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CARIBBEAN Petroleum Update A Publication of the Caribbean Energy Information System (CEIS)
June 2015 ISSUE
METHANE HYDRATES
A POSSIBLE SOURCE OF FUEL FROM ICE Nordic Calista Drilling Rig #3 on site at Ignik Sukumi, Prudhoe Bay, Alaska. Source: www.netl.doe.gov
Hydrocarbons have been the world’s major commercial energy source for many decades and the consensus view is that it will maintain this leading role well into the 21st century. This apparent addiction to hydrocarbons is due to the fact that this unique commodity has a combination of attributes which far exceeds that of any other energy source. It is sufficient, accessible, versatile, and easy to transport and, in many areas, low costs. Hydrocarbons have over the years fuelled global industrial development, however, whilst in abundance, there are alternative sources of energy that many countries around the world is tapping into, even in the most unusual form. In this issue of the Petroleum Update, methane hydrates will be explored and the possibilities of this unique commodity as an energy source.
Methane hydrates are getting increased attention as a major new source of clean hydrocarbon energy. It is widely posited that there is more energy in methane hydrates than in all the world’s oil, coal and gas put together. Methane hydrate, or fire ice, is a highly energy-intensive fuel source; one cubic metre of the compound releases about 160 cubic metres of gas. Methane hydrates, despite having natural gas have never been developed commercially. However with increased research and development in the area, the expectations are promising.
Formation of Methane Hydrates Methane hydrates otherwise known as methane clathcontinued on page 2/
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Methane Hydrates: A Possible Source of Fuel from Ice continued from page 1/
rates are solid ice like compounds consisting of water and methane. The substance looks like ice and can be found deep on the ocean floor, locked under layers of sediments. Methane gas is primarily formed by microorganisms that live in the deep sediment layers and slowly convert organic substances to methane. These organic materials are the remains of organisms that lived in the ocean long ago, sank to the ocean floor, and were finally incorporated into the sediments.
metres and for another, the temperature and pressure conditions are favourable for methane to be converted to methane hydrates. By lowering the pressure or raising the temperature, the hydrate simply breaks down into water and a lot of methane
Methane hydrates are the world’s largest source of untapped fossil fuel as shown by the US Geological Survey shown on page 3. Japan being the largest importer of liquefied natural gas faces four times higher gas prices Methane hydrates are only stable under pressures in ex- than in the United States. The development of hydrates cess of 35 bar and at low temperatures. The sea floor is could potentially erase that price differential depending thus an ideal location for their formation: the bottom on where the final cost of methane hydrates is located. waters of the oceans and the deep seabed are almost uniformly cold, with temperatures from 0 to 4 degrees The International Energy Agency estimates that once Celsius. First, small methane gas bubbles are produced efficient practices and processes are developed, natural deep within the sediment. These then rise and are trans- gas produced from methane hydrates will cost between formed to methane hydrates in the cooler pore waters US$4.70 and US$8.60 per MMBTU. The cost of gas pronear the sea floor. So the methane is formed in the deep duced from methane hydrates is estimated to be US$30 warm sediment horizons and is converted and consoli- to US$50 per million British thermal units (MMBTUs), dated as methane hydrate in the cold upper sediment compared to the current Henry Hub price of approximately US$6 per MMBTU. layers. It is important to note that methane hydrates are only Extraction formed mainly at water depths between 350 and 5000 metres. This is due to the fact that enough organic mate- The production of methane hydrate is fundamentalrial is deposited in the sediments at depths below 350 ly different from the extraction of oil and natural gas.
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These conventional fuels flow naturally through the pores of the reservoirs to the well. Hydrates, on the other hand, are solid, and must first be dissociated before the methane gas can be extracted. Three different procedures are being considered for the recovery of methane.
the pressure in the well using pumps, the hydrate slowly dissociates and the methane is released. On another instance carbon dioxide is injected into the hydrate, however, the carbon dioxide molecule replaces the methane. In this case the hydrate does not dissociate.
As shown below methane hydrates can be dissociated by pumping in hot water. When hot water is pumped into the methane hydrate deposits through a well, this raises the temperature to the point that the hydrate breaks down and methane is released. Also, by reducing
Most natural gas is produced from conventional gas accumulations by drilling a well into the reservoir rock, and then extracting the gas up the tubing, sometimes with the aid of a pumping system. The extraction of methane from hydrate deposits in sandstone or sandy
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reservoirs is likely to be approached in a similar manner. As pressure in the well bore is reduced, free water in the formation moves toward the well, causing a region of reduced pressure to spread through the formation. Reduced pressure causes the hydrate to dissociate and release methane. Subsequent removal of water and gas causes a further reduction in pressure and further dissociation and methane production. Simulations conducted in both the United States and Japan have shown that substantial energy resources may be available from methane hydrate deposits using largely conventional drilling and production technologies.
Environmental Impact
fossil fuels, notably conventional oil and gas (and more recently shale oil and gas), have been easier and cheaper to access. Alaska has conducted research on the North Slope where they found an approximate one million cubic feet of methane hydrates. Research on how the reservoir may respond to extraction is ongoing. However, in March 2013, Japan became the first country to conduct a marine gas hydrate test and successfully flow gas from methane hydrate deposits under the Pacific Ocean. Japan, the country making the most aggressive push into methane-hydrate development, will concentrate its efforts on relatively flat stretches of the seafloor off its coast. In addition, Asia is leading the way towards utilization of methane hydrates as a possible energy source as India discovered huge offshore gas hydrate deposits - about 26 trillion cubic metres. Other countries such as the United States, Canada and China have been exploiting methane hydrate deposits as well. Other interests spans Africa and Latin America but efforts in these areas are less advanced. There has been some research in countries such as Brazil, Chile and Uruguay, but it is still at an early stage
Natural gas is being dubbed as a bridge fuel to replace oil and coal while governments globally are investing heavily in renewable energy such as wind and solar energy. If methane hydrates were to rapidly develop similar to the shale revolution in the United States this would ultimately prolong the world’s dependence on carbon-based fuels. This could possibly pose as a deal breaker. For countries such as China and India, cleaner burning gas may assist tremendously to displace coal Conclusion consumption in these countries; however, methane hydrates could have a significantly detrimental effect on Hydrocarbons have been used to fuel the world’s industhe climate if methane escapes into the atmosphere. trial development but as reserves of oil, coal and gas become tougher to access, governments are looking ever Methane hydrates releases natural gas which is consid- harder for alternatives, not just to produce energy, but ered to be a cleaner burning fuel compared with coal to help achieve energy independence. Some have disand oil. However, according to the U.S. Environmen- covered a potential saviour, locked away under deep tal Protection Agency, while methane remains in the ocean beds and vast swathes of permafrost that could atmosphere for a shorter time than carbon dioxide, potentially be the next energy global energy source. Re“pound for pound, the comparative impact of methane newable energies like solar and wind, whilst playing a on climate change far outweighs that of carbon dioxide. significant role in reducing hydrocarbon dependence, at this point in time are not capable of addressing the Additionally, methane hydrates play a role in stabiworld’s total energy demands. Methane hydrate may lizing the seafloor and marine life as a consequence. one day have a major role as a fuel for the future. Drilling to extract hydrates from the ocean floor could negatively impact marine life and not to mention continental slopes. Methane hydrates are fragile and as such any dissociation can result in leakage.
Research Projects 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
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Source: www.scidev.net
Source: www.reuters.com Flare from methane hydrate gas produced from drilling in the Nankai Trough 30 miles off the coast of Japan
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PETROLEUM NEWS & HAPPENINGS Process[...]...Read more Warned! – NEPA Serves Notice On Digicel After Oil Leak In Kingston Harbour [...]..Read more NEPA Working to Contain Oil Leak near Kingston Harbour [...]...Read more Barbados: New Petroleum Prices Effective June 7, 2015 [...]...Read more
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Combustion of produced methane, after separation and measurement, in flare stack. Ignik Sikumi #1 flarestack; Kuparuk Operations Center in Alaska. (Source:www.netl.doe.gov)
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Prices at the Pump JUNE 2015
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Retail prices for Regular Unleaded Gasoline in the fourteen Caribbean countries reviewed at the end of June 2015 showed overall increases in prices for four countries Barbados,Dominica, Grenada and St.Lucia. Dominica saw the highest price increase of 53.8%. Prices in Bahamas and Suriname decreased by 4.8% and 9.3% respectively while prices remained stable in the remaining eight countries.
Unleaded Gasoline: Regular : Average Retail Price January - June 2015 (US$/Litre) COUNTRIES
JAN
FEB
MAR
APR
MAY
JUN
6 Mths AVG
ANTIGUA/ BARBUDA
1.11
1.11
1.11
1.11
1.11
1.11
1.11
BAHAMAS [91 OCT]
1.15
1.36
1.38
1.39
1.23
1.17
1.28
BARBADOS
1.53
1.42
1.43
1.51
1.55
1.58
1.50
BELIZE [87 OCT]
1.12
1.06
1.15
1.15
1.16
1.16
1.13
DOMINICA
0.92
0.85
0.83
0.98
0.98
1.51
1.01
GRENADA (95 OCT)
0.97
0.90
0.95
1.03
1.10
1.14
1.02
GUYANA
1.06
0.83
0.93
0.97
0.93
0.93
0.94
JAMAICA 87 Octane[E10]
0.96
0.89
0.90
0.98
0.99
0.99
0.95
MONTSERRAT
1.04
1.04
0.95
0.95
0.95
0.95
0.98
ST. KITTS/ NEVIS
0.96
0.96
0.94
0.94
0.94
0.94
0.94
ST. LUCIA
1.21
1.04
0.98
1.03
1.05
1.07
1.06
ST. VINCENT/ GRENADINES
0.85
0.85
0.85
0.85
0.85
0.85
0.85
SURINAME [95 OCT]
0.91
1.10
1.11
1.11
1.23
1.11
1.10
TRINIDAD/ TOBAGO [92 OCT]
0.42
0.42
0.42
0.42
0.42
0.42
0.42
NOTE: *US Gallon = 3.785 L *Imperial Gallon = 4.546 L
US$/Litre
*As at November 1, 2009 MTBE was phased out from all gasoline blends in Jamaica and replaced with 10% Ethanol.
1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00
Comparative Retail Pump Prices Regular Unleaded Gasoline June vs. 6 Mths Avg (Jan-June 2015) JUN
14 Caribbean Countries
See prices for all products at www.cippet.org
6 Mths AVG
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International OIL PRICES
CALL: 1-876-927-1779 | CARIBBEAN PETROLEUM UPDATE : JUNE 2015
Average Weekly and Monthly Crude Oil Prices (April - June 2015)
70
60.01
60
60.07
50
US$/Bbl
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56.14
40 30 20 Apr-15
10 WK2
WK3
WK4
Jun-15 MTH AVG
Average Monthly World Crude Oil Prices (2012 - 2014) 110.0
US$/BBL
Analysis of International Crude Oil Prices for the April to June 2015 period showed an average price of US$59.91/bbl . This average price was 13.25% higher than the avearge price reported in April 2015 and 1.3% higher than the price in May 2015. The highest weekly price seen in June 2015 for the commodity was US$60.07/bbl-reflected in week two while week one accounted for the lowest price of US$59.66/bbl. An average of the three month’s average prices reflected US$57.33/BBL.
0 Period WK1
May-15
106.6
106.6
105.8
90.0
70.0
2012
2013
2014
50.0
Period
FEATURED OFFERS: P E TS TATS - t h e Ca r i b b e a n E n e rg y I n fo r m at i o n System (CEIS) primary report of historical annual petroleum energy statistics provided for 18 Caribbean Countries. Included are data on total energy production, consumption, and trade; overviews of petroleum, natural gas, electricity, as well as financial and environmental indicators for over twenty years.
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