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Commission will monitor Prudhoe studies by owners Inquiry into whether gas offtake limit should be changed closed; staff, contractors will have access to owner reservoir studies Kristen Nelson Petroleum News Editor-in-Chief
The Alaska Oil and Gas Conservation Commission has ended its inquiry into whether rule 9 of conservation order 341D, limiting gas offtake from the Prudhoe Bay oil pool to 2.7 billion cubic feet per day, should be updated.
The commission held hearings on the issue in March and May, and said Dec. 5 that a proposed gas pipeline shipping 4.5 bcf a day would require an upward revision of rule 9. The commission also said that after reviewing the history and basis of rule 9, it “believes that there is a need to comprehensively revisit the question of the appropriate gas offtake limitation in light of several decades of reservoir development and the information that has become available since 1977, and in light of the current understanding of reservoir management and improved techniques for reservoir simulation.”
To date, the commission said Dec. 5, it has not received an application from any of the owners for a revision of the gas offtake rule. But because a delay in its decision making “could disrupt the timetable for a potential gas pipeline project,” the commission said it is adopting “a proactive approach to ensuring that there will be an adequate factual basis for its eventual decision on allowable gas offtake,” rather than relying on information the Prudhoe Bay owners “might choose to submit in support of a future application to amend the pool rules.” Will monitor owner studies The commission said it will monitor Prudhoe Bay working interest owner reservoir simulation studies on gas offtake issues, rather than undertake reservoir simulation studies of its own.
The commission held a public hearing Dec. 1 to take comments on a proposed report which incorporated principles that would govern monitoring by commission staff and consultants of Prudhoe owner reservoir studies. These principles ensure confidentiality of data.
Commission Chair John Norman said at the hearing that it would save time and expense for the commission to use reservoir simulations by the Prudhoe working interest owners, but the commission reserves the right, he said, to initiate its own studies if that becomes necessary.
Norman said that when hearings begin on the gas offtake rate for Prudhoe Bay, the commission will have legal rights, as will the Prudhoe Bay owners, and confidentiality will be established “issue by issue” at that time. He said the commission is concerned that enough data will be on the public record to support whatever decision the commission makes.
Commissioner Cathy Foerster said she thinks that the commission has reached an understanding with the owners which allows adequate time for staff and consultants to evaluate gas offtake; allows access to and understanding of the Prudhoe Bay reservoir model; allows the commission’s technical staff to add sensitivities to model runs; and honors confidentiality during the evaluation.
Norman said data would be made available to commission staff within 30 days following the commission’s signing off on the report.
Once gas offtake rate hearings begin, Norman said, the commission’s bias will be toward public disclosure and having as much information in the public record as possible. No additions to study team Harold Heinze, chief executive officer of the Alaska Natural Gas Development Authority, told the commission in a Nov. 30 letter that he thought the commission’s study would benefit if the study team included other state and federal employers “and contractors with other expertise than reservoir simulation,” but Norman said the commission has a process the owners are comfortable with which includes only commission staff and contractors. He said the commission would look at including others if the working interest owners were comfortable with the inclusion. Norman said he was also concerned about policing confidentiality for those outside the commission staff and contractors.
Heinze also suggested that in addition to reservoir simulation studies, “there is a need for separate studies of potential recovery impacts in the same range as differences in recovery under differing gas off take volumes,” specifically understanding: “component transportation capability” of a proposed gas pipeline system “dramatically different than 20 years ago”; a change in miscible injection slug design reflecting the availability of carbon dioxide “to allow greater marketing of ethane and propane; and alternate surface facility design, process specification and future use of existing operational capabilities” that might increase natural gas liquids recovery.
Norman said the commission would look at those suggestions. They are “subtle issues,” he said, which “may have conservation implications.”
At the end of the hearing Norman said the commission would keep the public advised on how the study process is going, perhaps at its monthly public meetings, but nothing confidential would be disclosed.
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