Could fire ice be the new shale?
Trapped inside ice, within permafrost and beneath the ocean floor is a new energy resource that some industry commentators have dubbed ‘the new shale’.
Methane hydrates- more commonly known as flammable ice or fire ice- have been discovered in the offshore waters of numerous countries including the US and Japan. Methane hydrate is a cage-like structure of crystallised ice, inside of which are trapped molecules of methane, the chief constituent of natural gas.
Just as shale has disrupted the global crude oil market, so too could fire ice. But only if an appropriate technological solution for exploiting it can be found.
Large-scale, commercial production of fire ice is years, if not decades away, if reports from the US Department of Energy are to be believed.
Nevertheless, China has recently claimed to have successfully extracted gas from gas hydrates in the South China Sea. The test field saw the extraction of approximately 16,000 cubic metres of gas (almost all of it being methane) each day.
A disruptive energy solution
The race is very much on to create a commercially viable method of exploiting fire ice deposits.
The sheer scale of the reserves gives an indication as to what’s at stake here.
According to a recent report from the US Department of Energy, “the content of methane is immense, possibly exceeding the combined energy content of all other known fossil fuels.” It must be admitted, however, that this is a speculative statement, as methane production from hydrate to date has not been documented beyond small-scale field experiments.
Regardless, numerous nations are eagerly researching the possibilities that fire ice could provide. Countries such as Japan- which is a net importer of energy- are hurriedly carrying out production tests on their offshore reserves. Only in April of this year, Japan 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 metres per day on average for six days.
According to the EIA (Energy Information Administration), Japan is hoping to begin commercial production from methane hydrates by 2023.
Japan aren’t alone in their endeavours…
As part of broader efforts to secure energy independence, the US is currently exploring the benefits that fire ice could offer.
A multi-disciplinary, multi-institutional team at the University of Texas at Austin (UTA) is currently studying methane hydrates in the Gulf of Mexico. The project’s principal investigator, Professor Peter Flemings, draws the parallel with shale gas, commenting: “This could be analogous to gas or shale oil 20 or 30 years ago…. None of us thought we were going to produce hydrocarbons out of shales then”.
The Gulf of Mexico is estimated to contain about 7,000 trillion cubic feet (TCF) of methane in sand-dominated reservoirs near the seafloor. To put it into context, it is more than 250 times the amount of natural gas used in the United States in 2013.
Arguably the most exiting part of fire ice is that many large global economies, that lack clean and secure energy supplies, have potentially enormous hydrate resources (Japan being just such an example).
The unconventional becomes conventional
The race is on to make gas hydrate production commercially feasible. Should producers succeed then it is very much possible that fire ice could become the ‘next shale’ upending the global crude oil market in the process.