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Cablegate: Staffdel Mixter's Visit to Inner Mongolian

VZCZCXRO7359
PP RUEHCN RUEHGH RUEHVC
DE RUEHBJ #2517 1070128
ZNR UUUUU ZZH
P 170128Z APR 07
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 6913
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEAEPA/HQ EPA WASHDC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC

UNCLAS BEIJING 002517

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL ENRG KIRF CH

SUBJECT: STAFFDEL MIXTER'S VISIT TO INNER MONGOLIAN
COAL LIQUEFACTION PLANT AND TIBETAN MONASTERY


1. (SBU) Officials of China's Shenhua Company told
Staffdel Mixter that their factory for direct coal
liquefaction could begin producing diesel fuel from
coal with minimal environmental impact by the end of
this year. During an April 6 tour of Shenhua's eighty
percent-complete facility in Erdos, Inner Mongolia,
project manager Peng Xiaochuan told the Staffdel that
Shenhua's process, which was tested successfully in
2006, will produce a product that is 10 percent LPG,
25 percent naptha and 71 percent diesel fuel (although
the fuel may require further refining before it can be
used in vehicles). Including the coal needed to run
the factory, the process requires three tons of coal
for every one ton of product produced, Peng said.

2. (SBU) Press reports about Shenhua's especially
clean direct liquefaction process attracted the
Staffdel to want to tour the factory, according to
delegation head Cobb Mixter. Shenhua's Peng confirmed
that the main emission from its process is carbon
dioxide, which the company hopes to store in many of
its nearby coal mines which are no longer in
production. The U.S. Department of Energy is helping
Shenhua study the process of carbon sequestration,
Peng noted.

3. (SBU) In a separate meeting on April 9 in Beijing,
BP-China Vice President Gary Dirks expressed
skepticism that Shenhua's direct coal liquefaction
process can work. Dirks claimed the project faces
technical problems and said cost overruns have nearly
tripled the intended investment in the project
facilities. Shenhua's Peng noted that heavy
investment from the company was required, but felt
that the process would be profitable so long as the
price of oil remained above USD38 per barrel.

Largest Tibetan Temple in Inner Mongolia
----------------------------------------

4. (SBU) A two-hour drive outside of Baotou, Inner
Mongolia, the Staffdel on April 7 visited the
Wudangzhao Temple, the largest Tibetan Buddhist Temple
outside of traditional Tibet and the third-largest
Tibetan Buddhist Temple in the world. Monks told the
Staffdel that the 250-year old temple now has fewer
than 70 monks in residence, including a living Buddha
who is a teenager. Staffdel members observed and
spoke with a number of teenage monks at the temple.
Large portraits of the Dalai Lama were on display,
along with a single small portrait of the Chinese-
nominated Panchen Lama, which was pushed off to the
side of an altar in the Temple's main hall.

5. (U) This message is SENSITIVE BUT UNCLASSIFIED and
should not be distributed outside the USG or posted on
the Internet. The Staffdel did not have the
opportunity to clear this message.
RANDT

© Scoop Media

 
 
 
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