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Jazzed by methane hydrates potential, state agrees to cooperate with feds

Jill Burke

From LNG 17, a huge, global conference on liquefied natural gas taking place in Houston, Texas, this week, Alaska Natural Resources Commissioner Dan Sullivan announced that the state and the federal government have pledged to work together in the effort to get more of Alaska's hydrocarbons into the energy stream.

To do so, the U.S. Department of Energy's Office of Fossil Energy and the State of Alaska signed a memorandum of understanding, which Sullivan and Christopher Smith, acting assistant U.S. Secretary of Energy, told reporters Tuesday formalizes the  governments’ relationships with each other.

The partnership will pursue technical issues that advance the energy interests of the nation and Alaska. Exploration, research and development of conventional and unconventional resources are all expected to be included.

“That cooperation is critical to move many projects forward,” Sullivan said.

Methane hydrates, shale oil and heavy oil 

Much of the work may focus on unconventional hydrocarbons such as heavy oil, viscous oil, shale oil, shale gas and, especially, methane hydrates.

The state will provide support to federal research projects by facilitating access to state lands, assisting with permitting and logistical issues, and providing expert review and interpretation of scientific data, according to a press release from the Department of Natural Resources.

Methane hydrates, which exist in the Arctic and the Gulf of Mexico, were touted by the Department of Energy in 2012 as “a vast, entirely untapped resource that holds enormous potential for U.S. economic and energy security.”

The hydrates consist of ice-lattice structures, which exist onshore and offshore, containing trapped molecules of methane. When the ice is melted or pressurized, water forms and the methane escapes.

Last year, a month-long test on Alaska's North Slope demonstrated it was possible to inject the hydrate with carbon dioxide, releasing the methane while selectively absorbing the CO2.

Parallel to shale gas 

Methane hydrates are to the oil-and-gas research industry what shale gas was in the 1970s and 1980s, according to the Department of Energy. Work on shale gas decades ago is paying off with an emerging LNG market today, and the department sees the same potential for methane hydrates to broaden the nation's energy markets in coming years.

President Barack Obama's newly released 2013 budget contains $17 million for oil and gas development, Smith said, some of which will be dedicated to methane hydrates. While none of the federal set-aside is specifically designated for an Alaska project, Smith said the next step for methane hydrate research in the Last Frontier would be to move into a longer production cycle, and choose a permanent gravel location from which to drill.

Meanwhile, Sullivan is among several Alaskans in Houston this week working to convince the world that Alaska is a hot ticket. The state has already come up as a topic in keynote speeches, and Sullivan is delivering his own talk on Wednesday.

LNG, oil, taxes and permitting reform are all topics of interest, he said, adding there is a definite vibe at the conference that “Alaska is back on the map.”

Alaska Sen. Cathy Giessel, members of Sullivan's department, and staff from the Alaska Gas Pipeline Project Office, Office of the Federal Coordinator for Alaska Natural Gas Transportation Projects, Regulatory Commission of Alaska, and the state's Joint Pipeline Office are all listed as attendees. So are representatives from BP Alaska, Exxon, Shell, Apache and Repsol, oil and gas companies with existing interests in the state. Other players include government and industry representatives from Russia, Australia, Mozambique and Japan.

Contact Jill Burke at jill(at)alaskadispatch.com