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Could ‘Fire Ice’ Fuel The Future?

South China Morning Post

Methane hydrates represent the world’s largest source of untapped fossil energy. They are believed to be more abundant than all of the world’s oil, natural gas, and coal resources combined. The prospects for global energy markets and geopolitics are staggering.

During their three-day meeting last month, Japanese Prime Minister Shinzo Abe again asked US President Barack Obama to speed up exports of American natural gas to help his beleaguered and energy-poor economy. But the big energy revolution that could ride to Tokyo’s rescue may not come on tankers from US ports, but rather from deep underneath the sandy seabed off Japan’s own shores.

Methane hydrates, which are chunky packets of ice that trap huge amounts of natural gas in the form of methane, are looming ever larger in Japan’s plans to meet its needs for energy in the wake of the Fukushima nuclear disaster and skyrocketing bills for imported fuel.

Other Asian countries facing an energy crunch, including South Korea, India and China, are also hoping to tap into the apparently abundant reserves of methane hydrates, also known as “fire ice.” That could help fuel growing economies – but it could also fuel further tensions in regional seas that are already the stage for geopolitical sabre rattling and brinkmanship over natural resources.

Totally unknown until the 1960s, methane hydrates could theoretically store more gas than all the world’s conventional gas fields today. The amount that scientists estimate should be obtainable comes to about 43,000 trillion cubic feet, or nearly double the 22,800 trillion cubic feet of technically recoverable traditional natural gas resources around the world. The United States consumed 26 trillion cubic feet of gas last year.

That raises the possibility of an energy revolution that could dwarf even the shale gale that has transformed America’s fortunes in a few short years. It could also potentially have big implications for countries, including the US, Australia, Qatar and even Russia, which are banking on unbridled growth in the global trade of liquefied natural gas. The trick will be to figure out exactly how to profitably tap vast deposits of the stuff buried inside the sea floor. […]

Enormous Potential

Japan is the epicentre of methane hydrates today not because it has so much of the resource – quite the opposite, most methane hydrates appear to be in North America – but because it needs the resource so badly and is working faster than any other country to make fire ice a commercial proposition.

The US and Canada are awash in methane hydrate resources, found both under the seabed such as in the Gulf of Mexico and in sub-Arctic permafrost. But both countries also have huge reserves of conventional and shale gas, dampening industry enthusiasm for a complicated, lengthy research process.

Although some companies, such as Chevron, work alongside the US government on methane hydrate research, “there’s a little less space in the industry for enabling field experiments and data collection than there was 10 years ago,” says Ray Boswell, technology manager for methane hydrates at the US Energy Department’s National Energy Technology Laboratory.

Not so in Japan. This spring, researchers in Japan reached a technical breakthrough, figuring out exactly how the gassy bundles of ice release 160 times their volume in methane as they are taken out of low-temperature, high-pressure environments. That could make commercial extraction, which experts estimate is at least 10 to 15 years off, an easier proposition.

New plan for Japan

Japan has sought a new energy blueprint in the wake of the 2011 nuclear disaster that shuttered the country’s nuclear reactors, which led to a spike in imports of expensive fuel, especially natural gas. Japan’s new energy plan, approved in April, puts nuclear power back on the table. But officials concede that nuclear energy will likely never reach the 30 per cent of Japan’s electricity output that it was before the disaster.

As a result, the government included methane hydrate development in its top five priorities for new energy supplies. Japanese officials say they are working on methane hydrates because they need an alternative to liquefied natural gas (LNG), which costs about three times as much as natural gas in the US.

“It’s very easy to understand the Japanese motivation, and with China, India and South Korea you have very similar situations,” says Tim Collett, a gas hydrate expert at the US Geological Survey.

Because Japan and South Korea are the first- and second-largest importers of LNG globally, methane hydrate development “is potentially a significant long-term threat to the LNG industry,” says IHS’s Stoppard. “Even small-scale development of methane hydrate would slow down any growth in LNG sales there.”

The kinds of shale gas reserves that have made the US an energy superpower exist elsewhere too. China is loaded with shale resources, as are parts of Europe and Latin America. But the shale gas revolution depends on small, nimble energy companies, thousands of drilling rigs, private ownership of land, and up-to-date financial and regulatory systems.

Getting methane hydrates out of the sea floor should be simpler, and because for now it requires close co-operation between industry and governments, it seems well suited to economies in the Pacific Rim.

The problem with methane hydrates isn’t exactly technological. Conventional drilling techniques, rather than some fancy breakthrough, will likely enable producers to tap undersea deposits, remove the gas from the icy lattice that traps it, and pump it to the coast.

The problem is figuring out how to do so economically. All possible techniques for extracting gas from the hydrates – such as raising temperatures to release the gas or depressurising the deposits – have their drawbacks. There are also other complications not found in conventional gas wells: the melting ice releases huge amounts of water, which producers must deal with, potentially raising costs.

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