**Why are policies tightening restrictions on the natural gas chemical industry?

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7. Current status of natural gas chemistry in China: **Stricter policies limit the use of natural gas in this sector. Natural gas is primarily used in the chemical industry for the production of chemicals such as nitrogen fertilizers and methanol. Until 2007, such applications accounted for the largest share of total natural gas consumption. However, according to China’s policies regarding the use of natural gas, especially the revised \"Natural Gas Utilization Policy\" issued by the National Development and Reform Commission on December 1, 2012, the conditions for using natural gas to develop the chemical industry have become increasingly stringent. 　　The newly revised Natural Gas Utilization Policy states that all new nitrogen fertilizer projects using natural gas as a raw material are classified as restricted projects, while new or expanded facilities for producing downstream products from methanol using natural gas have been added to the list of prohibited projects. 　　Compared with the Natural Gas Utilization Policy issued in 2007, the scope of restrictions on natural gas-based chemical industries has been expanded. For example, in projects for producing nitrogen fertilizers from natural gas, the previous policy classified as permitted those projects where it was not appropriate to transport the natural gas externally or where such gas could not be utilized by other users of higher priority; however, under the new policy, all new projects for producing nitrogen fertilizers using natural gas are classified as restricted. Regarding the natural gas-to-methanol projects, the new policy not only continues to prohibit the \"construction or expansion of new natural gas-to-methanol projects\" but also includes \"the construction or expansion of facilities for downstream methanol products\" in the list of prohibited activities. 　　In 2013, China’s consumption of natural gas for chemical applications was 21.8 billion cubic meters, representing a 5.8% annual increase; its share of total natural gas consumption dropped to 13.0%. In the short term, it is difficult for China’s natural gas chemical industry to develop; only when shale gas and coalbed methane can be utilized on a large scale in the future, leading to a significant increase in supply, can this industry experience a new wave of growth.