Alaska Oil and Gas Conservation Commission Chairman John Norman says the agency is looking at proposals to develop North Slope natural gas and is “starting to revisit the commission’s orders on allowable production from Prudhoe Bay.” The largest oil field in North America, Prudhoe Bay is expected to be a major source of natural gas for the proposed pipeline from Alaska’s North Slope to Canada and the lower 48 states.
Typically the oil in a reservoir is produced first, he told Petroleum News in a mid-September interview: “You use the gas to pressure that reservoir” and then produce the gas last. If you take out gas too soon, “you risk leaving oil in the ground.”
But the reverse is also true: “If you delay gas sales too long you don’t recover as much gas.” That could happen if gas sales are delayed so long that the facilities are past their useful life, are no longer economic to operate and the field is shut down before all of the recoverable gas is produced. And if you never produce any gas at all, then you’ve left most of the gas in the ground.
The conservation angle
Norman said the commission has a role to play in the optimum timing of gas development based on its charge to prevent waste.
It looks at the whole hydrocarbon issue, viewed as barrels of oil equivalent, with 6,000 cubic feet of gas equivalent to one barrel of oil. “Everyone else is properly focused on lots of other things, the creation of jobs and the profit…,” he said.
The commission does not want to “interfere with the planning, but it’s important that we get involved early on,” he said, so that before plans for gas development get “set in stone” the conservation issue has been adequately addressed.
To make sure the issue has been adequately addressed the commission needs something from the companies. It isn’t staffed to do the work of the companies, and could also spend a lot of time studying plans that aren’t efficient. The commission’s role, Norman said, is to rule on proposals that the companies present.
“But what we’re hoping to encourage the companies to do — and everyone else — is to keep us up to speed as much as you can so that we can monitor this instead of playing hide the ball and then three years from now just suddenly dropping this big study and saying here it is and you’ve got 30 days to rule on it.”
Goal to see hydrocarbon recovery optimized
The commission’s role in gas development is limited, Norman said, “but it’s important.”
What the commission would like to see is the “project done in a way that optimizes total hydrocarbon recovery and that doesn’t weight it toward the oil or gas.” There will be tradeoffs, he said, “depending on how it’s done and so it’s important to get that balance right.”
He said he doesn’t expect the commission to hold a project up. But it does have a role to play, and is “one base that has to be covered along with a number of others.”
The commission doesn’t represent the interests of any oil company, Norman said, but has a mandate “to assure Alaskans now, and those that may be here in the future, that waste is not going to occur within this project.”
