In a world awash with oil and gas, one would think it couldn’t be worse. Well, it is possible: China announcement that he had mined a record amount of what has been poetically called fire ice. It is, however, a form of natural gas trapped in frozen water.
At 861,400 cubic meters, that record might not be a lot of gas, but it could just be the start of something new, and gas producers might not like that ‘something’.
Typically, gas hydrates don’t get much media attention, simply because they haven’t yet become an addition to the global energy mix. But when they do, if they do, they can change the international oil and gas market even more than the coronavirus epidemic has changed now by decimating demand for hydrocarbons.
First, what are gas hydrates?
Gas hydrates are molecules natural gas, most often methane, trapped in a “cage” made up of water molecules. They exist in cold climates, such as under arctic permafrost and Antarctic ice, but also in sedimentary deposits – the same type of deposits where oil and gas accumulate along continental margins and also under the seabed of specific basins such as the South China Sea.
Because they only exist in cold places, research on gas hydrates has been difficult. As geologist Hobart M. King explains in an article on hydrates for Geology.com, hydrates are only stable in the environment in which they were formed.
To study them, researchers must remove the samples from their environment. The temperature change in pressure, however, melts the water cage, and the methane escapes.
Why bother with hydrates then? Because they may be more abundant than all other hydrocarbons taken together: oil, gas and coal.
According to the US Department of Energy, the world’s methane hydrates could be as vast as 250,000 to 700,000 billion cubic feet. According to the United Nations Environment Program, the world’s reserves of gas hydrates could reach 3,000 to 30,000 billion cubic meters. But these are just huge numbers that are hard to digest.
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Here is an estimate that could be more acceptable: the world reserves of gas hydrate could be between 100,000 and 1.1 million exajoules. For context, the total annual energy consumption in the world in 2014, when the UNEP document was drafted, was around 500 exajoules.
This means that we could be sitting on enough gas to power the world for hundreds, if not thousands of years.
It is also well packaged. According to the Department of Energy, a single cubic meter of hydrate can release up to 164 cubic meters of natural gas. Talk about energy density.
China is one of a handful of countries pursuing gas hydrate research with a focus on extraction. With its dependence on imported oil and gas, this is hardly surprising. The first extraction experiments in the South China Sea, in 2017, resulted in a production of 300,000 cubic meters extracted over a period of two months. Today, the Ministry of Natural Resources reported production of 287,000 cubic meters in a single day. This is quite significant progress in three years.
And that’s not all.
According to the ministry, the production obtained during this phase of gas hydrate testing provided a “solid technical basis for commercial operation”.
It’s probably the last thing gas producers around the world need to hear right now, but it’s what they need to hear. Large-scale commercial production can take years, even decades, but China is getting there. It seems, however, that he is getting there in big steps rather than small steps. It might inspire others to act or, so to speak, to act faster.
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In 2012, the United States and Japan reported successful production of methane from gas hydrates in the North Slope of Alaska. Then, a year later, Japan reported successful production again, this time from an offshore field at home. These tests ended earlier than expected due to technical issues. In 2017, Japan again announcement the first longest lasting successful extraction of methane from an offshore gas hydrate field.
Last year, the US Geological Survey update his estimate of gas hydrate reserves in Alaska at 53.8 trillion cubic feet. While this figure is significantly lower than the original 2008 estimate, which indicated that there were 85 trillion cubic feet of recoverable ice in the North Slope, it is still large enough to motivate exploration. Only maybe not now, given the pricing environment.
China’s announcement comes at a sensitive time for the global gas industry. Prices are severely depressed by a rare, if not unprecedented, combination of unusually low demand and oversupply. Energy companies are retreating and preparing to wait for the crisis to end. Exploration budgets are reduced and plans are revised. And now China has announced that it is working towards self-sufficiency in gas. It will be a bad year for the energy industry, but perhaps a good year for research into what may be the world’s most abundant fossil fuel resource.
By Irina Slav for Oil Octobers
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