Energy from Gas Hydrates: Opportunities and Challenges

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Energy from Gas Hydrates Opportunities and
Challenges

• John Grace,
• Chair, Council of Canadian Academies Panel on Gas
  Hydrates
• and Professor, University of British Columbia
• 18th Convocation of the International Council of
  the Academies of Engineering and Technological
  Sciences
• Calgary, July 14, 2009

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What and Where are Gas Hydrates? And How Large is
the Resource?

• Ice-like structures formed by water and natural
  gas at low temperatures and high pressures
• Gas hydrates exist in abundance worldwide,
  especially under oceans.
• Some estimates suggest that the amount of carbon
  stored in hydrate form may exceed the total in
  conventional fossil fuels coal, oil and natural
  gas.

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Worldwide Exploration Activities(Modified from
Kvenvolden and Rogers, 2005)
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Council of Canadian Academies (CCA)

• The CCA was founded in 2006
• Canadian Academy of Engineering is one of the
  three Constituent Academies, together with the
  Royal Society of Canada and the Canadian Academy
  of Health Sciences.
• Peter Nicholson will talk about the Council in
  detail at lunch tomorrow.
• CCA undertakes expert panel assessments of
  matters relevant to public interest.

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The Question
In September 2006, Natural Resources Canada asked
the Council of Canadian Academies to assemble an
expert panel to address the question
What are the challenges for an acceptable
operational extraction of gas hydrates in
Canada?
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Subsidiary Questions

• 1. What share of the total Canadian reserves can
  be profitably extracted?
• 2. What are the Science Technology needs for
  the safe use of this energy source?
• 3. What are the environmental considerations
  related to the use and the non-use of this
  resource?

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Expert Panel on Gas Hydrates
Expertise in engineering, geophysics, geology,
chemistry, biology, political science, economics,
safety and social impacts. 9 academics, 2
government, and 2 industry representatives. 9
from Canada, 4 from the U.S.
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Context for this Study

• Falling supply of conventional natural gas in N.
  America.
• Economic factors will play a major role, but are
  very uncertain e.g. role of LNG, future gas
  prices.
• Global concerns re climate change.
• Extensive RD on various alternative energies.
• Canada wishes to exercise sovereign rights in the
  North.
• Canada has energy super-power aspirations.
• Industry has so far shown little interest in
  investing.
• There are many unknowns about gas hydrate as a
  future energy source.
• Nascent public interest in the popular media.

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The Canadian Resource

• GH exists off the three coasts, as well as under
  permafrost in the Far North.
• Exact amounts are large, but impossible to
  quantify.
• The Mackenzie Delta region alone was estimated
  in 2005 to contain 1013 m3 (350 Tcf). Compare
  NEB total conventional natural gas 1.4 x 1013 m3
  (500 Tcf).
• Mapping all of Canadas resources basin-by-basin
  is impractical.
• Intensive field studies, combined with spot
  coring and drilling, are required.

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Regional Areas of Gas Hydrate in Canada (modified
from Majorowicz Osadetz, 2001)
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Producing Natural Gas from Gas Hydrate

• Depressurization appears to be the most feasible
  production option.
• Mallik tests provide evidence that flows can be
  sustained, at least over short periods, with
  conventional oilfield technologies, adapted for
  Arctic conditions.
• Production of gas from GH will be more costly
  than from conventional gas.
• Gas hydrates in marine and sub permafrost sand
  are most readily recovered.

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Schematic of Gas Hydrate Producibility (easiest
at top of pyramid) (modified from Boswell and
Collett, 2006)
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Infrastructure and Economic Issues

• Production is unlikely to proceed unless and
  until the Mackenzie Valley pipeline or other
  similar facilities are in place to bring gas to
  southern markets.
• Cost of developing offshore and Arctic resources
  is so large that the involvement of major energy
  companies would be essential to exploit Gas
  Hydrates.
• Based on Canadas National Energy Board
  projected gas prices, gas hydrate could be
  produced profitably by 2030 if the pipeline were
  in place.

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Safety Considerations

• Much of the information on safety issues related
  to encountering gas hydrate while drilling is
  proprietary, residing with commercial companies.
• Based on available information, safety issues
  related to producing gas from hydrate appear to
  be similar to those when producing conventional
  natural gas.
• But, since there has been no commercial
  production from gas hydrate, safety issues cannot
  be assessed definitively.

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Environmental Considerations

• Leakage of methane during production should be
  controlled by discontinuing depressurization.
• Water produced due to hydrate dissociation will
  be relatively pure.
• Significant seafloor destabilization due to gas
  hydrate production is not a meaningful risk.
• Methane from gas hydrate and its product CO2 are
  Greenhouse Gases, although methane combustion
  yields less GHG than oil and coal.
• Research is needed on the long-term possibility
  of replacing methane-hydrate by CO2-hydrate.

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Environmental Considerations continued

• Dilemma regarding greenhouse gases
• Exploiting gas hydrate would result in more CO2
  in the atmosphere.
• Global warming will eventually cause massive
  release of gas hydrate as CH4, a much more
  harmful greenhouse gas.
• There is no conceivable practical way that a
  substantial fraction of the worlds, or Canadas
  gas hydrate could be recovered.

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Jurisdictional Issues

• Only the East Coast has a framework for
  federal-provincial resource development.
• The West and North would have to develop a
  similar framework.
• Federal and British Columbia moratoria on the
  west coast on oil gas exploration would need to
  be lifted for GH to be developed.
• Northern development will depend heavily on
• whether the Mackenzie pipeline proceeds
• Arctic sovereignty claims.

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Community and Social Issues

• Past resource development projects in Canada hold
  lessons for any future hydrate exploitation.
• Social and cultural issues appear to be similar
  to those related to conventional natural gas
  development in remote fragile regions.
• Proper consultation and community involvement
  well in advance are essential for major gas
  hydrate projects.

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Three Broad Approaches for Gas Hydrate Development

• Research Only
• Research and Limited Development
• Major Targeted Research and Development

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Actions Which Could Be Taken

• Geo-studies to better delineate the resource.
• More demonstration projects.
• Participation in international programs.
• More RD on related environmental issues.
• More RD on gas hydrate extraction technology.
• Evaluate incremental costs of including gas
  hydrate when extracting conventional natural gas.
• Work with provinces and territories to remove
  jurisdictional and legal barriers.
• Build government-industry partnerships.

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Question 1 What share of total Canadian
reserves can be profitably extracted?

• Resources exist off the west, north and east
  coasts and under Arctic permafrost.
• It is impossible to estimate these resources
  accurately.
• Most readily exploitable resources are associated
  with sand below permafrost, or to extend life of
  off-shore wells extracting conventional natural
  gas.
• Profitability depends on many factors including
  future energy prices, development of alternative
  technologies, and the pace at which global
  climate change issues are addressed.
• Commercial development is highly unlikely in the
  next two decades.

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Question 2 Science technology needs for the
safe use of gas hydrates?

• Extraction and usage technology can be adapted
  from existing gas technology. No insuperable
  technical problems are seen.
• Subject to confirmation from long-term production
  tests, there do not appear to be significant
  safety issues beyond those already addressed in
  onshore and offshore conventional natural gas
  production.

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Question 3 Environmental considerations
related to use and non-use of the resource?

• Once produced, gas from gas hydrate is identical
  to conventional natural gas, and its use would
  lead to greenhouse gas emissions.
• In the medium term, it could displace some oil
  and coal, which release more CO2 per unit of
  energy.
• Marine gas hydrate is not expected to be released
  due to global warming in this century, but gas
  hydrate under permafrost may dissociate in
  specific locations. Any potential exploitation
  would have negligible impact on release of gas
  from gas hydrate.

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Other Key Conclusions

• Future GH exploitation will depend on decisions
  on how best to mitigate climate change.
• Industry must be engaged if gas hydrates are to
  be developed. Uncertainties of commercial
  development would require government-industry
  partnerships, as for the oil-sands decades ago.
• Commercial production would likely begin in
  association with frontier conventional natural
  gas fields.

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Full Report

• The full report is available on the website
• www.scienceadvice.ca

Thank you!