Legislation eyed for ANWR seismic surveys

• ANWR Coastal Plain Petroleum Setting [322,577 bytes]
• ANWR Stratigraphy [216,730 bytes]
• ANWR Reserves Estimates [57,541 bytes]

U.S. Sen. Frank Murkowski (R-Alas.) is considering introducing a bill to require the government to conduct 3D seismic testing of the Arctic National Wildlife Refuge's Coastal Plain.

The issue arose at a recent Senate energy committee hearing on the U.S. Geological Survey's increased reserves estimates for the Coastal Plain (OGJ, May 25, 1998, p. 22).

Battle lines drawn

Murkowski, the committee chairman, asked witnesses, "Would 3D seismic technology further enhance resource estimates of the area and confirm USGS predictions? We need further study to see whether the reserve would indeed provide staggering amounts of recoverable oil in the next century."

Murkowski added, "It is obvious to me that the true resource estimates of the area are undoubtedly considerably higher" than the USGS estimates.

Kenneth Boyd, director of the Alaska Department of Natural Resources Division of Oil and Gas, testified, "ANWR (2D) seismic data have served us well to this point, but after 15 years, it is time to face the reality that we have wrung all the information out of these data that we can.

"Three dimensional seismic in ANWR would go a long way in unraveling a number of secrets that this incredibly complicated piece of real estate holds."

Interior Sec. Bruce Babbitt has pleaded with President Bill Clinton to veto any bill authorizing 3D seismic in the refuge. "The issue is not really exploration and acquisition of data. It is the oil proponents saying: 'The more information we can extract from this, the better the case will be for opening the refuge,'" Babbitt said.

Murkowski noted the latest USGS estimates are the highest ever publicized regarding the Coastal Plain, estimating a mean resource of 7.7 billion bbl of producible oil.

"The new estimates are significantly higher than those produced by the Interior Department in 1987, which lead to (its) recommendation to Congress to open the 1.5 million-acre area to responsible oil and gas leasing, exploration, and production."

Murkowski noted that Clinton vetoed a budget bill that would have allowed leasing on the Coastal Plain.

"In the meantime, the production of oil from the North Slope has continued to decline to its present 1.28 million b/d, down from its peak of 2.18 million b/d.

"However, technology and understanding of the arctic environment have advanced by leaps and bounds in the last few years. Significant new commercial oil fields have come on stream or have been announced as projects on the North Slope: Badami, Northstar, Alpine, Tarn, and Liberty fields are all the products of new technology, more efficient economics, and better know-how (see related story, p. 18)."

USGS view

Thomas Casadevall of the USGS explained the latest study.

He said, "To conduct the new assessment the geoscientists compiled all available geologic, geophysical, and geochemical data; determined new data needs based on assessment methodology; and acquired, analyzed, and integrated the new data.

"Over the course of the project, new field studies were conducted, new well data from areas outside the refuge were analyzed, new geophysical data were acquired, and the assessment method was reviewed and modified.

"Perhaps, most importantly, all 1,400 miles of seismic data that had been collected by a petroleum industry consortium in 1984 and 1985 were reprocessed and reinterpreted. Findings from previous studies were also reviewed and incorporated.

"The goal and guiding principle of this work was the need to provide geologic and engineering details as required by the assessment method. That method is known as play analysisellipseTen plays were identified and assessed in this study. For each play, numerical simulations provided a size/frequency distribution of petroleum accumulations. Input for the simulations required interpretations of geologic and engineering details on reservoir rocks, source rocks, and types of hydrocarbons generated; sizes and numbers of traps (potential oil or gas accumulations) derived from seismic data; and the chronology of geologic development of the area.

"Overall, the level of investigation in this assessment was similar to that of an oil company exploration program evaluating a frontier region, but without drilling any wells."

Estimates

Casadevall said the Coastal Plain was estimated to have 11.6-31.5 billion bbl of oil in place, with a mean of 20.7 billion bbl.

Technically recoverable oil was estimated at 4.3-11.8 billion bbl, with a mean of 7.7 billion bbl, he noted: "It is estimated that most of this oil will occur in numerous accumulations, each containing less than 1 billion bbl of technically recoverable oil. Quantities of technically recoverable oil are not expected to be uniformly distributed.

"The western part of the area, where rocks are relatively undeformed, is estimated to contain nearly 85% of the total. The eastern portion, where rocks are more severely deformed, is estimated to contain about 15%."

Casadevall said quantities of economically recoverable oil depend on costs and prices of oil.

"In our analysis, we considered the costs related to finding, developing, producing, and transporting the oil, as well as a 12% after-tax rate of return to capital. All calculations were in constant 1996 dollars and costs.

"Our analysis is based on a continuous range of prices from $12/bbl to $30/bbl. This approach results in a set of curves that show increasing amounts of economically recoverable oil with increasing prices."

He said that, expressed as ranges between the 95th and 5th percentiles, and with oil prices at $15/bbl, the total quantity of economically recoverable oil is estimated to range from 0 to 2.7 billion bbl, respectively. At $16/bbl, it ranges from 0 to 3.6 billion bbl. And, at $20/bbl, it ranges from 0.7 billion bbl to 6.9 billion bbl.

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