Murkowski Proposes Expansion of Methane Hydrate Research

MURKOWSKI PROPOSES EXPANSION OF METHANE HYDRATE RESEARCH

Reauthorization Could Help Alaska Develop New Gas Supplies

In an effort to speed development of technology to unlock the nation's huge supplies of gas hydrates, Sen. Lisa Murkowski today introduced legislation to expand research and develop commercial methods to process hydrates into useable natural gas.

Murkowski, joined by Senator Ted Stevens, and Senator Daniel Akaka, D-HI, today introduced the Methane Hydrate Research and Development Reauthorization Act to increase federally funded efforts to tap the 200,000 trillion cubic feet (tcf) of methane hydrates in America - one fourth of the world's estimated reserves of the gas resource. Alaska alone is estimated to contain close to 600 tcf of onshore methane hydrate resources and about 32,000 tcf of methane hydrates - natural gas locked in ice, permafrost/rock -- enough methane alone to power America for nearly 1,000 years at expected future rates of natural gas consumption.

"This country is being sorely affected by the huge increases in natural gas prices and our economy is being threatened by our likely need to import natural gas from foreign nations, "Murkowski said. "We have already gone down this path with our petroleum supplies and have witnessed the unacceptable consequences that a reliance on foreign sources for critical energy supplies can cause. We must not, we can not, repeat this with natural gas."

Murkowski noted that natural gas costs in America have increased 350 percent in the past seven years with prices now exceeding $7 per thousand cubic feet. The United States currently produces about 22 tcf of gas a year, but U.S. gas production has fallen by 5 percent over the past three years. Even with Alaska's North Slope gas supplies fully on line, America is expected to produce just 21.8 tcf a year by 2025 and is expected to consume 31 tcf of gas. Without new domestic supplies, imports of liquefied natural gas will be needed to meet 30 percent of U.S. demand, likely further increasing gas costs. Imports from overseas have also been increasing since Canada has had less gas available for export to America. Canadian imports of gas to America have declined by nearly 25 percent in the past three years.

The previous hydrate research legislation, first crafted by Sen. Akaka, five years ago, is being proposed for expansion. It provides for expanded powers to a research Advisory Panel to ensure that research funding is put to the best use. It will increase the use of a scientific peer review process in determining which projects get funded, as recommended by the National Research Council in a recent study. The bill also will:

• Authorize increased funding, both for the technical aspects and to transition from a formerly largely research-oriented program into one that can fund projects to help in the commercialization of hydrate recovery.

• Authorize grants for identifying hydrate resources through remote sensing, funding the acquisition of seismic data to locate hydrates, developing technologies to unlock hydrates more economically, funding to mitigate the environment impacts of degassing the hydrates and funding to reduce the risks of drilling through unstable hydrate zones.

• Fund exploratory drilling, well testing and production testing in permafrost and non-permafrost zones and fund the drilling of one or more full-scale production test wells.

• Funding fellowships and graduate education and training programs to promote hydrate research.

• Authorize $165 million in research funding through 2010.

"We need to perfect the commercial means to get our huge reserves of unconventional gas to market. That is why we need to do more now to unlock the potential of hydrates," said Murkowski, who noted that accelerating gas hydrate development is the next vital step for Alaska, following passage last year of federal financial incentives, including loan guarantees and tax incentives designed to speed construction of an Alaska natural gas pipeline project.

Murkowski noted that plans already are underway for test gas hydrate production from portions of the Greater Prudhoe Bay oil field. But she said more research is needed to overcome the considerable problems with tapping gas hydrates throughout northern Alaska, including how to stabilize soils to prevent subsidence after removal of the hydrates, how to facilitate unlocking the gas economically, how to stabilize the gas tapped and how to handle associated environmental issues.

"Hydrates offer a vast supply of potential energy for this nation. But the technical problems to commercialization remain. The goal is to better direct federal research dollars to overcome these hurdles more quickly. The costs could be high, but the rewards for success will be huge for the nation," said Murkowski.

http://murkowski.senate.gov/pressapp/record.cfm?id=236035