Methane Hydrates: A Second Gas Revolution?
Speculation is rampant that a new gas cornucopia is coming. After a successful Japanese experiment to extract natural gas from methane hydrates 1,000 meters below the surface and 50 miles off its shores, some are beginning to wonder if the “shale revolution” was just the beginning. But don’t hold your breath.
There is no question that the world is awash in methane hydrates, which is methane gas trapped in lattice-like ice structures in ocean sediment and near permafrost. It is sometimes called “fire ice.”
There is also no question that these hydrates are an enormous potential energy resource. According to the US Geological Survey, the amount of methane trapped in hydrates worldwide is at least 100,000 trillion cubic feet—this completely dwarfs the entire total of known US shale gas reserves, which is at 2,074 trillion cubic feet.
There are two ways to release the methane gas from the hydrates: lowering the pressure or increasing the temperature. The Japanese experiment, run by the Japan Oil, Gas, and Metals National Corporation under contract for the Ministry of Economics, Trade, and Industry, used the depressurization technique. Their engineers drilled a well into a hydrate formation and pumped out water. The difference in pressure between the well and the hydrate deposits releases the methane. The depressurization technique is believed to produce the highest rates of recovery.
Japan, which has no domestic energy sources of its own and is currently the world’s largest importer of liquefied natural gas, has great incentive to develop methane hydrates. The Japanese hope to begin producing gas from methane hydrates by 2019. This appears very ambitious. But Ray Boswell, the director of the hydrates program at the Department of Energy’s National Energy Technology Laboratory told Bloomberg Businessweek, “I see no technological barriers that would stand in their way of accomplishing this.”
Perhaps. But commercializing methane is a more complex matter beyond technical feasibility. There are two big questions: the economics and the environmental cost.
As with many technically-feasible energy technologies, the bottom line question is price. Can this methane hydrates process, significantly more complicated and more expensive than the hydraulic fracturing producing shale gas, be accomplished and scaled up at a price competitive with shale gas (currently under $4 mmbtu), or even with pipeline gas (at $15 mmbtu)? That remains, at best, an open question. There is at present no industrial equipment or infrastructure in place for mining and processing gas from methane hydrates, and the cost of developing one is also uncertain.
Then there is the environmental question. The impact of disrupting the sediment bed where methane hydrates lay could release methane gas, a significant source of global warming. Can you drill into sediment with easily fragmentable lattice-structured ice without significantly affecting the geology? To their credit, the Japanese are committed to studying these still unanswered environmental impact questions.
Beyond that, there is the larger question of what an energy universe of almost unlimited natural gas would mean to efforts to mitigate climate change. Already, the shale revolution has set back the timetable for the competitive commercialization of renewable energies like wind and solar. Clearly, the science of methane hydrates is at an early stage of development. And the economics of it are no less uncertain. So don’t hold your breath waiting for methane hydrates.
But then again, who anticipated the shale revolution? In the National Intelligence Council’s Global Trends 2025 report released in 2008, there was no indication that the shale revolution would, less than three years later, begin to completely transform energy markets. So stranger things have happened.
Given this, though, commercial production of methane hydrates will likely not occur until 2030. But there is no question, if it does occur, it would be a whole new energy world.
Robert A. Manning is a senior fellow at the Atlantic Council’s Brent Scowcroft Center on International Security. This piece first appeared on GE's Ideas Lab.