From: Richard Mauer, Anchorage Daily News
Published January 26, 2005 12:00 AM

Alaskan Urges Gas Research Funding

WASHINGTON — Sharp increases in natural gas prices and concern over long-term supply brought dozens of suggested solutions to a special work session of the Senate Energy & Natural Resources Committee on Monday.


Dozens of representatives from industry, public interest groups and government agencies, including a state official from Alaska, spoke for two minutes each in a hearing room jammed with lobbyists and a handful of senators in the opening phase of a new bipartisan energy bill.


The Alaskan, state Oil and Gas Division Director Mark Myers, asked that Congress reauthorize and provide an additional $70 million to study techniques to produce an estimated 100 trillion cubic feet of crystallized methane gas beneath the Prudhoe Bay permafrost. If these highly compressed gas hydrates can be produced, the additional supply of gas would extend the commercial life of the proposed natural gas pipeline and make its construction and operation more economical, Myers said.


In 2000, Congress provided $49 million for gas hydrate research in Alaska and the Gulf of Mexico. That program expires in October.


Through an unusual set of circumstances involving seniority and Senate rules, the energy committee is run by New Mexico's two senators: Chairman Pete Domenici, a Republican, and ranking Democrat Jeff Bingaman.


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While White House energy legislation was fought to a partisan standoff in the last Congress, Domenici, with Bingaman on his right, vowed to do it differently this time. Not only did he pledge a bipartisan effort, he solicited proposals from industry and the public. Of the 120 applicants, 32 were chosen to make two-minute presentations on issues related to natural gas to the committee Monday and answer questions from the senators, who included Lisa Murkowski, R-Alaska.


In his opening remarks, Domenici said that natural gas, always clean-burning and abundant, is less affordable now than it was just a few years ago. At the same time, domestic production is slipping behind increases in consumption; while imports provided about 15 percent of the supply in 2004, the country will need to import about 25 percent in 2025, Domenici said.


"This natural gas crisis affects residential commercial and industrial consumers," he said.


Several speakers cited the proposed Alaska gas pipeline as one way to increase supply, though one senator expressed concern that government subsidies for the line would put Alaska gas at a competitive advantage to other pipelines and gas supplies.


Myers, who traveled to Washington with Alaska Sen. Gene Therriault, R-North Pole, and Alaska Rep. Ralph Samuels, R-Anchorage, said that current proven conventional gas reserves on the North Slope would provide a 20-year supply through the pipeline.


But the gas hydrates, which underlie the Prudhoe production infrastructure and sit above the oil reservoirs, could easily add another 35 to 40 years of supply if they can be produced.


In an interview after his presentation, Myers said that research conducted under the 2000 legislation has shown promising signs in the lab. Theoretically, the gas hydrates will break down, freeing the methane, if underground pressure is reduced, which would happen if conventional gas is removed. Methane is also freed if the ground is heated, or through a chemical reaction using carbon dioxide, which is abundant in the North Slope reserves.


Beyond Prudhoe Bay, 529 trillion cubic feet of gas from hydrates is thought to underlie the North Slope. Taking in offshore deposits, Alaska might hold an incredible 32,000 trillion cubic feet of natural gas in hydrate form, Myers said.


A new $70 million grant would be used to study theoretical and applied techniques for extracting methane from the hydrates. Myers said the money would be distributed by a federal agency to universities, oil and gas companies, and state agencies like his own. He hopes the research would be confined to the North Slope, with the idea that practical gains could be spread to other regions where hydrates are found, such as the Gulf of Mexico.


Aside from Myers, speakers from industry asked that permits for drilling, production, storage and processing be sped up, while others representing consumers and environmental groups said concern about permitting was overblown and that agencies need to work in an open, transparent fashion.


Among the alternative sources for natural gas cited at the hearing was coal-bed methane. Much like the public meetings in the Mat-Su Borough over coal-bed methane last year, the negative experiences in the Powder River Basin of Wyoming were relayed by a rancher and a representative of the National Resource Defense Council. The senators were shown the same large aerial photo of the mishmash of production roads and pipelines that had added to the concerns of Valley residents.


Source: Knight Ridder/Tribune Business News


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