What's new in production

And the 2015 Donnie Award for Best Oxymoron by an organization goes to… The United Nations Environmental Program for “Frozen Heat.” Subtitled, “A Global Outlook on Methane Hydrates,” this report is an interesting look at what is arguably the biggest wild card in the near-future energy mix.

In this hotly contested category, the runner-up is “Fire in the Ice,” a methane hydrates newsletter, published by the U.S. National Energy Technology Laboratory (NETL). Although we’re all generally aware of methane hydrates and their potential role in the energy mix, the numbers, as one issue of this newsletter outlines, remain brow-raising.

NETL’s Potential Gas Committee has estimated that the U.S. has a total natural gas resource base of about 2,074 Tcf. This figure includes 1,836 Tcf of potential natural gas resources and 238 Tcf of proved reserves.

That’s a lot, but we may need all of it and more. Electricity generation capacity from natural gas is projected by some to increase from 338 GW in 2008 (33% of total capacity), to about 454 GW in 2035 (46% of total capacity). While the volume of natural gas used to fuel vehicles is comparatively small, it is also growing. The amount of natural gas used for transportation in the U.S. tripled from 1998 to 2008, and it is projected to triple again by 2025.

Methane hydrate resource. Any fear of future fuel shortages seems almost comically off the mark. In 2008, the U.S. Minerals Management Service, now the Bureau of Ocean Energy Management, (BOEM), released a preliminary assessment of the in-place methane hydrate resource in the Gulf of Mexico. This assessment, which does not consider whether the resource is technically or economically recoverable, estimated that there are about 11,000 to 34,000 Tcf of methane-in-place, in hydrate form, in the northern Gulf of Mexico, with a mean value of 21,444 Tcf. The assessment also concluded that about 6,700 Tcf of this resource occurs in relatively high-concentration accumulations in sandy sediments—in the sort of reservoirs likely to be producible.

Wow. Recall that the total U.S. natural gas resource, excluding hydrates, amounts to 2,074 Tcf, based on estimates reported by the Potential Gas Committee. If one-third of the natural gas-in-place in methane hydrates, in sandy sediments of the Gulf of Mexico, becomes technically recoverable, the U.S. could double its total natural gas resource.

But wait, there’s more. Literally. The volume of methane also has been calculated for the methane hydrate resource, located in sediments within, and beneath, the permafrost on the North Slope of Alaska. In 2008, the U.S. Geological Survey (USGS) estimated that there are approximately 85 Tcf of undiscovered, technically recoverable natural gas resource within the methane hydrate deposits on the North Slope. However, the USGS offers a caveat that “…these estimates are continually refined and improved, as researchers obtain new and better information about the location and concentration of methane hydrate through direct sampling, laboratory testing, modeling, and remote detection.”

The sign over the door says, “Production,” so let’s consider the subject as it applies to methane hydrates. As it turns out, the notion that methane hydrates are a seafloor phenomenon is inaccurate. Arctic sandstone reservoirs hold the most promise for near-term recovery of natural gas from methane hydrates, because the hydrates are concentrated in reservoirs with high porosity and permeability. In addition, portions of these reservoirs are located within range of existing oil and natural gas production infrastructure.

Hydrate dissociation. Hydrate extraction from seafloor mounds is problematic, because the mounds are of limited extent, and there is potential for disruption of sensitive seafloor ecosystems that depend on these deposits. Production of methane hydrates from low-permeability muds has a different set of challenges, requiring an entirely new subsea development approach.

NETL notes some progress in safely and economically producing natural gas from methane hydrates, while minimizing environmental impacts, but much remains to be understood. However, production of methane from hydrate deposits in sandstone or sandy reservoirs seems likely to be approached in a manner similar to conventional natural gas wells, but with a few wrinkles, as NETL describes.

As pressure in the wellbore is reduced, free water in the formation moves toward the well, causing a region of reduced pressure to spread through the formation. Reduced pressure causes the hydrate to dissociate and release methane. Subsequent removal of water and gas causes a further reduction in pressure, and further dissociation and methane production. One complication is that hydrate dissociation is an endothermic process. So, a natural consequence of dissociation is cooling and potential re-freezing of adjacent portions of the reservoir. To be successful, a methane hydrate production strategy must include sufficient depressurization to cause the hydrate to dissociate and, in some cases, the addition of localized heating to overcome the natural tendency of the hydrate in the reservoir to return to its stable, frozen state.

NETL points to numerical simulations conducted in the U.S. and Japan, suggesting that conventional wellbores penetrating sand reservoirs can be used effectively to dissociate methane hydrate and produce methane in commercial volumes. In other words, substantial energy resources may be available from methane hydrate deposits, using largely conventional drilling and production technologies.

The price impacts of all this looming supply are grist for another mill. But it appears that what this industry does well—relentless improvement of proven techniques and technologies—will overcome all obstacles to methane hydrate production.