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Vol. 14, No. 12 Week of March 22, 2009
Providing coverage of Alaska and northern Canada's oil and gas industry

Salazar opens door (slightly) on ANWR

Says directional drilling might resolve issue of surface disturbance, but wants to see more information about the technology

Petroleum News

Interior Secretary Ken Salazar on March 16 said he would consider tapping oil from the coastal plain of the Arctic National Wildlife Refuge if it can be done from outside the boundaries of the North Slope refuge, leaving animals and other wildlife undisturbed.

But Salazar emphasized the Obama administration stands firm that ANWR “is a very special place” that must be protected and that he is not yet convinced directional drilling would meet that test.

Sen. Lisa Murkowski, R-Alaska, recently introduced legislation that would allow oil companies to access oil beneath the Arctic refuge’s coastal plain, also known as Area 1002, through directional drilling from platforms outside the refuge itself.

“I think some in the administration are looking at me and saying, ‘You must be crazy, Lisa. We’ve always opposed ANWR and you’re coming back with an ANWR proposal,’” Murkowski told reporters at the Platt’s Energy Podium on March 16. “But my response is, ‘Hey. This is different. You’ve always said you object to the surface disruption. … Well, if we’re not on the surface — if we’re not out there, if you can’t see us — tell me what your objection is.’”

Salazar remains uncertain about the available technology.

“The question of whether or not you can do directional drilling without impairing the ecological values of ANWR is an open question. Most of what I’ve seen up to this point is it would not be possible to do that,” Salazar said in a conference call with reporters.

Salazar said directional drilling is “something that can be discussed” because of recent advancements in the technology, but testifying on March 17 before the Senate Energy and Natural Resources Committee, of which Murkowski is the ranking member, Salazar said, “Our position as an administration has not changed at all with respect to ANWR.”

Sen. John McCain, R-Arizona, who has previously been opposed to drilling in ANWR, said if the technology isn’t available, the proposal is a non-starter, but if technology exists and can be used to tap resources without disturbing the refuge, “we ought to pursue it.”

Salazar is scheduled to come to Alaska in April to discuss energy-related issues.

A question of technology

Technology is the primary challenge for directional drilling, according to Harry Engel, engineering team leader for BP’s Alaska drilling and wells group, who spoke informally to state lawmakers on March 17.

“Can a field be developed with extended reach drilling? Sure it can. It’s got to be the right field. It’s got to be the right tools — the right drilling rig — and then the reservoir has to also match it,” Engel said at a new five-session speakers’ series sponsored by groups from various industries and taking place outside the normal hearing process.

Engel spoke on behalf of the Alaska Oil and Gas Association.

Engel said extended reach wells have a 1 to 3 ratio of vertical depth to horizontal reach.

The wells BP is proposing to drill to target the offshore Liberty prospect would push that boundary, dropping two miles underground before extending eight miles out, a 4-1 ratio.

“Liberty is going to be a tremendous learning round for industry on the limits of extended reach drilling,” Engel said.

Engel said the primary technical challenge for this ultra-extended reach drilling is the rig.

The custom rig currently under construction for the Liberty project is expected to be the biggest in Alaska, capable of lifting millions of pounds of drilling string, with enough torque to turn a drill bit and enough pumping power to circulate drilling mud eight miles down and back.

Asked about the applicability of the technology at ANWR, Engel said, “It’s hard to answer a question like that without knowing exact details on what we’re talking about.”

But he said engineers are already considering how best to drill even farther out. Ideas include switching from steel to aluminum tubulars to lighten the load on the drilling rig.

BP holds leases in ANWR, but has not been involved publicly in the debate for years.

—AP contributed to this report

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