Commercial Potential of Natural Gas Hydrate

Abstract

The entrepreneurial opening up of coalbed methane, shale, and tight gas was achieved mainly because small companies took initiative in wildcatting new methods. In addition, the U.S. Department of Energy provided material support over decades. NGH will probably also have to go through its wildcatting stage in which different exploration and production models are tested in the bridge from science to application. The current burst of oil and gas production from shale is based on mobile drilling rigs, relatively small fracking infrastructure, and innovative inclined or ‘horizontal’ drilling that keeps the well in the pay horizon for long distances. Because natural gas hydrate (NGH) is found in deepwater, the available drilling, logistic, and processing technology is inherently more expensive. Accordingly, less expensive exploration and production techniques are necessary for commercial production of natural gas from the NGH resource. The term ‘commercial’ probably should never be used in relation to any extractive material until after the concentrations have been identified and valued and estimates of technical recoverability have been made. The topic of commerciality is complicated because there are a large number of financial and other variables that have nothing to do with geology or with simple supply and demand. The chemical and physical characteristics of NGH, as well as the location of the resource world-wide, provide the potential for innovative technology and methodology to make NGH competitive on a producer basis. With the emerging world market and world price in compressed natural gas utilizing the new build-out in LNG and possibly CNG transport, natural gas could soon be as tradable as oil is today. Depending on the emphasis that is given by governments to reduction in from fossil fuels, Natural gas could become the main fossil fuel backing up renewable energy possibly into the far future because of its low CO2 emissions per energy produced. The very low environmental impact/risk of NGH could enable it to become the preferred source of natural gas.