The U.S Geological Survey has published its assessment of potential shale oil and gas resources under Alaska’s North Slope. The agency says that there may be anywhere from zero to 2 billion barrels of undiscovered oil and zero to 80 trillion cubic feet of undiscovered natural gas recoverable from source rocks in the region using currently available technology. The assessment does not evaluate the economic viability of developing and producing these resources.
“Better knowledge of the untapped resource potential found in all areas of the country will help us better make science-based decisions about how we continue to grow domestic energy production for America,” Secretary of the Interior Ken Salazar said on Feb. 24 when announcing the publication of the assessment. “Alaska’s energy resources hold great promise and economic opportunity for the American people, and we will continue to expand our scientific understanding of existing resources as part of our commitment to an all-of-the-above energy approach that includes safe and responsible production of American oil and gas resources.”
USGS Director Marcia McNutt said that providing scientifically sound and publicly available assessments of untapped oil and gas resources in frontier areas forms the first step in weighing their potential contributions to energy supplies and in analyzing the potential impacts of recovering the resources. (See full USGS diagram and map on jump pages 21 and 22 of this story.)
Growing interest
Interest in shale oil development in Alaska has grown rapidly since the State of Alaska’s October 2010 North Slope lease sale in which Great Bear Petroleum picked up 500,000 acres in leases with the intention of exploring for shale oil, oil that comes directly from an oil source rock rather than from a conventional oilfield reservoir rock. Shale oil development, using horizontal drilling and hydraulic fracturing, has resulted in a major upsurge in oil production in the U.S. Lower 48 states but has not yet been attempted in Alaska.
Great Bear plans to do its first shale oil drilling in Alaska in the coming months. And Royale Energy has also entered the Alaska shale oil scene by purchasing shale-oil-targeting leases in the December 2011 state North Slope lease sale
During a press briefing for the assessment announcement USGS geologist Dave Houseknecht said that the wide ranges in the potential volumes of recoverable resources, with the possibility of zero resource recovery at the bottom ends of those ranges, reflects the fact that as yet no drilling has successfully demonstrated shale oil or shale gas production on the North Slope. It is not possible to be sure of any production until the source rocks are tested, Houseknecht said.
And in a Feb. 27 interview with Petroleum News, Houseknecht said that if the Great Bear drilling demonstrates a flow of oil above a small, minimum rate, the lower range of the assessment’s oil estimate would rise above zero, with the remainder of the estimate range also being raised to some extent.
Five assessment units
In carrying out its assessment the USGS scientists have recognized five distinct shale assessment units or plays. Three of these assessment units correspond to shale oil potential in each of the three main North Slope source rock systems: the late Triassic Shublik, the Jurassic lower Kingak and an assemblage of rocks of Cretaceous age, including the Hue shale and HRZ or GRZ, within what is known as the Brookian sequence. The other two assessment units relate to shale gas potential in the Shublik and the Brookian.
The Shublik is the most promising of the oil assessment units, with the Shublik formation known to be a prolific North Slope oil source and having abundant brittle rocks within it, particularly suitable for hydraulic fracturing; the formation also contains natural fractures along which oil might flow. The USGS scientists judge that there is about a 95 percent probability of it being possible to produce at least a minimal volume of shale oil or gas from this source rock, Houseknecht said.
The Brookian, like the Shublik, contains brittle rocks. But because these brittle rocks are not present everywhere on the Slope, the scientists have downplayed the Brookian shale oil potential just a little, to a probability of 90 percent, Houseknecht said.
The Kingak, although an excellent source rock and in geologic proximity to the Shublik, is thought much less promising as a candidate for shale oil development: The rock contains much ductile clay material that would likely render the rock unsuitable for fracturing. The scientists have assigned just a 40 percent probability of successful oil production from this source and have not assessed the likelihood of any gas production.
However, since all three source rocks often tend to be found at the same locations in the more prospective parts of the Slope, with the rocks at different depths and with the Shublik formation being deepest, any well drilled to test a Shublik play will likely penetrate all three source rocks and therefore provide opportunities to test multiple plays, Houseknecht said.
Oil and gas generation
The generation of oil or gas in shale in any of the assessment units depends on the shale having contained appropriate quantities of organic material that could have converted into hydrocarbons, and on the rocks having at some time in the past been heated to appropriate temperatures for oil or gas generation.
When a source rock becomes hot, deep underground, its temperature may become high enough to cause oil to form from the organic material in the rock. At higher temperatures natural gas rather than oil will form. Some of the oil and gas will subsequently escape from the source rock and flow into porous reservoir rocks to form conventional oil and gas fields. Some oil and gas is also likely to remain trapped in the source to become the target of shale oil or gas development.
Thermal history
Using information gleaned from rock samples geologists have been able to assess the thermal history of the rock strata under the North Slope. There is a zone in which rocks were heated many millions ago to oil generation temperatures. That zone appears to dip northward under the Slope, apparently intersecting the source rocks of the closely spaced Shublik and Kingak at depth along a relatively narrow fairway under the northern end of the Slope and under the nearshore state waters of the Beaufort Sea, Houseknecht said. This fairway defines the maximum possible outer limit of the Shublik and Kingak shale oil assessment units.
The subsurface configuration of the Brookian source rocks, on the other hand, indicates a likely broader intersection with that oil generation zone, leading to the potential for oil in the Brookian sources across much of the northern half of the Slope.
And a broad zone where temperatures reached levels suitable for natural gas generation lies below and to the south of the zone “in the oil window,” so that the shale gas play assessment units for the Shublik and the Brookian lie in the more southerly part of the Slope.
Plotting the boundaries
To plot a boundary for each of the assessment units, the USGS scientists had to evaluate the subsurface distribution of the source rocks, discounting areas where the rock units are absent or unacceptably thin. But because of factors such as high levels of uncertainty in the sizes and positions of the subsurface thermal zones, there is major uncertainty over the locations of the assessment unit boundaries. This uncertainty is heightened by the probability that, rather than there being sharp boundaries between oil plays and gas plays in the source rocks, there will be transition zones containing varying combinations of oil, gas and condensate, Houseknecht explained.
Mapping the known extent of the Shublik onto the area of the inferred oil thermal window indicated a total shale oil play area of 5.0 million to 7.5 million acres, with a modal (or most likely) area of 7.3 million acres. And a plot of the thickness of the most oil-prone section of the Shublik suggests particularly high oil potential near the Beaufort Sea coast from Lake Teshekpuk in the northeastern National Petroleum Reserve-Alaska to the Kuparuk River field, and in the area to the south of the Kuparuk River and Prudhoe Bay fields, extending east to the Canning River. That more southerly area is where Great Bear and Royale have their leases.
Absent in ANWR
Ancient erosion of the Shublik rocks has resulted in an absence of the Shublik to the east of Prudhoe Bay, and hence resulted in no Shublik shale oil or gas potential, either under the 1002 area of the Arctic National Wildlife Refuge, or ANWR, or under the coastal area immediately west of the refuge, Houseknecht said.
The Shublik shale gas assessment unit, to the south of the oil assessment unit, covers a broad area of 20.0 million to 30.0 million acres with a modal estimate of 25.6 million acres.
The Brookian shale oil assessment unit covers a broad region over the northern half of the Slope, with an estimated area ranging from 14.0 million to 20.0 million acres, and a mode of 18.2 million acres. The Brookian shale gas unit, to the south, covers 14.0 million to 20.0 million acres with a mode of 17.3 million acres. With the Brookian source rock sequence becoming very thin to the east of the Canning River, at the western boundary of ANWR, the USGS scientists have, as with the Shublik, discounted any possibility of Brookian shale oil or gas development in ANWR.
Used well logs
The USGS scientists evaluated the Brookian oil and gas assessment units by using well log data to plot the thickness of zones with relatively high radioactivity, an indicator of a high organic content in the rock and potential good source rock quality. The use of this technique indicates an area that may have high oil potential in NPR-A, to the north of Lake Teshekpuk, and another especially high potential area along an east-west fairway of state land somewhat inland from the Beaufort Sea coast and extending east to the Canning River.
The area of the Kingak oil play appears somewhat similar to that of the Shublik, with an estimated area ranging from 5.0 million acres to 8.0 million acres and a mode of 7.4 million acres. But, in the absence of well log data suitable for inferring possible Kingak source oil potential, the USGS scientists have simply recognized broad areas in which the Kingak is known to be a good quality source rock.
Lower 48 analogues
Having delineated the possible extent of each assessment unit, the USGS scientists used comparisons between the North Slope source rocks and analogous source rocks that currently produce shale oil or gas in the Lower 48 to infer broad ranges of possible production profiles for potential North Slope shale oil and gas wells. Comparisons with Lower 48 analogues also enabled estimates of the area of source rock that each North Slope well might successfully access.
However, the USGS scientists also had to factor another major uncertainty into their calculations: The fact that no operational shale oil or gas play has uniform production rates throughout its entire geographic extent. Instead, production tends to be highly variable from one place to another, with development particularly focusing on what are termed “sweet spots” where production is especially prolific.
The locations of sweet spots within the North Slope shale plays will remain unknown until there is a track record of shale oil and gas drilling. However, the USGS scientists used the pattern of possible source rock oil potential that they had determined for each assessment unit to infer the proportion of each unit that might eventually be characterized as sweet spots, thus enabling a statistical evaluation of sweet spot occurrence to be meshed into the shale oil and gas estimates.
Statistical techniques
The scientists estimated ranges of possible oil and gas production from each assessment unit by calculating the total number of wells required to fully develop the unit and adding up the possible production from each well. Statistical techniques enabled the uncertainties in the areas of the plays and in the production characteristics of wells to be factored into the calculations, thus giving a range of uncertainty in the estimated potential production.
But there are some uncertainties that cannot be quantified.
One of these uncertainties arises from the fact that oil from the Shublik source rocks tends to be more viscous, or “heavier,” than oil from shale oil plays such as the Eagle Ford or the Bakken. No one knows whether, when heated towards gas-generating temperatures, the heavier oil would crack into natural gas or whether it would form some kind of rock-clogging tarry residue, Houseknecht explained.
Another uncertainty arises from what is termed the “overpressure,” the fluid pressure in excess of what would be expected from the depth of burial of the rocks. Geologists think that overpressure, probably caused by the thermal cracking of some oil into gas inside the rock, is a significant factor in driving oil from source rocks into production wells in successful shale oil plays such as the Eagle Ford in Texas.
But overpressures in the area of the North Slope shale oil plays appear relatively low or absent, and no-one really knows how that might impact oil production.
Estimated volumes
Crunching all of the various assessment numbers together resulted in an estimate of zero to 928 million barrels of technically recoverable oil for the Shublik oil assessment unit; zero to 72 trillion cubic feet of gas for the Shublik gas assessment unit; zero to 955 million barrels for the Brookian oil assessment unit; zero to 4.3 trillion cubic feet for the Brookian gas assessment unit; and zero to 117 million barrels for the Kingak oil assessment unit.
Although these numbers would appear to place the Brookian oil assessment unit on a par with the Shublik, Houseknecht cautioned about the importance of factoring the areas of the assessment units into any comparison. The smaller the area of a play for a given quantity of oil, the higher the “concentration” of the oil in the play and the higher the potential for a well at a particular point in the play to be productive. The Shublik appears, therefore, to be more attractive for shale oil exploration than the Brookian because the Shublik oil assessment unit covers a much smaller area of land than the Brookian assessment unit.
Combining the numbers for all five assessment units resulted in the overall estimates of zero to 2 billion barrels of oil and zero to 80 trillion cubic feet of gas for the entire North Slope.
