Wednesday, October 1, 2008

That. Is. Cool.

Inpex to Use Bacteria at Old Oil Wells to Produce Gas (Update2)

By Shigeru Sato and Yuji Okada

Sept. 29 (Bloomberg) -- Japanese researchers have developed a method of using bacteria found in depleted oil wells to turn leftover crude into natural gas, a technique that could help meet 10 percent of the country's demand for the fuel.

Inpex Holdings Inc., Japan's largest energy explorer, has produced methane using microbes and crude residue from the 139- year-old Yabase field in northern Japan, said Haruo Maeda, director of a laboratory operated by Teikoku Oil Co., an Inpex unit. A 2 billion yen ($19 million) trial will start in 2015 to decide if gas can be produced commercially at Yabase, he said.

Oil prices have more than tripled since 2002, making it attractive to invest in fields and technologies previously thought unviable. Inpex's trial at Yabase, Japan's biggest field in the 1950s, may help the world's fourth-largest energy consuming nation cut its $30 billion annual liquefied natural gas import bill.

``If oil stays above $100 a barrel in years ahead, it may be worth trying this unique technique,'' Hirofumi Kawachi, senior energy analyst at Mizuho Investors Securities Co., said in Tokyo. ``Development costs are the key for Inpex to determine whether or not to push ahead with this project.''

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