Rules for wells deeper than 1,000 feet

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AOGCC says its regulations will apply to wells in the Bristol Bay area because of likelihood of unexpected oil, gas encounters

Kristen Nelson

Petroleum News

The Alaska Oil and Gas Conservation Commission has determined that there is “sufficient likelihood” that wells drilled in designated townships in the Bristol Bay area would “encounter oil, gas or other hazardous substances.” Because of that, the commission said in an Oct. 27 order for geothermal exploration wells, it has determined that wells in the area drilled deeper than 1,000 feet will be subject to the commission’s regulations and requirements.

AOGCC permits oil and gas wells, but geothermal wells are permitted by the Department of Natural Resources.

At the commission’s August public meeting AOGCC Commissioner Cathy Foerster said DNR’s drilling regulations are based on 1986 commission regulations. Art Saltmarsh, senior petroleum geologist with the commission, said at the August meeting that the commission has stricter standards in a number of areas than DNR does, including: protection of correlative rights — the rights of adjacent resource owners; demonstration by the operator of safe drilling operations; demonstration by the operator of knowledge of geology and offset data in the area of the well; and ensuring the operator has plans in place for unexpected occurrences during drilling.

Saltmarsh said the commission had started receiving requests from DNR to review geothermal drilling proposals and expected that such requests would continue since DNR has held a geothermal lease sale.

Also at the August meeting commission reservoir engineer Winton Aubert said the commission’s drilling regulations differ significantly from those enforced by DNR, with blowout equipment and testing regulations “significantly different and less stringent” in DNR’s regulations. He said DNR’s regulations do not include a methane gas detection requirement and there is no completion equipment requirement.

Naknek Electric drilling for geothermal

Under state statutes, a well is subject to commission regulation if there is likelihood of “an unexpected encounter of oil, gas, or other hazardous substance as a result of well drilling.”

Tab Ballantine, the assistant attorney general who works with the commission, told the commission in August that its authority would arguably be circumscribed by whether there was a likelihood of an unexpected encounter with oil or gas during the drilling of a geothermal well. At the September hearing he said the commission could require compliance with its regulations even though DNR was issuing a drilling permit.

In its October order the commission listed wells in the general area of the townships listed in its order which encountered oil or gas shows.

The commission’s order is effective for all wells drilled in the specified townships after the date of the order.