Cheniere Energy, Inc. (LNG), ConocoPhillips (COP), TransCanada Corporation (USA) (TRP): Does Japan’s Recent Discovery Change the Global Energy Game?

Environmental uncertainties
Despite Japan’s promising test results, major hurdles and uncertainties for the future of gas hydrate extraction technology remain. Since the technique is still in its infancy, very little is known about its impact on the environment.

In a recent report, the USGS wrote: “Hydrates store immense amounts of methane, with major implications for energy resources and climate, but the natural controls on hydrates and their impacts on the environment are very poorly understood.”

When drilling for frozen gas, producers will need to find an effective and reliable way to avoid releasing large quantities of methane from gas hydrates into the ocean and the atmosphere. This is because methane traps much more heat than even carbon dioxide and is far worse for the environment than other greenhouse gases.

Final thoughts
Until researchers can bring costs down sufficiently and get a much better understanding of gas hydrate extraction’s environmental impact, Japan’s new breakthrough is unlikely to see large-scale commercial application any time soon.

However, with the island nation continuing to pay a fortune for its natural gas imports, the incentive for Japanese researchers to overcome these hurdles is huge. If they manage to make the technology economically viable sooner than expected, it would be a net positive not only for Japan’s energy security, but also for the entire world’s.

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The article Does Japan’s Recent Discovery Change the Global Energy Game? originally appeared on Fool.com and is written by Arjun Sreekumar.

Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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