In early November, Russian natural gas giant Rosneft signed a memorandum of understanding with South Korean shipbuilding giant Daewoo to join with two other Russian companies to create a giant shipbuilding cluster in Russia’s Far East. The deal represents a big step forward in Russia’s drive to create an oil and gas drilling industry in the Arctic Ocean.
It follows an announcement from Shell that it will file a new plan with the U.S. Department of the Interior to drill for oil in the Chukchi Sea, off Alaska’s north coast. Shell, which shut down its previous Arctic drilling efforts in 2012 after a series of mishaps, has spent around $5 billion on Arctic oil and gas exploration without recovering a single barrel. A new era of petroleum production is apparently dawning in the Arctic, possibly setting off international conflicts. The real prize, however, may turn out to be not oil or natural gas, but the odd, carbon-containing resource called methane hydrates.
Mind the Bubble
Since Japan announced a successful pilot program to recover methane hydrates off the island of Honshu last March, my colleagues Sam Jaffe and Dave Hurst have both written about the possibility of economically recovering methane gas from the sea floor. Methane hydrates are ice-like solids that form under high pressure and low temperatures in sediments beneath the sea. The amount of carbon trapped in these molecules worldwide is huge, possibly equal to the amount of all the carbon extant elsewhere in nature combined. Methane is a greenhouse gas that is far more potent than carbon, though shorter lived in the atmosphere. In recent years, scientists have warned of a possible methane bubble caused by the warming of Arctic waters that could emit catastrophic amounts of carbon in a short timeframe – perhaps 50 gigatons between 2015 and 2025, an amount 10 times the level of methane currently in the atmosphere.
More recently, other researchers have cast doubt on those predictions. Meanwhile, though, a small number of technologists and companies have begun to look for ways to avert a methane crisis while mining methane hydrates for use as fuel.
“Booming energy demand in Asia, which is spurring gigantic projects to liquefy natural gas in Australia, Canada and Africa, is also giving momentum to efforts to mine the frozen clumps of methane hydrate mixed deep in seafloor sediment,” reports The Wall Street Journal.
Because It’s There
In April, the U.S. Department of Energy and the Alaska Department of Natural Resources said they will collaborate on R&D for the recovery of unconventional energy resources in the Arctic, including methane hydrates.
Recovering this material, which is buried in permafrost on the seafloor dozens or hundreds of meters underwater, in some of the harshest operating conditions on the planet, is to say the least a speculative endeavor. One proposed method involves stretching a thin film of plastic, a square km or more across, equipped with tubes of heating fluid to melt the hydrates and release the gas. The Japanese project actually lowered the water pressure on the seafloor in order to allow the methane to escape. These are phenomenally expensive technologies that don’t exist today at any scale, and the risk of an inadvertent release of methane must be factored into any future project. However, if a way can be found to scoop up the vast reservoirs of methane underlying the Arctic Ocean instead of leaving them vulnerable to a mass uncontrolled release, explorers and producers will certainly pursue it.
Tags: Climate Change, Finance & Investing, Fossil Fuels, Methane Hydrates, Policy & Regulation, Smart Energy Program
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