ConocoPhillips to drill Putu with unprecedented mitigation steps
ConocoPhillips is finally ready to drill into a small and long-sought piece of the North Slope, but only after agreeing to employ mitigation measures largely thought to be unprecedented, particularly for a single well.
The Putu 2 exploration well is scheduled to be spudded in early February and finished in late April with completion of a well sidetrack, according to ConocoPhillips spokeswoman Amy Burnett.
The cause for the unique drilling mitigation practices — from an electrified drill rig to multiple air quality monitoring sites and light suppression efforts — flows from the drill site’s proximity to the Native village of Nuiqsut.
About three miles east-northeast from Nuiqsut, the Putu 2 drill site is in the direction of the prevailing winter winds that cross the tundra plains to the village.
That caught the attention of many in Nuiqsut, according to Kuukpik Corp. CEO Lanston Chinn, who said the residents became concerned about, among other things, exhaust drifting into the community from a diesel drill rig that would be running continuously for more than two months.
Kuukpik is the Native village corporation for Nuiqsut and holds title to about 147,000 acres on the Slope. It jointly holds surface rights along with the state to the Putu acreage, which the Department of Natural Resources awarded to ConocoPhillips in November 2016.
The company has also taken on the role of being a public voice for the community of about 400 residents that it answers to.
ConocoPhillips first planned to drill the Putu well a year ago. That exploration plan was a driving force behind DNR Commissioner Andy Mack overturning his predecessor’s decision and transferring all 9,100 acres in and around Nuiqsut, and once part of the now defunct Tofkat Unit, from the small independent Brooks Range Petroleum Corp. to ConocoPhillips.
It is now part of the large Colville River Unit, commonly referred to as Alpine, from which ConocoPhillips produces about 65,000 barrels of oil per day.
While a small area in North Slope terms, its proximity to a large, established oil field and the Nanushuk prospect that could hold more than 2 billion barrels of recoverable oil, according to its owner Armstrong Energy, make it a potentially rich piece of property.
ConocoPhillips held the acreage in the early 2000s but had to give it back to the state after failing to meet drilling requirements.
Brooks Range also held the leases for years but was unable to secure an access agreement with Kuukpik, according to documents previously submitted to the state.
ConocoPhillips Alaska President Joe Marushack said Jan. 19 at the Alaska Support Industry Alliance’s Meet Alaska Conference that even before drilling a well the company believes the Putu prospect could produce 20,000 barrels per day. It’s worth noting that as a publicly traded oil company, ConocoPhillips is in the business of making conservative public statements.
When the company informed DNR last winter that it had decided to defer its 2016-17 Putu plan because of the villagers’ concerns, Mack, charged with assuring the state’s resources are developed as timely as possible, threatened to revoke the acreage.
An agreement was eventually reached last August after a lengthy back-and-forth of formal correspondence to let ConocoPhillips keep the acreage if it drilled a well into the hot Nanushuk geologic formation by May 2018. The deal included a $7 million payment to the state in-lieu of the bids DNR estimated it would get if the area was put up for bid in a lease sale.
While ConocoPhillips has long held a surface access agreement with Kuukpik Corp., according to the producer, it still needed to allay the worries of the locals downwind that they would not be ignored.
For starters, the Putu 2 drill site is about a half-mile farther from Nuiqsut than the location chosen to drill last winter.
The drill rig — Kuukpik 5, another part of the producer-Native corporation agreement — will be electrified and powered by six, 975-horsepower Tier 4 diesel generators located about a mile north of the drill site.
Kuukpik Corp. has five subsidiary companies mostly focused on oilfield service support in the drilling, ice road, camp and catering, engineering and environmental monitoring specialties. Chinn said Kuukpik’s companies and Nuiqsut residents will do much of the work associated with drilling the well.
According to Burnett, about 85 people will be on site at peak activity.
A 13.8 kilovolt power cable encapsulated in ice 25 inches thick will connect the generators to the drill location, according to ConocoPhillips’ Putu 2 mitigation plan submitted to DNR.
The Tier 4 generators are top-of-the-line in terms of limiting emissions, according to Cummins Power Generation, which claims to be the first generator manufacturer to receive the Environmental Protection Agency’s most stringent applicable certification.
The exhaust scrubbers installed on the generators make them as much as 90 percent cleaner than the traditional drill rigs by capturing much of the sulfur and other particulate matter found in diesel exhaust before it is emitted, according to Chinn.
“There will be zero emissions from the drill rig and zero emissions from the camp,” he emphasized.
Further, three air monitoring stations will be set up for the project; two near the northeast edge of the village and one at the Putu 2 site. If particulate levels exceed EPA standards the whole operation will go into “warm shutdown,” Chinn said, and the generators and other engines will be run just enough to keep equipment and facilities from freezing.
Noise monitoring equipment will also be installed at one of the air quality stations at the edge of the village and ConocoPhillips will limit vehicle idling at the site to cut down on noise pollution. A snow berm — if there is enough snow — will be built on the village side of the pad as a final noise-dampening measure, according to the mitigation plan.
Water quality tests will also be done at the nearby lake that is Nuiqsut’s water source once it melts to assure none of the limited particulate matter emitted from the exhaust has settled and found its way into the lake, Chinn added.
“Everything is monitored all along the path,” he said. “I think singularly it’s the most any oil company I know of here in Alaska has ever agreed to do.”
If gas flaring is required to test the well, the flare will be enclosed and pointed away from the village, Chinn said.
When drilling is complete, the well will be plugged and abandoned but the well will be caped and buried eight feet below the tundra, a full five feet beyond state requirements.
Finally, ConocoPhillips plans to directional drill into the reservoir if it decides to develop the area, according to Burnett, meaning a permanent gravel well pad would be substantially farther from the village than the ice exploration pad.
“Essentially, we got to the point where — it was kind of interesting — we kind of ran out of things to even ask them for,” Chinn said. “This is about everything you can possibly, conceivably think of to reduce (impacts). It’s not just reduction of impacts, it’s reduction of unnecessary impacts and we got to the point where the reduction of unnecessary impacts was just gone.”
He said he believes the Putu 2 mitigation measures set a standard for exploratory drilling, if not Slope-wide, at least on Kuukpik land near Nuiqsut.
“At this point I think it sets a good tone for the future relationship with industry too, because once it gets done, whether they want to admit it or not, it does set a precedent about how you go about doing things,” Chinn said. “We just demonstrated that you can and that under the right set of circumstances — they drug their feet initially because they’re not used to doing this.
“But we said the environment is important; subsistence is important; the people are important; and therefore we have to address it accordingly. And I said if you’re not willing to address those major elements then we don’t need to be doing this. It’s important that the fundamental priorities that exist are treated that way.”
He acknowledged that project economics would likely play a role in future mitigation discussions Kuukpik is involved in but the Putu well is close enough to Nuiqsut that economic considerations had to take a backseat in this instance.
When asked if ConocoPhillips agreed that the Putu 2 well sets a precedent for future Slope exploration, Burnett wrote in an email that the well is much closer to a community than any other project on the Slope and the company is doing what it can to be a good neighbor.
“We are committed to collaborating with the Nuiqsut community to address their concerns on having an exploration well drilled close to their village,” she wrote. “We want the community to be comfortable with the drilling program. With that in mind, we have developed a robust mitigation plan to address concerns related to the drilling program.”
She said the company could not share the cost of the mitigation measures or the overall Putu 2 effort.
Chinn said Kuukpik — deep in the oil business — is not trying to play both sides of the game, but rather is trying to represent the interests of its shareholders who live amongst the North Slope development.
The company has objected to other projects as originally planned by ConocoPhillips and currently opposes the Nanushuk project in permitting north of the village because, he said, it’s pad and road designs do not adequately consider caribou migration routes and fill unnecessary amounts of wetlands.
“Here, where subsistence is such a big issue; it’s a really big deal, you have to accommodate everything: where people fish in a stream or river or so forth, where people hunt caribou. This is what people live on, ok. Alaska is very unique in that way,” Chinn stressed.
He added that fish — mostly from the Colville River that braids through much of the oil development north of Nuiqsut — account for up to 30 percent of a Nuiqsut resident’s diet.
“I’m not a flaming environmentalist, but I do care about the environment. I do care about the subsistence. I do care about the people that are involved in this and what kind of legacy does this leave for them.”
Elwood Brehmer can be reached at [email protected].