Natural gas hydrates are a potentially significant energy source, but more work needs to be done to determine if they can be economically produced, three experts told a US House subcommittee late last month.
“Estimates from the US Geological Survey peg the amount of gas in hydrate form in the US to be more than 200,000 tcf. That sounds large by itself but is even more impressive when the total amount of conventional natural gas in the US is estimated to be around 1,700 tcf,” said US Rep. Jim Costa (D-Calif.), chairman of the House Energy and Natural Resources Committee’s Energy and Mineral Resources Committee, in opening statement at the subcommittee’s second 2009 hearing on unconventional fuels, which focused on gas hydrates.
USGS made the first systematic assessment of US in-place gas hydrate resources in 1995 and found that the amount of gas in those accumulations was estimated to greatly exceed known conventional gas resources volumes, according to the first witness, Timothy S. Collett, a research geologist in the US Department of the Interior agency. However, gas hydrates represent both a scientific and technologic challenge, and much remains to be learned about their characteristics, he said.
While a huge amount of gas apparently is stored in hydrates and its production is technically feasible with existing technology, production of gas from hydrates also potentially could create hazards associated with seabed stability and release of methane into the oceans and atmosphere, Collett said.
The National Energy Technology Laboratory in the US Department of Energy’s Fossil Fuels Office has researched gas hydrates since 2000, reported a second witness, Ray Boswell, an NETL senior energy advisor.
Methane ‘storehouse’
“The program is driven by the relatively recent recognition that gas hydrates represent a significant global storehouse of methane, a fact with far-reach implications for the environment and for the nation’s, and the world’s future energy supplies,” he said. DOE has begun a series of field and modeling studies of gas hydrates’ links to climate and carbon cycling, which it hopes will show the role gas hydrates could play in climate change, Boswell said.
Primary field efforts in DOE’s research program have confirmed accumulations of the most promising gas hydrate resource targets, he continued. “We continue to prepare for the next stage of research and development, which will include extended testing of alternative production methods, as well as comprehensive resource confirmation and sample collection,” he said.
But a third witness suggested that gas hydrate wells will be more complex than most conventional and unconventional gas wells. Steven H. Hancock, well engineering manager at RPS Energy Canada, said that technical challenges include maintaining commercial gas flows with high water production rates, operating with low temperatures and low pressures in the well bore, controlling formation sand production into the wellbore, and ensuring well structural integrity with reservoir subsidence.
“Technologies exist to address all of these issues, but they will add to development costs. Gas hydrate production also has one distinct challenge compared to other unconventional resources, and that is the high cost of transportation to market,” Hancock said.
Collett said that while USGS’s 1995 study found US in-place gas hydrate resources ranging from 113,000 to 676,000 tcf, an evaluation of technically recoverable amounts in 2008 found an estimated 25.2-157.8 tcf on Alaska’s North Slope. That same year, the USGS official continued, the US Minerals Management Service assessed gas hydrate resources in the Gulf of Mexico and found a mean volume estimate of 21,436 tcf.
‘Not created equal’
“A key development in gas hydrates research in recent years is the realization, based on the findings of a series of recent scientific drilling programs around the world, that all gas hydrates accumulations are not created equal,” Boswell said in his written testimony. “They range from large, diffuse accumulations in clay sediments to small, discrete, high-concentration accumulations in sand reservoirs. They occur both on the sea floor as solid massive mounds, as well as buried several thousands of feet below the sea floor.”
Hancock said that stand-alone developments could be economic for onshore gas hydrate production with a gas price in the upper range of historic North American prices. For deepwater gas hydrates, developments could be economic with a gas price in the upper range of what India has paid for LNG imports on the spot market, he said in his written statement.
“As with all hydrocarbon developments, the economics of gas hydrates will be highly variable, depending upon such factors as well performance, sediment type, gas-in-place, thermodynamic conditions of a reservoir and access to existing infrastructure,” he told the subcommittee. “It is also clear that comparable conventional gas reservoirs will be economically more attractive than gas hydrate-only reservoirs, suggesting that the production of gas hydrates on a large commercial scale may be delayed.”
Collett said that the arrival at a technically recoverable estimate of US gas hydrate resources in 2008 was significant. “We have focused on concentrated reservoirs recently to work on resources which are more likely to be produced,” he said.
The witnesses agreed that US gas hydrate production will likely occur first in Alaska. “The next big step is to conduct an extended production test. We are working with BP, ExxonMobil, and ConocoPhillips to do that, and we expect it to take a year,” Boswell said.
“From an engineering standpoint, the next step will be to prove we can produce commercial amounts of gas from hydrates with technologies we have. We think we can,” said Hancock. “In economic terms, each gas hydrate field is unique and will rise or fall based on its own characteristics. The price is only a few dollars more than conventional production, but as average prices rise, other unconventional sources become competitive too.”
