Critics eye Point Thomson

Environmental, Native groups question drill pads so close to Beaufort Sea surf

Wesley Loy

For Petroleum News

Environmental groups are raising questions about ExxonMobil’s Point Thomson project on Alaska’s North Slope, arguing among other things that proposed drilling pads could be vulnerable to potential erosion along the Beaufort Sea coast.

The groups also are concerned the development crowds the western border of the Arctic National Wildlife Refuge, long a conservation priority for environmental campaigners.

The environmental groups raised their Point Thomson concerns in a joint comment letter submitted to the U.S. Army Corps of Engineers, which is the lead federal agency for preparing an environmental impact statement on ExxonMobil’s project.

The Fairbanks-based Northern Alaska Environmental Center wrote the letter on behalf of itself, the Alaska Wilderness League, the Sierra Club and The Wilderness Society.

Two Native organizations also signed onto the letter — the Gwich’in Steering Committee and Resisting Environmental Destruction on Indigenous Lands, or REDOIL.

The Corps of Engineers would not provide a copy of the letter. It also declined to provide access to other comments it received from a number of government and civic agencies.

The Corps did, however, provide a list of organizations that submitted comments by the Feb. 25 deadline.

Pamela A. Miller, Arctic program director for the Northern Alaska Environmental Center, was traveling and unable to provide a copy of the letter she helped draft. However, she shared her group’s concerns in a March 10 interview with Petroleum News.

Location, location, location

ExxonMobil’s project features three drilling sites — the West Pad, Central Pad and East Pad — arrayed along the coast between 250 and 500 feet from the water’s edge, Miller said.

Placing the pads so close to the sea would make them vulnerable to coastal erosion seen along the North Slope with the coming of climate change, Miller said.

Another consideration is that Point Thomson will have compressors and wells operating under exceptionally high pressure, increasing blowout risk and making it especially worrisome to have such wells so close to the shoreline, she said.

Miller’s group is suggesting to the Corps that a larger coastal buffer zone is needed, with all oil and gas facilities moved one to five miles farther inland.

The group also suggests consolidating the project’s three drilling pads into a single, central pad. This would reduce the 12 miles of gravel roads ExxonMobil is proposing to link the drilling pads, Miller said.

“We don’t want to end up with a proliferation of facilities like at Prudhoe Bay — poorly planned, a road here, a road there,” she said.

The environmental and Native groups also are concerned that the easternmost drilling pad would be only two miles away from the western boundary of ANWR.

Miller’s group suggests a larger buffer zone between the Point Thomson development and ANWR to minimize degradation to the refuge in terms of noise, unsightly industry and so forth.

Other reasons for consolidating the development as much as possible include reducing impacts on polar bears, caribou herds that attract subsistence hunters from Kaktovik, and migratory birds that feed in the area’s coastal lagoons, Miller said.

The environmental and Native groups also urge the Corps to analyze cumulative impacts to the region: Just how big a development does ExxonMobil ultimately see at Point Thomson? And would production from Shell’s offshore Sivulliq prospect be tied into Point Thomson?

Miller’s group does see some positives in ExxonMobil’s development plan.

“It is positive that there are no proposed offshore production well or processing sites (given that much of the oil and gas reservoir is located offshore) or other permanent facilities in the Beaufort Sea or on Flaxman Island which is particularly important polar bear denning habitat,” the Northern Alaska Environmental Center’s Web site says.

Miller said she’s also pleased that ExxonMobil decided to drop plans for a dock and gravel causeway out in the Beaufort Sea.

ExxonMobil’s project

One of North America’s richest undeveloped fields, Point Thomson contains an estimated 8 trillion cubic feet of natural gas — about a quarter of the North Slope’s total gas reserves — and 200 million barrels of condensate.

ExxonMobil is the operator of the Point Thomson unit, with other major leaseholders including BP, Chevron and ConocoPhillips.

Drilling already has commenced on Point Thomson’s Central Pad as part of a $1.3 billion, five-well plan to produce 10,000 barrels a day of gas condensate by the end of 2014.

Horizontal wells will tap the mostly offshore Thomson sands reservoir, bringing gas to the surface for processing to collect condensates, with the dry gas then shot back underground for storage pending construction of a natural gas pipeline.

ExxonMobil’s development plan calls for laying a new 22-mile elevated pipeline to carry Point Thomson condensates west to the Badami field, where an existing pipeline connects to Prudhoe Bay and the trans-Alaska oil pipeline.

Other elements of the Point Thomson project include a gravel airstrip, a gravel mine and a barge landing that might require some dredging.

Although ExxonMobil has begun drilling, the work is proceeding under awkward circumstances. The leaseholders are fighting in court, and administratively before the Alaska Department of Natural Resources, to retain the Point Thomson unit and the underlying leases.

Beginning in 2005, the state took steps to reclaim the Point Thomson acreage, saying the oil companies had failed to develop the field three decades after its discovery.

Despite the still unresolved legal conflict, DNR Commissioner Tom Irwin allowed ExxonMobil to start drilling in 2009. And the company, eager to hold onto a property worth many billions of dollars, has proceeded smartly.

Erosion worry discounted

In a 796-page Point Thomson Project Environmental Report submitted to the Corps on Nov. 19, ExxonMobil wrote: “To achieve effective development of the reservoir using three pads will require drilling world class wells that are at the edge of the envelope of existing directional drilling technology and experience for the depth and pressures” of the Thomson sands.

The report continues: “The West and East Pad locations have sufficient set back from the coast to accommodate projected coastal erosion without the need for slope protection.”

Using three drilling pads situated close to the coast offers several benefits, the report says.

First, the reservoir can be delineated, developed and produced from the mainland using LRDD — long-reach directional drilling technology — as opposed to building drill pads offshore on barrier islands. Second, locating the pads adjacent to the shore allows for the use of two old exploratory gravel pads, thus reducing the footprint of new gravel. Third, the beachfront pads reduce drilling distance, time and costs.

ExxonMobil concedes its coastal pad array has drawbacks.

“Coastal wetlands and near-shore terrestrial habitat would be impacted,” the environmental report says. “There could be a greater potential for polar bear interaction with this option than a site located further inland, because there is some movement and denning of polar bears along the coast line. Closer proximity to the coast could increase the chances of a spill reaching marine waters. The pads may be more visible from the ocean side and closer to subsistence hunters transiting along the shoreline in boats.”

ExxonMobil considered moving the East and West well pads a mile inland. But doing that would mean “large areas of the reservoir could not be reached using current LRDD technology.”

The Corps of Engineers expects to identify the “least environmentally damaging practicable alternative” and issue its record of decision by August 2011.