but also for the whole industry. They are really looking at these projects to be the flagship for the modern coal chemical industry,” said Li.
But Li added that if pilot projects like Shenhua's are having problems it’s a very worrying sign for their expansion. Currently, more than 100 coal chemical projects are waiting for Chinese government approval to move forward.