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Corps Pacific division reviewing request ConocoPhillips request for appeal over denial of permit for CD-5 drill site in NPR-A under review; Parnell makes second appeal Kristen Nelson Petroleum News
The U.S. Army Corps of Engineers Pacific Ocean Division said April 12 that it is “carefully reviewing the request for appeal from ConocoPhillips Alaska Inc. for the Colville River Delta (CD-5) project in Alaska.”
The corps said the request for appeal was submitted April 2, adding that the Pacific Ocean Division commander has initiated a review of the Alaska district’s denial of the permit application.
“We received the request for appeal and are moving deliberately to conduct a thorough review of the information provided,” Brig. Gen. Mark Yenter, the commanding general and Pacific Ocean Division engineer, said in a statement. “We are looking at the appeal in accordance with regulations covering the appeals process,” he said.
Alaska Gov. Sean Parnell has twice asked the Alaska district to elevate the decision to the division engineer, based on the state’s support for a compromise worked out for the project between ConocoPhillips and North Slope stakeholders, which included the North Slope Borough and entities representing Nuiqsut, the community nearest to Alpine and the CD-5 development.
The compromise plan involved a different location for the proposed bridge across the Nigliq Channel as well as ConocoPhillips’ assistance in connecting Nuiqsut to the bridge by road, thus giving the community access to the Alpine field’s main facilities across the channel which could open up employment possibilities for residents.
The governor’s first request for elevation was rejected in mid-March; Parnell then requested reconsideration of the elevation decision in late March, citing federal regulations which direct that decisions be referred to the district engineer when it is clear the district position is contrary to the state’s official position.
Corps wants HDD The corps’ Alaska district denied the ConocoPhillips’ permit application to construct the CD-5 drill pad west of the Colville River Delta on Feb. 5. The district said it determined there were other practicable alternatives that would have a less adverse impact on the aquatic ecosystem and still meet the overall project purpose.
When the corps denied the permit it acknowledged local and state support for the project, which would see the first development of oil and gas resources within the National Petroleum Reserve-Alaska, but said overriding national interests drove the denial, specifically concerns about “further impacts to the aquatic resources” in the Colville River Delta, which lies just east of NPR-A. Both the Environmental Protection Agency and the Department of the Interior’s Fish and Wildlife Service recommended permit denial.
The ConocoPhillips proposal is for a bridge across the Nigliq Channel of the Colville River which would carry both road traffic and a pipeline taking crude oil to Alpine for processing, combined with a road connecting Nuiqsut to existing Alpine infrastructure.
Two alternatives were identified by the corps: no bridge with a pipeline drilled under the Nigliq Channel using horizontal directional drilling and an airstrip at CD-5; and no bridge with a pipeline drilled under the Nigliq Channel with HDD and extension of an existing road from Nuiqsut to CD-5 with storage and vehicular infrastructure at the Nuiqsut airstrip.
The North Slope Borough told the corps it preferred a bridge rather than HDD and said there was local concern about contamination when the Alpine sales oil line was placed under the Colville River with horizontal directional drilling because an unknown amount of drilling mud was lost.
Anadarko Petroleum Corp., ConocoPhillips’ partner in the Alpine field, told the corps that while HDD is technically feasible it poses significant risks for pipeline corrosion, sedimentation, slugging and leak detection.
The line from Alpine carries sales quality oil — water and natural gas have been removed — while the line from CD-5 to Alpine would carry unprocessed crude oil for processing at the Alpine facilities.
Final expansion approval The ConocoPhillips-Anadarko acreage position in the CD-5 area was solidified by the state in early April.
On April 8 the Alaska Division of Oil and Gas gave final approval for the fourth expansion of the Colville River unit, which adds some 16,000 acres of state, Arctic Slope Regional Corp. and federal land to the unit. The division had issued a preliminary decision approving the expansion on Dec. 23, subject to execution of documents.
The division also has approved a deferral until Aug. 1, 2014, of the date by which a block of leases contract out of the unit if not part of a participating area. Participating areas are the known producing areas of a unit, so drilling is required before participating areas are established.
Both the expansion and contraction leases are on the south and southwest border of the unit.
ConocoPhillips’ planned development activities in the expansion include 13 horizontal wells for the Alpine A sandstone and two wells for the Kuparuk sandstone from the proposed CD-5 drill pad.
“In the event of success, a total of 22 Alpine A sandstone wells and up to four Kuparuk wells may be drilled,” the division said in its decision.
The denial of the CD-5 permit by the corps will delay drilling of the expansion area Alpine wells until the 2013-14 drilling season, and the division said that while the timing for commencement of drilling has changed, the development plans for the expansion area have not changed.
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