Do you remember the peak oil hysteria from the early 2000s? Oil didn’t just not end, the world started pumping even more thanks to the shale revolution. Now the reign of fossil fuels is being undermined by renewable energy and batteries, spurred on by the growing environmental awareness of humankind. But it’s precisely this growing awareness – along with a few other things like the drive to energy independence – that could usher in a new era of fossil fuels: the era of methane hydrates.
Methane hydrates are, simply put, molecules of natural gas trapped in the crystal structure of frozen water molecules far below the seabed. Back in 2013, the Scientific American wrote that the world’s reserves of this compound, poetically called fire ice, could be as much as 15 times greater than total shale gas reserves.
This is a truly staggering amount, but realistically, not all of it is accessible or recoverable. In fact, at this point, despite long-running methane hydrates research programs in the U.S. and Japan, success has only been achieved in the last few years, in the form of successful test production of natural gas from hydrate formations in Japan.
Large-scale production of gas from methane hydrates remains a distant prospect, but should it turn into reality, it would have major implications for the world that reach far beyond energy.
As Atlantic’s Charles C. Mann notes in an exhaustive piece on methane hydrates, the compound could turn energy-dependent countries into independent ones, which in turn would transform geopolitical dynamics since so much in geopolitics comes down to energy security and the defense of energy interests across the world.
At the same time, if methane hydrates becomes the new oil, countries dependent on their oil industry for survival will have a much bigger problem than the current oil rout. They will be faced with a scenario of diversify-or-die, and it’s questionable how many of them can make the transition and survive.
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Other countries will get the windfall of newly discovered methane hydrates and become the new oil kingdoms with all usual consequences from such developments, such as a dominant energy industry stifling the rest of the economy, eventual stagnation and accompanying corruption, as detailed by political scientist Michael Ross in his book The Oil Curse, and quoted by Mann as the most likely scenario for the majority of new (or even existing) players on the energy market. It’s hard to rein in the energy industry—this is the overwhelming conclusion of researchers into the effects of oil and gas on national and international politics.
On the other hand, if methane hydrates replace oil as the new dominant fossil fuel – a possible scenario given that natural gas is a cleaner fuel than both coal and crude oil – this will undermine the renewables industry, and could wreak havoc on global ambitions for zero carbon footprints.
Of course, this would only happen if methane hydrates become cheap enough to produce, which is not at all a given. The thing about technology, however, is that it is constantly improving, especially with the right encouragement. For Japan, this encouragement is the prospect of it becoming more energy independent. With this in mind, Japanese (and very likely other) scientists will continue to refine their drilling and gas extraction tech, bringing methane hydrates closer to the market. They could fail spectacularly, or they could turn the global energy industry as we know it on its head, just like fracking did.
By Irina Slav for Oilprice.com
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What we're witnessing is pretty much what was expected: demand destruction by oil at too high a price. And why is that price so high? Because the cheap stuff cannot be pumped fast enough out of the ground. Because we've passed peak. Peak oil = peak oil production.