On a recent visit to Yan’an, a mountainous north-central city in China, analysts got a firsthand glimpse of just how tough the country’s terrain could be on shale drillers. James West, a Barclays Capital analyst, described a harrowing trip to a work site along winding, cliff-hugging roads ridden with potholes.

“At one point, the envoy even had to dodge a hog that was being guided up the road by one of the villagers,” West said. To complete the hydraulic fracturing of a well, oilfield services companies would have to make the same precarious trip, truck by truck, 40 times for each stage of the frac.

Terrain is just one of the many problems China faces in its nascent venture into shale territory. The country also faces water shortages, limited infrastructure and stateowned companies that want to keep foreign entities at arm’s length.

China wants and needs to meet those challenges. The world’s most populous country is also the center of the world’s coal production, imports and consumption. Coal is the country’s main fuel, supplying 70% of China’s energy and half of worldwide consumption. China’s CO2 emissions accounted for 27% of the world’s total in 2012, data from the U.S. Carbon Dioxide Information Analysis Center show.

Pollution is so bad in some cities that cars collide in the smog and people wear protective masks on the streets.

The country has escalated its natural gas use rapidly in recent years through imports via pipeline and LNG. But the scale of coal in the Chinese economy is simply incomparable to fuel use anywhere else on Earth.

“Replacing coal with gas in Chinese power generation would require twice the volume of all global LNG trade,” said Maria van der Hoeven, executive director, International Energy Agency.

So it’s with envy that China looks to the success of the U.S gas surplus, said Dave McCurdy, president and CEO of the American Gas Association and a former Oklahoma congressman.

“They think we have won the global lottery,” he added.

Nevertheless, China’s leaders have every reason to believe they can replicate the U.S. success story. The country’s resources are second to none. The U.S. Energy Information Administration (EIA) estimates that China’s technically recoverable shale gas resources are 1,275 trillion cubic feet.

Fundamentals in China are strong and technology adoption is improving after years of snubbing foreign practices, West said.

Yet China is just beginning to make its plunge into the basins.

“If it’s the second or third inning in the U.S. shale revolution, it’s like batting practice in China,” said Jason Bordoff, a professor and director of the Center on Global Energy Policy at Columbia University.

China lacks the incentives and open market financing that helped push the U.S. shale boom.

Private ownership of mineral rights, a vibrant exploration and production sector, and deep financial markets willing to fund pioneers—such as George Mitchell—all played a role.

On the surface, China’s sovereign treasure, vast shale resources and desirable marine shale would seem to make its production goals feasible. Yet the country lacks the U.S. right to individual ownership of mineral rights. The country has been partners with many foreign companies but has shown an unwillingness to give up control of assets.

China’s well costs are staggering by U.S. standards. With improvements in processes and drilling efficiencies, the costs could eventually be reduced, said Zhang Dingyu, director, Chongqing Land and Resource Bureau, at the recent World Shale Oil & Gas Summit held in Houston.

Despite the hunger for new technology, China’s national oil companies have been reluctant to accept advice, change or embrace new methods, according to Hong Kong-listed Anton Oil, an oilfield services company that spoke to West. The company has operations in Xi’an and Chongqing, a city where shale gas is being heavily pursued.

In 2013, Anton spent three months convincing Sinopec International Petroleum Exploration and Production Corp. to accept its coiled-tubing fracturing services. Before that, it spent two years winning Sinopec over to open-hole, multistage fracturing technology.

West said state-owned companies come with “a smaller appetite to take on risk and to embrace change.”

In the past, Halliburton tried to introduce new technology but was rebuffed because it was considered too expensive and “unproven,” West said.

Extraction is one problem; moving the gas is yet another. The U.S. is tied together by 2.4 million miles of natural gas pipeline. China has about 300,000 miles of pipeline, McCurdy said.

“The Chinese have fewer constraints on permitting—permitting doesn’t seem to really stand in the way there,” he said. “However, they only have one pipeline company.”

The company is slow, bureaucratic and inefficient but “they can build infrastructure, and when they decide they’re going to do it, they do it,” he added.

So when will they decide? In China, Sinopec, PetroChina and others are better understood as government bureaucracies than companies, Haley said.

“Their motivations are not profits,” Haley said. “Their motivations are to grow as big as possible and to dominate the industry.”

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