EAGER:Technology Development, Strategic Risk and National Policy: The Impact of Chinese State-Capitalist Investments in U.S. Shale Gas

West Virginia University Research Corporation, Morgantown WV

Investigators

Abstract

The United States is the largest producer of shale gas and has the most advanced technology. China, the world's largest energy consumer, is strategically targeting shale gas, but lacks competitive advantage. China's response is to invest in U.S. small and medium-sized enterprises that have pioneered exploration and development of energy resources and technology. This project explores how Chinese investment is shaping U.S. technology development and, how shale-gas investments and risks evolve as information is shared cross-nationally. To understand how the locus of control affects technology development in shale gas, the project investigates the complex interactions between national differences in R&D funding mechanisms, technology-producing organizations, and natural-gas geological structures. The central hypothesis is that China's investments in U.S. shale gas will lead to technology development suiting its unique institutions and geology, affecting variety and selection of technology; subsequent shale-gas production will alter technology trajectories and investments in U.S. shale gas with strategic, environmental and national-security repercussions. The project provides tools to identify high-leverage investments, improving decision-making and social welfare while enhancing national security. This research will allow policymakers to identify investment opportunities in shale-gas research and to gauge how investments should shift for optimal social benefits. Few policy tools evaluate effects of foreign governments' investments in U.S. technology. This project develops metrics to consider how state-capitalist investments shape global technology development, with immediate policy implications for U.S. national security, trade, employment and environmental protection. The research moves beyond economic input-output or engineering models, developing new expertise on how and why contextual decisions on technology occur. Specifically, the research determines the effects of China's investments in U.S. shale gas on technology development. The project employs mixed qualitative and quantitative methods. The research design includes an industry survey, patent analysis, personal interviews/site visits, regulatory analysis and case studies of a Chinese State-owned Enterprise's and a Chinese private company's investments in U.S. shale gas. For science and technology policy, this research clarifies interlinked processes, histories, geological features and investments that impact technology trajectories in energy generally, and oil-and-gas specifically.