Based on China's basic national energy conditions of "abundant coal and scarce gas reserve", the development of the coal based SNG industry is considered to be an effective way to solve the conflict between the supply and demand of natural gas and an important direction in the clean use of coal. Xinjiang is rich in coal resources and is listed by the central government as one of the main bases of the coal based SNG industry. Nearly 70% of the coal based SNG projects are being conducted in Xinjiang, with the goal to take advantage of the lower coal price in Xinjiang to promote the development of the coal based SNG industry. However, the coal based SNG industry is subject to the constraints of pollution, immature technology, poor economic returns, water resources and many other factors. Therefore, the development of the coal based SNG industry should be limited to industrial demonstration. Taking into account China's energy security and environmental governance, once the technology matures, the development prospect of the coal based SNG industry is broad. (C) 2013 Elsevier Ltd. All rights reserved.