LegiStorm

Summary:

Solid gas hydrates are a potentially huge source of natural gas for the United States. Gas hydrates occur naturally onshore in some permafrost regions, and at or below the seafloor in sediments where water and gas combine at low temperatures and high pressures to form an ice-like solid substance, in which frozen water molecules form a cage-like structure around high concentrations of natural gas, or methane. The Bureau of Ocean Energy Management within the Department of the Interior estimated a mean value of over 51,000 trillion cubic feet (TCF) of in-place gas hydrates combined for the Outer Continental Shelf off the U.S. Atlantic and Pacific coasts and Gulf of Mexico. However, the in-place estimate disregards technical or economical recoverability, and likely overestimates the amount of commercially viable gas hydrates. To date, gas hydrates have no confirmed commercial production. The U.S. Geological Survey estimated that there are about 85 TCF of technically recoverable gas hydrates in northern Alaska. By comparison, U.S. consumption of natural gas was 25 TCF in 2012. An issue for the 113th Congress is whether gas hydrates represent a viable component of the future energy portfolio of the United States, and if federal research and development programs are appropriate and sufficient to meet energy policy goals. Gas hydrates are also a risk, representing a hazard to oil and gas drilling and production. If gas hydrates dissociate suddenly and release expanded gas during offshore drilling, they could disrupt marine sediments and compromise pipelines and production equipment. The tendency of gas hydrates to dissociate and release methane, which can be a hazard, is the same characteristic that research and development efforts strive to enhance so that methane can be produced and recovered in commercial quantities. Gas hydrates hindered early attempts to plug the Deepwater Horizon oil well blowout in the Gulf of Mexico and to siphon the leaking oil and gas to the surface. Given the potential risk associated with developing the resource, Congress may consider whether to evaluate the evolving regulatory and safety infrastructure for offshore development to determine if it is appropriate for exploiting gas hydrates offshore. Developing gas hydrates into a commercially viable source of energy is a goal of the U.S. Department of Energy (DOE) methane hydrate program, initially authorized by the Methane Hydrate Research and Development Act of 2000 (P.L. 106-193). The Energy Policy Act of 2005 (P.L. 109-58) extended the authorization of appropriations through FY2010. Since 2005, DOE has spent approximately $79 million on gas hydrate research and development through FY2013. The Obama Administration requested $5 million for gas hydrate R&D in FY2014. In 2012, DOE funded a field trial conducted by ConocoPhillips on the North Slope of Alaska, which successfully recovered methane from gas hydrates using two different methods. In 2013, Japan’s Oil, Gas and Metals National Corporation, announced that it had produced methane from gas hydrate deposits 300 meters below the seafloor in the Eastern Nankai Trough off the east coast of Japan. According to company reports, this was the first test conducted of offshore gas hydrate production. Both tests represented just a few days of production, and it appears that further work is needed before gas hydrates can be commercially exploited in permafrost regions and below the seafloor.