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Taking a rest in the shade of trees, one could hardly imagine what the flower-strewn grasslands in northwest China's Shaanxi Province were like only five years ago.

"The barren mountainous land was pock-faced with thousands of small oil wells, and stinky sewage was flowing everywhere, threatening our drinking water," said Guo Zitian, a villager from the Zhouhe village of ecologically vulnerable Jingbian county.

Since oil was discovered in the region in the 1980s, private oil wells have sprouted around the state-owned large oil wells, siphoning off some oil altogether and leaving other hotbeds split.

Theft was so rampant that some people built houses there as cover for wells built indoors, and took oil directly from pipelines while other by-night thieves would literally drive away with vehicles packed with oil.

Such action caused massive pollution with the tainting of the Dali River, providing drinking water for local villagers, forcing some 6,000 villagers in the county to transport water from miles away.

Referring to those private operators disgustedly as "oil ghosts", Guo recalled the past conflicted days.

"Villagers always appealed to local courts saying that their land was ruined by private operators," said an official heading up the Jingbian county environmental protection bureau. "Private oil wells with less capital and poor facilities and techniques neglected environmental protection."

The worsening situation attracted attention from the government, who ordered a shutdown of private oil wells in 2003.

The shutdown saw a large number of local families lose their main source of income, and they received compensation from the government accounting for 70 percent of their losses.
After three years, 70 percent of the private oil wells closed voluntarily while the rest were shut down by local governments.

The move also propelled other oil fields to invest more on environmental protection.

In the state-owned Changqing Oil Field, one of the largest in the region with an annual processing capacity of 10 million tons, over 500 million yuan has been invested annually in improving facilities and bolstering ecological environment in the oil field.

"As we build an oil well, we plant trees around it to minimize the damage to the environment," said Hao Shengliang, an official with Changqing Oil Field.

"We urge our staff to pay special attention environmental protection and conduct both regular and surprise inspections," said the official with the Jingbian county environmental protection bureau, "besides, environmental issue is also key to the evaluation of leaders of the fields"

The exhaust gas in oil exploration used to be discharged into the air or burned, but now it is transported to nearby residences for heating or electricity generation.

"Local villagers no longer have to lumber for firewood," said Fan Xiquan, an official with the oil field, "a virtuous circle of economic development and environment protection has taken shape."

China's western regions are vital to the domestic energy structure, containing 65 percent of the nation's mineral deposits and 76 percent of its water resources. The area bordering Shaanxi, Shanxi and Inner Mongolia alone holds 60 percent of China's verified coal reserves.

However, western regions are prone to natural disasters such as drought and sand storms.

China has pumped 110 billion yuan (US$14.2 billion) on protecting the environment in western regions since 2000 and has set a target of reducing energy consumption per unit of GDP by 20 percent between 2006 and 2010 nationwide.

(Xinhua News Agency August 28, 2007)