Murkowski: directional wells at ANWR

In the latest attempt to open area to drilling, senator announces bill to drill ANWR from state lands or waters outside the area

Eric Lidji

Petroleum News

Sen. Lisa Murkowski plans to introduce legislation to allow directional drilling into the Arctic National Wildlife Refuge from somewhere outside the boundaries of the area.

Alaska’s senior senator said the proposal would open access to some of the resources believed to be under ANWR without disturbing the surface of the region.

Murkowski, the ranking Republican on the Senate Committee on Energy and Natural Resources, said ANWR could possibly be tapped from nearby state lands or waters.

“The nation gets its oil. Those who are concerned about the loss of wilderness get to enjoy the Refuge as it exists today. Impacts to subsistence are minimized, if not eliminated,” Murkowski said in an address to Alaska lawmakers in Juneau on Feb. 19.

Murkowski acknowledged the proposal was “not a perfect solution,” citing the technical limitations of directional drilling. Opponents of drilling in ANWR quickly came out against the proposal, saying it wouldn’t fly in the current political climate in Washington.

Meanwhile, state lawmakers considered resolutions asking Congress to allow drilling in ANWR, and to avoid a “wilderness designation” over a portion of the disputed region.

ANWR geology remains unknown

First, the resources would need to be situated close to the boundaries of the area.

The 1.5 million-acre coastal plain of ANWR, also known as the 1002 area, is often called the most prospective untapped oil resource in the United States, but little is publically known about the geology of the region, including the size and location of various fields.

Most of the public information comes from a 1998 assessment from the U.S. Geological Survey, which estimated the coastal plain held some 10.4 billion barrels of oil focused toward the northwest corner, which would bode well for a directional drilling project.

Unlike traditional vertical wells, which simply drill straight down, directional wells branch out, allowing a driller to reach underground targets from a distance. BP is currently extending the limits of existing directional technology by targeting the Liberty prospect on the North Slope with a six- to eight-mile well, the longest in the world.

It would be highly unlikely for an oil company to drill a directional well without first conducting a 3-D seismic survey over the region. And because seismic would have to be shot over the surface of ANWR, it would not only require an act of Congress, but also raise longstanding debates about the impact of surface occupancy on plants and wildlife.

Murkowski estimated companies could tap about 10 percent of the oil and 80 percent of the natural gas believed to be buried under the coastal plain using directional drilling.

Those figures are new. They come from the U.S. Department of the Interior, according to her office. If they prove correct, though, the price of oil would need to be high enough to justify using expensive technology to access only a portion of the resource, or a pipeline would need to be ready to move any natural gas produced in the area to market.

Is it viable under Obama?

Those opposed to drilling in ANWR say political viability is the first hurdle. Considering the new Democratic administration in the White House and the Democratic majorities in both houses of Congress, that hurdle is seen by some as being insurmountable right now.

Murkowski said she presented the directional drilling idea to President Barack Obama’s energy team late last year, and got a “very non-committal” response: “They didn’t say, ‘Lisa, you’re crazy.’ They didn’t endorse it, obviously,” Murkowski said.

The opposing sides dispute the intention of the idea. Adrian Herrera, with the ANWR lobbying group Arctic Power, called it an attempt to find “common ground,” while Peter Van Tuyn, an Anchorage environmental lawyer, called it “the camel’s nose under the tent,” a first step toward eventually opening more of the area to oil and gas drilling.

Meanwhile, Alaska lawmakers continued periodic attempts to open ANWR. The House Resources Committee moved two resolutions related to ANWR on Feb. 23.

Public hearings around the two resolutions brought up familiar arguments from both camps, from the need to keep the debate alive in Congress, to concerns about caribou in the region, and from hopes for keeping the trans-Alaska oil pipeline full for longer, to a desire to move away from fossil fuels and embrace renewable energy technologies.

There are three ANWR bills in the current Congress. A pair in the House and the Senate would list the coastal plain as “wilderness,” while a bill from Alaska Rep. Don Young would lead to a federal lease sale, with revenues used to fund alternative energy projects.

ANWR became a symbol of public discontent last summer as rising oil prices led to high gas prices at the pump for consumers. A federal report issued last May said ANWR oil alone would improve the balance of trade, but do little to lower global oil prices.

Don’t forget Sourdough

Although the results of the drilling program have not been released publically, some geologists believe an oil reservoir at Sourdough could extend into federal land in ANWR.

If so, a company could use natural field pressure to drain some of the oil at ANWR.

The law of capture allows one landowner to drain the resources beneath neighboring lands, as long as the actual well does not extend beyond the property line and as long as the surrounding land owners have no plans to develop the resource for themselves.

The state land beyond the western border of the coastal plain is the Point Thomson unit, which the state terminated for inactivity, but where Exxon plans to drill in the near future.

If Exxon brings the region online, it would further bridge the gap on the eastern North Slope between ANWR and the facilities around Prudhoe Bay that lead to the pipeline.