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Can ‘Fire Ice’ Replace Shale?

Scientists, researchers, and engineers have known for decades that there is an energy resource trapped inside ice and found under Arctic permafrost or beneath the ocean floor. Once thought to be rare in nature, newer estimates are that methane hydrates-popularly known as flammable ice or fire ice-are abundant in offshore waters of both resource-rich countries like the U.S., and resource-starving big energy importers like Japan.

The current state of methane hydrates development around the world is in studies, resource assessment, and production tests. "The most recent estimates of gas hydrate abundance suggest that they contain perhaps more organic carbon that all the world's oil, gas, and coal combined," the U.S. National Energy Technology Laboratory (NETL) says.

Despite the fact that estimates suggest that the content of methane is "immense, possibly exceeding the combined energy content of all other known fossil fuels," according to the U.S. Department of Energy, potential commercial production is years, probably decades, away.

But if, for example, Japan-the world's biggest LNG importer and among the world's top four oil and coal importers-or China, or India, or the U.S. were to manage to launch methane hydrate production in future, they would upend the world's crude oil demand and potentially undermine the relevance of oil powerhouses such as Saudi Arabia and OPEC as a whole, or Russia.

Natural gas burns cleaner than coal, and therefore it is seen as a "bridge fuel to a low-carbon energy economy". Still, it's a fossil fuel, and the gas hydrates mining is currently facing both technological and environmental challenges to become commercially viable.

There are two very obvious dangers in making methane hydrates commercially exploitable: the danger of damaging and destabilizing the seabed due to the high pressure, and methane escape, with methane thought to be a much more damaging greenhouse gas than CO2.

Although estimates speak of its immense potential, possible production volumes are only speculative, because methane production has only reached the production test stage.

Last month, China said that it had successfully extracted gas from gas hydrates in the northern part of the South China Sea. Every day some 16,000 cubic meters (565,000 cubic feet) of gas, almost all of which was methane, were extracted from the test field.

In July last year, the U.S. Geological Survey said that large deposits of potentially producible gas hydrate was found in the Indian Ocean for the first time, in what was a joint research project with the governments of India and Japan.

Japan-estimated to have spent an additional annual average of around US$30 billion for fossil fuel imports in the three years following the Fukushima disaster-has been studying methane hydrates mining for years.

In March 2013, two years after the Fukushima disaster, Japan Oil, Gas and Metals National Corporation (JOGMEC) carried out the first methane hydrate offshore production test in the Japan Eastern Nankai Trough, successfully extracting 20,000 cubic meters (706,300 cubic feet) per day on average for six days. Related: The World Is Millions Of Barrels Away From Peak Oil

Japan is currently conducting the second such test, confirming the production of gas earlier this month, after having suspended the test in May due to a significant amount of sand entering a gas production well.

At the start of the second test, Japan's Agency for Natural Resources and Energy (ANRE) said that in light of the test results, it would continue research and development, aiming to launch private-led projects for commercialization around the mid-2020s.

The U.S. has also been studying gas hydrate deposits for years. The University of Texas at Austin (UTA), for example, leads a multi-disciplinary and multi-institutional team studying methane hydrates in the Gulf of Mexico in a 2014-2020 program, supported by the DOE.

"The heart of this project is to acquire intact samples so that we can better understand how to produce these deposits," Professor Peter Flemings, University of Texas Institute for Geophysics (UTIG) research scientist and the project's principal investigator, said at the start of the program in 2014.

"This could be analogous to gas or shale oil 20 or 30 years ago," Flemings said. "None of us thought we were going to produce any hydrocarbons out of shales then," the scientist noted.

Should gas hydrates production become commercially feasible, it could not only upend crude oil demand. It could be a breakthrough technology that would replace coal as an energy source, and allow resource-challenged countries like Japan to reduce import dependency. Or, depending on the point of view, methane hydrates could be a nightmare for environmentalists and renewable energy transition efforts, as it would unlock yet another fossil fuel resource.

So, could 'fire ice' become the new shale gas 20 or 30 years from now?

By Tsvetana Paraskova for Oilprice.com

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Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.  More