1. Liz Morel The Washington Internships for Students of Engineering Program Sponsored by: The American Institute for Chemical Engineers August 2, 2006 lizmorel@kualumni.org The Methane Hydrate Paradigm Shift: “Just do it” is Not Just for Nike Anymore

2. Issue Definition US Methane Hydrate Research –Natural Gas Need by 2030: Increase in consumption, 20% Increase in imports, 3 tcf (LNG) –US Methane Hydrate Research Goal “Can methane hydrate be technically and economically produced in the United States?”

3. Issue Definition US Methane Hydrate Research –Need for Industry: Future research = field work Diverse work teams Technology transfer Encouragement of production

4. Issue Definition US Methane Hydrate Research –Industry Perceptions: Unreliable business partner - politics Uncertain funding –Program Results: Decreased Industry Participation Loss of expertise, additional funding, and equipment Slowed research schedule

5. Methane Hydrates Background “Frozen Methane” –Methane (natural gas) trapped in water cages –Hydrates may be contained in sediments like shale, sand, etc. –Associated with conventional deposits

6. http:// The Importance of Methane Hydrates Energy Costs Energy Security US Economy The Environment www.eia.doe.gov/oil_gas/natural_gas/analysis_publications/natbro/gasprices.htm

7. Goal Realization Process To assess domestic methane hydrate energy resource and production potential Technology Development Domestic Methane Hydrate Mapping, Characterization, Field Surveys, etc. Goal Steps to Goal Broad Research Goals Improper Funding: Irregularity and Amount Barriers Industry Participation

8. History – Goal Development Congressional Legislation –Methane Hydrate Research and Development (MHR&D) Act of 2000 –Energy Policy Act (EPACT) of 2005 Amendment to the 2000 MHR&D Act Royalty Relief

9. 2000 MHR&D Act, Research Goals A.Determine the commercial viability? B.Methane hydrate location C.Characterizing methane hydrate accumulations D.Tech development required for efficient and environmentally sound development of methane hydrate resources E.Education and training F.Research on the environmental impact of hydrate degassing G.Tech development for safe production H.Exploratory drilling, well testing, and production testing History – Goal Development

10. History – Funding Gap Discontinuity –Authorizations and Appropriations Amounts (in $M) –Irregularity of funds

11. U.S. Policy Recommendations To expedite US research schedule, the US Congress should: 1.Appropriations equal to authorizations 2.Advanced appropriation process 3.Amendment: Domestic Methane Hydrate Assessment Initiative - authorize funds to be USGS, the BLM, and the MMS

12. Questions? Thank you! (This presentation is dedicated to all the oxen that were gored in the production of this power point presentation.)

13. History – Goal Development Congressional Legislation, Con. A.conduct basic and applied research to identify, explore, assess, and develop methane hydrate as a commercially viable source of energy; B.identify methane hydrate resources through remote sensing; C.acquire and reprocess seismic data suitable for characterizing methane hydrate accumulations; D.assist in developing technologies required for efficient and environmentally sound development of methane hydrate resources; E.promote education and training in methane hydrate resource research and resource development through fellowships or other means for graduate education and training; F.conduct basic and applied research to assess and mitigate the environmental impact of hydrate degassing (including both natural degassing and degassing associated with commercial development); G.develop technologies to reduce the risks of drilling through methane hydrates; and H.conduct exploratory drilling, well testing, and production testing operations on permafrost and non-permafrost gas hydrates in support of the activities authorized by this paragraph, including drilling of one or more full-scale production test wells.

14. Outline Issue Definition Methane Hydrate Background The Importance of Methane Hydrates History of U.S. Methane Hydrate Goal Development History of U.S. Methane Hydrate Funding Options Policy Recommendations

15. Methane Hydrates Background www.fossil.energy.gov/programs/oilgas/publications/methane_hydrates/Interagency_coor_hydrates.pdf

16. History – Goal Development Coordination Groups 1.The Methane Hydrate Advisory Committee (MHAC) 2.The Interagency Coordination Committee (ICC) 3.The Technical Coordination Team (TCT) Publications: –“Assessment of Uncertainty of the Impact of Methane Hydrate on Global Climate Change”, 2002 –FY2004 Federal Advisory Committee Annual Report –Advisory Meeting Minutes, 2005, 2006 –Interagency Research Roadmap, 2006 http://www.fe.doe.gov/programs/oilgas/hydrates/Methane_Hydrates_Advisory_Committee.html