Legislature(2005 - 2006)BUTROVICH 205
02/07/2005 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SJR5 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SJR 5 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
February 7, 2005
3:38 p.m.
MEMBERS PRESENT
Senator Ralph Seekins, Vice Chair
Senator Ben Stevens
Senator Fred Dyson
Senator Bert Stedman
Senator Kim Elton
MEMBERS ABSENT
Senator Thomas Wagoner, Chair
Senator Gretchen Guess
COMMITTEE CALENDAR
SENATE JOINT RESOLUTION NO. 5
Urging the United States Congress to reauthorize the Methane
Hydrate Research and Development Act.
MOVED SJR 5 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: SJR 5
SHORT TITLE: REAUTHORIZE METHANE HYDRATE RESEARCH ACT
SPONSOR(s): SENATOR(s) THERRIAULT
02/02/05 (S) READ THE FIRST TIME - REFERRALS
02/02/05 (S) RES
02/07/05 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
Senator Gene Therriault
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SJR 5.
Mr. Mark Myers, Director
Division of Oil and Gas
Department of Natural Resources
400 Willoughby Ave.
Juneau, AK 99801-1724
POSITION STATEMENT: Commented on SJR 5.
ACTION NARRATIVE
CHAIR RALPH SEEKINS called the Senate Resources Standing
Committee meeting to order at 3:38:26 PM. Present were Senators
Dyson, Ben Stevens, Stedman, Elton and Chair Seekins.
3:38:57 PM
SJR 5-REAUTHORIZE METHANE HYDRATE RESEARCH ACT
CHAIR RALPH SEEKINS announced SJR 5 to be up for consideration.
SENATOR GENE THERRIAULT, sponsor, said he introduced SJR 5 after
traveling to Congress with Representative Samuels and Mark
Myers, director of the Division of Oil and Gas, to make a
presentation to the Senate Energy Committee on how natural gas
could solve future energy needs of the nation and how Alaska
fits into that equation.
3:39:54 PM
SENATOR THERRIAULT said gas hydrates need either temperature
control or tremendous pressure to keep the gas in a hydrate
structure. Alaska is one of the areas in which those hydrates
are known to exist in abundant supply; another place is the Gulf
of Mexico. Methane or natural gas molecules are trapped in ice
cages on the North Slope.
SENATOR THERRIAULT referred the committee to a United States
Geological Survey (USGS) map of the North Slope indicating where
gas hydrate conditions are believed to exist. Alaska is
perfectly situated now to take the information gathered under
the Methane Hydrate Research Development of 2000 and move that
into the field. Five hundred and ninety trillion cubic feet of
natural gas is estimated to be in a hydrate structure underneath
the existing Prudhoe Bay reserve.
3:41:45 PM
Development of a small percentage of that, 40 - 100 TCF, could
be used as reserve that would back up development of the gas
pipeline. It would potentially impact tariffs paid on the line
and how it is structured and sized for capacity.
3:42:17 PM
There are already a number of proposals to bring on 35 TCF of
known gas reserves on North Slope. If only a small percentage of
the 590 TCF that is known to be onshore was developed, that's
multiples of the current 35 TCF that is being considered enough
to build a line to market.
3:42:52 PM
Alaska has infrastructure in Prudhoe Bay and the oil industry
has become adept at mapping hydrates because they drill down
through and map them. Casings are installed quickly to prevent
pressurization of the wells from the gas hydrate structures.
3:43:41 PM
SJR 5 asks that the Methane Hydrate Research Development Act be
reauthorized. Its conclusion is due this year in October and it
is time to take laboratory applications into the field,
especially in the Prudhoe Bay area. Total gas hydrates available
on the North Slope, including onshore and offshore, get into
truly staggering numbers - instead of hundreds of trillions of
cubic feet, you're talking about 1,000s of trillions of cubic
feet.
Offshore gas hydrates are more difficult to develop, but as
technology develops over time, Alaska has the resource to fill a
pipeline with it both - short-term and long-term.
3:46:12 PM
MR. MYERS, Director, Division of Oil and Gas, said he would
answer questions.
3:46:42 PM
SENATOR ELTON asked the department to put together information
outlining how the Law of the Sea Treaty could affect all
offshore methane hydrate resources. Mr. Myers acknowledged his
request.
3:47:32 PM
CHAIR SEEKINS indicated a map of potential gas hydrates based on
seismic data and well information.
3:48:33 PM
MR. MYERS said estimates on the map are accurate using seismic
data and well information. Characteristics of the hydrates can
be identified from seismic data. The estimates in the
Kuparek/Milne Point area are accurate. The National Petroleum
Reserve Alaska (NPRA) also has identified hydrates.
He explained that industry considered hydrates a geohazard. To
get a drilling permit on the North Slope a company must present
the Alaska Oil and Gas Conservation Commission (AOGCC) with a
map of the potential for hydrates of free gas that must be
drilled through before going to a deeper oil objective. The
shallow intervals have to be cased off. They have been mapped
over the North Slope extensively, but the in-place numbers
around the infrastructure are very good. The question then
becomes how much of if it is economically recoverable.
3:49:44 PM
MR. MYERS said Prudhoe Bay hydrates are unique in that a free-
gas leg lies beneath the hydrate pressure cell. A simulation was
done of lowering the pressure on the free gas leg where the
hydrates come out of solution. It was found that at least 60% of
the hydrates would be recoverable at the rate of 50 MMCF per day
- suggesting highly commercial wells from the hydrate
accumulations.
3:50:30 PM
He explained that most hydrates are biogenically created by
microorganisms near the surface. High pressures at deep ocean
depths, for instance, create a stability field for the hydrates
to form. The temperature there is also relatively high.
Conventional fault blocks are the structure in which gas is
trapped on the North Slope. Conventional gas migrates up through
the faults into near permafrost where the right temperature and
pressure conditions exist to form the hydrates. Conventional
gas and hydrates are trapped together and a relatively simple
pressure mechanism will lead to relatively high rates of
production of free gas followed by a tremendous amount of
hydrates as they come out of solution.
3:51:08 PM
MR. MYERS said that hydrates are about 180 times denser in terms
of the volume of gas per cubic foot than conventional gas.
Engineering tests are needed to demonstrate that the reservoir
simulations work.
We're more speculative as we move out away from the
infrastructure. But again, good seismic data in some
of these areas - well penetration - so, we know the
hydrates are there and we know the volumes are
significant enough to potentially dwarf some of the
known proven reserves of conventional gas.
3:51:48 PM
CHAIR SEEKINS asked if he prepared the zero fiscal note.
MR. MYERS replied yes.
3:52:11 PM
SENATOR BEN STEVENS noted a technical correction on page 2, line
1, where "form" should be changed to "from".
SENATOR DYSON moved to pass SJR 5 from committee with zero
fiscal note and individual recommendations. There were no
objections and SJR 5 moved from committee. There being no
further business to come before the committee, Chair Seekins
adjourned the meeting at 3:53:10 PM.
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