Abundant but difficult to exploit, are gas hydrates the next major energy source?

Darren Spalding and Laura Fox, Bracewell & Giuliani LLP, London

The energy of the future could lie buried deep beneath the world’s oceans and the Arctic permafrost. Methane hydrates, also known as “flammable ice,” are vast reservoirs of natural gas trapped in ice-like crystals and hold the potential to alter trade flows and reshape the geopolitics of energy.

As the name suggests, methane hydrates consist of a methane molecule surrounded by a cage of interlocking water molecules. Hydrates store large amounts of gas in a relatively small area; one cubic meter of hydrate can hold around 160 cubic meters of methane and 0.8 cubic meters of water. Methane hydrates are similar to ice in their composition and occur naturally in subsurface deposits in freezing temperature and high pressure conditions.

The sea floor is thus an ideal location for their formation: the deep seabed is uniformly cold, with temperatures from zero to four degrees Celsius, and below a water depth of about 350 meters, the pressure is sufficient to stabilize the hydrates. When melted or exposed to pressures and temperatures outside those where the ice is stable, the solid crystalline lattice turns into liquid water, and the enclosed methane molecules are released as gas.

Until recently, methane hydrates had never been tapped as a source of energy to meet increasing global demands. It has generally been considered that other sources of fossil fuels, notably conventional oil and gas (and more recently shale oil and gas), have been easier and cheaper to access. But in March 2013, Japan became the first country to successfully flow gas from methane hydrate deposits under the Pacific Ocean.

Read more in the May 7 2014 issue of Oil and Gas Financial Journal