North Slope called promising shale play
If Alaska's North Slope joins the shale revolution, there's likely plenty of natural gas to be found,from the U.S. Geological Survey.
The report pegs the mean estimate of shale gas at 42 trillion cubic feet (tcf) that could be produced with current technology. That's almost twice the volume of gas the entire United States consumed last year.
But in a July 31 presentation in Anchorage, David Houseknecht, the USGS research geologist who wrote the analysis, cautioned that the estimates are squishy due to lack of drilling into the shale strata. It's possible that no North Slope shale gas can be recovered, although he doubted that this would be the outcome of future drilling.
Despite the abundance of natural gas, little North Slope gas is produced and marketed because there is no pipeline to carry the gas to consumers. However, three major North Slope producers — ExxonMobil, ConocoPhillips and BP — and pipeline company TransCanadawhether to pursue a multibillion-dollar project that would export liquefied natural gas to Asian and other markets. They're also about their interest in a pipeline from the North Slope to Alberta to feed North American markets.
The USGS's new shale gas estimate joins several other numbers that collectively represent what is publicly known about the North Slope's natural gas resources:
- 35 tcf of proved reserves, mostly at the giant Prudhoe Bay oil field.
- 203 tcf of estimated undiscovered natural gas resources, onshore and offshore in Alaska's Arctic, that could be produced using current technology.
A caveat: Gas that can be produced profitably is a much smaller volume than gas that could be produced if technology, not money and profits, was the only constraint.
For example, thethe National Petroleum Reserve-Alaska, an Indiana-size tract west of Prudhoe Bay. The agency concluded that NPRA held a mean estimate of 52.8 tcf of technically recoverable natural gas resource. But only 7.3 tcf to 17.5 tcf of that gas could be profitably produced if gas prices were $8 per thousand cubic feet — more than double the current Lower 48 price.
Another caveat: Shale gas is considered "unconventional," meaning it's relatively difficult and expensive to produce. Conventional gas, such as that found at Prudhoe Bay and in the NPRA estimate above, typically gets drilled before shale gas plays. The North Slope's conventional gas plays are barely tapped, and they will be first in line when commercial gas production begins. In the Lower 48 states, a shale-gas boom is occurring in part because conventional gas production is falling.
Houseknecht spoke about his North Slope shale gas assessment during the K&L Gates Alaska Shale Conference in Anchorage.
He called the North Slope a "highly gas-prone area," particularly south and southwest of the cluster of oil fields already producing.
The 42 tcf of undiscovered shale-gas resource likely could be among the nation's great shale plays, he said, exceeded only by the estimated 81 tcf at the Marcellus play in the eastern U.S., 61 tcf at Haynesville in Louisiana and Texas, and 50 tcf at Eagle Ford in Texas.
But wells drilled so far into the North Slope's shale have probed just a small patch of the sprawling shale formations. Further blurring the picture is a lack of outcrops exposing the shale at the ground's surface. Such outcrops can provide insight into how brittle and fracturable the shale rock is deep below ground and how to produce the oil and gas efficiently, he said. Shale that is easily fractured can flow more gas and oil up the wells.
|Undiscovered shale gas resource
|Alaska North Slope mean estimates|
|Shublik||38.9 tcf||227 million barrels||463 million barrels|
|Brookian||3.1 tcf||44 million barrels||449 million barrels|
|Kingak||0.057 tcf||1 million barrels||28 million barrels|
|Total||42 tcf||272 million barrels||940 million barrels|
|Lower 48 states mean estimates|
|Marcellus||81 tcf||3.4 billion barrels||N/A|
|Haynesville||61 tcf||36 million barrels||N/A|
|Eagle Ford||50 tcf||2 billion barrels||853 million barrels|
|Bakken||2 tcf||148 million barrels||3.6 billion barrels|
|Source: U.S. Geological Survey|
Houseknecht assessed three North Slope shale formations, called the Shublik, Brookian and Kingat. They were laid down in the age of dinosaurs, roughly 75 million to 225 million years ago, depending on the formation.
The Shublik is the most promising of the three. It is the mother of Prudhoe Bay — the nation's largest oil field. Most of Prudhoe's oil and gas migrated from Shublik shale before getting trapped in the Prudhoe reservoir, he said.
"Shublik is off the charts," he said. He pegged Shublik's mean resource at 38.9 tcf of gas. Natural gas liquids weigh in at 227 million barrels — the equivalent of a good-sized oil field. (Houseknecht estimates Shublik houses 463 million barrels of oil that technically could be produced.)
The Brookian stratum holds a mean estimated 3.1 tcf of shale gas.
Much less is known about the Kingak formation, which got a soft estimate of 57 billion cubic feet — less gas than residents and industry in Southcentral Alaska consume in a year.
Still, because of the North Slope's trove of conventional natural gas, particularly at Prudhoe Bay, it could be many years before petroleum companies pay much attention to pure shale gas plays there. The area's roughly two dozen oil fields have yielded over $200 billion worth of production in the past 20 years, according to Alaska Department of Revenue figures, although production has dropped by more than two-thirds since peaking in the late 1980s. Almost all gas that rises up Prudhoe's oil wells continues to be reinjected to help coax more oil from the ground. This conventional gas will be produced first after a gas pipeline gets built.
SHALE OIL DRILLING
But shale drilling has come to the North Slope.
A small private company this summer is drilling the first shale oil wells.
has spudded the first of six wells it plans to test the North Slope's shale formations, Ed Duncan, company president, told the shale conference.
The company's leases lie just south of Prudhoe Bay. Its six vertical wells, with horizontal sections, are named after Big Dipper stars. They're targeting the Shublik — and any conventional oil pockets identified en route. The goal is to prove up Great Bear's concept for how to produce its North Slope shale leases and launch pilot production in 2014, Duncan said.
As the first baby steps of shale drilling begins, a voice arose at the conference insisting that Alaska's 10,000 Arctic residents get a seat at the shale-planning table.
Charlotte Brower, mayor of the North Slope Borough, used her time on the program to stress three points. Local residents expect to be actively consulted and listened to as shale development occurs, she said. They expect a share of the revenue. And they want shale development to support, not obstruct, their subsistence culture.