OREANDA-NEWS. October 07, 2014. On a hazy morning last September, 144 American and Chinese government officials and high-ranking oil executives filed into a vaulted meeting room in a cloistered campus in south Xi'an, a city famous for its terra-cotta warriors and lethal smog.

The Communist Party built this compound, called the Shaanxi Guesthouse, in 1958. It was part of the lead-up to Chairman Mao's Great Leap Forward, in which, to surpass the industrial achievements of the West, the government built steelworks, coal mines, power stations, and cement factories—displacing hundreds of thousands and clear-cutting a tenth of China's forests in the process. Despite its quaint name, the guesthouse is a cluster of immense concrete structures jutting out of expansive, manicured lawns and man-made lakes dotted with stone bridges and pagodas. It also features a karaoke lounge, spa, tennis stadium, shopping center, and beauty salon.

The guests at the compound that week were gearing up for another great leap: a push to export the United States' fracking boom to China's vast shale fields—and beyond. Attendees slid into black leather chairs behind glossy rosewood tables, facing a stage flanked by large projector screens. Chinese businessmen wore high-waist slacks with belts clasped over their bellies. I watched as one thumbed through business cards bearing the logos of Chevron, ConocoPhillips, Exxon Mobil, and Halliburton. Behind closed doors, a select group of Chinese and American officials and executives held a "senior VIP meeting." Outside, a troop of People's Liberation Army guards marched in tight formation.

The U.S.-China Oil and Gas Industry Forum, sponsored by the U.S. departments of Commerce and Energy, as well as China's National Energy Administration, has convened for the last 13 years. But the focus turned to shale gas in 2009, when President Obama and then-President Hu Jintao announced an agreement to develop China's immense resources. The partnership set the stage for companies in both countries to forge deals worth tens of billions of dollars.

The Atlantic's James Fallows was interviewed for the video portion of this report. To watch the full video series, click here.

Here at the 2013 conference, the first American to take the podium was Gary Locke, the U.S. ambassador to China at the time. He wore a dark suit and a striped red-and-purple tie; his slick black hair glistened in the fluorescent light. "From Sichuan to Eagle Ford, Texas, from Bohai Bay to the Marcellus Shale in Pennsylvania and Ohio, U.S. and Chinese companies are investing and working together to increase energy production in both countries," he proclaimed. U.S. and Chinese companies were so tightly knit, Air China had recently started offering non-stop flights between Beijing and Houston, "making business trips much quicker for many of you gathered here."

The soft, static voice of a Chinese interpreter seeped from headphones as young women in red vests quietly passed through each row, pausing to pour hot tea, their strides almost synchronized. Tiny plumes of steam arose from the teacups lining each table, like miniature smokestacks. It seemed fitting, because underlying all the talk of new energy was an urgency to wean China from its decades-long addiction to coal. Locke promised that shale gas would do just that: "We can make further strides to improve energy efficiency, produce cleaner energy, increase renewables, and increase supply," he asserted. "Unconventional gas, especially shale gas, is just the start."

There are two main reasons behind China's newfound zeal for gas. As Michael Liebreich, the founder of New Energy Finance, an energy-market analytics firm now owned by Bloomberg L.P., put it, "One is to feed the growth. There has to be energy and it has to be affordable in order to continue the growth machine. But the other one is that they've got to get off this coal."

Constituting a whopping 70 percent of China's energy supply, coal has allowed the country to become the world's second-largest economy in just a few decades. But burning coal has also caused irreparable damage to the environment and the health of China's citizens. City officials have been forced to shut down roads because drivers are blinded by soot and smog. China's Civil Aviation Administration ordered pilots to learn to land planes in low-visibility conditions to avoid flight delays and cancellations. Scientists wrote in the medical journal The Lancet that ambient particulate matter, generated mostly by cars and the country's 3,000 coal-fired power plants, killed 1.2 million Chinese people in 2010. In late 2013, an eight-year-old girl in Jiangsu Province was diagnosed with lung cancer; her doctor attributed it to air pollution. And earlier this year, scientists found that up to 24 percent of sulfate air pollutants—which contribute to smog and acid rain—in the western United States originated from Chinese factories manufacturing for export.