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THE EXPLORERS 2006 - Gas program challenges Red Dog miners
Sarah Hurst For Petroleum News
Every large mine in Alaska is looking for ways to reduce the stratospheric costs of fuel and power. Fort Knox, an open pit gold mine near Fairbanks operated by Kinross, is considering building a heap leach facility to lower its electricity bill — primarily due to the mill — of $1.9 million a month. Barrick and NovaGold are hoping to use some wind power for their Donlin Creek gold project. At Red Dog, the world’s largest lead-zinc mine, Vancouver, B.C.-based Teck Cominco is getting its feet wet in the shallow gas business, and the results so far have been mixed.
Red Dog is in the northwestern Arctic and currently depends on 18 million gallons of diesel fuel to produce 25 megawatts of electricity annually. Teck Cominco has been exploring for gas in the vicinity of the mine since the late 1990s. The company’s four shallow natural gas leases were extended by three years in October 2003, and in fall 2006 Cominco applied to Alaska’s Department of Natural Resources to form a 19,200-acre unit adjacent to the mine.
$8 million on drilling this summer In summer 2006 Teck Cominco spent about $8 million on its drilling program, but it encountered severe problems. “We put down two holes last year and we were able to flare off some gas, but we had some hole deviation problems in subsequent drilling,” said Red Dog’s general manager, John Knapp. “We reinstituted (the program) this year with the intention of establishing a five-spot gas draw. All the drilling failed, so we need to revise our strategy and methods.”
Drilling consultant Advanced Resources International was one of 12 contractors that Teck Cominco hired for the shallow gas program. “Teck Cominco has absolutely no expertise or past experience with shallow gas drilling whatsoever,” Knapp said. The program this year used pneumatic air hammers, with the idea that the contractors wouldn’t have to contend with large quantities of mud. “It’s not the best way to do gas drilling in fractured rock with high water content. Pressure surges resulted in rock failure,” Knapp explained.
Two of the drill strings got stuck as a consequence. One was salvaged, but the drill bit was lost. The other drill string was completely lost and the hole had to be abandoned. “We will continue drawing water out of the formation and discharging it into the tailings facility for treatment,” Knapp said. That process will provide engineering data on the amount of water in the aquifer that will be useful for planning next year’s program, he added.
Teck Cominco is contemplating using rotary tricone drill bits instead of the pneumatic air hammers next year, according to Knapp. This does mean that a pit will have to be excavated so that mud can be pumped into a drill hole rather than trying to purge it with air. “We expect that will stabilize the hole and avoid the fracturing,” Knapp said. Knapp himself is a mining and processing engineer who has had to quickly come up to speed on the gas program in order to oversee it.
One of Red Dog’s biggest successes is its partnership with Alaska Native corporation NANA. The mine is on NANA land and more than 50 percent of its employees are shareholders of the corporation. Teck Cominco hopes that NANA can learn from the drilling experience at Red Dog and start its own shallow gas program in the very prospective region. It wouldn’t be economic to establish a gas pipeline from Red Dog to the villages of Noatak or Kivalina, but NANA could drill closer to the villages, Knapp said.
Local residents overwhelmingly support Red Dog's gas exploration program, according to Knapp.“All of the communities are intimately aware of what we're doing,” he said.Teck Cominco representatives tour the dozen or so villages in the region with a presentation about Red Dog at least once a year.
Advice for new governor Knapp is also happy with the State of Alaska's dealings with the mine and wouldn't advise the new governor to change anything.“I think the agencies treat us with the care and respect that we're entitled to and warrant,” he said.“We're very pleased with the regulatory environment, although it's obviously very onerous.”
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