Responsible Transition from Resource-dependency

By staff reporter LU RUCAI

DONGYING City has been dependent on non-renewable petroleum resources but these days it is successfully facing the heavy burden of economic transition.

In line with the Yellow River Delta's development plan, Dongying has adopted "efficiency" and "ecology" as its two basic standards. "Ecology" is regarded as the common concern for the city's three leading industries – petrochemical, petroleum equipment manufacture, and modern fishery and animal husbandry.

Dongying City adheres to economic development based on the principles of "high efficiency" and "ecological responsibility."                                                                Cnsphoto

Clean Production

People generally have the impression that an oilfield is a heavy polluter and energy guzzler. Shengli Oilfield has been working hard in every way to change this perception.

"People used to think leakage is a by-product of any drilling operation, and that waste liquid discharge is unavoidable," said Yang Huaijie, a senior engineer with the Safety and Environmental Protection Department of the Shengli Oilfield Administration Bureau. "Actually, that's not the case now. By upgrading equipment, we were able to get a good start on anti-leakage measures, and we apply solidification treatment to oily sludge, so drilling will not damage crops and vegetation around the work site. Today we are realizing our goal of '10,000 acres of crops above ground and 10,000 tons of oil below ground'. Green oilfields are no longer a lot of empty talk," he elaborated.

Yang Huaijie said that an obvious benefit to upgrading is that people are no longer offended by piles of residue. "If pollution exists, we on the work site are the direct victims," he said. Besides technological augmentation, the oilfield has also strengthened on-the-spot supervision and examination, and enhanced the emergency response capability constructed to mitigate environmental risks.

To lower energy consumption, Shengli Oilfield has practiced wind power generation and solar energy illumination. In 2006, it began its technological upgrading of the oilfield's power grid. In 2007, the power consumption decreased by a stunning 100 million kWh from the previous year, and in 2008, by another 2 million kWh. "Comparatively, the 2008 reduction is much less than that of 2007, but after technological upgrading it is very difficult to realize further reductions in energy consumption," said Song Xin, deputy chief engineer of Shengli's Technical Supervision Department. Shandong Province requested the oilfield save 91,000 tons of standard coal. To meet the goal, the administration bureau chief concurrently assumed the lead position in the department responsible for energy saving and emission reduction. "As a major energy consumer in Shandong Province, Shengli's success with coal reduction targets is a big determinant of whether the whole province realizes its goals in energy consumption and emission reduction," explained Song Xin.

Clean production needs investment. Shengli Oilfield has sunk more than RMB 2 billion into environmental protection, aiming to create a bona fide "green oilfield."

With huge sums capitalizing environmental protection, great strides have been made. The oilfield is no longer on barren land. Lush, green surroundings have replaced the drab colors that used to dominate the well sites and the administration base.

The concept of clean production has penetrated into other sectors of heavy industry in Dongying City as well. Huatai Group, with its headquarters located in Dongying's Guangrao County, is the largest newsprint producer in Asia. To lower its energy consumption, the company invested RMB 8 billion in four advanced newsprint production lines. Zhang Shouhui, chief of the company's Energy Measuring Section, said that the energy consumption quota made possible by new digitalized controls has advanced power conservation. "Current consumption has dropped by three-fifths," he told this reporter.

Strict Access Standards

Compared with the Pearl and the Yangtze deltas, Dongying is not as well developed industrially. However, straddling the center of the Yellow River Delta with the oilfield at its back, the city has prudently ventured into the oil equipment manufacture-related industrial chain.

The Shengli Industrial Park, a namesake of the oilfield, was established in 2002, aiming to serve both the oilfield and Dongying's petroleum industry. Now nearly 80 percent of the 70-plus enterprises in the park are engaged in oil equipment manufacture. Due to its special concentrations, the park maintains strict control over pollution, partially through a careful choice of enterprises and projects. "We reject any undertaking that is not up to the environmental standards of the state, even if it promises good economic returns," said Li Tao, director of the Economic Development Department of the park. In addition, since most of the enterprises involve hazardous materials, the park administration invites intermediary organizations to conduct safety evaluations to guarantee fairness and objectivity against standards.

Faray Petroleum Steel Pipe Co., Ltd. is a Sino-Japanese joint venture in the Shengli Industrial Park. In 2008 its business revenues amounted to RMB 480 million, 70 percent of which was earned through exporting to North America, South America and Europe. Li Guodong, deputy manager of Faray, said that to meet the demand of clean production, the water used in production is recycled, using energy-saving motors that have replaced old models. The company's energy consumption ranks above average in the trade. "Developing the Yellow River Delta provides a very important opportunity for us, as the local industrial infrastructure is sure to improve. What's more, such improvements need our products." At present, Faray is analyzing and planning for such growth in business.

Recently, another oil equipment manufacturer, Shandong Kerui Holdings Limited, set up its R & D base in the park. "We are intensifying our research and development efforts despite the fact the financial crisis is undermining our company's achievements. At present, we are negotiating with certain companies abroad for technological cooperation on the development of ocean oil exploration and drilling equipment," said Yan Shi, executive supervisor of Kerui. He believes that both the development of the Yellow River Delta, and the provincial government's efforts to get Shandong listed on the national ocean development plan, will win the company more financial support from the central treasury.

Meanwhile, construction of Dongying Harbor is in full swing, and invitations to do business in the Dongying Harbor Economic Development Zone continue unabated. The orientation of this zone is chemicals, power generation, storage and logistics, and other harbor-related industries. "Dongying Harbor's investment is RMB 1.488 billion, and it has attracted RMB 45 billion from the China National Offshore Oil Corporation (CNOOC) and Datang International," said Li Weiguo, deputy director of the zone's administrative committee. "It's the trend for iron, steel and petroleum enterprises to settle near harbors. For these enterprises, logistics is a key factor, and access to the coast can obviously save on delivery costs," Li added.

Although the development zone is sparsely populated, the administration still pays strict attention to environmental protection. Li Weiguo promises, "When introducing new enterprises we will make sure they do not pollute local environment." Though the development zone lacked funds in its initial period, it nevertheless set aside RMB 130 million for the construction of a large sewage treatment plant, which will be completed and operational at the end of this year.

Ecological Cultivation

As a Chinese saying goes, "Those living near the water live off the water." Aquatic cultivation is another industry integral to Dongying, which sits at the juncture of the Yellow River and the Bohai Sea.

The 10,000-mu (15 mu = 1 hectare) Yellow River Estuary Hairy Crab Breeding Demonstration Park is a part of the county's 100,000-mu freshwater fishery zone. Located in the Kenli County Rice Demonstration Farm, the park's 521 high-standard crab ponds produce 400 tons of crabs and 32 million crab larvae annually, with a production value of RMB 40 million. Its crabs are exported to Japan and the Republic of Korea, and sell well in big and medium-sized cities including Beijing and Hong Kong.

"Small-scale hairy crabs cultivation existed before construction of the demonstration park, but the yield was poor," declared Song Yuemei, deputy director of the demonstration farm. To preserve the eco-system of the ponds, no chemical disinfectants are permitted; instead, bio-bacteria and quicklime are used. Wild and natural growing conditions are imitated, and chubs and shrimps are raised in the ponds to form a normal biological chain. "The cultivation mode has changed from traditional to ecological," she added. Since pollution-free cultivation has been adopted, and the hairy crabs are a good size, the Yellow River Estuary Hairy Crab has become a well-known green brand name in local and domestic markets.

Ecologically-driven cultivation has brought considerable financial returns to villagers. The annual yield of the crab ponds reaches RMB 5,000 per mu, and the net profit amounts to RMB 3,000. Ding Yuchun, a local villager, earns a monthly salary of RMB 3,000 as an employee of the farm, while his family contract and tend 20 mu crab ponds. "Very few people in our village are engaged in crop planting. Most households are engaged in crab breeding, and the income is much higher than crop planting," he told this reporter. Farm regulations forbid villagers to pull up weeds in their contracted crab ponds – one means of keeping the ecology balanced. The crab feed is personally procured by the farm; excellent supply channels are selected and the prices for bulk purchases are very reasonable. Ding Yuchun's family income from crab breeding is average for the village amounting to RMB 50,000-60,000 per year.

In addition to freshwater cultivation, Dongying's ecological fishery has also conserved 200,000 mu of seawater for cultivation, mainly of sea cucumbers. Processes like the intake and discharge of water are separate for this kind of operation. After purification, seawater is introduced into the breeding area, and the tail water is discharged into the salt field, realizing cycled usage. Phase one of the project, covering 40,000 mu, has already started operation, attracting such enterprises as Dalian Youde and Shandong Hualong. To meet market demand, the demonstration park has cooperated with Yantai University to build a modern fishery R & D center and experimental bases.

In Xisong Township, Kenli County, no one is engaged in raising grain crops. Instead, peasants have established fruit production bases, mainly peach orchards. The 10,000-mu peach orchard here is composed of fields managed by more than 3,000 peasant households in 10 villages. There are additional smaller orchards growing winter dates and muskmelons. "Xisong's muskmelons are well-known far and wide. During the peak season they fetch RMB 30 per kilo," Li Xiufen, a fruit grower, informs us. The muskmelons and peaches are sold in some urban supermarkets through agricultural cooperatives. In recent years more than 300,000 tourists have made the annual trek to Xisong during the peach blossom and harvesting seasons for sightseeing and fruit picking.

Both the Shandong provincial and Dongying municipal governments have been probing for the ideal development mode for the Yellow River Delta as part of their planning processes. Their conclusions are the same, that is, they should not copy the development modes of the Yangtze and the Pearl deltas, but make full use of their own advantages. Those are a long coastline, rich reserves of oil and gas, waste alkali land, shoal land, bittern, and of course, the commitment to do a good job of preserving the stability of the original ecosystem.