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August 2010

Vol. 15, No. 34 Week of August 22, 2010

AOGCC takes over Cook Inlet UCG wells

Wells deeper than 500 feet in two onshore areas where encounters with oil, gas likely now must have commission drilling permits

Kristen Nelson

Petroleum News

The Alaska Oil and Gas Conservation Commission is asserting authority over wells drilled to depths greater than 500 feet in specified onshore areas of Cook Inlet.

At issue here are wells drilled to explore coal, which are permitted by the Department of Natural Resources, not by AOGCC. Last fall the commission asserted authority over geothermal wells in specific areas where there was the potential to encounter unexpected hydrocarbons. This spring the Alaska Legislature turned authority for geothermal drilling over to the commission.

The commission said in Conservation Order No. 631, dated Aug. 9, and aimed at underground coal gasification exploration wells, that wells drilled in specified areas of the Kenai Peninsula and the Matanuska-Susitna boroughs are “likely to have unexpected encounters of oil, gas or other hazardous substances,” citing instances of blowouts or well control issues in shallow wells drilled in the area.

In a summary of its findings the commission said the onshore northwest Cook Inlet area “is known to be underlain by laterally extensive coal deposits” beginning near the surface.

“Increasing interest in unconventional energy sources including Underground Coal Gasification will likely result in exploratory drilling projects to assess the coal resource in the NW Cook Inlet area,” the commission said.

There are multiple biogenically sourced natural gas fields in the northwest Cook Inlet area and throughout the basin and drilling records throughout the area “have established that natural gas can be encountered at shallow depth,” with multiple natural gas fields developed on the west side of Cook Inlet in the townships and ranges designed for regulation.

Well control problems

The commission said its records indicate that at least three wells in the area have experienced well control problems while drilling at depths of about 1,500 feet or less, specifically the Moquawkie No. 1 (drilled in 1965,) which encountered shallow gas and experienced a blowout and fire while drilling at about 1,525 feet; the Moquawkie No. 4 (drilled in 2008) which experienced a blowout while drilling at about 900 feet; and the CC-4C-10 (drilled in 2010,) which encountered shallow gas and experienced a kick while drilling at about 1,320 feet.

The commission said it has no records indicating well control problems in the area at depths shallower than 500 feet.

According to a transcript of the commission’s July 27 hearing on this issue, Art Saltmarsh, senior petroleum geologist at the commission, said the blowouts at the Moquawkie wells were controlled with heavy drilling muds — in the case of the Moquawkie No. 1 after the fire, which extensively damaged the rig, was put out. He said that in both of these cases it appeared the drilling fluid used initially wasn’t sufficient to overbalance formation pressures.

The well drilled this year, the CC-4C-10, was one of five wells drilled by Cook Inlet Region Inc. in the vicinity of Forcenergy’s 1998 Coffee Creek No. 1 well. Saltmarsh said that when Coffee Creek was drilled, the operator had to use mud weights in excess of 10 pounds per gallon while drilling at some 800 feet and more than 10.6 pounds per gallon while drilling at approximately 2,600 feet to suppress and contain formation gases encountered while drilling.

CIRI encountered shallow gas while drilling the CC-4C-10 well at about 1,320 feet and some 2,000 gallons of brackish drilling fluid was ejected from the wellbore. The blowout preventers were closed and the well was brought under control with heavier drilling mud and then cemented.

AOGCC worked with DNR

Underground coal gasification falls under the regulatory control of the coal regulatory group at DNR which issues permits for surface coal exploration and extraction.

Saltmarsh said that because of the high likelihood of encountering gas in the CIRI wells, senior AOGCC staff had worked with the coal regulatory group at DNR to ensure that proper blowout prevention equipment and sufficiently heavy drilling muds were used in the project.

Commissioner John Norman said at the hearing that under state statute the commission can exercise its authority to regulate drilling on nonconventional energy projects — the commission has statutory authority to regulate oil and gas drilling — if it finds that unexpected encounters with oil, gas or other hazardous substances is likely in a designated area.






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