Abstract

The pursuit of unconventional gas resources, such as gas hydrate, can appear unnecessary in a world with vast reserves of conventional natural gas. The current global reserves of natural gas currently exceed 6,000 TCF, a 67 year supply at current rates of consumption. In addition, the rate of discovery for conventional gas reserves exceeds consumption in most years. The growing liquid natural gas infrastructure for liquefaction, transport, and regasification poses a challenge to the justification for developing unconventional resources.

The use of liquid natural imports is critical to the energy needs of the United States; however a reliance on liquid natural imports carries several significant risks. First, most conventional gas reserves available for export are in unstable parts of the world, including the Middle East, the former Soviet Union, Southeast Asia, and West Africa. The potential for future supply disruptions is very large. Second, it is unlikely that sufficient liquid natural import terminals will be constructed, and thus liquid natural imports are unlikely to be able to fill the gap between domestic production and demand. Third, there is a concern for potential supply disruptions due to accidents or terrorist attacks.

While these factors point to an increasing role for gas hydrate and other unconventional gas resources, their development will only proceed if critical business issues are addressed. For gas hydrate development these critical issues include prospect identification, recovery per well, production rates, operating expense, production technology and environmental impact.