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Is the future of energy under the frost?

CONCERNS over climate change often refer to the potential thawing of the Arctic permafrost, where large-scale releases of methane could significantly accelerate global warming. Yet at the same time, governments and energy companies are weighing up the potentially lucrative reserves of methane lying below the permafrost that covers the Siberian continental shelf, and extends up to 1,000 kilometres into the Arctic Ocean.

In the 1960s, Russian scientists from Vniigaz, the Scientific-Research Institute of Natural Gases and Gas Technologies (and now part of Gazprom) (NOTE--SPELLINGS CHECKED), found natural methane hydrates--a solid form of natural gas--in Siberian permafrost. The Messoyakha (NOTE--SPELLING CHECKED) permafrost gas field in the northern part of the West Siberian Basin, located under 400 metres of permafrost, is one of the world's three largest permafrost locations for methane hydrates. Vniigaz also believes that permafrost gas hydrates are present in other permafrost areas of northern Russia, including Timan-Pechora province, the eastern Siberian Craton, and the northeastern Siberian and Kamchatka areas, with potential reserves of up to 54 trillion cubic metres. Vniigaz anticipates the exploration and drilling of natural hydrates by 2020, along with the development of pipeless technologies of gas transportation to markets. "We think hydrates will be a smaller player up to 2030 and possibly a key resource after that," said Gazprom spokeswoman Tatyana Klimova. According to the US Geological Survey (USGS), the distribution of methane hydrates along the oceans and the permafrost regions is more than twice that contained in recoverable and non-recoverable fossil fuel. The USGS puts the resource potential of methane hydrates in the United States alone at 318,000 trillion cubic feet (9.005 trillion cubic metres)--the United States uses 23 trillion cubic feet (0.7 trillion cubic metres) of gas a year.

But while the potential rewards are huge, the challenges make economically viable extraction a monumental task, according to Azfar Shaukat, director of oil and gas for analysts Mott MacDonald (NOTE--SPELLING IS CORRECT). "Methane hydrates tend to be rather fragmented. They're a long way from anywhere, and though you get a lot of them in one place their actual values are not really commercial enough--you'd need them over a bigger area."

In 2008, Canadian and Japanese researchers extracted a constant stream of natural gas from a test project at the Mallik methane hydrate field in the Mackenzie Delta, in northern Canada. The investigators are focusing on developing methods to mine this energy from the permafrost regions. Dr B.B. Rath, Associate Director of the US Naval Research Laboratory (NRL), predicts that methane from Canadian and Alaskan permafrost regions could be extracted within five to 10 years.

"Where we will be in 10 to 15 years' time is linked to geopolitics, and the availability of petroleum," said Dr Rath. "But commercial exploitation of the permafrost methane hydrates is very likely to happen within that time. The permafrost regions will definitely see an orderly exploitation, rather than the deep ocean."

Vniigaz acknowledges that gas hydrates present a "considerable geohazard" in permafrost regions, because methane hydrates become unstable once removed from the high pressures and low temperatures of the deep sea. A spokesman for Gazprom added the priority was to address challenges with respect to seismology, geochemistry, electromagnetics, heat flow, micro- and macrobiology, as well as drilling technology in ocean sediments.

"The Russians don't have the capability to transport these hydrates to where they're wanted, but to be fair, neither does anybody else right now," said Mr Shaukat. "The challenge they face is transport. If you're going to ship it then the sea routes from Siberia are iced up for much of the year, so you either have to build a train route or convert it in situ, with all the environmental risks and flare-ups that involves. It's not a pretty picture. The price of oil would have to go up dramatically before that becomes viable. The best use would be for local power."

Complicating the picture is the thawing permafrost. Research cruises along the Siberian coast, funded by the International Polar Year of 2007-2008, observed substantial releases of methane from ocean sediments above the permafrost. They identified the East Siberian Shelf as the source of the largest, shallowest, and most vulnerable methane hydrate deposits that could be released by instability in sub-sea permafrost.

Ms Klimova acknowledged these significant challenges. "Technologically, it does not make it easier to reach the methane hydrates," she said. Dr Richard Coffin, chief scientist of the NRL's chemistry division, has recorded an abundance of methane hydrates in Russian permafrost regions, indicated by the presence of large pockmarks--craters where methane has risen to the surface and escaped to the atmosphere. "Permafrost hydrates are a major area of exploration," he said. "The technology is there to obtain the methane. But the thawing may destabilise the sediments in the permafrost region."

"It will be a tight balance, and the answer [whether long-term exploitation of permafrost methane hydrates is possible] is not yet there. As the permafrost thaws, the methane hydrates will become unstable and prospectors will have to decide whether to go for permafrost or go for offshore hydrates. It will be harder to access methane hydrates because of climate change drilling operations will have to be far more cautious and careful in order to stabilise platforms."

In the medium term, it appears unlikely that methane hydrates will alter the nature of energy supply to Europe. "That won't happen at the moment," said Mr Shaukat. "The bigger argument would be that methane from coal is possibly a bigger game changer in terms of the geopolitics of gas."

One key issue for the European Union (EU) is whether hydrates can be discovered in EU territorial waters, rather than adding to Russia's already immense energy reserves. There is growing research interest in the Baltic Sea's gas hydrate reserves for instance, which has partly been piqued by the construction of the Nord Stream pipeline through Finnish territorial waters. Significantly, the route of the pipeline passes close to areas in the Baltic Sea surveyed by marine geologists and believed to hold sizable gas hydrate reserves. And this choice of route will only become more important should oil companies and investors take a direct interest in pursuing gas hydrate commercialisation strategies, said Robertas Bertinskas, an investment manager in the Vilnius-based Hermis Bank and a director in Geonafta, Lithuania's biggest oil exploration company.

Bertinskas is taking a deliberately cautious view about the pace at which commercialisation might take place, however. Geonafta has no immediate plans to engage in gas hydrates exploration and exploitation in the Baltic Sea, he said. "A lot of research has been done to estimate the size of the reserves in the Baltic, and this work is ongoing. However, I do not believe it will happen fast. Commercialisation will occur if it makes investment sense and is technically possible," he said.

There is some way to go for sure. Regional companies such as Sweden's Svenska Petroleum Exploration (SPE) are currently discounting future commercialisation. The Baltic Sea may well have "theoretical or substantial" gas hydrate reserves, said SPE's CEO Fredrik Ohrn, but he added: "As far as I know there is no potential to commercialise gas hydrates in the Baltic Sea. The water in the whole sea is just too shallow and apart from a couple of deep points, it is generally just around 100 metres deep right across. There are some troughs close to the Swedish coast but these are very narrow," said Ohrn.

"In Sweden there is an enormous reluctance on the part of authorities to allow any form of hydro carbon exploitation in the Baltic Sea. We have absolutely no focus on it ourselves," said Ohrn.

Despite the oil industry's lack of enthusiasm for gas hydrates related investments in the Baltic Sea, EU and government funded projects, such as the Germany-based SUbmarine GAs hydrate Reservoirs (SUGAR) project, (NOTE--SPELLING IS CORRECT) and Norway's Gas Hydrates on the Norway Barents Sea Svalbard Margin (GANS) ventures continue apace. SUGAR was launched in 2008 to identify technical challenges and assess gas hydrate reserves in the Baltic Sea. The project, which is financed using German federal government and industry funds, has 25 institutional and industry partners, and is coordinated at the Kiel based Leibniz Institute for Marine Sciences (IFM GEOMAR).

Meanwhile, the most substantial research programme to focus on gas hydrates in the Baltic Sea is funded by Germany's federal ministry for the environment, nature conservation and nuclear safety (BMU), which is supporting a Baltic Sea Region Programme (2007 2013) project called 'Advancing Sustainable New Uses of Marine Resources in the Baltic Sea Region'. The Maritime Institute Gdansk (Poland) is acting as lead partner in the project, a core segment of which will examine the "potential to exploit gas hydrates in the Baltic Sea.

"We will look at strategies, actions and investments for sustainable use of marine resources including the introduction of best available technologies and practices in the field of advanced technologies in aquaculture, the exploitation of gas hydrates, offshore wind energy, fish breeding, the use of biomass, the exploration of underwater and tourism potential," reads the project's mission statement.

Of course, being deeper, the potential for the commercialisation of gas hydrate reserves in the Barents Sea, north of Norway, could be larger, although they would be outside EU waters. Ohrn, again, was pessimistic: "There are too many unresolved issues in terms of the technologies to use and the costs involved," he said.

But, with the onset of Norway's 21st licensing round, the Barents Sea remains an area of high exploration interest for the oil and gas industry. With interest particularly strong to the west of the Loppa High, 3D multi-client data acquired by Norway's Ministry of Petroleum and Energy (MP&I) in 2008 indicates flat spots within Triassic rock-structures that are believed to be gas hydrates.

The GANS project is working to define and quantify gas hydrates and associated seepage systems in Norwegian territorial waters and in the Barents Sea, with a particular focus on resource potential. Findings produced by GANS in March, based on results from Integrated Ocean Drilling Program 1 (IODP1), indicated that the distribution of gas hydrates might be much more complex than previously assumed.

The project, which is part-funded by Norwegian Geological Survey, the Norwegian Geotechnical Institute, the SINTEF Petroleum Research Institute, the Norwegian Deepwater Programme (NDP), FUGRO, TGS NOPEC and Petroleum GeoSystems, is taking the long-term view on gas hydrates as a potential viable future resource. "We are only at the beginning of understanding how hydrates interact with various types of sediments, how they may shape the seabed and influence the seabed stability, and how they may be utilised in the future as a potential resource," said the GANS' project mission statement.

GANS believes in the potential commercialisation of gas hydrates in the Barents Sea and other waters off northern Norway but acknowledges the major challenges that lie ahead, said Haflidi Haflidason, GANS' project leader. "We must continue to learn about gas hydrates, but as regards their use as a future energy resource in Norway or regionally, this is very far into the future. It is very difficult to predict," Haflidason said.
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Author:Rowe, Mark; O'Dwyer, Gerard
Publication:International News
Date:May 1, 2010
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