**MINUTES**

**UNITED STATES DEPARTMENT OF ENERGY**

**METHANE HYDRATE ADVISORY COMMITTEE MEETING**

Sea Lodge Hotel

La Jolla, California

**Tuesday, September 21, 2004**

The meeting was called to order by James Slutz, Deputy Assistant
Secretary for Oil and Natural Gas, who was delegated as the Designated
Federal Official by Mark R, Maddox, Principal Deputy Assistant Secretary
for Fossil Energy at 8:00 a.m..

The following Committee Members were in attendance: Richard Charter,
Environmental Defense; Stephen Holditch, Texas A & M University; Arthur
Johnson, Hydrate Energy International, Chairman; Emyrs Jones,
ChevronTexaco; Miriam Kastner, University of California, San Diego;
Devinder Mahajan, Brookhaven National Laboratory; Keith Millheim,
Anadarko Petroleum; Harry Roberts, Louisiana State University; Robert
Woolsey, University of Mississippi and James Slutz, Designated Federal
Official. Peter Brewer, Monterey Bay Aquarium Research Institute was
unable to attend.

Other attendees included:, Edith Allison and Brad Tomer, U.S. Department
of Energy; Brenda Pierce, U.S. Geological Survey; Robert Hunter, ASRC
Energy Services, Earl Doyle, National Research Council; George
Dellagiarino, Minerals Management Service; Kirk Osadetz, Natural
Resources Canada; Constance Arvis, Department of State; Paul Winn, Shell
Oil Company; Bilal Haq, National Science Foundation; Richard Coffin,
Naval Research Lab; and, Andrew Shephard, National Oceanic and
Atmospheric Administration.

***Morning Session***

After welcoming everyone and asking individuals on the panel and in the
audience to introduce themselves, James Slutz, explained that he had
been delegated by Mark R. Maddox, Acting Assistant Secretary for Fossil
Energy to be the Designated Federal Official and asked for nominations
for committee Chair. Art Johnson was unanimously selected. The meeting
then proceeded to presentations and discussions of DOE-sponsored Methane
Hydrate Research Accomplishments and Planned Activities.

Brad Tomer, National Energy Technology Lab, reported on recent U.S.
Department of Energy Laboratory and Modeling Research. He emphasized the
value of multiple agencies supporting the program and the excellent
interagency cooperation. The committee asked for an explanation of staff
assignments and responsibilities in light of the recent Fossil Energy
and NETL reorganization

Keith Millheim reported on the Anadarko Petroleum Hot Ice #1 Gas Hydrate
Well and the success of the Arctic Platform for low-impact North Slope
operations. He noted that the well location, south of Kuparak River
Field, Alaska North Slope, was based on the location of company leases
and may have missed the best potential locations. Dr. Millheim noted
that all samples from the well are preserved and available for studies
that might answer the question of why hydrates were not present even
though the conditions considered necessary for hydrate formation were
present -- natural gas, water and temperature and pressure within the
hydrate stability field. Anadarko does not intend to conduct additional
hydrate studies.

Emyrs Jones reported on the ChevronTexaco Gulf of Mexico Joint Industry
Project, which is scheduled to drill core holes in Atwater Valley and
Keatley Canyon areas of the Gulf of Mexico in spring 2005. There were
questions about the usefulness of Tetrohydrofuron (THF) hydrate studies
of seismic velocities in hydrate-bearing sediments. In response to
questions, ChevronTexaco assured the committee that they do not plan to
withhold any data. Scientists will have time to prepare their analysis
for publication before the data is released.

Robert Hunter, Arctic Slope Regional Corporation Energy Services,
Alaska, reported on the BP Alaska Project. Eileen and Tarn hydrate
trends (which overlie Milne Point Oilfield) are estimated to contain
about 100 Tcf of methane. Within this area, 14 prospects, averaging 600
bcf each have been delineated. Recently completed production simulation
and econ0omic modeling will form the basis for a BP decision whether or
not to drill, which is expected soon. The BP project is also supporting
research into using CO2 injection to stimulate hydrate dissociation and
methane production, which shows promise.

Kirk Osadetz , Canada Department of Natural Resources reported on "Gas
Hydrates - Fuel of the Future Program, Earth Science Sector, Canada:
Goals, Accomplishments and Plans." This is important because of the
joint research conducted by the US and Canada and dependence of the US
on Canadian gas imports. Canada will need large volumes of natural gas
for oil sand production and as a signatory to the Kyoto treaty will
emphasize fuel switching. In addition to the Arctic, Canada is starting
to study hydrate occurrences on its Atlantic margin. Mr. Osadetz
described the Mallik 2002 hydrate well that included several production
experiments that have since been used as a basis for reservoir
simulations. The research results from the well will be published within
a few months as a Canada Geological Survey Bulletin. A large-scale
production test is the logical next step. It is pending a decision by
Japan on its involvement. A committee member asked about the NEPTUNE
project, a regional, ocean observatory in the northeast Pacific Ocean
(offshore US and Canada). The planned 3,000-km network of
fiber-optic/power cables will be instrumented to detect/measure
physical, chemical, and biological phenomena. Hydrate studies will
probably be included.

Andy Shephard, National Oceanic and Atmospheric Administration reported
on the recent workshop on Gas Hydrates and Global Climate Change and
provided copies of the draft proceedings. This workshop aimed to bring
the hydrate and climate change communities together and propose an
experimental program that would address the contradiction between the
interpretation of pre-historic major swings in climate caused by methane
releases and current readings that show little atmospheric methane is
coming from the oceans (and therefore hydrates). In the global methane
budget, atmospheric inventory and emissions seem well defined, but
sources and sinks, such as wetlands and the seafloor need more study.
Work proposed to address understanding of oceanic methane included
detailed study of target sites, model development and new sensors,
samplers and platforms for measurement. This can be accomplished in
partnership with NSF Ocean Observatories Initiative, ORION and NEPTUNE.

Edith Allison, US DOE gave a presentation on International and
Multi-national Methane Hydrate Research. Activities initiated over the
past year may stimulate more multi-national collaboration: APEC energy
working group support for Pacific Rim R&D; United Nations encouragement
of hydrate R&D in the Informal Collaborative Process for Law of the
Seas; interest in multi-national projects on arctic hydrates during the
International Polar Year 2007-2008; and the currently developing
International Methane Hydrate Research Consortium. Dr. Woolsey offered
as an example of the value of international cooperation the fact that
geophysicists at the University of Victoria have been active in the
University of Mississippi consortium to develop a vertical array which
in turn may be used VENUS subsesa monitoring site.

***Afternoon Session***

Earl Doyle, chair of the National Research Council committee, presented
the findings of its study, "Review of Activities Authorized Under the
Methane Hydrate Research and Development Act of 2000." He stated that
the NRC committee was positive on the program and its critique was
intended to improve the program. The committee found that although there
are technical and engineering challenges to be overcome there are no
obvious roadblocks to methane production from hydrates. The NRC
recommendations included:

-   Foster further international collaboration on the basis that US
    participation will help maintain our technical ability to
    collaborate.

-   The three industry projects are excellent but need greater
    peer-reviewed reporting, DOE control of the decision process and
    more scientific review.

-   It was not clear how many of the smaller projects fit into the
    program objectives. The NRC recommended that these undergo
    peer-review process for publication and validation.

-   The US is not spending enough to accomplish the statutory goals.

-   The panel found USGS research to be excellent.

-   Interagency collaboration should continue and involvement in the NSF
    seafloor monitoring systems should be pursued.

-   The panel considered that the Federal Advisory Committee contains
    six members that are involved with DOE funded projects and therefore
    have a conflict of interest. This point was strongly disputed by the
    advisory committee.

-   The NRC panel recommended that DOE fund post-doctoral fellowships in
    hydrate research

The advisory committee members had numerous questions and comments,
which were compiled into the following statement during the course of
the meeting:

> The advisory committee has the following reservations or concerns
> regarding NRC's assessment of the role of the advisory committee:

-   It appears that the NRC fails to distinguish between the Committee's
    2002 report to Congress and the appendix of that report.

-   The NRC proposals for the role of committee members are in conflict
    with the current committee Charter.

> This committee has the following reservations or concerns regarding
> the NRC report:

-   The NRC did not recognize the publications and public release of
    information that the DOE is responsible for.

-   The interagency contributions to specific projects were apparently
    not evaluated, which may have projected a negative bias in the NRC
    evaluations of the DOE contribution.

-   The NRC recommendations for more review and oversight of industry
    projects could have a negative impact on industry involvement, and
    fails to recognize the current DOE oversight process. The NRC
    committee also did not recognize that some of the DOE sponsored
    projects already have a scientific review process.

Art Johnson reported on the Hedberg Conference which occurred in
Vancouver, British Columbia, Canada, a week before this meeting. Mr.
Johnson stated that the meeting showed that real progress has been made
in hydrate R&D addressing methane production; an outgrowth of this is
the fact that focus on global estimates of gas in place is being
replaced by a focus on reservoir simulations of individual prospects.
The conference also showed that there is significant interest in the
hazards aspect of hydrates. Presentations and discussion by Japanese
researchers made it clear that Japan is rethinking its emphasis on BSRs
as hydrate indicators and focusing on the geologic conditions for
hydrate-bearing reservoirs, based on their 2004 drilling program.

The rest of the afternoon was used for general discussion of future
program directions and the importance of work on environmental and
global climate change aspects of gas hydrates

The meeting adjourned for the day, at 5:07 p.m.,

***September 22, 2004***

The meeting resumed at 8:00 a.m. The following Committee Members were in
attendance: Richard Charter, Environmental Defense; Stephen Holditch,
Texas A & M University; Arthur Johnson, Hydrate Energy International,
Chairman; Emyrs Jones, ChevronTexaco; Miriam Kastner, University of
California, San Diego; Devinder Mahajan, Brookhaven National Laboratory;
Keith Millheim, Anadarko Petroleum; Harry Roberts, Louisiana State
University; Robert Woolsey, University of Mississippi and James Slutz,
Designated Federal Official. Peter Brewer, Monterey Bay Aquarium
Research Institute was unable to attend.

Other attendees included:, Edith Allison and Brad Tomer, U.S. Department
of Energy; Brenda Pierce, U.S. Geological Survey; Robert Hunter, ASRC
Energy Services, George Dellagiarino, Minerals Management Service; Kirk
Osadetz, Natural Resources Canada; Constance Arvis, Department of State;
Paul Winn, Shell Oil Company; Richard Coffin, Naval Research Lab; and,
Andrew Shephard, National Oceanic and Atmospheric Administration.

Mr. Johnson started by answering a question from Tuesday regarding what
happened in response to the 2002 report to Congress: many in Congress,
non-governmental organizations and educational institutions asked for
copies, but Congress has made no statement about the report.

Ms. Arvis asked if the advisory committee would like to make
recommendations to the Administration on its response to the U.S.
Commission on Ocean Policy report. After some discussion, a copy of the
report was requested, for consideration but not formal statement was
developed.

The Designated Federal Officer asked if the committee could provide DOE
with some program guidance. After significant discussion on what should
drive the budget, work necessary to accomplish program goals, importance
of high volumes of high-quality proposals, and the ability to accomplish
goals with limited funds by using partnerships, the committee declined
to make budgeting recommendations.

Mr. Tomer described the draft DOE methane hydrate strategic, 5-year plan
and answered numerous questions. Extensive discussion continued until
lunch.

***Afternoon Session***

Comments on the draft DOE strategic plan were incorporated into the
following statement:

> The committee supports the general direction set forth in draft plan
> and makes the following recommendations.
>
> The Committee recognizes that there are significant differences
> between onshore Arctic and Deepwater gas hydrates in terms of
> occurrence, resource potential, safety issues, and potential
> environmental impacts. As a result of these differences, the strategic
> plan should distinguish the methodologies, timelines, and
> responsibilities that are most appropriate for each.
>
> Gas hydrate resource assessment is further advanced in the Arctic
> onshore than in deepwater, and the commercial development of Arctic
> gas hydrate is likely to occur sooner than deepwater gas hydrates. The
> U.S. should play the leading role in the development of Arctic gas
> hydrate resource assessment, remote detection, characterization,
> production technology, and environmentally sound methods. Basic
> research on Arctic environmental issues is an area where the US
> program should take a leading role. A key goal of the Federal program
> is to determine whether gas hydrates can be a valid commercial
> resource for the United States. At that point industry will take the
> lead in subsequent efforts. Field experiments are essential but are
> inherently expensive and thus should be undertaken with strong
> international leveraging. Ensuring safe production of conventional oil
> and gas resources through hydrate-bearing zones is viewed as the
> responsibility of private industry.
>
> The immediate impact of hydrates in deepwater areas involves the
> safety of conventional oil and gas facilities. The US should play a
> leading role in basic research, technology development, and field
> experiments. In addition, a better understanding of the relationship
> of sensitive marine ecosystems associated with marine gas hydrates,
> the potential impact of future activities, and an assessment of the
> effectiveness of appropriate mitigation measures, needs to be better
> understood. To this end the Federal program (in conjunction with other
> agencies) should take a leadership role in the basic research,
> technology development, and field experiments to make this assessment.
> The US should take a leading role in the assessment of deepwater gas
> hydrate resource potential, characterization, and remote sensing, but
> the development of production technology and field experiments will be
> best achieved over a longer time-frame and with strong international
> leveraging.
>
> The role of gas hydrate in ocean chemistry, global climate change and
> the relationship of gas hydrates as part of the global carbon cycle
> are areas that require dedicated research and field experiments.
>
> Graduate and post-graduate education is viewed by the committee as an
> important component of current and future gas hydrate research. The
> committee strongly supports the establishment and/or expansion of
> programs that will ensure that US science and technology capabilities
> can be maintained for the future.

The committee discussed issues and concerns about the National Research
Council review of the DOE Methane Hydrate program that they wished to
communicate to the Secretary of Energy. Their final text is:

> The committee reviewed the report by the National Research Council on
> the activities authorized under the Methane Hydrate Research and
> Development Act of 2000, with the following comments. The committee
> appreciates the interest and attention of the NRC to the issues of
> commercialization of methane hydrate; however, the NRC report makes it
> appear that the NRC panel may have misunderstood the charge given to
> the Methane Hydrate Advisory Committee by the enabling legislation.
>
> This committee has the following reservations or concerns regarding
> NRC's assessment of the role of the advisory committee:

-   It appears that the NRC fails to distinguish between the Committee's
    2002 report to Congress and the appendix of that report.

-   The NRC proposals for the role of committee members are in conflict
    with the current committee Charter.

> This committee has the following reservations or concerns regarding
> the NRC report:

-   The NRC did not recognize the publications and public release of
    information that the DOE is responsible for.

-   The interagency contributions to specific projects were apparently
    not evaluated, which may have projected a negative bias in the NRC
    evaluations of the DOE contribution.

-   The NRC recommendations for more review and oversight of industry
    projects could have a negative impact on industry involvement, and
    fails to recognize the current DOE oversight process. The NRC
    committee also did not recognize that some of the DOE sponsored
    projects already have a scientific review process.

The committee briefly considered whether it should make comments on the
possible reauthorization of the Methane Hydrate R&D Act of 2000 but
determined to not make any comments.

Finally, the group agreed to meet in the spring, probably May, 2005. If
possible the meeting should be held in connection with the Interagency
Coordinating Committee meeting.

The meeting was adjourned at 3:09 p.m. Wednesday September 22, 2004.

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Art Johnson, Methane Hydrate Advisory Committee Chairman

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James Slutz, Acting Designated Federal Official