Energy from Gas Hydrates: Opportunities and Challenges

What and Where are Gas Hydrates? And How Large is the Resource? Ice-like structures formed by water and natural gas at low temperatures and high pressures Gas hydrates exist in abundance worldwide, especially under oceans. Some estimates suggest that the amount of carbon stored in hydrate form may exceed the total in conventional fossil fuels – coal, oil and natural gas.

Worldwide Exploration Activities (Modified from Kvenvolden and Rogers, 2005)

Council of Canadian Academies (CCA) The CCA was founded in 2006 Canadian Academy of Engineering is one of the three Constituent Academies, together with the Royal Society of Canada and the Canadian Academy of Health Sciences. Peter Nicholson will talk about the Council in detail at lunch tomorrow. CCA undertakes expert panel assessments of matters relevant to public interest.

The Question In September 2006, Natural Resources Canada asked the Council of Canadian Academies to assemble an expert panel to address the question: What are the challenges for an acceptable operational extraction of gas hydrates in Canada?

Subsidiary Questions 1. What share of the total Canadian reserves can be profitably extracted? 2. What are the Science & Technology needs for the safe use of this energy source? 3. What are the environmental considerations related to the use and the non-use of this resource?

Expert Panel on Gas Hydrates Expertise in engineering, geophysics, geology, chemistry, biology, political science, economics, safety and social impacts. 9 academics, 2 government, and 2 industry representatives. 9 from Canada, 4 from the U.S.

Context for this Study  Falling supply of conventional natural gas in N. America.  Economic factors will play a major role, but are very uncertain; e.g. role of LNG, future gas prices.  Global concerns re climate change.  Extensive R&D on various alternative energies.  Canada wishes to exercise sovereign rights in the North.  Canada has energy super-power aspirations.  Industry has so far shown little interest in investing.  There are many unknowns about gas hydrate as a future energy source.  Nascent public interest in the popular media.

The Canadian Resource  GH exists off the three coasts, as well as under permafrost in the Far North.  Exact amounts are large, but impossible to quantify.  The Mackenzie Delta region alone was estimated in 2005 to contain ~10 13 m 3 (~350 Tcf). Compare NEB total conventional natural gas: 1.4 x m 3 (~500 Tcf).  Mapping all of Canada’s resources basin-by-basin is impractical.  Intensive field studies, combined with spot coring and drilling, are required.

Regional Areas of Gas Hydrate in Canada (modified from Majorowicz & Osadetz, 2001)

Producing Natural Gas from Gas Hydrate  Depressurization appears to be the most feasible production option.  Mallik tests provide evidence that flows can be sustained, at least over short periods, with conventional oilfield technologies, adapted for Arctic conditions.  Production of gas from GH will be more costly than from conventional gas.  Gas hydrates in marine and sub permafrost sand are most readily recovered.

Schematic of Gas Hydrate Producibility (easiest at top of pyramid) (modified from Boswell and Collett, 2006)

Infrastructure and Economic Issues  Production is unlikely to proceed unless and until the Mackenzie Valley pipeline or other similar facilities are in place to bring gas to southern markets.  Cost of developing offshore and Arctic resources is so large that the involvement of major energy companies would be essential to exploit Gas Hydrates.  Based on Canada’s National Energy Board projected gas prices, gas hydrate could be produced profitably by 2030 if the pipeline were in place.

Safety Considerations  Much of the information on safety issues related to encountering gas hydrate while drilling is proprietary, residing with commercial companies.  Based on available information, safety issues related to producing gas from hydrate appear to be similar to those when producing conventional natural gas.  But, since there has been no commercial production from gas hydrate, safety issues cannot be assessed definitively.

Environmental Considerations  Leakage of methane during production should be controlled by discontinuing depressurization.  Water produced due to hydrate dissociation will be relatively pure.  Significant seafloor destabilization due to gas hydrate production is not a meaningful risk.  Methane from gas hydrate and its product CO 2 are Greenhouse Gases, although methane combustion yields less GHG than oil and coal.  Research is needed on the long-term possibility of replacing methane-hydrate by CO 2 -hydrate.

Environmental Considerations continued Dilemma regarding greenhouse gases: Exploiting gas hydrate would result in more CO 2 in the atmosphere. Global warming will eventually cause massive release of gas hydrate as CH 4, a much more harmful greenhouse gas. There is no conceivable practical way that a substantial fraction of the world’s, or Canada’s gas hydrate could be recovered.

Jurisdictional Issues  Only the East Coast has a framework for federal-provincial resource development.  The West and North would have to develop a similar framework.  Federal and British Columbia moratoria on the west coast on oil & gas exploration would need to be lifted for GH to be developed.  Northern development will depend heavily on:  whether the Mackenzie pipeline proceeds;  Arctic sovereignty claims.

Community and Social Issues  Past resource development projects in Canada hold lessons for any future hydrate exploitation.  Social and cultural issues appear to be similar to those related to conventional natural gas development in remote fragile regions.  Proper consultation and community involvement well in advance are essential for major gas hydrate projects.

Three Broad Approaches for Gas Hydrate Development 1. Research Only 2. Research and Limited Development 3. Major Targeted Research and Development

Actions Which Could Be Taken  Geo-studies to better delineate the resource.  More demonstration projects.  Participation in international programs.  More R&D on related environmental issues.  More R&D on gas hydrate extraction technology.  Evaluate incremental costs of including gas hydrate when extracting conventional natural gas.  Work with provinces and territories to remove jurisdictional and legal barriers.  Build government-industry partnerships.

Question #1: What share of total Canadian reserves can be profitably extracted?  Resources exist off the west, north and east coasts and under Arctic permafrost.  It is impossible to estimate these resources accurately.  Most readily exploitable resources are associated with sand below permafrost, or to extend life of off-shore wells extracting conventional natural gas.  Profitability depends on many factors including future energy prices, development of alternative technologies, and the pace at which global climate change issues are addressed.  Commercial development is highly unlikely in the next two decades.

Question #2: Science & technology needs for the safe use of gas hydrates?  Extraction and usage technology can be adapted from existing gas technology. No insuperable technical problems are seen.  Subject to confirmation from long-term production tests, there do not appear to be significant safety issues beyond those already addressed in onshore and offshore conventional natural gas production.

Question #3: Environmental considerations related to use and non-use of the resource?  Once produced, gas from gas hydrate is identical to conventional natural gas, and its use would lead to greenhouse gas emissions.  In the medium term, it could displace some oil and coal, which release more CO 2 per unit of energy.  Marine gas hydrate is not expected to be released due to global warming in this century, but gas hydrate under permafrost may dissociate in specific locations. Any potential exploitation would have negligible impact on release of gas from gas hydrate.

Other Key Conclusions Future GH exploitation will depend on decisions on how best to mitigate climate change. Industry must be engaged if gas hydrates are to be developed. Uncertainties of commercial development would require government- industry partnerships, as for the oil-sands decades ago. Commercial production would likely begin in association with frontier conventional natural gas fields.