Thursday, November 13, 2008

Alaskan Natural Gas via Hydrates

By Daniel Whitten

Nov. 12 (Bloomberg) -- Alaska has enough natural gas trapped in ice formations beneath permanently frozen subsoil and offshore to heat more than 100 million homes for a decade, a U.S. report estimated.

Hydrates, crystalline structures consisting of gas and water locked below the permafrost, contain 85.4 trillion cubic feet of natural gas, the Interior Department's U.S. Geological Survey said in a report released today.

``The hydrates have more potential for energy than all other fossil fuels combined,'' Interior Secretary Dirk Kempthorne said in a news conference. ``This is a huge resource for energy and one cannot overstate that.''

Natural gas is considered a bridge fuel to cleaner energy because it produces fewer emissions of greenhouse gases, which are blamed for global warming, than coal and involves fewer hazards than nuclear reactors. Coal generates half of the U.S.'s power.

Some environmentalists say hydrate production causes the release of methane, which is a greenhouse gas.

The world currently consumes about 104 trillion cubic feet of natural gas annually and the U.S. uses about 23 trillion cubic feet gas per year, according to the Energy Information Administration.

Hydrates gas could be produced and sold at under $10 per million British thermal unit, and less than that with advancements, said U.S. Geological Survey Director Mark Myers. Natural gas for December delivery cost $6.413 per million Btu at 12:20 p.m. on the New York Mercantile Exchange.

ANWR Drilling

About 4 percent of the estimated gas hydrates lies below the Arctic National Wildlife Refuge, which Congress has placed off limits to drilling.

While Interior Department officials wouldn't estimate when full scale gas-hydrate production would begin, they said it could be within the next decade if it was proven to be profitable.

Researchers must perform long-term production tests to demonstrate gas hydrates as an economically producible resource, Myers said. ``Hydrate accumulation in conventional hydrate reservoirs can be produced with existing technology,'' he said.

Much of the promise of Alaskan hydrates depends on whether a pipeline advocated by Alaska Governor Sarah Palin, the former Republican vice presidential candidate, can be built, Myers said. The $27 billion conduit would carry natural gas from Alaska to U.S. markets.

Extraction Methods

Several methods for extracting gas hydrates are under development. One method, depressurization, separates gas and water from the hydrate structure. A second involves injecting carbon dioxide below the permafrost, which releases methane molecules in production.

The Energy Department is spending $12 million on a 27-month study with ConocoPhillips to test the carbon-dioxide injection method. BP Plc also is researching a process using $4.6 million in federal funding. Chevron Corp. is researching in the Gulf of Mexico.

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