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Matt Ridley: ‘Burnable Ice’ Will Set The Energy World On Fire

Matt Ridley, The Times

Even the most die-hard environmentalists should not argue against this new power source

Move over shale gas, here comes methane hydrate (perhaps). On Tuesday the Japanese Government’s drilling ship Chikyu started flaring off gas from a hole drilled into a solid deposit of methane and ice, 300m beneath the seabed under 1,000m of water, 30 miles off the Japanese coast.

The real significance of this gas flare probably lies decades in the future, though the Japanese are talking about commercial production by 2018. The technology for getting fuel out of hydrated methane, also known as clathrate, is in its infancy. After many attempts to turn this “fire ice” into gas by heating it proved uneconomic, the technology used this week — depressurising the stuff — was first tested five years ago in northern Canada. It looks much more promising.

Methane hydrate is found all around the world beneath the seabed near continental margins as well as in the Arctic under land. Any combination of low temperature and high pressure causes methane and water to crystallise together in a sort of molecular lattice. Nobody knows exactly how much there is, but probably more than all the coal and oil put together, let alone other gas.

The proof that this can be extracted should finally bury the stubborn myth that the world will run out of fossil fuels in any meaningful sense in the next few centuries, let alone decades. In 1866 William Stanley Jevons persuaded Gladstone that coal would soon run out. In 1922 a United States Presidential Commission said “Already the output of gas has begun to wane. Production of oil cannot long maintain its present rate.” In 1956 M. King Hubbert of Shell forecast that American gas production would peak in 1970. In 1977 Jimmy Carter said that oil production would start to decline in “six or eight years”. Whoops.

The key will be cost. However, Japan currently pays more than five times as much for natural gas as America, so even high-cost gas will be welcome there.

The American economy, drunk on cheap shale gas, will not rush to develop hydrate. (Unlike oil, there is no world price of gas because of the expense of liquefying it for transport by ship.) The shale gas revolution is effectively already putting a ceiling on the price of energy. America has lost its appetite for gas imports, which now go to Europe and Asia instead, but is gaining an appetite for exporting it. Domestically, America’s cheap gas has caused electricity generators to switch from coal to gas, and buses and trucks to start switching from oil to gas. Even if hydrate proves stubbornly expensive — and it’s generally wise not to bet against Japanese ingenuity — it will put a roof over this price ceiling.

Hydrate and shale are not the only new sources of gas. Thanks to newly perfected drilling technology, new deep-sea gas fields are coming online off Brazil and Africa and in the eastern Mediterranean. The days when gas production was concentrated in a few charming places such as Iran, Russia, Venezuela and Qatar are gone.

Indeed, one of the best ways to love the new gas-fired future is to list those who detest it. As recounted in a new documentary, FrackNation, Vladimir Putin, at a dinner with journalists in 2011, suddenly became agitated about the supposed devastation of Pennsylvania by the shale gas industry. His new-found concern for the Appalachian countryside might just have something to do with the threat that shale gas poses to Gazprom’s stranglehold on European markets.

For those still concerned about climate change, this is also good news. In atomic terms, methane is one fifth carbon and four fifths hydrogen. Not even the most die-hard environmentalist can find anything bad to say about burnt hydrogen, or “water”. Given that combined-cycle gas turbines run at higher energy- conversion efficiency than coal-fired steam turbines, the carbon dioxide output from gas-fired electricity is well below half that of coal-fired.

Thanks to shale gas, America’s carbon dioxide emissions in energy production have plummeted by nearly 20 per cent in five years without political targets or policies, while Europe’s have hardly changed, despite expensive schemes to subsidise the producers of renewable energy and penalise fossil fuels. (Apart from hydro, which has little capacity for expansion, and biomass, which is environmentally worse than fossil fuels, renewable energy remains an irrelevance in the energy debate. Even now, Britain still gets less than 1 per cent of its total energy from wind.) Moreover, there is a possibility that methane hydrate could be almost carbon neutral. The University of Bergen, in Norway, has developed a process that pumps carbon dioxide into the hydrate deposits, where it replaces the methane, turning methane hydrate into carbon dioxide hydrate. The results from a field trial in Alaska are expected any day. If this process can be scaled up, and if the carbon dioxide from burning the methane could be captured economically (big ifs), in future Japan could run on fossil fuels but generate almost no carbon emissions.

As it takes market share from oil and coal, gas will dominate the world’s energy supply for much of this century before perhaps giving way to something cheaper — perhaps nuclear energy based probably on thorium rather than uranium, or solar power.

Not only has cheap gas given the United States falling carbon dioxide emissions, it has also delivered it a huge competitive advantage in manufacturing. Firms are “re-shoring” their operations from Europe and even China, as the low cost of American gas outbids the low cost of Chinese labour. To be competitive, countries must have either cheap labour or cheap energy. The European elite’s strange determination to have neither is the root cause of its current stagnation.

Matt Ridley is the author of The Rational Optimist and a member of the GWPF’s Academic Advisory Council

The Times, 15 March 2013