
A new “fire ice” methane hydrate discovery off Japan’s seaboard could fuel the nation’s gas needs for a century. Fact, or simply a fantasy of policymakers?

For a nation whose resource insecurity is ingrained into the national psyche, and which imports nearly all of its energy supplies, a large gas resource within reach and safe from its Asian neighbors could be nothing short of a game changer.

On March 12, the Japanese government announced a research team had successfully extracted natural gas from offshore methane hydrate, the first known time anyone had achieved this feat. Previously, Japanese companies and others have tapped methane gas from onshore hydrate reserves.

Japan’s government research team drilled 330 meters into the seafloor at a depth of around 1,000 meters, then decompressing and gasifying the deposits of methane-rich gas from the Nankai trench seabed off Aichi and Mie prefectures.

The area is believed to hold 1.1 trillion cubic meters of natural gas, equivalent to 11 years’ worth of Japan’s liquefied natural gas (LNG) imports. According to some estimates the waters surrounding Japan hold 7 trillion cubic meters of methane natural gas, the equivalent of a century of Japan’s consumption at current levels.

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The Ministry of Economy, Trade and Industry (METI) plans to test-produce such gas as early as 2014 and announce estimated development costs the following year. In February, the government announced plans to develop methane hydrate production technology by fiscal year 2018, with a goal of launching commercial production after 2023.

According to local media, the new ocean policy will be approved later this month, promoting not only methane hydrate but also the recovery of rare metals from the seabed.

“Japan could finally have an energy source to call its own,” said Takami Kawamoto, a spokesman for the Japan Oil, Gas and Metals National Corporation (JOGMEC), the state-run company leading the trial.


In 2008, JOGMEC successfully demonstrated a six-day period of continuous methane gas production from hydrate reserves held in permafrost in Canada. However, the ability to extract such gas from beneath the seabed, where most of the deposits are believed to exist, could mark a major transformation for the resource-poor nation.

"Now we know that extraction is possible…the next step is to see how far Japan can get costs down to make the technology economically viable,” Mikio Satoh, a senior researcher in marine geology at the National Institute of Advanced Industrial Science and Technology, told the New York Times.

Because it needs to import almost all the energy it consumes, making it the largest LNG importer and second largest coal importer in the world, rising energy costs have caused Japan’s trade deficit to skyrocket and damaged its emission reduction targets. Last year Japan recorded its highest trade deficit ever and in February of this year a weakening yen combined with high prices led the value of Japan’s crude imports to jump by 20 percent and natural gas imports to rise 10 percent year-on-year.

The dispute with China over the Senkaku/Diaoyu islands is also driven, at least in part, by the area’s potential energy reserves, making the new Nankai discovery even more welcome. Historically Japanese policymakers have felt an acute sense of strategic vulnerability over their overwhelming reliance on foreign sources of energy. This concern has only grown in the wake of Tokyo shutting down its nuclear reactors.

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According to the U.S. Geological Survey (USGS), estimates of the global methane hydrate resource range from 100,000 trillion cubic feet (TCF) to 100 million, with even the lower number being equivalent of 4,000 years of U.S. natural gas consumption.

However, the USGS has noted that “only a fraction of the methane sequestered in global gas hydrate deposits is likely to be concentrated enough and accessible enough to ever be considered a potential target for energy resource studies.”

Economics is the biggest barrier, however, with the cost of extracting natural gas from undersea methane hydrate estimated at $50 per million BTUs (British thermal unit) compared to $3 for U.S. shale gas and $15 for gas imported to Japan.

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Environmentalists have raised concerns over the environmental impact of mining unstable methane hydrates, as methane’s impact on climate change could be as much as 21 times as powerful as carbon dioxide.

Yet should these significant barriers prove surmountable, Japan’s dream of energy independence could become reality, according to consulting firm Wood Mackenzie.

“However unlikely, achieving this target [of full-scale commercial production] will dramatically reposition Japan on the world energy stage, potentially turning it from a gas importer, to a self-sufficient province,” it said in a report.


For Australia and other gas exporters, the news is not so good.

“The resulting fall in gas imports would severely disrupt the global LNG market, and question the viability of projects in Australia, Malaysia and Papua New Guinea,” Wood Mackenzie said.

Japan a gas superpower? For skeptics it might be worth considering that before its “shale gas,” the United States was never considered capable of becoming energy independent again.