Posted Thursday, March 21, 2019 - 10:51 am
An official with the U.S. Army Corps of Engineers said Wednesday that the agency has not received any compelling reason to extend the 90-day comment period on a draft environmental review of a major mine project in southwest Alaska.
Shane McCoy is project manager for the corps' review of the Pebble Limited Partnership's permit application. The Pebble partnership wants to develop a gold-and-copper mine near a major salmon fishery in Alaska's Bristol Bay region.
McCoy told reporters that while 45 days is standard for such reviews, the corps decided 90 days was appropriate for the Pebble project given the nature of the project and level of interest in it.
The corps has received requests to extend the 90-day period and is considering those, but so far it has not received a strong reason for an extension, he said. The corps also has received comments saying 90 days is sufficient, he said.
Critics of the project have criticized the substance of the review and say the process has been rushed. When the draft review was released last month, Pebble partnership CEO Tom Collier said the partnership saw "no significant environmental challenges that would preclude the project from getting a permit."
McCoy said the draft review is not a rubber stamp of the project. If there's evidence contrary to what the corps' draft analysis shows, "absolutely provide it to us and allow us to use that to inform a revision if necessary," he said.
A spokesman for the Pebble partnership said the project will need dozens of permits, approvals and authorizations as it seeks to advance.
Last month, Republican U.S. Sens. Dan Sullivan and Lisa Murkowski questioned the adequacy of the 90-day comment period.
Bristol Bay Native Corp., the regional Native corporaiton which formally opposes the Pebble project, has insisted upon a 270-day comment period, as have other area Native and fishing organizations.
Sullivan spokesman Mike Anderson said by email Wednesday that Sullivan's comments stand, but he did not respond to questions on whether Sullivan had formally requested a longer comment period.
Representatives for Murkowski did not immediately respond to an email asking her position on the 90-day period.
Journal reporter Elwood Brehmer contributed to this report.
Posted Wednesday, March 20, 2019 - 10:41 am
A group of business owners and advocates are pushing for Alaska to place more of an economic stake in its outdoor recreation economy.
Alaska boasts a massive number of tracts of undeveloped public land. Most Alaskans take advantage of all that land for various activities all year, and the summer brings tourists from all over the world, especially to fish. The founders of Confluence, an outdoor recreation advocacy group begun under the umbrella of the Valdez Adventure Alliance, think the state could advertise the outdoor economy better and enable more businesses to cater to it.
A new study from the University of Alaska Anchorage’s Center for Economic Development establishes a numerical sketch for the industry’s impact as well. The study estimates that participants in outdoor recreation spend about $3.2 billion annually, excluding equipment purchases, and that the industry provides about 29,000 direct jobs and about 10,000 indirect and induced jobs. The report estimates that equipment purchases could be a similar sum.
“A majority of Alaskans say that opportunities to get outside are a reason they choose to live or remain in the state, and a similar share of visitors come to Alaska to experience the great outdoors,” the report states. “Both locals and visitors spend money in the course of their activities that circulates throughout the state economy, making outdoor recreation a substantial industry.”
During a House Resources Committee meeting on March 6, committee members heard testimony in support of legislation enhancing the outdoor recreation industry in the state. Lee Hart, one of the co-founders of Confluence, told the committee that Alaskans have long shown support for spending state resources on outdoor recreation, including taxing themselves for trail maintenance.
“Since at least the year 2000, residents of this state have been clamoring for more access to the public lands and waterways that surround their communities,” she said.
Nolan Klouda, the director of UAA Center for Economic Development, presented the study to the committee and noted that outdoor recreation is also an attraction for workers. An economic strategy for a geographically isolated state like Alaska may not necessarily be to attract firms, but to attract talented workers to live here because of the quality of life and thus lure the businesses to where the workers are, according to the study.
Klouda said businesses often identify hiring talent as a major obstacle to operating.
“Economic development increasingly is about attracting talent and keeping talent in your area,” he said. “Just the ability to hire any workers at any skill level that can fill the positions that you have, and Alaska businesses will tell you that that is a major challenge.”
Exploring ways to attract and retain residents is one of four recommendations included in the report. The others include gathering better data about outdoor recreation consumers, adding an economic impact component to state recreation development and supporting entrepreneurship.
The report points to efforts such as the Anchorage-based Launch Alaska and the Seward-based Alaska Ocean Cluster as examples of incubators for businesses in particular sectors.
The study also references programs like the state of Vermont’s grant program for remote workers, which grants prospective residents up to $10,000 for living in the state while performing remote work, and to an effort in Valdez to start a telework center meant to attract tech workers from crowded, expensive areas like Seattle and Silicon Valley based on the local outdoor recreation opportunities available.
In a handout presented to the committee, Confluence identified four priorities: raising awareness of emerging sectors, creating a blue ribbon commission to identify ways to reduce regulatory burden for outdoor industries, leveraging federal matches to fund outdoor recreation access, and management and preserving the Snowmobile Trails Grant Program.
A number of stakeholders also wrote letters to the committee in support of the SnowTRAC program, in which snowmachiners pay an increased license and registration fee in exchange for maintained trails.
Gov. Michael J. Dunleavy’s fiscal year 2020 budget proposes reorganization for the state recreational trails program, under which the snowmobile trail grant program is administered, by eliminating a position, according to the Office of Management and Budget.
Michele Stevens, who represented the Petersville Community Nonprofit Corporation, said the snowmobile trails provide more than just recreational opportunity — they are important for search and rescue operations, as people are less likely to get lost.
Matanuska-Susitna Borough Assembly member Dan Mayfield wrote a letter to Dunleavy that he was surprised that funding for the snowmobile trail program, known as SnowTRAC, was not included in the budget.
“The money funds trail care, safety and grooming activities that, in turn, bring increased business through recreational visitation to each of the communities throughout the state who have qualified for these funds,” he wrote. “Failure to fund this program means the end of SnowTRAC, increased hazards on the trails, the failure of several non-profit organizations who work to support snowmobile activity and decreased business/revenue for communities up and down the trail system.”
Elizabeth Earl can be reached at [email protected]
Posted Wednesday, March 20, 2019 - 10:41 am
Recently, several public opinion messages and campaigns have voiced concerns about the mining industry here in Alaska.
It seems that much of the angst is based on either a perceived favorable bias of the regulatory system towards industry, a bias against natural resource extraction in general, or a zero-sum game view that says you must “trade one resource for another,” which precludes the possibility of success for more than one resource.
I am grateful this attitude has not defined Alaska’s journey, and I pray it will not define our path forward. I believe Alaska is on the verge of the greatest resource production renaissance in the history of our state and it will only be realized if we come together as one.
All resource extraction industries have struggled to overcome enormous obstacles in this last frontier and have evolved into more accountable and effective stewards of our environment, providing excellent jobs for our people.
Alaska is a paragon for the world because of our long history of the mining and oil and gas industries co-existing with fisheries, wildlife and other habitat users. In Cook Inlet, oil and gas exploration, development and production has existed alongside a significant commercial and sport fishing industry for nearly 70 years.
Mining and commercial salmon fishing have co-existed in the waters of Southeast Alaska for generations. And the North Slope oil and gas industry has demonstrated to the world that polar bears, caribou and other wildlife can thrive alongside one of the world’s largest oil producing basins. We understand that the land and the sea make up one Alaska.
There is no question that the mining practices of the late 1800s and early 1900s were hard on the laborers and the environment. The commercial fishing industry certainly had its dark moments in the history of our state and was one of the prime motivators for statehood. And certainly, the oil and gas industry has made mistakes.
Yet we all know that much has changed with these modern industries. Today, you can’t find better regulated, higher performing resource extraction industries anywhere in the world. Alaskans decided to move forward.
I have been commercial salmon fishing in the waters of Bristol Bay and Cook Inlet for nearly 50 years. I remember listening to my father and others from his generation talk with pride about the honor of being able to participate in the rhythm and cycle of this harvest. It was a family business.
We were focused and “all-in” physically and emotionally. We enjoyed success and failure, exhaustion and exhilaration — together.
I was never a miner, but I have dear friends who have devoted their whole lives to this industry. One recently told me a story of his late father emerging from a mine at the end of a hard day, his face dark with dirt and sweat, a hard hat with an attached light on his head.
He said, “the grimace on my dad’s face would break into a smile when he would see us. We were always waiting for him at day’s end. Mining was our family, our life.”
The roustabout crews from the oil derricks in Cook Inlet to the drill pads of the Slope are no different. They live, work, and die as a family. These vocations all have inherent risks, and we Alaskans accept and learn from them. We keep moving forward, no matter what.
Today our state university has powerfully connected education to jobs through robust fisheries, mining, and petroleum engineering programs because these industries have a great future in Alaska and need a highly skilled workforce.
The incorporation of strong public input into our industry permitting processes and considerable regulatory oversight is a good thing. It is true we have well-founded concerns about local impacts and the need for safe, responsible development of our resources.
But I think it is fair to say that most Alaskans want to see mining, fishing and other resource extraction industries be well-regulated and flourish in our state.
Alaska has consistently had a higher unemployment rate than the national average since 2013. Within Alaska, unemployment is highest in rural areas, which have limited economic opportunities and year-round employment is almost non-existent.
Mines produce high paying jobs without question and a sense of self-sufficiency in areas long deprived of careers that can offer multi-generational prosperity.
No one industry could have brought us to the point where we have the capacity to energize, feed and enrich far more than just our own people.
If we each are willing to support opportunity, self-sufficiency and purpose’s expansion outside of our own interest, there is no limit to how bright our future will be. Our families and future generations will be the beneficiaries.
Chuck Kopp is serving his second term as state House representative for District 24 in Anchorage and is chair of the House Rules Committee.
Posted Wednesday, March 20, 2019 - 10:41 am
A rejuvenated Tanner crab fishery in Prince William Sound is showing positive signs of finishing out its second season in 30 years.
The fishery opened for the first time since 1988 in 2017, operating on commissioners permits. A test fishery operated as an information-gathering pot fishery in the area in 2016 to a limited number of vessels. Based on Alaska Department of Fish and Game survey data, the stocks were good to go for another season this year, opening March 1 and closing either by EO or on March 31.
So far, 11 vessels have landed about 16,850 Tanner crabs, totaling about 28,699 pounds. Harvest has been better than expected in two areas, said Jan Rumble, the area management biologist for commercial shellfish fisheries in Prince William Sound. One, in federal waters off of Cape Puget, had a harvest of 14,754 pounds and the Icy Bay/Whale Bay area harvested 7,042 pounds.
“Fishing for the first week of the fishery has been more spread out than last year, and not as focused in one statistical area, with 10 statistical areas fished to date,” she wrote in an email.
Fishermen in the area are feeling fairly optimistic about the catches and catch per unit of effort so far, said Chelsea Haisman, the executive director of Cordova District Fishermen United.
“The weather has been the biggest buzzkill,” she said. “(One fisherman has) sat out 11 days so far. It’s been hardly any fishing at all. It’s part of the game, I guess.”
There was enthusiasm on the docks when the fishermen first came in with the crab in Whittier, Seward and Cordova, she said. The catch provides a new seafood opportunity for residents before the summer fishing season kicks into gear.
It also fills in some of the space for the Prince William Sound fleet before the summer salmon season starts — there are several quiet months right now around December and January, and the salmon season doesn’t start in earnest until early May, she said.
“It sounds like right now, the fishery can keep going as long as the biomass is there,” she said.
“The fleet is seeing some smaller crabs that they are releasing back.”
Deliveries have been made in Whittier, Seward and Cordova, she said. Tanner crab, often marketed as its cousin the snow crab, is a fairly valuable product for fishermen. In 2017, the average ex-vessel price was $3.53 per pound, the highest price since 1994, according to ADFG records.
The scientific species name of Tanner crab is C. bairdi, though another species of crab — C. opilio — is also often marketed as snow crab and sold for more than $4 per pound at the dock in 2017, according to ADFG.
The commercial Tanner crab fishery in Prince William Sound boomed from 1968 until the late 1970s, when the catch began to decline before the fishery was closed in 1988. At its peak, fishermen brought in 13.9 million pounds, according to a March 2017 memo from Fish and Game. That was before the minimum carapace width of 5.3 inches was set, though.
By 1988, fishermen only brought in about a half-million pounds, with little to no harvest in the Eastern District because there were fewer legal males available.
The collapse of the stock could be due to overharvesting and changes in environmental conditions, according to the memo. The early fisheries on legal-size males were limited by season rather than by Guideline Harvest Level, which is the current limit set by the Board of Fisheries for Tanner crab fisheries.
“Handling mortality of undersized and female crab may have contributed to the decline, particularly during fishing seasons of seven months duration, which encompassed some of the molting and mating seasons,” the memo states. “Changes in environmental conditions, documented on a Gulf of Alaska-wide basis, may have caused high mortality of Tanner crab larvae, impaired growth and reproduction, and coincided with increased production of crab predators such as gadoid fishes.”
The fishery depends on daily call-ins from fishermen on the grounds for tracking and port sampling of the catch. At the beginning of this season, ADFG asked fishermen to call in faithfully to provide accurate information so the fishery can stay open.
In the face of less information, ADFG tends more conservative in its management in the best interest of stocks. So far, fishermen have been providing regular reports, Rumble said.
“The mandatory call-in compliance has been good and has allowed harvest and effort tracking by the statistical area; harvest has been relatively stable,” she said. “The fishery will continue to be closely monitored via the call-in reports and deliveries for the next weeks to determine if any management action is necessary.”
At this point, Fish and Game feels confident enough in its information that there are no immediate plans to close the fishery early, she said. Without early intervention from Fish and Game, the fishery will close March 31.
Elizabeth Earl can be reached at [email protected]
Posted Wednesday, March 20, 2019 - 10:40 am
While cutting back on overall spending to preserve its money to last into 2020, the Alaska Gasline Development Corp. continues answering questions and providing additional information to federal regulators, submitting on March 1 the first of six batches of information it is scheduled to submit through September.
The information will be included in the Federal Energy Regulatory Commission’s safety review and final environmental impact statement, or EIS, but not necessarily in the draft EIS that is scheduled for release in June.
The March 1 packet answered about 60 of FERC’s information requests from January, dealing mostly with fire safety, equipment and procedures, including trucking fuel to the facilities; mapping fault lines, unstable slopes and other geologic hazards; and plans for a temporary access road during construction that would cross over existing buried pipelines at Prudhoe Bay.
The state-led Alaska LNG project team had told FERC it would answer the remaining questions about fire safety, spill-containment safeguards, hazard mitigation and other design issues in monthly batches March through July. The requested information covers various details of the North Slope gas treatment plant at Prudhoe Bay, and the liquefaction plant and liquefied natural gas storage tanks in Nikiski.
It will be September, however, before AGDC provides federal regulators with more information about the project’s 27-mile underwater pipeline crossing of Cook Inlet to Nikiski. FERC wants more geotechnical data about the seafloor. It also wants to know if AGDC expects tidal flow and other currents will move debris and boulders across the pipeline, and how the project proposes to stabilize and protect the line against tidal currents and boulders.
If all goes according to schedule between the state project team, FERC and other federal agencies involved in preparing the EIS, the final impact statement is scheduled for release in March 2020. That allows nine months for public and agency comment, public hearings, review and revisions between the June 2019 draft and the final EIS.
The single EIS will be used by all federal agencies involved in regulatory oversight of the proposed Alaska LNG project, which includes a gas treatment plant at Prudhoe Bay to remove carbon dioxide and other impurities, 807 miles of large-diameter high-pressure steel pipe to move gas to the liquefaction plant and LNG export terminal in Nikiski.
Though the state corporation expects to end the current fiscal on June 30 with about $20 million still available to spend, it could run out of funds about the same time that FERC finishes work on the EIS according to a staff financial presentation at the March 6 AGDC board meeting.
The corporation is cutting back on its leased office space in Anchorage, closing its Houston office and taking other steps to stretch out its available funding. Interim AGDC President Joe Dubler told the board March 6 that the corporation also has been able to reduce its legal and contractual spending this year.
The Alaska Legislature is now working to put together the state budget for fiscal year 2020, which starts July 1, but there was no request before lawmakers as of March 11 to appropriate additional funds to AGDC.
Many legislators have said they are looking for evidence that the estimated $43 billion project is commercially viable before proceeding past the EIS. Gov. Michael J. Dunleavy has said he opposes state control of the project — with the state taking all the risk — and he wants to see the North Slope producers back on board.
“AGDC will only pursue Alaska LNG if the project viability is assured,” Dubler told the board March 6. “AGDC will seek third-party support from qualified, experienced LNG project owners and operators to build, own, and operate the project.”
The state took over the project more than two years ago after North Slope oil and gas producers ExxonMobil, BP and ConocoPhillips — citing market conditions — declined to spend the billion-plus dollars that would be required to complete permitting, final design and engineering.
The state, anxious to see the project continue at a faster pace, took over 100 percent funding of the application to FERC and the environmental impact statement.
AGDC has not contracted for construction-ready final engineering and design work, which could cost as much as $2 billion, Dubler told the board March 6.
While working to finish the EIS, the state corporation continues talking with potential investors and customers, looking to determine if the project can pass the economic-viability test.
While continuing its quest for the large-volume Alaska LNG project, the state corporation has completed its original 2010 assignment when the Legislature created AGDC: Obtain regulatory approval for a smaller-volume backup project to deliver North Slope gas to Alaskans. The U.S. Army Corps of Engineers and federal Bureau of Land Management on March 4 signed a joint record of decision for the Alaska Stand Alone Pipeline, or ASAP, also known as the in-state project and the bullet line.
The 733-mile pipeline would move North Slope gas south through the state, ending at a connection point near Big Lake, north of Anchorage, to ENSTAR’s gas distribution system for Southcentral Alaska. The project, estimated by AGDC several years ago at $10 billion, does not include a liquefaction plant or any other export component.
The line’s maximum capacity would be 500 million cubic feet of gas per day, far less than the LNG project that is designed to handle 3.5 billion cubic feet per day at the entrance to the gas treatment plant at Prudhoe Bay.
ASAP was intended to meet in-state needs for natural gas, in particular providing gas to Fairbanks and potential mining projects. The line’s capacity would be more than double the average daily demand of all Southcentral gas users. The state paid 100 percent of the cost of permitting to reach the federal record of decision, but there is no money available for final engineering and design. And, like the LNG venture, the economics of the backup project are questionable.
The Legislature has appropriated about $480 million in state funds to AGDC for the two projects since 2010.
The final EIS and record of decision on the backup line are helpful to AGDC and the larger gas pipeline project, particularly the decision by the Army Corps to allow construction in wetlands, with mitigation as required.
“Because ASAP and Alaska LNG share a common path for 80 percent of Alaska’s LNG pipeline route, this permit and the underlying data will help the Alaska LNG project efficiently advance through the federal permitting process,” AGDC said in a prepared statement.
Larry Persily is a former Alaska journalist, state and federal official who has long tracked oil and gas markets and projects worldwide.
Posted Wednesday, March 20, 2019 - 10:40 am
Alaska’s new gasline team expects to have the analyses that will determine the path of the estimated $43 billion Alaska LNG Project complete in the next two months.
Gov. Michael J. Dunleavy’s senior policy advisor Brett Huber said March 14 that the Alaska Gasline Development Corp. should know in about 60 days whether or not the state should continue actively pursuing the large LNG export plan based on the project’s economics.
Dunleavy and several members of his administration held a conference call with reporters while attending the CERAWeek oil and gas industry conference in Houston.
The governor subsequently downplayed the prospects of Alaska LNG, saying there generally appeared to be little interest in the project from potential investors also attending the conference. He said talks about Alaska were instead primarily focused on the state’s conventional oil plays, which he highlighted in a speech at the conference.
AGDC officials offered more detail on the Alaska LNG review in background discussions.
The project review is being done from two angles. First, AGDC engineers are attempting to determine what advancements in LNG technology, such as modular construction, might have occurred over the last three years that could bring the $43 billion Alaska LNG cost estimate down.
In 2016, the international energy consulting firm Wood Mackenzie concluded the Alaska LNG Project likely wasn’t economic if developed by Alaska’s major producers, as first envisioned, in part because of the high internal return requirements oil companies typically have. However, a state-led project with federal tax exemptions could be viable, Wood Mackenzie said at the time.
Secondly, the state corporation is conducting an all-in, long-term economic modeling exercise for the project that includes construction expenses, financing rates, operations and management costs under multiple ownership and investment structures.
That economic modeling, which is being done in conjunction with the Department of Revenue, will ultimately forecast rates of return for potential investors based on the project’s structure; those returns will largely determine the path forward, officials said.
If the expected investment returns from the project are favorable — in the 10 percent to 15 percent range — AGDC is likely to begin seeking investors with experience in the LNG realm. If the range of returns comes in lower, the Dunleavy administration, the corporation’s board of directors and legislators will have to decide how much further they want to take the project at this point.
AGDC leaders are also planning to meet with BP and ExxonMobil representatives in Houston to review the modeling with them when it is complete. The companies signed agreements announced in early March to assist the state corporation in finding ways to improve the project’s economics.
Regardless of the outcome of the economic modeling, AGDC will almost certainly continue seeking a favorable record of decision for the project from the Federal Energy Regulatory Commission.
In February, FERC pushed back the Alaska LNG environmental impact statement schedule several months; the first draft of the EIS is now expected in June, with a final EIS set for March 2020 and a decision on the broad federal authorization coming in the months after the final draft.
AGDC officials and other industry observers have emphasized the value of securing the authorization whether or not the project is advanced immediately afterwards. It is seen as a major step in de-risking the project, which could attract investors at lower return thresholds or allow the state to quickly resume the project if LNG market conditions improve.
Those big decisions aren’t likely to be made until the EIS is complete.
On the commercial side, a dialogue between AGDC and potential LNG buyers continues but the sides are no longer actively negotiating.
Corporation leaders said they are continuing the relationship they have with the three Chinese companies — Sinopec, Bank of China and the China Investment Corp. — that signed a nonbinding joint development agreement with AGDC in November 2017 with monthly phone calls and will meet with them in Shanghai at the LNG2019 conference in early April.
Elwood Brehmer can be reached at [email protected]
Posted Wednesday, March 20, 2019 - 10:40 am
Two years after a major gas line in Cook Inlet leaked millions of cubic feet of methane into the water, the citizen agency charged with monitoring oil and gas activity is assembling a panel of experts to review information related to the region’s aging industry infrastructure.
The Cook Inlet Regional Citizens’ Advisory Council took on a project to conduct a risk assessment for the area’s oil and gas facilities about a year after Hilcorp, the operator of the leaking pipeline, announced in April 2017 that the leak had been stopped.
The leak, which drew international attention, began in December 2016; the company said ice conditions made it too difficult to dive down and repair the line at the time.
Later investigation indicated a rolling boulder — about 3 feet by 10 feet long, according to the Alaska Department of Environmental Conservation — at the bottom of the Inlet had damaged the line, which delivered dry natural gas to a production platform.
The assessment included taking an inventory of existing infrastructure and its structural integrity. With funding from the Kenai Peninsula Borough and the Alaska Department of Environmental Conservation as well as its own dollars, CIRCAC began the first phase of a review in May 2018 and, on March 15, announced that it would move into its second phase.
The CIRCAC and its sister organization in Prince William Sound were created by Congress after the March 24, 1989, Exxon Valdez disaster that spilled nearly 11 million gallons of crude oil.
The second phase involves an expert panel of independent experts: Dr. Christopher Dash, James Howell, Andrew Kendrick, Christopher Myer and Dr. Shirish Patel. All five are pipeline safety experts, and four have direct Alaska experience, according to a March 15 announcement from CIRCAC.
“Myers has an intimate knowledge of Cook Inlet oil and gas operations, while Howell and Dash have worked on pipeline safety in other parts of Alaska,” the announcement states. “Kendrick has consulted on risk management and safety for pipeline projects throughout the country, and Patil spent 30+ years teaching and studying petroleum engineering at the University of Alaska Fairbanks prior to moving to a similar role in Saudi Arabia.”
Tim Robertson, the co-owner of Nuka Research and Planning Group, the contractor managing the project for CIRCAC, said the operators are still reviewing the information gathered in the inventory but that part of it should be publicly available by the end of the month.
“It’s going to put out by a website, and that website should be live by the end of the month,” he said. “There is a second level of the inventory, which is a little more proprietary for the operators.”
Most of Cook Inlet’s oil infrastructure dates back to the 1960s, when the oil boom began there in earnest. Companies in the succeeding years patched and repaired platforms and pipelines there, handing them off to newcomers as each successive company sold its interest in the Inlet.
Hilcorp, which bought into the inlet in 2012, controls and operates the majority of Cook Inlet’s infrastructure, with Marathon Petroleum operating the former Tesoro refinery in Nikiski and Cook Inlet Energy, Furie Operating Alaska and BlueCrest Energy operating units of their own.
Robertson said one of the challenges of assembling the inventory so far has been the sales between companies. Nuka Research previously worked on a pipeline risk assessment for the North Slope, where the infrastructure has mostly been built by the current operators.
In Cook Inlet, assets have been bought and sold multiple times over the years and records of maintenance have not been easily available. The operators have been helpful where they can, but they’re often busy and sometimes may not have the records themselves, he said.
“Recent information is really, really good, but if you go back beyond about 1995, it’s really fuzzy,” he said. “Likewise, we’ve had some variability in repairs. Again, that’s been really hard information to find out in some cases.”
The panel members have already met via teleconference and will meet face-to-face in Anchorage on May 8, Robertson said. This will also be a chance for the public to participate and gather more information about the infrastructure in Cook Inlet. CIRCAC plans to announce the details of the meeting in the future.
So far, the timeline has been going about as Nuka expected, Robertson said. There have been some delays because of hiccups in obtaining funding from the state and because of the schedules with operators — including the Nov. 30 earthquake that rattled Southcentral Alaska.
Moving into the second phase, Nuka is planning for the experts to spend the next month reviewing the information before meeting in May to discuss it. They will then provide feedback, which Nuka will review before the panel meets again around August or September, he said.
Right now, they don’t have a prescribed set of deliverables they expect from the panel. They may take a different form than the North Slope pipeline review’s recommendations did, Robertson said.
“We certainly want the expert panel to take ownership of their recommendations,” he said. “They’re all members of the industry … some from a worldwide perspective, others from a Cook Inlet perspective. They all understand the industry. We aren’t putting any bounds on recommendations at this point. I think at this point, they’ll be looking at best practices and information gathering.”
Elizabeth Earl can be reached at [email protected]
Posted Wednesday, March 20, 2019 - 10:40 am
Although the first new oil is yet to flow, the apparent recent successes of several companies exploring on the North Slope has at least a few people looking for new clues in old geologic information that covers a large swath of the oil and gas basin.
Geologist Bill Enyart and his Denver-based company Seismic Strategies have applied modern processing techniques to approximately 1,000 miles of the roughly 15,000 miles of two-dimensional seismic data shot across the National Petroleum Reserve-Alaska.
The 23 million-acre federal NPR-A covers nearly the entire western half of the North Slope. The eastern portion of the reserve nearest to existing oil infrastructure is a focal point for Slope oil exploration after Torok and Nanushuk formation discoveries by ConocoPhillips in the NPR-A and Armstrong Energy and Caelus Energy on adjacent state acreage.
ConocoPhillips’ Willow prospect, announced in early 2017, has the potential to produce upwards of 100,000 barrels per day, according to the company, as does Armstrong’s original Nanushuk discovery in the Pikka Unit on state lands just to the east of the reserve. Both of those finds centered on the shallow, conventional Nanushuk formation, are being permitted for development.
Oil Search, an Australian producer, took over operations of the Pikka Unit last year after a $400 million deal with Armstrong announced in fall 2017.
Caelus’ similarly large Smith Bay prospect in state waters on the northern edge of the NPR-A is focused on the Torok formation, which is geologically related to the Nanushuk.
Those discoveries also led the U.S. Geological Survey to drastically increase its oil resource estimate for the reserve and nearby state lands in late 2017 to more than 8.8 billion recoverable barrels.
Enyart said the NPR-A 2D seismic data was shot by federal agencies, including the Navy, in the 1970s and 80s. The NPR-A was first established as a Naval Petroleum Reserve in 1923 and was later transferred from the Navy to BLM.
He described the original seismic as “a very good data set” that would be difficult to duplicate today, primarily because of cost and environmental considerations.
Given that, the mere fact that it exists makes the old information valuable today, he said.
“The signal’s there but since that data was acquired we have seismic data processing routines that can extract additional information and those routines just weren’t available 40 years ago,” Enyart said.
Very simply, when geologic seismic data is shot, sound waves are sent into the depths of the Earth and when those waves return — in a basic sonar process — they provide information about the type and formation of rocks beneath the surface as well as the possibility of hydrocarbon deposits.
New seismic reprocessing technology provides higher resolution images and can better organize old sound signals that were disrupted by permafrost, which can scramble seismic signals.
“The original process was just broad-brush processing looking deep into the section. Historically, a lot of the production was coming from older, deeper formations, so we put a lot of effort looking into the (often shallower) Cretaceous rocks, that would be the Nanushuk and Torok formations,” Enyart said, adding that he’s not aware of anyone else doing this work on the NPR-A data.
While the Slope is generally considered a vastly underexplored oil and gas basin, such reprocessing can help identify previously overlooked prospects even in heavily covered areas such as the Gulf Coast, according to Enyart.
He acknowledged that most oil companies today won’t commit to drilling an exploration well — which on the Slope can cost $20 million or more depending on the remoteness of the location — without first seeing modern 3D seismic data of the target, but said an updated version of the publicly available 2D data is a good starting point for companies interested in Alaska.
“The downside to 3D is it’s an expensive means of acquiring seismic data and 2D is a good reconnaissance project,” Enyart described. “You go into an area the size of the NPR-A and shoot 15,000 miles of 2D seismic — that gives you clues as to the broad geology. It gives you an idea of what it looks like below the surface in kind of a gross or coarser sense and then that allows you to zero in on choice areas and go out and acquire 3D for finer prospecting.”
Similar reprocessing could be done on “tax credit” seismic data shot on state lands that is becoming publicly available because it was shot with the financial help of the state’s former refundable oil and gas tax credit program, according to Enyart.
Companies that use the seismic tax credit program were able to get state support for the work in exchange for agreeing to make the data public after 10 years.
Alaska Division of Oil and Gas geophysicist Holly Fair said reprocessing old seismic is a basic way to add value to what is already publicly available.
Geologist Kevin Frank, head of the Oil and Gas Resource Evaluation Section, added that seismic shoots on the North Slope must be done when the tundra is frozen, which limits the ability to acquire the data.
A planned 3D seismic shoot over the newly-opened for exploration portion of the Arctic National Wildlife Refuge had to be scratched this winter after the government shutdown delayed permitting for the work, Frank noted.
“If you just cannot get — even if you’re indifferent to cost — you cannot get new data, you work the old data to your benefit,” he said.
Some seismic was shot on the ANWR coastal plain by a consortium of companies in the mid-1980s, but it generally remains proprietary information.
Elwood Brehmer can be reached at [email protected]