Sizing Up Oil on Alaska’s North Slope
Kenneth J. Bird and David W. Houseknecht
North Slope by the numbers Print Exclusive
Northern Alaska and the adjacent shelf of the Arctic Ocean make up a petroleum province the size of California that extends from the Canadian border on the east to the Russian maritime border on the west, and northward from the Brooks Range to the edge of the continental shelf. All lands north of the Brooks Range drainage divide are referred to as the North Slope. The vast, sweeping vistas characteristic of this region are made more dramatic by the absence of trees. The spectacular mountain scenery of the Brooks Range is bordered on the north by tundra-covered foothills that pass northward into a lake-dotted coastal plain, with the largest expanse of Arctic fens (a distinct type of wetland) and thaw lakes in the world.
Alaskan North Slope exploratory wells operate only during the winter, using ice roads and pads. To develop petroleum resources, engineers had to build an infrastructure that would not disrupt the region’s permafrost. Photograph is by U.S. Bureau of Land Management.
This beautiful country is also one of the most oil-productive regions in the United States, having produced about 15 billion barrels of oil over the past 30 years. From first oil production in 1977, it has typically accounted for about 20 percent of U.S. domestic production. Even after 60 years of exploration, this region remains a lightly explored frontier with petroleum potential that accounts for about 44 percent of U.S. undiscovered oil resources and 36 percent of the nation’s undiscovered conventional gas resources.
To date, about 65 individual oil and gas accumulations have been discovered on the North Slope, but only 25 have been developed into producing fields. The others generally are considered not to be economic to develop, owing to distance from infrastructure, small size or absence of a gas transportation system.
Although oil exploration in northern Alaska began in the early 20th century, it was not until the discovery of the Prudhoe Bay field in 1968 that the true potential of this region was realized. As the largest oil field in North America, Prudhoe Bay has been the centerpiece and driver of oil development in northern Alaska and has had — and continues to have — significant economic and social consequences for Alaskans and the United States.
Before the partial shutdown of the Prudhoe Bay oil field in August for pipeline corrosion problems, about 900,000 barrels of oil per day were being produced on the North Slope. The partial shutdown temporarily reduced production by about 200,000 barrels per day.
Now, exploration interests continue within and well beyond the Prudhoe Bay region, as the United States tries to find more domestic sources of energy. The future of this region as a supplier of the nation’s petroleum depends on finding significant new oil and gas accumulations, which in turn depends on policy decisions related to land access, exploration and development practices, and continued technological advances, including a natural gas pipeline transportation system.
Creating the oil
During the following 65 million years, the continental margin slowly pulled apart, as northern Alaska rifted away from North America. Eventually, northern Alaska became a relatively small but separate tectonic plate, the Arctic Alaska microplate, bordered on the north and the south by oceans. Sediments deposited during this episode are dominantly marine mudstone with local sand bodies, some of which have become petroleum reservoir rocks.
During the final tectonic episode, which dates from about 150 million years ago to the present, the southern margin of the Arctic Alaska microplate collided with island arcs and other plate fragments. The collisions produced a rising tectonic highland, which was the ancestral Brooks Range. The growing mountain range was bordered on the north by a relatively deep basin, which accumulated great amounts of sediments shed from the mountains. The basin, known as a foreland basin, was asymmetric; it was deeper in the south and shallower in the north.
As the sea advanced during each tectonic episode, organic carbon-rich mud stones, the petroleum source rocks, were deposited. Burial of these source rocks beneath the thick foreland-basin deposits that accumulated during the past approximately 120 million years provided the heat necessary to generate petroleum.
Key elements in the petroleum geology of this region are the axis of the foreland basin beneath the foothills — the region where deep burial and heating of the source rocks led to generation of oil and gas — and the Barrow Arch, a region of significant oil and gas accumulation located beneath the northern coast. A third key element is a widely distributed erosional surface, or regional unconformity, as young as 135 million years old that marks an episode of uplift and erosion, followed by later subsidence and burial. This unconformity is believed to have provided a pathway along which oil from multiple source rocks migrated to several important reservoirs.
Many oil accumulations on the Barrow Arch are believed to be mixtures of oils derived from as many as three different source rocks. Most of the known accumulations are in broad arch-like features (structural traps) or similar features modified by erosional unconformities (structural-stratigraphic traps) during formation of the Barrow Arch.
As a result of these processes, virtually all petroleum production on the North Slope is from a 160-kilometer-long coastal area that lies above the Barrow Arch and is centered at Prudhoe Bay. These accumulations are estimated to hold remaining reserves of nearly 7 billion barrels of oil and more than 35 trillion cubic feet of gas.
Recent estimates by the U.S. Geological Survey and U.S. Minerals Management Service of total mean volume of undiscovered, technically recoverable resources for northern Alaska are more than 50 billion barrels of liquid petroleum and 200 trillion cubic feet of gas. These amounts are estimated to be distributed equally between the federal offshore and the combined state onshore and offshore areas.
Producing at Prudhoe
From a depth of more than 2.5 kilometers (9,000 feet) and a temperature of more than 90 degrees Celsius (200 degrees Fahrenheit), the original hydrocarbon column extended upward about 300 meters and consisted of 120 vertical meters of oil overlain by 180 vertical meters of natural gas, the so-called gas cap. The main reservoir is a 250-million-year-old sandstone and conglomerate deposited by southward-flowing streams that fed into a shallow sea during the first tectonic episode. Remarkably, the greatest accumulation of sand and gravel coincided with the hydrocarbon trap that formed in the same place, but 150 million years later. This coincidence is a key reason the Prudhoe Bay accumulation is so large.
Reservoir properties in Prudhoe are excellent, averaging about 20 percent porosity with high permeability. Some early production wells flowed at rates of as much as 30,000 barrels of oil per day — comparable to Middle East production rates. The familiar pump jacks observed in many U.S. oil fields are not required because the oil flows to the surface under natural pressure.
Analysis of the geologic development of the Prudhoe Bay oil accumulation indicates it was nearly twice as large 40 million years ago. But regional tectonic events starting 40 million to 35 million years ago shifted the oil westward, reducing the height of the trap and causing oil to leak upward along faults into younger sandstone reservoirs.
These younger reservoirs currently host multibillion-barrel accumulations of heavy (low viscosity) oil, which is difficult to extract. These deposits have been the subject of considerable study and pilot projects. Several of them are now being produced using innovative production techniques.
Shaping a community
Once the magnitude of the Prudhoe Bay oil accumulation was ascertained, the problem became how to get the oil to markets several thousand miles away. Several transportation schemes were proposed, including a railroad with tank cars, icebreaker oil tankers that would follow the Northwest Passage across northern Canada and then to East Coast markets, and a pipeline. At least two pipeline routes were proposed: The current route south of Prudhoe Bay and a route eastward from Prudhoe Bay across the Arctic National Wildlife Refuge and into Canada.
The final choice was a 122-centimeter-diameter, 1,300-kilometer-long pipeline that carries oil to a shipping terminal at Valdez in southern Alaska, and from there the oil is shipped by tanker to various West Coast ports. It took four years to resolve pipeline right-of-way issues and to redesign the pipeline in response to critics.
Ultimately, the Alaska Native Claims Settlement Act of 1971 settled native claims to the land across which the pipeline would cross. In this act, Congress chose a corporate model that created 12 regional native-operated corporations with oversight of 44 million acres of land and $962 million in compensation (see story, page 30). The act prohibited claims within a pipeline right of way and led to the establishment of the Arctic Slope Regional Corporation and numerous village corporations. It also led to the founding of the North Slope Borough, which includes all of northern Alaska. The Borough collects taxes on oil and gas facilities, and is responsible for education and other services for about 7,500 residents concentrated in eight communities.
After settling the native claims, the National Environmental Policy Act (NEPA) was a second legal hurdle. The Arab oil embargo in 1973, however, led to diminished pipeline opposition and passage of the Trans-Alaskan Pipeline Authorization Act that barred further review on the basis of NEPA.
Still, a three-year technical review process indicated that the original buried-pipeline design was vulnerable to failure by thawing permafrost and by earthquakes. It mandated a redesign in which about half of the pipeline is elevated to minimize these risks. The original $900 million estimated cost of the pipeline rose to $8 billion. The haul road that parallels the pipeline, the Dalton Highway, was opened to the public in 1995 and now provides public access to this region.
Now, proposed construction of a natural gas pipeline is facing similar challenges, with three plans currently under consideration that follow different paths through Alaska (see story, page 18). The known North Slope gas reserves (35 trillion cubic feet) would last about 21 years under proposed production rates. The United States presently consumes about 22 trillion cubic feet per year, and the North Slope gas would provide about 1.5 trillion cubic feet per year, or 7 percent of current U.S. consumption.
With a proposed capacity to transport 4.5 billion cubic feet of gas per day, a gas transportation system would spur long-dormant exploration for natural gas. Additional discoveries of oil and gas would likely occur, and would thus extend the life of the oil pipeline.
Permafrost must be maintained in its natural frozen condition to avoid surface melting, which would result in destructive settling of roads, buildings and other structures. Thus, roadways are elevated on thick gravel berms, pipelines are elevated on pilings, heated buildings are elevated on pilings above gravel work pads, and closely spaced production wells are cooled by refrigeration equipment to preserve the supporting permafrost.
Motivated to save money and reduce environmental impact, industry has significantly improved exploration and production practices over the years. For example, seismic surveys and exploratory drilling are conducted only in the wintertime, when the ground is frozen and snow-covered. And 3-D seismic surveying improves the chance of finding oil and may result in fewer exploratory wells. Exploratory well locations are reached by ice roads or by large rubber-tired vehicles (Rolligons), and wells are drilled from ice pads. When the ice melts, little evidence remains of the activity other than compressed tundra.
Wells also are now drilled with less toxic drilling mud, reserve pits have been eliminated, and wastes, such as drilling mud and drill cuttings, are disposed of by underground injection. Once a commercial oil accumulation is found, production facilities are constructed on gravel pads. The number of pads and their sizes have been dramatically reduced by slant, or “directional,” drilling of extended-reach and multi-lateral wells, as well as by spacing wells closer together on the surface.
An oft-cited example of technological improvement is the development in the late 1990s of the Alpine oil pool that covers about 20,000 acres in the subsurface. On the surface, it is being developed from only two production pads connected by a 4.8-kilometer-long gravel road and airstrip that together cover about 100 acres. The Alpine field and its pipeline represent a roadless development.
Recent technological developments include a lightweight “truckable” drill rig that can drill more exploratory wells in a winter season than a conventional drill rig, and an onshore drill rig mounted on a platform that eliminates the need for an ice pad. Development of an offshore oil discovery from an onshore surface location is proposed by directional drilling up to 16 kilometers (farther than the current world record), thus eliminating the need for offshore production islands and connecting causeways.
Production from other fields has slowed, but not reversed the decline in northern Alaska’s total production, which is predominantly from Prudhoe Bay. In 2005, production was about 900,000 barrels per day and accounted for 17 percent of domestic production, or about 7 percent of overall U.S. oil consumption. Several developments have stimulated a renewed intensity in leasing and exploration activity, however, including new discoveries, new exploration and production technologies, evolving industry demographics, rising oil and natural gas prices, and the anticipation that northern Alaska natural gas resources may become economic and marketable through a planned pipeline.
Until recently, increased activity was focused mostly on Alaska state lands and waters of the central North Slope located between the National Petroleum Reserve in Alaska (NPRA) on the west and the Arctic National Wildlife Refuge on the east. Exploration in these areas has led to the discovery of mostly oil in relatively large traps similar to that at the Prudhoe Bay field, as opposed to smaller, more subtle traps.
The 1994 discovery of 500 million barrels of oil at Alpine field — one of the largest U.S. discoveries in the last quarter century — and success at nearby Tarn field (more than 100 million barrels of oil) stimulated interest in exploration for stratigraphic traps. These accumulations are located about 80 kilometers west of Prudhoe Bay. As a result, exploration during the past decade has progressed westward and southward from the main productive fairway into areas where new fields may be discovered. These discoveries prompted renewed interest and government leasing in the NPRA.
Despite this renewed interest, however, the future of North Slope petroleum could be as short as 20 years. Without new commercial oil discoveries and improved production rates, it is projected that the 300,000 barrel-per-day minimum economic threshold of the Trans-Alaska Pipeline System will be reached in 2025. Its future could be considerably longer, however. The certainty of a natural gas pipeline, for example, would spur more exploration and hopefully additional gas and oil discoveries, which together with gas production, would assure a longer petroleum future for Northern Alaska.
Bird is a research geologist with the U.S. Geological Survey (USGS) Energy Program, in Menlo Park, Calif. E-mail: email@example.com. Houseknecht is also a research geologist with the USGS Energy Program, located in Reston, Va. E-mail: firstname.lastname@example.org.