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Shale gas development plans in China have generated excitement throughout the energy community, and the Chinese Ministry of Natural Resources has just completed its second shale gas exploration block licensing round. The 20 blocks are located in Guizhou, Chongqing, Hunan, Hubei, Jiangxi, Anhui, Zhejiang, and Henan Provinces. Yet no blocks in the shale-rich Ordos Basin of Shaanxi, Inner Mongolia, or Tarim Basin of Xinjiang are up for bidding in this latest round. The choice of location of the new shale exploration blocks may just be coincidence, but it highlights a geographic reality—shale gas reserves near major low-cost coal production areas such as Xinjiang face tough development challenges because the shale gas is likely to cost substantially more per unit of heat than the coal it must compete with in the…