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Scientists Envision Tapping Methane Hydrates In Arctic And On Ocean Floor

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Ben Lefebvre, The Wall Street Journal

Scientists in Japan and the U.S. say they are moving closer to tapping a new source of energy: methane hydrate, a crystalline form of natural gas found in Arctic permafrost and at the bottom of oceans.

[image]A ConocoPhillips drill rig at Prudhoe Bay on Alaska’s North Slope, seen in 2012, tested a method for extracting methane from methane hydrate. ConocoPhillips Alaska/Associated Press

At room temperature the crystal gives off intense heat, earning it the nickname of “fire in ice,” and making the estimated 700,000 trillion cubic feet of the substance scattered around the world a potentially major fuel source, containing more energy than all previously discovered oil and gas combined, according to researchers at the U.S. Geological Survey.

Commercial production of methane hydrate is expected to take at least a decade—if it comes at all. Different technologies to harvest the gas are being tested, but so far no single approach has been perfected, and it remains prohibitively expensive. But booming energy demand in Asia, which is spurring gigantic projects to liquefy natural gas in Australia, Canada and Africa, is also giving momentum to efforts to mine the frozen clumps of methane hydrate mixed deep in seafloor sediment.

The biggest concern is that the sediment that contains methane hydrate is inherently unstable, meaning a drilling accident could set off a landslide that sends massive amounts of methane—a potent greenhouse gas—bubbling up through the ocean and into the atmosphere.

Oil and gas companies establishing deep-water drilling rigs normally look at avoiding methane-hydrate clusters, said Richard Charter, senior member of environmental group the Ocean Foundation, who has long studied methane hydrates.

Nevertheless, the government of Japan—where natural gas costs are currently $16 per million British thermal units, four times the level in the U.S.—has vowed to bring methane hydrate into the mainstream by 2023 after a successful drilling test in March.

In the government-sponsored test off of the southern coast of Japan’s main island, Honshu, a drilling rig bored nearly 2,000 feet below the seafloor.

Special equipment reduced the pressure around the methane hydrate crystals, dissolving them into gas and water, and then pumped about 4.2 million cubic feet of gas to the surface. While not a huge haul, it was enough to convince Japanese researchers that more natural gas could be harvested.

If Japan can deliver on its vow to produce natural gas economically from the methane hydrate deposits off its shores, it could experience a natural-gas boom that matches the fracking-fueled one under way in North America, said Surya Rajan, analyst at IHS CERA.

“If you look at what a dramatic shift the North American gas industry has gone through, could you afford to bet against something similar happening in methane hydrate?” Mr. Rajan said.

Successful development of methane hydrates could throw a wrench into liquefied-natural-gas megaprojects such as Australia’s $50 billion Gorgon development led by Chevron Corp. experts say.

“It would make me have pause about investing billions of dollars in an LNG export terminal,” said Christopher Knittel, an energy economics professor at the Massachusetts Institute of Technology in Cambridge.

Not all observers think that the costs can come down enough to make methane hydrate viable. But plenty of countries, particularly in Asia, are planning to try.

China plans to host an international conference on methane hydrate in 2014.

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