6
Summary of Findings and Recommendations

The Department of Energy (DOE) Methane Hydrate Research and Development (R&D) Act of 2000 enabled a renewed focus on methane hydrate research in the United States. The DOE Methane Hydrate R&D Program established as a result of the act has to date funded more than $30 million of methane hydrate research. A successful program in methane hydrate research requires clearly defined scientific program goals, has an effective data management and dissemination strategy, coordinates actively with other agencies and international programs, develops applications that are useful to ongoing and future projects, and recognizes the importance of community support and scientific oversight.

The program has, for the last four years, administered funds from a funding base of $9 million to $10 million each year. This has allowed the program to fund some projects over multiple years and to initiate studies based on results of previous and ongoing activities. Section 3 of the act will cease to be effective at the end of FY 2005, and therefore the recommendations in this report are expected to be considered for implementation in the reauthorization of the act.

This report provides guidance to the DOE on Methane Hydrate R&D Program emphasis to ensure that contributions are made toward understanding methane hydrate as a potential source of energy and a contributor to climate change. In addition, the report provides an assessment of how well the program is meeting the goals set out in the Methane Hydrate Research and Development Act of 2000 and makes



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Charting the Future of Methane Hydrate Research in the United States 6 Summary of Findings and Recommendations The Department of Energy (DOE) Methane Hydrate Research and Development (R&D) Act of 2000 enabled a renewed focus on methane hydrate research in the United States. The DOE Methane Hydrate R&D Program established as a result of the act has to date funded more than $30 million of methane hydrate research. A successful program in methane hydrate research requires clearly defined scientific program goals, has an effective data management and dissemination strategy, coordinates actively with other agencies and international programs, develops applications that are useful to ongoing and future projects, and recognizes the importance of community support and scientific oversight. The program has, for the last four years, administered funds from a funding base of $9 million to $10 million each year. This has allowed the program to fund some projects over multiple years and to initiate studies based on results of previous and ongoing activities. Section 3 of the act will cease to be effective at the end of FY 2005, and therefore the recommendations in this report are expected to be considered for implementation in the reauthorization of the act. This report provides guidance to the DOE on Methane Hydrate R&D Program emphasis to ensure that contributions are made toward understanding methane hydrate as a potential source of energy and a contributor to climate change. In addition, the report provides an assessment of how well the program is meeting the goals set out in the Methane Hydrate Research and Development Act of 2000 and makes

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Charting the Future of Methane Hydrate Research in the United States recommendations for scientific oversight and research priorities that would help the program meet those goals. MEETING THE GOALS OF THE METHANE HYDRATE RESEARCH AND DEVELOPMENT ACT OF 2000 Projects Funded by the Act In general, DOE implemented and followed the requirements of the act. The DOE was authorized to conduct studies in several areas as mandated by the act (Appendix B; P.L. 106-193, Section 3b) (see Box ES.1). With respect to the research areas described in the act, the DOE Methane Hydrate R&D Program funded research on identifying, exploring, assessing, and developing methane hydrate as a source of energy (A); assisting in developing technologies for efficient and environmentally sound development (B); developing technologies to reduce the risk of drilling (F); and conducting exploratory drilling (G). No projects have been funded in the area of transportation and storage. None of the projects emphasized education and training, and research only minimally addressed the area of environmental impacts of degassing (decomposition as the solid state hydrate transforms to the gaseous state), which include climate change. To meet the goals of the act in the future, the DOE Methane Hydrate R&D Program should strengthen its contribution to education and training through funding of postdoctoral fellowships and should increase efforts in basic research to address the relationship between gas hydrate and climate change. It is, however, appropriate that some research areas mentioned in the act (e.g., transportation) receive no support since they are peripheral to the primary objectives of the act. The DOE Methane Hydrate R&D Program began in FY 2000. The project selection process during the course of the first three years of the program has varied. At this time, there are six solicitation or project types currently being funded by the program: (1) targeted solicitations; (2) broad-based solicitations; (3) national laboratory projects; (4) interagency projects; (5) National Energy Technology Laboratory in-house projects; and (6) other nonfederal government procurements. Each

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Charting the Future of Methane Hydrate Research in the United States of these project types is used to address a particular need in the program. For example, targeted solicitations are issued exclusively for projects in a specific research area, while national laboratory projects are used to fill critical gaps or support for activities performed by others. In Chapter 3, several projects in four major categories—(1) international collaborative projects; (2) targeted research projects; (3) the U.S. Geological Survey (USGS) interagency projects, and (4) smaller-scale projects—are reviewed. The results of those reviews are summarized below. International Projects Relative to the United States, other countries (e.g., Japan) are spending significantly more money on hydrate research. Canada, Japan, and India are investing significant resources in hydrate research. For example, Japan is reportedly investing $65 million in this area in 2004, which includes drilling and coring several wells in the Nankai Trough off of Japan’s East Coast. By effectively leveraging funding, the DOE Methane Hydrate R&D Program made wise investments of relatively small resources in support of major international research efforts. As evidenced by the Mallik 2002 International Gas Hydrate Production Research Well Program and Ocean Drilling Program (ODP) Leg 204, science and engineering can be integrated through multidisciplinary research with valuable results. These types of programs are expensive to conduct, but the scientific and engineering knowledge obtained will allow methane production from gas hydrate to become a reality. The U.S. DOE Methane Hydrate R&D Program is currently not funded at a level to allow participation in large-scale international research efforts such as proposed for continuing studies at Mallik. Therefore, unless substantially greater resources are devoted to the DOE Methane Hydrate R&D Program, the United States may fall behind other nations in leading hydrate development technology. It is clear that projects such as the Mallik 2002 Production Research Well Program and the ODP Leg 204 represent achievements that will multiply the DOE investment leading to energy production from hydrate. Participation by U.S. scientists in these international programs has enhanced their success and benefited U.S. programs by providing increased intellectual support. It will be to the benefit of all nations,

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Charting the Future of Methane Hydrate Research in the United States including the United States, to foster further collaboration with groups conducting methane hydrate research. Where appropriate, the DOE Methane Hydrate R&D Program should be encouraged to lead such endeavors. Targeted Research Projects The targeted research projects funded within the authorization provided by the act, include three large industry-managed efforts: the BP Exploration (Alaska) (BPXA) project, the Maurer/Anadarko Hot Ice well, and the ChevronTexaco Gulf of Mexico Joint Industry Project (JIP). The overall aims of these projects were to (1) characterize, quantify, and determine the commercial viability of in situ recoverable gas hydrate (onshore BPXA); (2) apply technology to drill and produce methane (onshore Maurer/Anadarko), (3) develop technology to assist characterization of deepwater, naturally occurring hydrate in the Gulf of Mexico; (4) understand how natural gas hydrate affects seafloor stability; (5) gather data to aid the development of safe and efficient drilling and coring protocols in naturally occurring gas hydrate; and (6) determine how project results can be used to assess whether and by what means gas hydrate acts as a trapping mechanism for shallow oil or gas (Chevron-Texaco JIP). A review of the BPXA project revealed that it has a good management framework and technical oversight, giving it the potential to establish the United States as a leader in hydrate research. The study area was well chosen, and project objectives have been communicated clearly. A drawback to the project is that the data have not been made publicly available. Therefore greater effort to communicate the results of the project is recommended. For example, a project Web site would be a valuable asset to other researchers interested in the data generated by this research. The decision to proceed from Phase I to Phase II (the drilling phase) has not been made, and at this time is entirely up to BPXA. It is recommended that the project undergo external peer review to assess the decision to drill while taking into account the goals of the Methane Hydrate R&D Program. Future large-scale, industry-managed projects should include a pre-agreement that the drilling decision should be made by an external science-based review panel. Initial results of the Maurer/Anadarko project have been disseminated through a project Web site and through live Web casts from the

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Charting the Future of Methane Hydrate Research in the United States field. Although drilling has been completed, no hydrate has been encountered at the site. Few data are available to enable an external evaluation of the site selection process. USGS prepared a report for DOE on the potential gas hydrate accumulations along the western and southern margins of the Kuparauk River Unit, North Slope, Alaska. The report, provided as a memorandum to DOE (and made available to the Anadarko project team) in December 2001 (Collett, 2001), concluded that the likelihood of encountering gas hydrate at the proposed Anadarko Hot Ice Drill sites was very low; a point reiterated in subsequent USGS communications from September and October 2002. An external science-based review process would benefit the program and allow an evaluation of possible drill sites or the identification of potential problems. The ChevronTexaco Gulf of Mexico JIP is an example of a project that engages the academic, federal agency, and industrial communities in developing and implementing a project. This has been accomplished through planning workshops and workshops to discuss results. The process employed by ChevronTexaco, whereby several workshops were used to engage community input, was effective and valuable in development of the program. While the planning process for the ChevronTexaco Gulf of Mexico JIP has been unique within the program, it is too soon to determine whether the project will be successful. It is recommended, however, that workshop summary reports be prepared and made publicly available once the JIP participants reach decisions based on the workshop. Although the issues vary, the committee’s review of the industry-managed, targeted research projects raises concerns about each that could limit the ability of these projects to contribute to the goals of the program. To ensure the future success of large, industry-managed targeted research projects, the DOE Methane Hydrate R&D Program should implement the following: science-based proposal review; science-based assessments of project progress and milestones; expert consultation with a diverse project team; data to be made publicly available; and peer-reviewed publication of results.

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Charting the Future of Methane Hydrate Research in the United States USGS Projects The USGS has a long history of gas hydrate research (in both the laboratory and the field) and collaboration, which has provided basic and essential information on the chemistry and occurrence of gas hydrate. Of the federal agencies, the USGS has developed an extensive knowledge base on the geological occurrence of gas hydrate. This has made the USGS instrumental in several aspects of the DOE Methane Hydrate R&D Program. First, the USGS has been the primary agency providing evaluations of gas hydrate resources in the Arctic. USGS researchers have served on both Mallik projects and have given advice on geologic aspects of drilling for the BP Exploration (Alaska) and the Maurer/Anadarko projects in the Arctic. Second, the USGS has been a close collaborator with the ChevronTexaco JIP in the Gulf of Mexico. Finally, the USGS conducts laboratory experiments on natural and man-made gas hydrate. DOE has been funding these efforts for more than a decade. The USGS should continue to play a major role in gas hydrate research as a collaborator in the DOE Methane Hydrate R&D Program. Smaller-Scale Projects Smaller-scale projects funded by the DOE Methane Hydrate R&D Program are generally funded through either broad-based solicitations or national laboratory projects. In Chapter 3, these projects are grouped into three general categories for discussion: (1) University of Mississippi efforts to establish a seafloor observatory in the Gulf of Mexico, (2) other university-based studies, and (3) laboratory or modeling projects. Overall, the DOE Methane Hydrate R&D Program has, through its proposal process, funded a number of small-scale R&D projects. Some of these have had a major technological impact. Several factors enhance the productivity of these projects including research that builds on an existing knowledge base, having a history of working in the area, undertaking effective collaboration with other workers in the field, and striving for technology transfer between fields (e.g., EOSHYD2 modeling project). It is important, however, to note that the results of many of these projects have not been published, and therefore, they could not be thoroughly evaluated. A summary of DOE Methane Hydrate R&D Program-sponsored projects should be developed on

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Charting the Future of Methane Hydrate Research in the United States an annual basis and posted on the program Web site. In addition, a set of instructions and guidelines outlining the requirement for timely and full disclosure of project results should be provided to project applicants. As much as practical, these instructions should include the consequences of noncompliance. Program Breadth The DOE Methane Hydrate R&D Program has effectively advanced a number of research and development goals to determine the production potential of gas hydrate as a future energy resource and to assess potential geohazards associated with disturbance of gas hydrate deposits. Since initiation of the Methane Hydrate R&D Program in 2001, most (more than 60 percent) of the DOE funding has gone to targeted industry-managed projects. These projects have not indicated how methane would serve as an energy resource or as a geohazard for energy production or climate change. A minor portion (4 percent) of DOE funding was designated for participating in collaborative international projects, which resulted in advanced production testing of a gas hydrate reservoir (Mallik 2002) and characterized hydrate in a natural seafloor environment. Such projects should be encouraged in the future. FUTURE PROGRAM EMPHASIS, RESEARCH, AND RESOURCE DEVELOPMENT The overarching goal of the DOE Methane Hydrate R&D Program is to conduct focused and applied research to identify, assess, and develop methane hydrate as a source of energy. The Methane Hydrate Research and Development Act of 2000 specified broad research goals and areas of study (Box ES.1) but did not prioritize activities in a number of areas. The recommendations for future research emphasis are discussed in Chapter 4. In addition to the specific research areas discussed below, the DOE Methane Hydrate R&D Program should place major emphasis on educating a new generation of scientists and engineers. This can be accomplished through a program of graduate assistantships and fellowships. In addition a program of postdoctoral fellowships could be patterned after DOE’s successful Hollander Fellowship program, but

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Charting the Future of Methane Hydrate Research in the United States modified to include opportunities for research experience involving cooperation between academia, government, and industry. The overriding focus of the DOE Methane Hydrate R&D Program in the future should be on the potential importance of hydrate as a future energy resource for the nation and the world. To optimize the potential impact of the amount of hydrate research funding available (~$9 million per year), such a focused program should systematically address research in areas that are poorly or partly understood. These areas are listed below and discussed in detail in Chapter 4: Future field experiments, drilling, and production testing with consideration of testing offshore hydrate that might be of sufficiently large quantity for potential commercial extraction. Hydrate deposit identification and characterization. Reservoir modeling. Technology recovery methods and production. Understanding the natural system and climate change potential. Geological hazards. Transportation and storage. Collaboration between the DOE Methane Hydrate R&D Program and other agencies, to augment infrastructure, will facilitate the achievement of program goals. For example, collaboration with the National Science Foundation (NSF), especially with the Ocean Observatories Initiative (OOI) and the Ocean Research Interactive Observatory Network (ORION), would be useful to implement studies geared toward understanding the temporal evolution of gas hydrate systems using long-term observatories on and beneath the seafloor (NRC, 2003). (More information available at http://www.coreocean.org\orion.) The DOE Methane Hydrate R&D Program should sponsor a workshop focused on specific aspects of required research, for example, finding “sweet spots” or monitoring the evolution of gas hydrate deposits over time in the context of the OOI. Efforts to determine whether hydrate is economically producible are commendable; however, a more systematic science-based plan should be developed to ensure that the best sites are chosen and drilled so that these sites will have the best chance of producing natural gas from hydrate formations. To the extent that energy production from hydrate is likely to have a 30-year horizon, it is essential to ensure the next generation of

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Charting the Future of Methane Hydrate Research in the United States workers, by providing for their education in hydrate technology in the future. While the concept of energy extraction from hydrate has been validated, the proof of economical energy production from hydrate will require dedication and perseverance beyond the current generation. SCIENTIFIC OVERSIGHT OF THE DOE METHANE HYDRATE R&D PROGRAM A key component of meeting the goals and priorities of any science-based program is scientific oversight (Chapter 5). This oversight includes external reviews of projects and proposals to ensure that the goals of the program can be met. Roles of the Advisory Committees The DOE Methane Hydrate Research and Development Act of 2000 mandated the establishment of two committees to help oversee the scientific aspects of the program. The Methane Hydrate Advisory Committee (MHAC) with members from industry and academia was established to advise the Secretary of Energy on potential applications of methane hydrate, to help develop research priorities, and to produce a report on the global climate impacts of methane hydrate formation, degassing, and consumption. The DOE Methane Hydrate R&D Program could have made more effective use of the original members of the MHAC and given them more support to carry out their charge as mandated by the act. The program would benefit from the current MHAC’s scientific advice and perspective on the activities ultimately funded by the program. In the future, the members of the MHAC should take a significant role in providing guidance and recommendations on research priorities for the program. They should have a role in providing a scheduled, independent, in-depth procedure for scientific review of the progress of existing projects as well as the selection criteria for new projects and site selection within the program. However, a conflict-of-interest protocol should be drafted to require the members of the MHAC to recuse themselves from discussions and decisions directly related to their own research or institutions. Implementing these changes will help to ensure that the goals of the

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Charting the Future of Methane Hydrate Research in the United States Methane Hydrate R&D Program are being met with the best scientific input provided in a timely fashion. The Interagency Coordinating Committee (ICC) (also mandated by the act) consists of individuals designated by the heads of all agencies engaged in hydrate research. This committee was charged with reviewing the progress of the program and making recommendations for future research. While this charge overlaps significantly with the charge of the MHAC, the purpose of the ICC is to avoid duplication of effort and to collaborate on past, present, and future research being conducted by each agency. The ICC established the Technical Coordinating Team (TCT) to aid it in its charge. The TCT, acting as the operating arm of the ICC, has performed some of the tasks envisioned in the act for the ICC. The overall coordination by senior agency administrators has allowed clear gains to the program. However, neither the ICC nor the TCT has played a role in reviewing the progress of the Methane Hydrate R&D Program or provided advice on future directions. The advisory committees established by the Methane Hydrate R&D Act (the MHAC and ICC) have not had a major impact on evaluating the progress and priorities of the program as mandated by the act. The purview and responsibilities of the MHAC, ICC, and TCT committees should be clearly defined with respect to each other. In addition, their efforts should be clearly aligned to eliminate any confusion in how proposed projects are received, evaluated, authorized, monitored, and assessed. Science in the Project Selection Process The internal, merit-based DOE review process used to select projects for funding is not as effective as it could be in examining the program as a whole and ensuring that overall program goals are met. The DOE Methane Hydrate R&D Program currently uses a “merit-based review” of proposals consisting of input from DOE project managers responsible for managing proposals to the program. Currently, the project managers reviewing these proposals have responsibilities in other research areas and therefore may not be able to examine the proposals as a whole to ascertain whether particular projects would help to meet program goals. While merit-based reviews are consistent with the language of the act, the additional use of external peer reviewers in the project selection process would serve to assess progress toward program goals, evaluate program balance, aid in the perception of fairness to the research community, provide

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Charting the Future of Methane Hydrate Research in the United States scientific guidance to program managers, and perhaps improve the quality of the program over time. All projects above a defined dollar level should be submitted to external review following appropriate guidelines and procedures (e.g., those of NSF), and the comments and recommendations received should be evaluated by the MHAC or similar body in compliance with the conflict-of-interest protocol. In addition, the DOE Methane Hydrate R&D Program should implement a mechanism to incorporate greater scientific oversight to assess progress toward program goals, evaluate program balance, and enhance the quality of the program over time. This can be accomplished by initiating external proposal and program reviews. A set of instructions and guidelines outlining the requirement for timely and full disclosure of project results should be provided to project proponents. OVERVIEW Gas hydrate has become the focus of international attention because of the vast reserves estimated to exist and the possibility of tapping those reserves for human use. Researchers recognize that the estimates are of limited use in assessing the capability for production, predicting slope instability, or understanding the potential impacts on global climate because there is a great spatial heterogeneity in gas hydrate distribution. It is evident that significant progress has been made over the last five years by the international community to prove the concept of energy production from gas hydrate. The United States and other nations recognize that given sufficient in-place reserves, there are no obvious technical or engineering roadblocks to prevent commercial production of gas from hydrate in the future. However, there are some technical and engineering challenges that have to be solved before commercial production can begin. The immediate future will see progress from engineering proof of concept to proof of economic production. The DOE Methane Hydrate R&D Program provides a significant incentive and valued role in developing this nation’s ability to produce energy from gas hydrate and to understand the potential geological constraints on drilling hydrate. Although commercial interest in drilling and producing hydrate is presently low, the DOE Methane Hydrate R&D Program’s continued support of hydrate efforts is a key component of this nation’s ability to produce energy from hydrate in the future.

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