Economic Motivations

Because of uncertainties about the geologic settings and feasible production technology, few economic studies have been published on gas hydrate. The National Petroleum Council (NPC), in its major 1992 study of gas (National Petroleum Council, 1992), published one of the few available economic assessments of gas hydrate production. This information, extracted from MacDonald (1990), assessed the relative economics of gas recovery from hydrate using thermal injection and depressurization. It also benchmarks the cost of gas hydrate production with the costs of conventional gas production on Alaska's North Slope. The NPC report concluded, that within countries with considerable production of cheaper conventional natural gas, hydrates appear not to be an economically viable energy resource in a competitive energy market.

Japan, India, and South Korea, like many other countries with little indigenous energy resources, pay a very high price for imported liquid natural gas (LNG) and oil. The high cost of imported hydrocarbon resources is one reason why in the last two years government agencies in Japan, India, and South Korea have begun to develop hydrate research programs to recover gas from oceanic hydrate. One of the most notable gas hydrate projects is underway in Japan, where the Japan National Oil Corporation (JNOC), with funding from the Ministry of International Trade and Industry (MITI), has launched a five year study to assess the domestic resource potential of natural gas hydrate. In numerous press releases, MITI has indicated that "methane hydrate could be the next generation's source of producible domestic energy". JNOC is scheduled to drill a gas hydrate test well in the Nankai Trough area, near Tokyo, in the later part of 1999. As much as 50 trillion cubic meters of gas may be stored within the gas hydrate of the Nankai Trough. In 1998, JNOC also drilled the Mallik 2L-38 gas hydrate research well with the Geological Survey of Canada in the Mackenzie Delta of northern Canada (Dallimore et al., 1999).

India (Chapter 17), like Japan (Chapter 18), has also initiated a very ambitious national gas hydrate research program. In March of 1997, the government of India announced new exploration licensing policies that included the release of several deep water (>400m) lease blocks along the east coast of India between Madras and Calcutta. Recently acquired seismic data have revealed possible evidence of widespread gas hydrate occurrences throughout the proposed lease blocks. Also announced was a large gas hydrate prospect in the Andaman Sea, between India and Myanmar, which is estimated to contain as much as six trillion cubic meters of gas. The government of India has indicated that gas hydrates are of "utmost importance to meet their growing domestic energy needs". The National Gas Hydrate Program of India calls for drilling as many as five gas hydrate test wells. Most recently the United States, through the U.S. Department of Energy, has launched a national level research program to assess the resource potential of both marine and permafrost-associated gas hydrate.

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