Massive imports of oil and natural gas have exacerbated India’s big trade deficit, which is a hurdle to the acceleration of economic growth. Light at the end of the tunnel comes from a technological breakthrough last week by JOGMEC (Japan Oil Gas and Metals National Corporation). It succeeded in extracting natural gas from sea-bed deposits of methane hydrate, popularly called “fire ice” because it is a white crystalline solid that burns. India has some of the biggest methane hydrate reserves in the world. It will reap a bonanza if technological progress allows gas to be extracted from hydrates economically and safely.
JOGMEC says it is contemplating commercial gas production maybe as early as 2016. Meanwhile China and the US have major programmes for exploration and experimental extraction. India, alas, is nowhere in the picture.
Estimates of global reserves are sketchy, but range from 2,800 trillion to 8 billion trillion cu. metres of natural gas. This is several times higher than global reserves of 440 trillion cu. metres of conventional gas. However, only a small fraction of hydrate reserves will be exploitable.
Methane hydrate is a mixture of natural gas and water that becomes a solid in cold, high-pressure conditions in deep sea-beds (where the temperature falls to 2 degrees centigrade). It is also found in onshore deposits in the permafrost of northern Canada and Russia. Heating the deposits or lowering the pressure (the technique used by JOGMEC) will release gas from the solid. One litre of solid hydrate releases around 165 litres of gas.
India has long been known to have massive deposits of methane hydrate. These are tentatively estimated at 1,890 trillion cu.m. An Indo-US scientific joint venture in 2006 explored four areas: the Kerala-Konkan basin, the Krishna-Godavari basin, the Mahanadi basin and the seas off the Andaman Islands. The deposits in the Krishna Godavari basin turned out to be among the richest and biggest in the world. The Andamans yielded the thickest-ever deposits 600 metres below the seabed in volcanic ash sediments. Hydrates were also found in the Mahanadi basin.
Formidable economic and environmental challenges lie ahead. Nobody has yet found an economic way of extracting gas from hydrates. Industry guesstimates suggest the initial cost may be about $30/ mmBTU, double the spot rate in Asia and nine times higher than the US domestic price. JOGMEC is optimistic that the cost can be cut with new technology and scale economies.
The environmental challenges may be greater. Hydrates have to be heated or depressurised (or both) to extract gas, and in the process a lot of gas may leak into the atmosphere. That will have climate repercussions: natural gas traps 15-20 times more heat than carbon dioxide does. Fears of gas leakage have blocked the development of shale gas in many countries, and environmentalists will strongly resist gas extraction from hydrates too. Controlling leaks from shale gas is not difficult. It remains to be seen whether the same holds true of gas from hydrates.
Way back in 2006 Mukesh Ambani asked for a national policy on gas hydrates. No policy is in place yet. Much research is in progress in the US, Japan and China, but very little in India. The first National Gas Hydrate Programme marine expedition to explore deposits, with US collaboration, took place as long ago as 2006. A second expedition has long been talked about, but has yet to happen.
Hoping that India can simply buy hydrate extraction technology after it is developed in Japan and the US will not do. Some of the biggest Indian deposits, notably those in the K-G basin, have been found in fractured shales, whereas deposits in Japan and the USA are found mostly in sandstone. So, the exploratory techniques being developed in the US and Japan may not be usable in India without modification. We must develop our own technical capabilities.
The Directorate General of Hydrocarbons has long pleaded for the establishment of a National Gas Hydrate R&D Centre. This must not be a purely government outfit: private sector must be involved too. Simultaneously, joint ventures must be established with Japan and the US to further explore and establish hydrate deposits in Indian waters.
Today, even the few geological core samples of hydrates from drilling are being sent to foreign laboratories for examination and analysis. This is pathetic. India’s oil companies have been forced to dish out lakhs of crores by way of consumer subsidies, but have not been allowed to spare even a few crores for a national R&D centre. That represents a terrible distortion of priorities, and must change.