The article below was written in 2011 for the Woodrow Wilson Center’s China Environment Series 12 (CES), the release of which is TBD. In light of our recent return from a research trip to the Gobi desert, we are publishing it here.
Inner Mongolia: Coal Heaven, Water Hell
By Troy Sternberg, Francesco Femia & Caitlin Werrell
China’s richest city is no longer Shanghai or Hong Kong. It is dusty Ordos in dinosaur fossil-laden Inner Mongolia, a town based not on land or water, but coal. Amazing wealth has been created as the province has become China’s economically fastest growing region and the number one domestic source of energy. The 7,000 super rich (>$100 million each) are building themselves a $5 billion new city to invest their wealth, park their Maseratis and enjoy life. Ten years ago Ordos was desperately pitching itself as the home to Genghis Khan’s tomb (Mongolians disagree). Today it strives to be a playground for the wealthy.
Ordos reflects the story of Inner Mongolia writ large, a region where the arid, infertile lands of the Gobi desert have yielded new black gold. Coal is found throughout the province, often near the surface, which has encouraged a proliferation of informal and wildcat mines. Insatiable demand for the end product means that those who control the land, the communist party and the government (at times a blurry distinction) focus on income while the environment and water are bent to accommodate mining demand. The recent oil price spikes resulting from the Arab Spring have increased the importance of the province’s vast coal reserves. As good businessmen, the coal bosses are quick to develop new uses for its product.
Enter the idea of gasification, the process of turning coal into liquid fuel, particularly diesel for heavy trucks and energy production. The process, perfected by Germans and South Africans in the 20th century, requires a significant amount of water to convert coal to fuel, and results in by-products from coke, sulphur and ammonia to soil and groundwater contaminants. Despite the drawbacks, gasification has strong advocates in China. The process helps increase the utility of Inner Mongolia’s coal reserves, and is seen as an important step towards China’s goal of energy independence and security (China currently imports approximately 3% of its coal – 233 million metric tons – and more than half of its oil). Gasification is also promoted by its standard bearers as a cleaner solution in terms of air pollution and greenhouse gas emissions. However, while gasification is often touted as more economically and ecologically sound, it may prove difficult to sustain in the parched, desolate stretches of Inner Mongolia.
Gasification combines coal with copious amounts of water to make a slurry that is crushed into liquid energy. This process takes place in Inner Mongolia where every drop of water counts. Stepping into Ordos, the capital Hohhot, or elsewhere in the province, one quickly realizes that Inner Mongolia is a great dryland — larger than France and Spain combined. In an area where rainfall is as little as 50mm per year, water-scarcity is the defining feature across the steppe grassland in the east, and the world’s highest sand dunes in the west.
Even without the late arrival of coal mining and gasification, human pressures on this water-deprived land are many. Agriculture, the region’s main livelihood, presents a perennial stress on the region’s water table. Water is, of course, essential for crops and pasture vegetation. Furthermore, in the last 50 years, the great influx of Han Chinese has led to an increased number of mouths to feed and repeated attempts to increase agricultural productivity through an intensified use of groundwater, irrigation and fertilizers. Pastoralism, the traditional lifestyle of Inner Mongolia’s indigenous people, also plays its part in the region’s scramble for water. The indigenous Mongols, once nomadic pastoralists, are often the target of ‘ecological resettlement’, compelled to practice de facto sedentarized livestock raising. Prevented from roaming as they once did, pastoralists are forced to use less land more intensively for grazing, which places a heightened burden on the region’s water resources (not to mention being a source of ethnic tension and conflict). Lastly, urbanization, a more recent and rapid phenomenon, is also taking its toll. The steel works of Baotou (4 million people), and urban migration, contributes to an increased demand for water and energy in the cities. With people comes power – state control pursues income first, with towns hopeful of being the next Ordos.
In addition to a steady increase in water demand within the region, in some instances there is actually a water-supply deficit. Groundwater that has been stored beneath the soil for hundreds if not thousands of years is being extracted faster than it can be replenished. Based on the current level of consumption, it will not be long before the wells begin to run dry. Indeed, some already have.
Drought & Climate Change: Threat Multipliers
To make matters worse, this year  China experienced its worst drought since the communist state was founded in 1949, impacting millions of people and livestock. The central government has sent in a special drought relief team to the region to help. This lack of precipitation means agricultural production falls, livestock have less vegetation to graze, cities have water shortages and there is less water to generate energy. Climate change predictions for the region paint an even more dire picture, with the climate records showing trends of precipitation decreases and temperature increases. The combination of drier and warmer conditions will further induce shortages of water, resulting in a decline in water runoff into major rivers and lakes and a decrease in groundwater recharge rates. In some instances the reduction in runoff to lakes and high withdrawal rates mean lakes may disappear. In short, the drought is exacerbating an already tight situation and climate change may mean that this becomes the new norm.
Coal & Water Demands Not Going Away
‘Inner Mongolia is famous for its vast beautiful grassland and endless skyline,’ stated an urban dweller in Beijing during an interview. ‘Recent news on Inner Mongolia is always about how rich it has become and the number of luxury cars. The government needs a clear vision rather than building gigantic but empty cities for government employees.’ Yet the desire to create cities like Ordos, dusty yet shining beacons in the desert, threatens to overwhelm and outstrip efforts at sustainability and a secure water supply in Inner Mongolia. Unfortunately, this picture presents an all-too familiar development trajectory, with stakeholders maneuvering to slice limited water resources to their own advantage. Once it was thought that ‘rain follows the plow’; now water follows money. Cash locked up in the ground in the form of coal seems to be best way to quick riches. Competing interests will chase less water, leaving a veritable dust cloud of questions to answer. Where will the water come from for gasification? How can the region develop sustainably? In Inner Mongolia, the remains of ancient dinosaurs give way to modern mega-challenges.
Troy Sternberg is a British Academy Post-doctoral Research Fellow in the School of Geography at Oxford University
Francesco Femia is Founding Director of the Center for Climate and Security
Caitlin Werrell is Founding Director of the Center for Climate and Security