Exploration and Production of Oceanic Natural Gas Hydrate

Michael D. Max · Arthur H. Johnson

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Exploration and Production of Oceanic Natural Gas HydrateCritical Factors for Commercialization

Michael D. MaxHydrate Energy International LLC Kenner, LA USA

ISBN 978-3-319-43384-4 ISBN 978-3-319-43385-1 (eBook)DOI 10.1007/978-3-319-43385-1

Library of Congress Control Number: 2016945966

© Springer International Publishing Switzerland 2016This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed.The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use.The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made.

Arthur H. JohnsonHydrate Energy International LLC Kenner, LA USA

Disclaimer: The facts and opinions expressed in this work are those of the author(s) and not necessarily those of the publisher.

Cover illustration: Image supplied by Dr. T. Collett from the deck of a recent NGH drilling operation showing a deepwater Remotely Operated Vehicle (ROV) used to support operations. Image enhancement by Rachel Max.

Printed on acid-free paper

This Springer imprint is published by Springer Nature The registered company is Springer International Publishing AG Switzerland

This book is dedicated to our friend and colleague Dr. William P. Dillon, a pioneer in natural gas hydrate research and mentor to a generation of geologists, geophysicists, geo-chemists, and oceanographers. Bill’s studies at sea and in the laboratory provided a solid basis for understanding the distribution and controls of natural gas hydrate distribution in marine sediments. His interests spanned natural gas hydrate as an energy resource, its potential effect on seafloor safety and morphology, and its impact on climate. His efforts led to the creation of the first gas hydrate laboratory equipment in the US Geological Survey Woods Hole Laboratory in which the acoustic effects of natural gas hy-drate in sediments could be measured as an aid to detection and quantification. His great willingness to openly share ideas and data with others serves as a model for the practice of science. When I (MDM) phoned him out of the blue one day in 1988 and asked, “Bill, what’s gas hydrate?”, he said, “Michael, it is really interesting stuff. Come up here and we’ll show you.” A week after I (AHJ) had attended my first gas hydrate conference,

Bill tracked down my phone number and called me to give some advice on seismic processing and interpretation.

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Preface

Throughout human history, technology has changed reality. In the modern world, the industrial revolution ushered in the greatest changes to the existing realities and the current age of electronic automation is again changing reality for most people as economic, political, and social systems struggle to adapt. This book is about one facet of change: Energy, and development of technology to underpin the transition from the fossil fuel age to a renewable energy future.

“Exploration and Production of Oceanic Natural Gas Hydrate” is our fourth book on the topic of natural gas hydrate (NGH). The term NGH is synonymous with “methane hydrate,” “gas hydrate,” and “clathrate” when used to refer-ence the resource. The term NGH also includes compound hydrate which can be composed of two or more hydrocarbons, including natural gas liquids and other gases. Hydrocarbon gases produced from the hydrate resource are essentially the same as the natural gas used by consumers the world over. The NGH resource is a potentially very large gas resource that is approaching the tipping point of commercialization.

Our second book concerned the application of the NGH physical chemical sys-tem to the economic geology of NGH. The third mainly concerned the potential for NGH resources in the Arctic Ocean and included resource estimates and proce-dures along with an outline of the NGH petroleum system analysis.

This book is written as a resource for deepwater (includes ultra-deepwater) NGH exploration and production activities. It is intended for scientists, students, engineers, company administrators, regulators, and policy makers, but specifi-cally for those interested in developing new technology, responding to opportuni-ties arising from the special attributes of NGH. This book builds on our previous three NGH Books. The first (2000, 2003) summarized the understanding of NGH issues. The second (2006) concerned physical chemistry applied to the forma-tion of NGH concentrations and its economic geology. The third focused on NGH resource potential in the Arctic Ocean. Besides our books, there exists an expand-ing NGH literature on topics including climate, seafloor morphology and sedimen-tation, drilling and other seafloor interventions, safety, biosystem interaction, and

Prefaceviii

the primary driver of NGH research and development funding, which is energy. We assume that the reader has a background in NGH, marine technology, and a familiarity the energy industry, including conventional and unconventional fuel sources. The book is intended to inform current industrial and technology trends including the future possibilities for NGH. Summaries for other power sources are readily available and are widely understood by the environmental and industrial communities. We refer to non-renewable energy sources, particularly fossil fuels, when necessary in discussion.

Although this book has been written during the post-2014 oil and natural gas price crash, market rebalancing of supply and demand should once again raise interest in oil and gas exploration and production. From a supply-chain perspec-tive, this point in the hydrocarbon economic cycle is a period for innovation to bring through new approaches and technology for deepwater developments to improve efficiency and lower cost. Deepwater will be a cost-competitive source of world-class hydrocarbon reserves. With this in mind, we stress two strate-gic opportunities. First, natural gas is the best fuel to backstop the wide use of renewable energy and second, NGH has a relatively low environmental risk to the biosphere. We intend to show how existing technology can be leveraged and new technology developed so that cost of NGH development can be reduced so that it has a competitive advantage on a cost basis.

Of hydrocarbon fuels, natural gas provides the best option for a high-quality combustible energy resource for base load and peak power demands in an oth-erwise carbon-free energy supply scenario, while replacing coal- and oil-based power in the nearer term. Natural gas is an ideal base load and peak (spiker) on-demand energy source in an otherwise largely renewable energy future. Our focus is on natural gas, and particularly the potentially great oceanic NGH resource. We anticipate that natural gas will be the backbone on-demand fuel of the future and that as the most environmentally friendly of all natural gas resources, NGH has the potential to provide natural gas far into the future.

This book also considers implications of the development of the renewable energy paradigm wherein increasing amounts of renewable, non-combustible energy will eventually dominate energy production. Natural gas will almost cer-tainly emerge as the preferable fossil fuel backstop for renewable energy and the transition to it. The content of this book strongly supports the position of COP21 (Conference of Parties under the United Nations Framework Convention on Climate Change), in which natural gas is also considered to be the combustible backbone fuel of the future. Replacement of oil and especially coal by gas-fired power generation will have the effect of lowering CO2 emissions.

The physical attributes of the NGH are very different from conventional hydrocarbon resources in a number of important aspects. Springing from these differences, new approaches to exploration and production offer options for devel-opment and utilization of new technology and methods that have the potential to dramatically lower the cost of exploration and production. These opportunities could dramatically lower the cost of commercialization of the resource and make NGH competitive with other natural gas resources on a produced basis.

Preface ix

Many of the recent references that are relevant to potential commercialization of the NGH resource are not published in traditional books and journals because it is too new and the technology is only in development. We do reference indus-try standard publications, which are almost entirely Web site references that may have a limited longevity compared with hardcopy and formal electronic publi-cations. These include, but are not limited to: the Oil & Gas Journal (PennWell Corp.), Offshore Magazine (PennWell Corp.), PennEnergy Daily Petroleum Update (PennWell Corp), Petro Global News, DW Monday (Douglas Westwood), GEOExPro, OilOnline, OilVoice, Drilling Contractor, Fuel Fix and other blogs, Xinhua (China) daily news and also major energy-related news sources in other countries, Sea Technology (Compass Publications), Chemical & Engineering News, publications of the Marine Technology Society, EOS (American Geophysical Union) and the American Association of Petroleum Geologists. Further, many of our suggestions for development of technology and practices that we regard as having the potential to lower the cost of NGH exploration and pro-duction are new, although they may be consistent with some elements of current technology development. We have made and retain PDFs of all materials refer-enced from the Web.

Disclaimer: Throughout this book we have referenced specific companies, pro-cesses, equipment, and developments, among other things to provide examples to assist readers without familiarity of all the subjects and as a way to help them fur-ther research topics. Neither the authors, the publisher, nor anyone associated with this book infer any particular support or promotion of any commercial or other entity over any other that may have similar products or services of any type.

Book Chapters and Organization: The book is divided into 11 chapters with topical sections. The organization and discussion of topics stress the place of natu-ral gas in a long-term energy future, as well as the attributes of the NGH system that pertain to the exploration and production. Chapters are broadly referenced so that readers will have a head start to deeper research in each topic. Key references are often used in more than one chapter.

Chapter 1 Energy Overview: Prospects for Natural Gas Availability of energy to fuel motors, widespread electricity generation and distribution, and industrial-ize food and water production and distribution is the basis of modern civilization and the socialeconomic well-being of nations. Energy is the economy. Nations that have access to abundant energy have many options that energy-poor nations do not.

The change from vertically organized power companies having traditional fos-sil fuel electrical generation plant(s) serving relatively small areas to new horizon-tally organized electric power systems serving much larger areas is necessary to draw on renewable as well as fossil fuel energy. This allows companies to meet electric load demands over much larger regions while using as much renewable energy as is available at any time. The importance of natural gas as an on-demand backstop to renewable energy is correlated with the development of the low envi-ronmental risk NGH resource for the renewable energy paradigm.

Prefacex

Key Topics: Renewable Energy, Fossil Fuels, Gross Domestic Product, Human Development Index, Quality of Life, Energy Mix, Climate

Chapter 2 Economic Characteristics of Deepwater Natural Gas Hydrate Basic elements of the NGH system are outlines that we regard as the most impor-tant to use of existing and development of new technology that could have the potential to dramatically lower the cost of exploration and production. This chap-ter captures the basic elements of NGH that are important for exploration and production: How NGH sequesters gas from the natural gas flux, controls of crys-tallization and growth, and the NGH prospect zone. What, where, why, and when are considered, although “when” is more thoroughly discussed in Chap. 11.

Key Topics: Gas Hydrate Stability Zone, Biogenic, Thermogenic, Crystallization, Dissociation, Migration, Stability Zone, Sulfate/Methane Transition, Reservoirs, Resource Potential, Environmental Risk

Chapter 3 Exploration for Deepwater Natural Gas Hydrate This chapter focuses on NGH as part of a petroleum system that makes exploration amenable to a systematic approach and the impact of geophysical analytical techniques that have been ground-truthed by drilling. The chapter describes seismic and electri-cal approaches to prospect analysis. A general case for exploration for NGH con-centrations in the principal geological target for a marine turbidite sand reservoir host is discussed. Special attention is given to NGH potential in the Mediterranean and Black seas, in which little NGH exploration has been carried out. New origi-nal work by the authors is included. The NGH exploration programs of nations throughout the world are summarized.

Key Topics: Petroleum System, Stability Zone, Paragenesis, Migration, Reservoir, Exploration, Basin Modeling, Seismic, Bottom Simulating Reflector, Mediterranean, National Programs

Chapter 4 Potential High-Quality Reservoir Sediments in the Gas Hydrate Stability Zone This type of reservoir is not currently regarded as a NGH explo-ration target but under certain conditions, they could be. Because of the much higher quality of the reservoirs, we include it for completeness. Although the first-order exploration target for NGH are marine turbidite sands, on some continen-tal margins complex early tectonic, sedimentary depositional situations may have existed during transition to conditions of fully marine sedimentation. In particular, rift clastics associated with the separation of continental crust masses, and shal-low marine sediments, would normally underlie the marine sequences that devel-oped as rifting transitioned into passive continental margins of new ocean basins. In addition, the formation of paralic sediments in that may now be in the upper marine succession associated with oceanic flooding. The Black and Mediterranean seas and the northern Gulf of Mexico are discussed in some detail because their younger history of these basins could have yielded high-quality reservoirs of the type that are generally much more deeply buried by sediment in open ocean conti-nental margins. Other rifted margins of interest are more lightly discussed.

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Key Topics: Exploration, Reservoir, Rift-Related Sediments, Paralic Depositional Environments, Eolian Systems, Sequence Stratigraphy, Mediterranean Sea, Black Sea

Chapter 5 Valuation of NGH Deposits NGH is an economic mineral deposit similar in many ways to low-temperature strata-bound mineral deposits. Mineralization by NGH fills porosity in a host bed while displacing pore water, rather than filling all available space in a reservoir volume as is the case for gas or liquid conventional hydrocarbons. Filling over 80 % of host sediment poros-ity may occur in high-grade deposits. The valuation of a NGH concentration will more closely resemble the volume or cell approach to metallic mineral deposits. This discussion suggests other methods than classical drilling that takes forward the current ability to predict closely NGH in a reservoir host and its concentration using a geotechnical approach to seismic interpretation alone.

Key Topics: Gas-in-Place, Petrogenesis, Permeability, Mineralization Grade, Cell Valuation, Seismic Response, Creaming Curve

Chapter 6 Deepwater Natural Gas Hydrate Innovation Opportunities In this chapter, we elaborate on physical/chemical and petroleum system aspects of NGH and highlight those specific elements of the NGH system that offer potential for new technology development. The natural characteristics of NGH and its reservoir system, physical environment, and relatively low pressures and temperatures allow for new approaches to many aspects of exploration and production.

Key Topics: Depressurization, Exploration, Drilling, CAPEX, Geotechnical Attributes, Reservoir Stability, Production, Stability Zone, Environmental Security, Seafloor Operations, Lightweight Paradigm

Chapter 7 Leveraging Technology for NGH Development and Production Deepwater technology development has reached the point where a very large part of the technology necessary to open the NGH resource exists. The technology that deals with production (including processing, power, and automated control sys-tems and remote control of seawater industrial sites) may be used mainly as they are. Other technology can be optimized with minor redesign for NGH conditions. Industry is already installing special hardware for exploration and processing to the seafloor; the surface handling capabilities for establishing and maintaining sea-floor work sites appear to largely exist. Seafloor processing will largely follow cur-rent trends in conventional production and processing.

Key Topics: Robotics, Seafloor Installations, Lightweight Paradigm, Technology Innovation, ROV, AUV, Power Systems, Data Acquisition, Data Management, Drilling, Coiled Tubing, Processing, Sand Control, Flow Assurance

Chapter 8 New Technology for NGH Development and Production The spe-cific properties of NGH and its host sediments provide a broad range of oppor-tunities for introducing new approaches for resource development. In addition to robotization, we outline new drilling and wellbore lining processes that are derived from a combination of drilling and tunneling practices.

Prefacexii

Key Topics: Technology Innovation, Exploration, Production, Drilling, Coiled Tubing, Casing, Active Bottom Hole Assemblies, Active Tethered Drilling, Active Wellbore Lining, Sand Control, Gas/Water Separation, Active Reservoir Control, Technology Readiness Level

Chapter 9 Offshore Operations and Logistics The main issues concern how to deal with stranded gas and long-term operation of seafloor sites. Transfer of gas from wellhead/processing systems to transport and the trade-offs of pipelines and ships carrying the gas in different compressed formats may follow current prac-tices and developments because once the gas has been produced to the seafloor, it is no different in general from conventional natural gas. Remote and difficult operational areas such as the Arctic are discussed.

Key Topics: Exploration, Production, CAPEX, O&M Costs, Access, Search and Rescue, Spill Response

Chapter 10 Energy Resource Risk Factors Risk in general is discussed first fol-lowed by discussion of risk factors of the different natural gas resources, other fos-sil fuels, and unconventional energy resources. Discussion of specific risk factors deals with overdependence on a single fuel, environment risk, geohazards, and the risks of other energy sources, followed by business issues including regulations, leasing, price, and business cycles. Finally, exploration, new technology, and cost-benefit analysis are discussed in a renewable energy context. The existing transi-tion to natural gas from other fossil fuels will be accelerated by both cost factors and regulations that will, in part, relate to climate change mitigation.

Key Topics: Environmental Risk, Reservoir Performance, Access, Exploration, Appraisal, Development, Production, Abandonment, Fracking, Climate, Dependability, Energy Prices, Technology Risk

Chapter 11 Commercial Potential of Natural Gas Hydrate Commerciality of a product such as natural gas is decided by a number of factors. These include exploration and production costs, transport to market entry point, regulations that may introduce additional costs (or prove prohibited for other reasons), subsidies for existing competition, and other factors. Climate issues are taken into account, but mainly from exploration and production viewpoints.

Key Topics: Economics, Valuation, EROI, World Gas Market, LNG, CNG, Dissociation, Production Rate, Production Profile, Pressure Management, Infrastructure, Stranded Gas

Notes to Chapters

1. The first use of natural gas hydrate introduces the term NGH, which is used throughout the remainder of each chapter. Where the phrase occurs in the abstract as well as the text, the term is also defined.

2. Dates are in American notation (MM/DD/YR).

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State of the Industry and Timing of this Book: Although this book has been written while the hydrocarbon energy industry was undergoing substantial down-sizing bordering on collapse of the higher cost segments of exploration and pro-duction, publication of this book in late 2016 should see a slowing if not a bottom to the deterioration of the business environment, if not the development of some positive inflections for the industry as a whole. A considerable part of the industry will have downsized and operational and business innovation should be recognized as key to the energy future. We feel that the suggestions that we make for lowering the cost of NGH exploration and production may be more relevant than if publica-tion took place in an environment dominated by traditional conventional hydrocar-bon energy.

Fields of Innovation: The bulk of the new technology suggestions in this book follows a program of innovation undertaken by HEI that culminated in the filing of a number of patents, which may be summarized in this book but are not discussed in detail and are not referenced in text or in the reference lists.

Kenner, USA Michael D. MaxArthur H. Johnson

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Contents

1 Energy Overview: Prospects for Natural Gas . . . . . . . . . . . . . . . . . . . 11.1 Energy, GDP, and Society . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 The Energy Mix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.3 Matching Power Supply to Demand . . . . . . . . . . . . . . . . . . . . . . . 161.4 Energy Policy in a CO2 Sensitive Power Future . . . . . . . . . . . . . . 251.5 Strategic Importance of Natural Gas in the New Energy

Paradigm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271.6 Natural Gas Backstop to Renewable Energy . . . . . . . . . . . . . . . . . 32References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

2 Economic Characteristics of Deepwater Natural Gas Hydrate . . . . . 392.1 Natural Gas Hydrate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

2.1.1 NGH as a Natural Gas Storage Media . . . . . . . . . . . . . . 402.1.2 Solution Concentration Controls Growth . . . . . . . . . . . . 432.1.3 NGH Stability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 462.1.4 The Gas Hydrate Stability Zone . . . . . . . . . . . . . . . . . . . 492.1.5 The Seafloor May Not Be the Top of the GHSZ . . . . . . 52

2.2 NGH Stability Within the GHSZ: Implications for Gas Production Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

2.3 Geology Controls NGH Paragenesis . . . . . . . . . . . . . . . . . . . . . . . 542.4 Production-Oriented Classification of Oceanic NGH . . . . . . . . . . 582.5 NGH May Be the Largest Natural Gas Resource on Earth . . . . . . 612.6 NGH in the Spectrum of Conventional and Unconventional

Oil and Gas Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 662.7 Low Environmental Risk Character of the NGH Resource . . . . . . 68References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

3 Exploration for Deepwater Natural Gas Hydrate . . . . . . . . . . . . . . . . 753.1 NGH Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75

3.1.1 Deepwater and Ultra-Deepwater . . . . . . . . . . . . . . . . . . 763.1.2 Basin Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 803.1.3 NGH Prospect Zone . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

Contentsxvi

3.2 NGH Petroleum System Analysis . . . . . . . . . . . . . . . . . . . . . . . . . 833.2.1 NGH and Conventional Hydrocarbon

System Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863.3 Marine Sediment Host for NGH Deposits . . . . . . . . . . . . . . . . . . . 873.4 NGH Exploration Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

3.4.1 Seismic Survey and Analysis . . . . . . . . . . . . . . . . . . . . . 883.4.2 Ocean Bottom Seismometers . . . . . . . . . . . . . . . . . . . . . 943.4.3 Electromagnetic (EM) Survey . . . . . . . . . . . . . . . . . . . . 953.4.4 NGH Ground-Truthing: Drilling . . . . . . . . . . . . . . . . . . 963.4.5 State of NGH Exploration . . . . . . . . . . . . . . . . . . . . . . . 98

3.5 NGH Exploration Potential: Glacial Period Sea Level Low Stands in the Mediterranean and Black Seas . . . . . . . . . . . . . 993.5.1 The Mediterranean Sea . . . . . . . . . . . . . . . . . . . . . . . . . 993.5.2 Lowstand in the Black Sea: Sand Transfer

to the Slopes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1063.5.3 GHSZ and NGH Prospectability

in the Mediterranean and Black Seas . . . . . . . . . . . . . . . 1093.6 National NGH Programs and Company Interest . . . . . . . . . . . . . . 111

3.6.1 Exploration Activity in Regions and Countries . . . . . . . 1123.7 Frontier Regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

4 Potential High-Quality Reservoir Sediments in the Gas Hydrate Stability Zone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1374.1 High-Quality Sand Reservoirs on Continental Margins . . . . . . . . 1374.2 Subsided Rift-Related Sediments . . . . . . . . . . . . . . . . . . . . . . . . . . 1394.3 Paralic Reservoirs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1414.4 Aeolian—Sabkha Reservoirs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1434.5 Sequence Stratigraphy-Related Marine Sequences . . . . . . . . . . . . 1454.6 High-Quality Reservoir Potential in the Mediterranean

and Black Seas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1454.7 Exploration for High-Quality Reservoirs . . . . . . . . . . . . . . . . . . . . 150References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152

5 Valuation of NGH Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1575.1 Petrogenesis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

5.1.1 Mineralization Grade . . . . . . . . . . . . . . . . . . . . . . . . . . . 1595.2 Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

5.2.1 Regional Estimates: Shelf or Basin Analysis . . . . . . . . . 1605.2.2 Reservoir Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1615.2.3 3D Body Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1625.2.4 Cell Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1635.2.5 Water in the NGH Reservoir . . . . . . . . . . . . . . . . . . . . . 165

5.3 Geophysical Characterization of NGH Deposit Settings . . . . . . . . 1665.4 The Creaming Curve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170

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6 Deepwater Natural Gas Hydrate Innovation Opportunities . . . . . . . 1736.1 NGH Technology Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . 1736.2 Exploration Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1756.3 Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

6.3.1 Material Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . 1766.3.2 Geotechnical Attributes and Reservoir Stability . . . . . . 1776.3.3 Wellbore Stability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1786.3.4 Drilling Depths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179

6.4 Production Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1806.4.1 Temperature and Pressure: Production Hazard

Potential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1826.4.2 Production Containment: Leak-Proof

Production from NGH . . . . . . . . . . . . . . . . . . . . . . . . . . 1836.5 Operations on the Seafloor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1846.6 Environmental Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1866.7 Lightweight Exploration and Production . . . . . . . . . . . . . . . . . . . . 1886.8 Summary of NGH Opportunity Issues and Conclusions . . . . . . . . 192References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

7 Leveraging Technology for NGH Development and Production . . . . 1957.1 The Curve of Technology and Innovation . . . . . . . . . . . . . . . . . . . 1967.2 Moving to the Seafloor: Subsea Industrial Sites . . . . . . . . . . . . . . 2007.3 Background Technology Trends. . . . . . . . . . . . . . . . . . . . . . . . . . . 204

7.3.1 Convergence of AUVs, ROVs and Robotization of Seafloor Industrial Sites . . . . . . . . . . . . . . . . . . . . . . . 205

7.3.2 Preparation of Seafloor Industrial Sites . . . . . . . . . . . . . 2097.3.3 Power Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2097.3.4 Data Acquisition and Management . . . . . . . . . . . . . . . . 2107.3.5 Long Range Communications . . . . . . . . . . . . . . . . . . . . 2117.3.6 Conventional Drilling: Ships

and Semisubmersibles . . . . . . . . . . . . . . . . . . . . . . . . . . 2137.4 Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214

7.4.1 Riserless Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2167.4.2 Steerable Drilling Systems . . . . . . . . . . . . . . . . . . . . . . . 2177.4.3 Dual Gradient Drilling/Managed Pressure Drilling . . . . 2177.4.4 Seafloor Hydraulic Units . . . . . . . . . . . . . . . . . . . . . . . . 2187.4.5 Advanced Drilling Tools . . . . . . . . . . . . . . . . . . . . . . . . 2197.4.6 Narrow Bore and Rigless Drilling . . . . . . . . . . . . . . . . . 2207.4.7 Inclined and Horizontal Well Bores . . . . . . . . . . . . . . . . 2217.4.8 Coiled Tubing Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . 2227.4.9 Multi-pad and ‘Octopus’ Drilling . . . . . . . . . . . . . . . . . . 224

7.5 Production Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2257.5.1 Gas Scrubbing, Separation,

and Compression/Artificial Lift . . . . . . . . . . . . . . . . . . . 2257.5.2 Sand Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227

Contentsxviii

7.5.3 Flow Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2287.5.4 Floating Gas Compression and Transport

for Stranded Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2307.5.5 Water Injection/Extraction Pumps . . . . . . . . . . . . . . . . . 233

7.6 Modularization of Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2337.7 Leveraging of Conventional Technology . . . . . . . . . . . . . . . . . . . . 234References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234

8 New Technology for NGH Development and Production . . . . . . . . . . 2438.1 New Technology for NGH Development and Production . . . . . . . 2438.2 Exploration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2468.3 Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247

8.3.1 NGH Drilling Issues and Objectives . . . . . . . . . . . . . . . 2498.3.2 Active Tethered Drilling . . . . . . . . . . . . . . . . . . . . . . . . . 2568.3.3 Active Bottom Hole Assemblies . . . . . . . . . . . . . . . . . . 2588.3.4 NGH Well Conventional Casing Options . . . . . . . . . . . . 2658.3.5 Active Wellbore Lining . . . . . . . . . . . . . . . . . . . . . . . . . 2678.3.6 Wellbore Geometry . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272

8.4 Production Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2728.4.1 Sand and Sediment Fines Production . . . . . . . . . . . . . . . 2738.4.2 Produced Water . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2748.4.3 Gas/Water Separation . . . . . . . . . . . . . . . . . . . . . . . . . . . 2758.4.4 Flow Assurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2768.4.5 Production Risers/Pipelines . . . . . . . . . . . . . . . . . . . . . . 2768.4.6 Communications, Monitoring, and Active

Reservoir Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2778.5 Well Abandonment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2798.6 NGH as a Geotechnical Material . . . . . . . . . . . . . . . . . . . . . . . . . . 2808.7 Role of Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2808.8 Technology Readiness Levels (TRL) . . . . . . . . . . . . . . . . . . . . . . . 2818.9 Optimizing Leveraged and Innovative Technology

for NGH Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283

9 Offshore Operations and Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2879.1 NGH Exploration and Production Operations . . . . . . . . . . . . . . . . 2879.2 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2889.3 Open Oceanic Regions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2909.4 Arctic Ocean. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291

9.4.1 Arctic Spill Response . . . . . . . . . . . . . . . . . . . . . . . . . . . 2959.5 Other Frontier Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297

10 Energy Resource Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30110.1 Factoring Risk into Development of Energy Resources . . . . . . . . 30110.2 Risk Factors of Major Natural Gas Resource Types . . . . . . . . . . . 304

Contents xix

10.2.1 Gas Purity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30610.2.2 Sediment Host . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30710.2.3 Flows Under Own Pressure . . . . . . . . . . . . . . . . . . . . . . 30810.2.4 Recovery Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . . 30910.2.5 Injection of Materials and Water Required . . . . . . . . . . 30910.2.6 Temperature and Pressure . . . . . . . . . . . . . . . . . . . . . . . 30910.2.7 Impact on Water Resources . . . . . . . . . . . . . . . . . . . . . . 31010.2.8 Water and Air Quality Risk . . . . . . . . . . . . . . . . . . . . . . 31210.2.9 Blowout Risk and Atmospheric Greenhouse

Feedback Potential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31510.2.10 Reservoir and Production Performance . . . . . . . . . . . . . 318

10.3 Risk of Overdependence on Natural Gas . . . . . . . . . . . . . . . . . . . . 31910.4 Environmental Risk to Energy Projects and Production . . . . . . . . 32510.5 NGH Environmental Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 326

10.5.1 Tracking of Ocean Environmental Impact . . . . . . . . . . . 32810.6 Geohazards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32910.7 Risks of Non-NGH Energy Sources . . . . . . . . . . . . . . . . . . . . . . . 33110.8 Regulations, Leasing, Tax, Matters, and Law . . . . . . . . . . . . . . . . 33410.9 Energy Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33910.10 Business Cycles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34010.11 Exploration Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34110.12 New Technology Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34210.13 Risk-Cost-Benefit Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 345

11 Commercial Potential of Natural Gas Hydrate . . . . . . . . . . . . . . . . . . 35511.1 State of the Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35511.2 Conventional and Shale Gas and Oil Dominate Markets . . . . . . . . 35711.3 Underlying Economics of the Natural Gas Commodity . . . . . . . . 35911.4 Supply, Demand, and Natural Gas Resources and Markets . . . . . . 36211.5 The Emerging World Gas Market . . . . . . . . . . . . . . . . . . . . . . . . . 36411.6 A World Price for Natural Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36711.7 NGH Production Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 369

11.7.1 NGH Conversion Techniques . . . . . . . . . . . . . . . . . . . . . 36911.7.2 Production Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37111.7.3 Permeability in a NGH Concentration

and its Significance for NGH Conversion and Gas Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . 372

11.7.4 Production Rate Profiles . . . . . . . . . . . . . . . . . . . . . . . . . 37511.7.5 Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38411.7.6 Solution for Stranded Gas . . . . . . . . . . . . . . . . . . . . . . . 385

11.8 How Soon NGH? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 389

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395

xxi

Abbreviations and Terms

Abbreviations (& Principle Chapter) Also see Lloyd’s Register, 2014:

ABHA Autonomous and semi-autonomous bottom hole assemblyAUV Autonomous underwater vehicleBbl Barrel, defined as 42 gallons (US)Bcm Billion cubic metersBHA Bottom hole assemblyBOE Barrel of oil equivalentBOP Blowout PreventerCAPEX Capital ExpenditureCNG Compressed natural gasDG Distributed power generationE&P Exploration and productionEIU Environmental impact unitENGO Environmental non-governmental organizationEOR Enhanced oil recoveryERD Extended reach drillingEROI Energy return on investmentFGZ Free gas zoneFLNG Floating liquefied natural gas installationFPSO Floating production, storage, and offloading facilityGHSZ Gas hydrate stability zoneHHV Higher heating valueJOGMEC Japan Oil, Gas and Metals National CorporationLNG Liquefied natural gasLOE Lease operating expensesLWD Logging wellbore while drillingmbpsl Meters below present sea levelMcf Thousand cubic feetMEMS Micro-electro-mechanical systemsMM Million metric tons

Abbreviations and Termsxxii

MMcf Million cubic feetMPD Managed pressure drillingMWD Measurement while drillingng Nano-gramsNGH Natural gas hydrateNGO Non-governmental organizationNPP Net primary productionO&G Oil and gasOPEX Operational expenses, including management & operationsPDM Positive displacement motor ESDPpm Parts per millionRMR Riserless mud removalROP Rate of penetrationROV Remotely operated vehicleRUV Robotic underwater vehiclesSCS South China SeaSm3 Standard cubic meterSMI Sulfate–methane InterfaceSPG Subsea power gridTcf Trillion cubic feet (of natural gas)Tcm Trillion cubic meters (of natural gas)TENORM Allowable concentrations of technologically enhanced radioactive

materialTLP Tension leg platformTRL Technology readiness levelTTRD Through tubing rotary drilling

Terms

Petroleum: While a strict definition of petroleum is “rock oil” and is often used synonymously for “oil,” it is also often used as a catch-all term for oil, gas, and condensate. We use “Petroleum System” to describe the overall process of oil and gas generation, migration, and trapping.

Oceanic, marine, sea, and offshore: The most common O&G industry term for operations is “offshore.”

The O&G industry tends to consider oil and gas deposits as “accumulations” rather than “concentrations,” although we may use concentrations to distinguish accumulations of a high enough grade to constitute a potential recoverable energy resource.

A lot of industry terminology depends on context. For example, to drilling engineers, a “floater” is a drillship or semi-submersible. To the production work-ers, a floater could be a floating production system. Newsletters are often aimed

Abbreviations and Terms xxiii

at a specific segment of the industry. A typical geologist, for instance, if told that they were going to be sent out to a floater would want more detail.

Another abbreviation often seen in industry magazines is “MODU”—mobile offshore drilling unit. This can be anything from a jack-up to a drillship. Also, FPSOs used in support of a production platform may store, process, and offload oil to smaller tankers.

Liquid: 1 barrel = 42 US gallonsGas (1 MCF = 1000 cubic feet of gas; 1 MMCF—1 million cubic feet of gas1 metric ton liquefied natural gas (LNG) = 48,700 cubic feet of natural gas1 billion cubic meters NG = 35.3 billion cubic feet NG

xxv

About the Authors

Michael D. Max has a broad background including geology, geophysics, chemis-try, acoustics, and information technology. Max has a B.Sc. (History, Geology) from the University of Wisconsin, Madison, an M.Sc. (Petroleum & Economic Geology) from the University of Wyoming, and a Ph.D. (Geology) from Trinity College, Dub-lin, Ireland. He has worked as a geologist/geophysicist for the Geological Survey of Ireland, the Naval Research Laboratory, Washington, DC, in shallow water acoustic propagation prediction, and the NATO Undersea Research Center, La Spezia, Italy, in at-sea experiments and operational technology applications. From 1999 to 2011, Max was the CEO and Head of Research for Marine Desalination Systems LLC, which established a hydrate research laboratory and explored industrial applications of hydrate chemistry. He has been an author on many scientific publications and three textbooks and over 40 patents and patent applications. He assisted in the writ-ing of the US Gas Hydrate Research and Development Act of 2000. Michael was appointed by the Secretary of Energy to the Methane Hydrate Advisory Committee of the Department of Energy for 2014–2017 and is a co-chair, Diving Committee of the Marine Technology Society. He has been a principal of HEI since 2001 and is also an adjunct professor in the School of Geological Sciences of University College, Dublin, Ireland. Max is a member of the Geological Society of America, Geological Society of London, American Geophysical Union, American Chemical Society, Explorers Club, Coast Guard Auxiliary, Acoustical Society of America, and American Association for the Advancement of Science, among others.

Arthur H. Johnson is a founding partner of Hydrate Energy International, LLC (HEI) and is engaged in energy consulting in the USA and throughout the world. Prior to forming HEI in 2002, Art was a geologist with Chevron for 25 years where his career included most aspects of hydrocarbon exploration and development. Art was instrumental in initiating Chevron’s Gulf of Mexico program for gas hydrate studies in 1995. He has advised Congress and the White House on energy issues since 1997, and chaired advisory committees for several Secretaries on Energy. He has an ongoing role coordinating the research efforts of industry, universities, and government agencies. Art served as the Gas Hydrate Lead Analyst for the

About the Authorsxxvi

“Global Energy Assessment,” an international project undertaken by the Interna-tional Institute for Applied Systems Analysis (IIASA) of Vienna, Austria, and sup-ported by the World Bank, UN organizations, and national governments that evalu-ated the energy resource base of the entire planet with a view to addressing energy needs in the decades to come. He is the Chair of the Gas Hydrate Committee of the Energy Minerals Division of the American Association of Petroleum Geologists (AAPG) and has a continuing role as an AAPG Visiting Geoscientist. Art has pub-lished over 80 papers and articles, along with several books. These cover a diverse range of topics that include geology, geophysics, economics, and astrogeology.

Previous Books published by Springer:

Natural Gas Hydrate In Oceanic and Permafrost Environments (2000, second edition 2003)Economic Geology of Natural Gas Hydrate (2006)Natural Gas Hydrate—Arctic Ocean Deepwater Resource Potential (2013)