What is gas hydrate?
Gas hydrates are solid crystalline compounds formed when gas molecules occupy the void space of the water molecule. The solid compound resembles ice or wet snow. They are included in a general class of compounds called clathrates.
Natural gas hydrates are formed when natural gas, mainly methane, ethane, propane, isobutane, hydrogen sulfide, carbon dioxide, and nitrogen takes the position within the water lattice, and occupies the vacant space. The phenomenon causes water to freeze at temperatures significantly higher than the freezing point of water.
Where are these gas hydrates formed?
Naturally occurring hydrates exist abundantly in two types of environments - arctic permafrost and deepwater oceanic sediments. The majority of the hydrates occurs in oceanic sediments as these are the zones of active production of methane through the process known as methanogenesis in marine sediments.
The methane formed in the marine sediments then comes in contact with pore water and forms methane hydrate under optimum pressure and temperature conditions. As there is little data available on the distribution of gas hydrate deposits in the ocean, it is tough to estimate the actual volumes of natural gas trapped inside the hydrates beneath the sea floor.
How natural gas is extracted from their hydrates?
There is no proved commercial method to produce gas from gas hydrates. Most of the projects are in pilot phase, so the methods developed for extraction of gases may or may not be successful on commercial scale. Few of the known methods of extraction of gas from hydrates are-
In thermal method, hot water is supplied to the deposit of gas hydrate. Temperature of the deposit is increased to such an extent that the hydrate stability is broken and natural gas and water is separated.
Depressurisation, as the name suggests, involves lowering of the pressure of the deposit through drilling. The hydrate deposits sit under significant pressure due to overlying sediments and water. Drilling releases the pressure similar to a tire, where pressure could be reduced through a sudden puncture.
The pressure release breaks the stability of the gas and water system and in due process, the gas is released.
Carbon dioxide can be infused into the hydrate structure, causing the release of trapped gas and infusion of the carbon dioxide. The CO2 makes stronger bond with water with respect to hydrocarbon. Also, this method could ease CO2 sequestration and help fight global warming.
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How much gas is available in form of gas hydrates?
The volume of methane available in the form of hydrates has been estimated through several studies. The highest estimates are based on the hypothesis that fully dense clathrates could be spread on the entire floor of the deep ocean.
As more clarity came on clathrate chemistry and enhanced knowledge of sedimentology, it was found that hydrates only occur in a narrow depth ranges like continental shelves. They typically occur in low concentrations (0.9-1.5% by volume).
Constrained by direct sampling method, the recent estimates of the global inventory lie between one and five million cubic kilometres. The corresponding hydrate resource is estimated to be around 500-2500 gigatonnes carbon (Gt C). The estimates are lower than 5000 Gt C for all other known fossil fuel resources, but significantly higher than ~230 Gt C other natural gas sources.
For the sake of comparisons, the total carbon present in the atmosphere is around 700 gigatons.
How are hydrate deposits classified?
Scientists developed a classification system for hydrate-bearing geologic media. The classification of the hydrate deposits is done in four classes - Class 1, Class 2, Class 3, and Class 4. When hydrate-bearing layer is underneath the zone of mobile water and free gas, it is classified as Class 1 system.
Class 2 system includes the hydrate-bearing layer, which is underneath of water. Class 3 systems are those in which a single hydrate-bearing layer exists with no underlying mobile fluids. The Class 4 hydrate deposits are typical of oceanic-hydrate accumulations. These are low-saturation deposits with no bounding formations.
Another classification system is used in parallel to the above-discussed one. The system is based on the geological occurrence of the deposit. Most of the hydrate deposits can be classified as either structural or stratigraphic in the marine environment. Sometimes combination of both, structural and stratigraphic deposits, can be observed.
Structural hydrate deposits are generally formed by the thermogenic gases. These gases migrate from the deeper subsurface to the hydrate stability zone along the faults or permeable channels, gas chimneys above petroleum reservoirs, or mud volcanoes. Then they react with the water in the hydrate stability zone and form hydrates.
The factors which control the hydrates in structural deposits are heat flow, variations in the salinity levels of the sediments, and the presence of permeable pathways.
Gas hydrates can be found concentrated locally around the faults and mud volcanoes. The northwestern Gulf of Mexico is one of the examples of structural gas hydrate accumulation. Other examples are Hydrate Ridge (offshore Oregon) and the Haakon Mosby mud volcano (offshore Norway).
Stratigraphic hydrate deposits are formed mainly by the biogenic gas in marine sediments. These types of deposits come into existence in a low-fluid flux environments or diffusion dominated environments. Hydrates are located beneath the seafloor, having large areal extent, and may occur in very low saturations.
Combination of the two deposits systems is found where hydrates occur in permeable strata. The flow or movement of the gas for hydrate formation occurs along the conductive faults or diapirs. Scientists recently introduced a new system to classify hydrate deposits into four major categories. The geological framework and lithology of the hydrate-bearing sediments are main factors in this type of classification.
According to these researchers, the four major plays where hydrates are found are - sand-dominated plays, fractured clay-dominated plays, massive gas-hydrate formations exposed at the seafloor, and low-concentration hydrates disseminated in a clay matrix.
Ichimoku Kinko Hyo is a versatile technical indicator used to identify trends, support and resistance, gauge momentum, and to generate buy or sell signals. The name of the indicator translates into “one look equilibrium chart”. Must read: What Is Technical Analysis? The indicator reflects on all of the above parameters by taking multiple averages into consideration and plotting them on a chart, and the interpretation of the chart is factual in nature, i.e., it remains the same irrespective of the time frame. Originally developed by a Japanese journalist – Goichi Hosoda in 1960s, the indicator provides more data points as compared to the traditional candlestick chart, and it could be applied on any type of chart, irrespective to the chart’s own data points, i.e., the chart could be a bar chart, a candlestick chart, or a simple line chart. While at first glance the indicator could seem intimidating and highly technical to novice traders or investors. However, the indicator is relatively easy, and once a trader understands the nitty-gritty of its derivation and implications, it could become quite handy to gauge the market sentiment. Moving Parts of Ichimoku Kinko Hyo The Ichimoku Kin Hyo mainly contains two short-term moving averages- the conversion line (kenkan sen) and the base line (Kijun sen), one medium-term average – Leading Span A (senkou span A), one long-term moving average – Leading Span B (senkou span B), and a historical closing plot – Lagging Span (chikou span). Derivation of Components The conversion line of the indicator is derived by taking the mean value of 9-period high and low. Likewise, the base line of the indicator is derived by taking the mean value of 26-period high and low. The leading Span A is typically the mean value of the conversion line and the base line. The leading Span B is the mean value of 52-period high and low. And the lagging Span is the close plot of 26-period in the past. Cloud 1 – Span A crosses above Span B. Cloud 2 – Span A crosses below Span B. In the definition, we mentioned that the Ichimoku Kin Hyo is factual in nature; thus, in the derivation section, we have used PH and PL notions. The period here could take any from, such as daily, weekly, monthly. So, if we are applying Ichimoku kin Hyo on the daily chart, the PH and PL notion would consider 9-day high and 9-day low. Likewise, if are applying the Ichimoku Kin Hyo indicator on a weekly chart, the PH and PL notion would consider 9-week high and 9-week low, and so on. Interpretation For interpreting signals from the Ichimoku, the first thing which should be considered is the crossover between the conversion line and the base line along with relative position of Span A and Span B. When the conversion line crosses above the base line from below, it is typically considered as a positive signal, and when the conversion line crosses the base line below from above, it is considered as a negative signal. Furthermore, if the positive crossover between the conversion line and the base line takes place above Span A, it reflects on the strength of the trend towards upward. Likewise, if the negative crossover between the conversion line and the base line takes place below Span B, it reflects on the strength of the trend towards downward. Ideally, if Span A trades above Span B, the trend is considered to be an uptrend. Likewise, if Span A trades below Span B, the trend is considered to be a downtrend. The behaviour of the cloud as either support or resistance depends upon the relative position of the price with respect to the cloud. For example, if the price of an asset is trading below cloud, the cloud acts as the resistance zone for the price. Likewise, if the price of an asset is trading above cloud, the cloud acts as the support zone for the price.
What are capital goods? Capital goods are physical assets or durable goods used as a factor of production by a firm in a business sense. But in microeconomic terms, capital is a separate factor of production, primarily used to acquire capital goods. Capital goods include items like heavy machinery, equipment, vehicles, plant, computers, building. As a tangible asset for the firm, they are capital intensive products having many components. Final goods are produced with the utilisation of capital goods. A printing press for a press firm is a capital good used to print newspapers, which is a source of revenue. Similarly, robots used in assembling automobiles are also capital goods for automobile companies. Firms require investments to acquire capital goods. In accounting terms, the investment in capital goods with useful life over one year is a capital expense. Despite an expense for the firm, it is recorded under assets of the firm on the balance sheet and is expensed on the income statement over its useful life. Capital goods have resale value over its useful life. To account for the wear and tear, depreciation expense is incurred by the firm on the balance sheet, thus reducing the value of an asset on the balance sheet. In macroeconomics, capital goods are a factor of production and investment in capital goods is referred to as capital expenditure, which indicates the level of core investments in factors of production for an economy. Capital expenditure levels of a nation also reflect the ability and intention of producers to increase the capacity of production, and its influence on the gross domestic product of a country. What is the importance of capital goods in an economy? Capital goods are an essential consideration in an economy and also reflect the outcomes of research and development undertaken in the economy. As a crucial factor of production, countries seek to develop and commercialise capital goods according to the growing needs. Increased intensity of research and development enables the country to develop sophisticated and futuristic capital goods, which also exhibit the latest technological advancements and enhancements from the previous models. Capital goods are crucial to improving the long-term productivity and capacity of a nation. Investments in capital goods industry and goods create manufacturing jobs in an economy. They are crucial to producing finished goods and have an important role in the economy. Development in an economy is driven by making use of capital goods, increasing the productivity of capital goods. At the same time, it is necessary for an economy to nurture skilled labour to produce capital goods and robust research and development. Therefore, education and skill development are also precursor to improve the productivity of capital goods, which are crucial for economic development and manufacturing independence of a country. Capital goods Vs consumer goods Consumer goods are used by households and are a type of finished goods, which are produced with the help of capital goods. Consumer goods can be durable goods such as refrigerator, television, washing machine etc. They are not used to make capital goods after the purchase, unlike capital goods that are used as a factor of production across many industries. But there could be differences in terms of utilisation as well. Oranges consumed by a household are consumer goods. However, when they are used by a company to produce orange juice as a finished good, orange will be a capital good for the company producing orange juice. Most of the time capital goods don’t create revenue for a firm directly since they are used as a factor of production. For companies engaged in the manufacturing of capital goods are the source of revenue for such companies. Consumer goods are also an important part of the economy, and the consumption of final goods (consumer goods) is used to calculate the gross domestic product. Capital goods indicate the level of capital expenditure in an economy and are also an important consideration in the gross domestic product. Some of the well-known capital goods companies The Boeing Company Boeing is a US-based company engaged in design and manufacturing of aircraft, rockets, satellites, defence, space and security systems. It also provides services and aftermarket support to its customers and is famous for its aeroplanes. It supports the airlines' industry globally with customers in over 150 countries. Boeing also manufactures tailored products such as weapons, electronic defence systems, military aircraft, launch systems, information-based communication systems etc. Siemens AG Siemens AG is a German company and is one of the largest manufacturing companies in Europe with a worldwide footprint. It emphasises of automation, electrification and automation. Siemens is a large developer of resource-saving and energy-efficient technologies. It is also a leading supplier of equipment for power generation and transmission, medical diagnostics. Siemens contributes to industrial and infrastructure solutions for a range of industries. Caterpillar Inc. Caterpillar is a US-based company established in 1925. It is a leading manufacturer of diesel and natural gas engines, mining equipment, construction equipment, diesel-engine locomotives, industrial gas turbines. It also provides financial and related services to consumers. Caterpillar provides services throughout the product life cycle and develops new technologies with decades of the domain expertise. It has a global presence in the industries served. Cummins Inc. Cummins Inc. is an industrial goods manufacturer based in the USA. It is engaged in the design and manufacturing of diesel and natural gas engines, high-speed horsepower engines, power generation equipment, alternative-fuel electric generators. Cummins is also involved in turbo technologies, filtration, emission solutions etc. It sells in over 190 countries and has a global footprint. Daikin Industries Ltd Daikin is a Japanese multination company. It is a leading manufacturer of air conditioner and equipment. It also operates chemicals, filter, oil hydraulics, defence systems, and electronic businesses. Daikin is present in over 150 countries and manufactures in markets where the demand exists, thus it manufactures in over 100 location across the world.
Utilities sector is comprised of a range of companies that are involved in providing basic facilities, such as electricity, water, sewage services, dams, independent power and natural gas. Though, players in this sector earn profit, they are heavily regulated as they are part of the public service landscape.
A carbon credit is a criteria used by countries to cap the carbon dioxide emissions from industrial activities in order to fight climate chnage. It involves issuing of a permit /certificate, which is also tradable, and provides its owner the right to 1 tonne emissions of carbon dioxide or another greenhouse gas.