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Energy special: Get ready for the ‘fire ice’ revolution

The next great fossil fuel rush could make life very difficult for oil sheikhs – and for greens

15 June 2013

9:00 AM

15 June 2013

9:00 AM

On Saturday, 8 June, the research vessel Kaiyo Maru No. 7 left the port of Joetsu, in western Japan, to begin a three-year survey of the Sea of Japan — the latest step in a little-known research programme that in a decade or less could profoundly change the international balance of power.

Kaiyo Maru, a 499-ton trawler, is hunting for beds of methane hydrate, a cold, white, sherbet-like substance found off coastlines in Japan and much of the rest of the world. The United States Geological Survey estimates that as much as 2.8 trillion cubic metres of this mixture of frozen water and natural gas may exist. Although only part of this vast deposit is accessible, methane hydrate — ‘ice that burns’ — may be the Earth’s single biggest fossil-fuel source. (Natural gas consists primarily of the colourless, odourless gas methane — the two terms are almost interchangeable.)

Canada, China, Germany, India, Korea, New Zealand, Norway, Taiwan and the United States have also been investigating this combustible slush. But Japan’s $700 million programme, which began in 1996, is the most advanced and extensive. In March, Tokyo completed its first production test, in another deposit 80 kilometres off the coast of eastern Japan. Jubilant, the Ministry of Economy, Trade and Industry announced plans to commercialise ‘ice that burns’ by fiscal 2018.


The announcement roiled the energy industry, which was already shaken by the discovery of huge amounts of ‘unconventional’ petroleum — oil and gas from non-traditional sources, such as shale oil, tar sands and, especially, ‘fracked’ natural gas — in North America. US petroleum output has risen so much that the International Energy Agency predicted in November that the nation could surpass Saudi Arabia as the world’s top oil producer by 2017. No longer will Washington pay billions of dollars every year to Opec’s petrostates, energy analyst Philip Verleger argued in January. And that, in turn, will lead to an American ‘economic renaissance’.

Even as North America profits from the fracking-led oil and gas boom, Europe and Asia are being bypassed. Europe is thought to have big unconventional reservoirs in France, Germany and the Balkans (Britain has shale-gas deposits in Lancashire). The incentive to explore them is strong; EU nations pay twice as much as the US for natural gas, much of it from Russia, which has regularly used it as a political weapon, threatening to withhold supplies. Nonetheless, Europe has been slow to develop unconventional oil and gas, largely because of political resistance. Although Britain dropped its ban on fracking in December, it continues to be blocked in France, the Netherlands, much of Germany, the Czech Republic, Bulgaria and, effectively, Austria (environmental regulations there make fracking impractical).

Opposition is less intense in Asia, but geologists there see fewer accessible deposits; Japan, which produces less than 1 per cent of the oil and gas it consumes, has almost none. China has shale petroleum, but according to the IEA will still import more than 80 per cent of its oil by 2030 — a huge and continuing economic burden. India may import more still. For all these nations, methane hydrate represents a potential escape from Opec’s stranglehold.

At the same time, a methane hydrate rush would be a game-changer for oil producers, notes UCLA political scientist Michael Ross, author of The Oil Curse. Most oil nations are autocracies with economies that depend almost wholly on petroleum. Vladimir Putin, the late Hugo Chavez, the Saudi royal family, the mullahs of Iran — all have floated their rule on petroleum revenues. If Japan, China, Europe and the Americas stopped importing their oil, Ross says, leaders like these ‘would have few alternatives’. Unrest would rise. Meanwhile, energy-independent America will be less willing to intervene to stop disorder in oil states.

More important still, the supply of methane hydrate is so large that it could impede efforts to fight potentially disastrous climate change. Because natural gas produces roughly half the carbon dioxide of coal, many environmentalists have embraced it as a ‘transition fuel’ — a ‘bridge to a low-carbon future’, in the phrase of US energy secretary Ernest Moniz — which can be used until the price of solar and wind power falls to competitive levels. But if a vast flood of natural gas emerges from coastlines around the world, the switch to renewables becomes more difficult, and the prospect of mitigating climate change dimmer.

None of this may occur. Methane hydrate is still an expensive pilot project. Years of engineering are still needed to see if the price can be brought down. Still, ‘shale gas was considered technologically difficult to extract but is now produced on a large scale,’ argued Japan trade minister Toshimitsu Motegi in March. ‘By tackling these challenges one by one, we could soon start tapping the resources that surround Japan.’ The results, methane-hydrate project director Koji Yamamoto says, could be ‘interesting’ — and not just for Japan.

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