|
Unocal’s Cook Inlet gas program replaces production Company’s gas currently goes mainly to Nikiski fertilizer plant; for basin, challenge will be to meet gradual growth in demand, peak winter demands Kristen Nelson PNA News Editor
Unocal Alaska Resources produces natural gas in the Cook Inlet basin, both for itself and for Cook Inlet platform partner Marathon Oil Co. Martin Morell, the company’s Alaska oil and gas operations manager, told PNA July 25 that in his opinion the Cook Inlet basin “is very rich in gas resources.
“And I say that in terms of potential,” Morell said, because “if I remember the numbers right, over 98 percent of the current gas production is from fields that were discovered more than 30 years ago. So we’ve had a distinct lack of new field production in the area.”
And, he said, “as our old war-horse fields start playing down, as they are now, there’s a real need for new exploration.”
Morell said that he’s concerned, long term, about the gas supply in the area and finds it ironic that it’s so difficult to get access to resource potential in what “is probably one of the richer gas basins in the United States.” Permitting challenges severe The permitting challenges are severe, Morell said. “It’s very difficult to go through the maze of permits of various government agencies and levels of government agencies, in combination with the multiple threats of lawsuits from, mostly from environmental related groups.”
Morell said what he finds ironic is that “natural gas being such a clean-burning, non-polluting energy source and one that’s extremely good for Alaska — both the environment and the economy of Alaska — that it would be so difficult to access that resource potential.”
Natural gas is the resource everyone has come to depend on for heating and electrical needs, and Morell said he “doesn’t mean to be a complainer.
“I just find it very ironic,” he said, “that the situation exists that way.” In the years to come, even with only moderate increases in the need for natural gas, reserves that have been discovered will play out, and “it will become in short supply when there is such an apparent wealth of it to be had.” Biggest problems farthest from infrastructure “The big problems are in new field exploration, especially farther away from infrastructure,” Morell said. “In the existing fields, where infrastructure’s already in existence, it’s relatively easy to further develop the field. But those fields have been picked over for decades and the availability of resources is limited in any one field, so without introducing new fields, there’s no way to keep up with the depletion of reserves.”
He said he didn’t think there was a single solution.
“I think it is extremely important that oil companies continue to be very responsible in their behavior.”
On the regulatory side, he said, there is a lot of duplication between agencies and levels of government. “They all work hard to try to coordinate with each other, but there are so many individuals and agencies involved that it’s a massive effort to try to keep everyone on the same page and on the same schedule.”
In addition to permitting, lawsuits and threats of lawsuits by environmental groups tend to slow the process down and make it very costly.
The process is both lengthy and costly. Unocal has recently begun work on an environmental impact statement for an area in the federal wildlife reserve around Swanson River for the potential of developing satellite facilities. Morell said his understanding that the study itself is probably a two-year several-hundred thousand dollar process — and that’s just one of the first steps toward a permit.
“So that’s what I find ironic about the situation, is that I truly feel it’s for the good of the community, it’s for the good of the state, it’s for the good of everyone involved and yet it’s such an onerous process.”
Morell said he things that “in everyone’s experience the process had gotten much more complicated over time, whether it’s in Alaska or other places.”
But, he said, “I have the impression that Alaska is looked on — certainly by environmental groups — as a pristine area that should be left untouched and that there tends to be particular fervor in defending wilderness against development.”
Morell said: “We see strong opportunities as the current resource base, reserve base, plays out, for openings in the existing market and in the event of a large discovery, the potential for further market is always there.” Gas from offshore, onshore Unocal produces gas onshore and offshore. Morell said nine of the 10 platforms the company operates in Cook Inlet are primarily oil, one primarily gas. While a lot of the work done on the platforms is for oil, Morell said Unocal also does quite a bit of gas work offshore.
“We have a limited market for gas and our natural decline is in the neighborhood of 60 million cubic feet a day every year, so basically we have a work program that replaces about 60 million cubic feet a day,” he said. Almost all of Unocal’s gas goes to the Kenai fertilizer plant.
Onshore the company primarily produces gas, Morell said. The company’s only oil property onshore is Swanson River, and while there’s a significant amount of oil there, he said today that production is mostly gas. Gas storage to meet peak needs To ensure that gas is available to meet peak winter demand, Unocal is looking at gas storage. The way that up swing in the market from summer to winter has been addressed in the Lower 48, Morell said, is through gas storage projects.
“As the very large fields in the Cook Inlet tend to lose their deliverability, if you will, their ability to deliver at high rates, the most likely way in our minds to address that change in supply is through gas storage,” he said.
“Typically, gas storage reservoirs are relatively smaller reservoirs but are very prolific so they can be filled up in the summer and then produced quickly in the winter.” Morell said it depended on the circumstances, but normally a gas reservoir will have pressured injection and further compression for withdrawal.
Unocal has started to look at gas storage.
Morell said Unocal had intended a pilot project for storage this year, were weren’t able to follow through because of a complication with a pipeline partner. He said Unocal sees gas storage as something which will evolve as deliverability becomes tighter in the area.
| 