Offshore in depth

While U.S. onshore shale plays grab all the headlines, another trend, flying lower under the radar at the moment, may have an even greater and longer-term influence on the global energy future. I’m referring to the potential for gas production from methane hydrates.

A methane hydrate, also called a gas hydrate, is a clathrate compound, a structure in which water molecules, under certain conditions, bond to form an ice-like cage that encapsulates a gas molecule, known as a guest molecule. That is the basic definition given by the U.S. Dept. of Energy’s Oak Ridge National Laboratory (ORNL), which is researching gas hydrates and carbon dioxide hydrates. When that guest is a methane molecule, you have a methane hydrate.

Methane hydrates, which form at low temperatures and high pressures, are found in seafloor sediments and the arctic permafrost, ORNL says. They can be scattered through several-hundred-meter depths, and at various concentrations. An estimate that is routinely batted around today is that tucked away in methane hydrates is enough natural gas to meet the current, worldwide annual demand for natural gas for 3,000 years. Although the technology to produce them economically is still evolving, early tests suggest a clear path to success.

Among energy consumers, no entity is more interested in developing methane hydrates than Jogmec (Japan Oil, Gas and Metals National Corporation), a governmental agency created in 2004 to integrate the functions of the former Japan National Oil Corporation, which was in charge of securing a stable supply of oil and natural gas, and the former Metal Mining Agency of Japan. In short, it is Jogmec’s goal to find a reliable domestic energy source for Japan.

Jogmec in March 2013 drilled its first methane hydrates test—a team aboard the Chikyu drillship successfully produced about 4.2 MMcfg from a layer of methane hydrates 1,000 ft below the seabed in the Eastern Nankai Trough. Jogmec estimates that the surrounding area in the Nankai submarine trough holds at least 39 Tcf of methane hydrate, enough to meet 11 years of gas imports to Japan.

Bigger picture. But the big picture is bigger than that, according to John C. Wiltshire, Ph.D., Director of the Hawaii Undersea Research Laboratory (HURL) and Associate Chair, Dept. of Ocean & Resources Engineering, University of Hawaii.

“The beautiful thing about hydrates,” Dr. Wiltshire says, “is that by the time we sort of convert to a natural gas-based economy, and start to run into problems from depletion rates (from onshore shale wells), we should be able to bring these huge hydrate resources online. Globally, there is basically double the amount of carbon in hydrates as we have in all other kinds of fossil fuels, combined. The resource is gigantic, literally thousands of years of potential resources in terms of current usage.”

“So, this gets to be very attractive,” he adds, “because if you convert to a natural gas economy on the basis of standard and unconventional gas, you then have a backstop in terms of methane hydrates for the secondary production to make up that loss from the depletion of standard gas. This gets to be philosophically very attractive. “

“We’re not going to have endless amounts of oil, but that is not true for natural gas,” he says. “It looks like we have an endless—or very long term—supply of natural gas.”  

More benefits. The ripple effect of plentiful and cheap gas reserves may result in even more benefits, Dr. Wiltshire points out. “We have all kinds of companies that are taking advantage of that,” he says, “from rail companies, for instance, who are converting diesel engines to run on natural gas, to power companies that are switching from coal to natural gas, and big-engine manufacturers, like Cummins and Caterpillar, that are now putting out mining equipment and heavy trucks that are dual-fuel—diesel and natural gas. Both companies are also coming out with new engines that are powered solely by natural gas. I talked with an engineer from Caterpillar recently, and he said, ‘You know, we think this is where the future is headed.’”

At the same time, natural gas is reinvigorating U.S. manufacturing, Dr. Wiltshire says, “because you have companies that are leaving China and coming back to the U.S. because of cheap natural gas.” Although Japan is, at this point, leading the race for methane hydrates, the U.S. is getting into the hunt. The U.S. Geological Survey has done a number of studies. Last November, it awarded $5 million in contracts to seven U.S. universities for additional methane hydrate research.

Production. There are several technologies for producing the hydrates—heat using water, a sort of chemical anti-freeze, or by reducing pressure. Pressure reduction is emerging as the most productive and economical. It’s achieved by drilling through the hydrate reservoir and reducing the pressure, which causes the gas molecules to separate from the water. At that point, the well can be produced like any other gas well. That was the technique used in the well drilled by Jogmec in the Eastern Nankai Trough.

For producers in the U.S., the Gulf of Mexico hydrate reserves provide a number of advantages: an existing infrastructure, locations in relatively shallow water, and a shallow drilling depth—typically about 2,000 ft.

Production of gas from hydrates is not without its challenges. The Jogmec well encountered significant sand control issues, and associated CO2 may raise environmental concerns (although recent research is producing solutions to that issue, as well).

Bottom line. Methane hydrates present a win-win scenario for long-term, low-cost energy, not only for the U.S. but for energy-consuming nations worldwide. They really are the next big thing, and I be following their development here with great interest.