MOSCOW, March 13 (RIA Novosti) – Japan has become the first country in the world to extract natural gas from underwater deposits of methane hydrate - a development that can be potentially threatening for Russia whose budget depends heavily on revenues from the export of hydrocarbons.
Deposits of methane hydrate, a frozen gas sometimes referred to as “flammable ice,” are found in ocean sediments and under the permafrost on land. According to the US Geological Survey, they are believed to be a larger hydrocarbon resource than all of the world's oil, natural gas and coal resources combined.
State-owned Japan Oil, Gas and Metals National Corporation (JOGMEC) announced on Tuesday a successful test drilling at an offshore methane hydrate deposit located about 50 kilometers away from Japan's main island of Honshu, in the Nankai Trough.
JOGMEC estimates that at least 1.1 trillion cubic meters of methane hydrate is held in deposits in the area surveyed by the company, which is an the equivalent of 11 years of Japan's gas consumption.
Japan currently imports nearly all of its oil and natural gas but successful tapping into alternative energy sources like methane hydrate could turn the country into a major hydrocarbon producer for the first time in history.
At present, the extraction technology is too expensive to be commercially viable, but the Japanese government is aiming to develop a production model within the next five years.
If the technology proves commercially sustainable, it could also benefit other energy-hungry countries, including the United States, India and China as they are looking for ways to reduce dependency on oil and gas imports.
Russia’s status as a key global energy supplier, on the contrary, may be seriously hurt by a new energy source as the country heavily relies on extraction of traditional fuel-carriers – oil and natural gas.
Official government data indicate that revenues from oil and gas exports contribute around 50 percent of the federal budget while unofficial reports claim up to 80 percent, which makes Russia extremely vulnerable to declines in international oil prices, to international competition for oil and gas sales, and to any threats to domestic oil and gas production.
Russian Prime Minister Dmitry Medvedev said in an interview with the Brazilian media in February that the share of state budget revenues from oil and gas sales should be reduced to 25 percent and Russia must diversify its economy away from oil and gas dependency through developing hi-tech industries.
"Competitiveness is a major driving force in the development of the present-day world and we must try to achieve a high level of competitiveness in all areas,” Medvedev said.
