Legislature(2015 - 2016)BUTROVICH 205
10/26/2015 03:00 PM Senate RESOURCES
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| Audio | Topic |
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| Start | |
| Overview by Aogcc: Offtake Authorizations for Point Thomson and Prudhoe Bay | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
October 26, 2015
2:59 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Mia Costello, Vice Chair
Senator John Coghill
Senator Peter Micciche
Senator Bert Stedman
Senator Bill Wielechowski
MEMBERS ABSENT
Senator Bill Stoltze
OTHER MEMBERS PRESENT
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Anna Mackinnon
Senate Click Bishop
Senator Charlie Huggins
Senator Pete Kelly
Senator Kevin Meyer
Representative Lora Reinbold
Representative Shelley Hughes
Representative Liz Vazquez
COMMITTEE CALENDAR
Overview by AOGCC: Offtake Authorizations for Point Thomson and
Prudhoe Bay
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
DAN SEAMOUNT, Commissioner
Alaska Oil and Gas Conservation Commission (AOGCC)
Anchorage, Alaska
POSITION STATEMENT: Explained AOGCC offtake rulings for Prudhoe
Bay and Point Thomson.
CATHY FOERSTER, Engineering Commissioner and Chair
Alaska Oil and Gas Conservation Commission (AOGCC)
Anchorage, Alaska
POSITION STATEMENT: Explained AOGCC offtake rulings for Prudhoe
Bay and Point Thomson.
ACTION NARRATIVE
2:59:47 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 2:59 p.m. Present at the call to
order were Senators Coghill, Stedman, Costello, Micciche,
Wielechowski and Chair Giessel.
^Overview by AOGCC: Offtake Authorizations for Point Thomson and
Prudhoe Bay
Overview by AOGCC: Offtake Authorizations for Point Thomson and
Prudhoe Bay
CHAIR GIESSEL said the goal for this meeting is to advance a
natural gas pipeline project for Alaskans, and today the
committee would hear from the Alaska Oil and Gas Conservation
Commission (AOGCC) on its recent ruling on gas offtakes for the
North Slope.
She said the AOGCC is a very significant organization that most
Alaskans aren't familiar with. It was established in [1955]. The
commission had a hearing on gas offtakes and methods for it and
she looked forward to hearing about how that went along with the
criteria they used to evaluate that request and their
conservation order.
CHAIR GIESSEL recognized Senators Dunleavy, Hoffman, Bishop and
MacKinnon.
3:02:00 PM
DAN SEAMOUNT, Geologist Commissioner, Alaska Oil and Gas
Conservation Commission (AOGCC), said the most important reason
they are here today is to talk about their decisions on gas
offtake, which was based mainly on engineering analysis. While
he is a geologist, Commissioner Foerster is best qualified to
talk about the engineering part of the four decisions they made.
He explained that the geology of the North Slope has been worked
over the decades. Hundreds of wells have been drilled there; at
least nine were drilled before Prudhoe Bay was discovered; and
the reservoir and structure is very well understood
geologically.
MR. SEAMOUNT related that mainly the AOGCC regulates the
subsurface operations of oil fields, not the surface or air
quality. They make sure wells are drilled safely and
efficiently, and try to ensure there is no waste of the resource
- neither oil nor gas.
CHAIR GIESSEL recognized Senators Meyer and Stevens.
3:05:08 PM
CATHY FOERSTER, Engineering Commissioner and Chair, Alaska Oil
and Gas Conservation Commission (AOGCC), explained that the
offtake rulings for Prudhoe Bay and Point Thomson were made in
anticipation of major gas sales from the North Slope in 2025.
She would tell the committee what they decided and then the
history behind those decisions and what they mean going forward.
She said the gas offtake allowable at Prudhoe Bay was changed
from 2.7 bcf/day to 3.6 bcf/day. However, if they were to wake
up tomorrow morning and find a gas pipeline, the commission
would have an emergency session and take that allowable [the 2.7
bcf/day] to zero, because it would be too soon.
MS. FOERSTER explained that Point Thomson had no gas offtake
allowable, because that field had no pool rules - the operator
applies for pool rules when they are ready to start operating
it. There are statewide rules that all fields operate under, but
when a field comes on line, it typically has some special rules
that require tweaking the statewide rules or new rules need to
be added that will allow for that field to be operating
appropriately. Pt. Thomson had no rules in anticipation of
coming on line next year with a gas cycling for a liquids
removable pilot, so it's time for them to have pool rules. Along
with those, in order to move forward their gas pipeline, they
needed an offtake allowable, which the commission ruled is now
1.1 bcf/day total gas offtake (including fuel and tiny sales to
little users).
3:07:54 PM
MR. SEAMOUNT related that when he first started his job in 2000,
the state was talking about putting in a gasline in 2014. That
just "scared the hell out of me," because the North Slope was
producing 1 million barrels of oil a day and the gas was being
used to help produce it. His thought was that if a gasline is
hooked up by 2014, there will be a lot of waste. However, the
timing is right for 2025.
MS. FOERSTER added that the AOGCC is responsible for regulating
oil, gas and geothermal exploration, production and development
in Alaska on all state lands and in state waters. The agency
oversees drilling, well work, well production operations and
reservoir management. Their primary responsibilities are
protection of human safety and fresh ground waters, waste
prevention, encouraging greater ultimate recovery and protect
correlative rights; the two that come into play most in making
gas offtake decisions are to prevent waste and encourage greater
ultimate recovery.
MS. FOERSTER said all of the known proven gas on the North Slope
resides at Prudhoe Bay and Point Thomson, and there is a lot of
it. That gas has been called stranded for a long time, because
there is no way to get it to market. As the agency charged with
encouraging greater ultimate recovery of all hydrocarbons, it is
AOGCC's job to help see that this gas does get to market.
3:10:39 PM
SENATOR GIESSEL and asked what other potential gas fields are on
the North Slope and how much gas is in them.
CHAIR GIESSEL recognized Representative Reinbold.
MS. FOERSTER answered that a little Barrow gas field is being
used to fuel the City of Barrow, but they consider it to be off
the table. Kuparuk is gas poor and other fields are having gas
exported from Prudhoe Bay to them. So, nobody else has
significant gas to contribute to a pipeline on the North Slope.
The United States Geological Survey (USGS) estimates a potential
154 tcf/gas yet to be discovered. But how much of that can be
counted on? The oil and gas business is a gambler's game, she
said, and the potential is only that until someone discovers it.
Money has to be spent to discover it and it's got to be in some
place that the federal government hasn't put off limits.
MR. SEAMOUNT remarked that the North Slope is on the same trend
as the one (Laramide Orogeny) running all the way down east of
the Rocky Mountains into the Gulf of Mexico. He had worked the
entire trend and had never seen a part of it that is more oil
and gas prone than the North Slope. It seems like every well
that is drilled there finds some gas and finds some oil. The
problem in the past has been economics and the environment, but
he was "pretty confident" that there is a lot more gas to be
found on the North Slope.
3:13:21 PM
CHAIR GIESSEL asked if the Foot Hills is a potential area.
MR. SEAMOUNT answered that he believes it is, but the people
that really have done a lot of work on it are the USGS, the
state DNR and the Alaska Division of Geological and Geophysical
Surveys (DGGS).
CHAIR GIESSEL asked if it is possible for a 42 or a 48-inch
pipeline to drain the North Slope of gas in 10 or 15 years.
MS. FOERSTER answered that it depends on the pipeline design:
how many compressor stations and the operating pressure. It is
probably possible that 28 tcf with the right design could be
gone in 10 years, but that is a good question for the people who
are designing and planning to operate it.
CHAIR GIESSEL asked if it's possible to drain a gas field too
quickly so that one can't get the optimal amount of gas like
with an oil field.
MS. FOERSTER replied that gas fields act just the opposite of
oil fields. She explained there are two basic kinds of gas
fields: a pressure depletion gas field - simply, the pressure
drops as it gets produced - and water-drive gas fields that have
an aquifer underneath the gas and as the pressure is lowered,
water comes in. In that kind of field the operator wants to pull
it as fast and hard as possible, because it lowers the pressure
in the encroached area. Most of the gas fields in Alaska are
pressure depletion fields and however it is done it is fine.
CHAIR GIESSEL asked her to comment on the gas in Prudhoe Bay and
Point Thomson.
3:16:51 PM
MS. FOERSTER said that timing on the gas is not the issue; it's
the timing on getting the gas out so that the oil is protected.
The other half of AOGCC's mission in making these decisions is
prevention of waste. Taking the gas from an oil or a condensate
field before all the oil has been produced will cause some of
that oil and condensate to be lost. This is a fact.
She said 2.5 billion barrels of oil is left at Prudhoe Bay. This
is about how much oil has come out of the Kuparuk reservoir in
its 34 years of production and Kuparuk is the second largest oil
field in North America. "It's not chump change." One doesn't
make decisions about 2.5 billion barrels lightly; one is trying
to protect 2.5 billion barrels for the citizens of Alaska. She
and Dan had lost a lot of sleep worrying about it.
She explained that at Point Thomson before the latest wells were
drilled and more data was provided on that reservoir they
thought there was a whole lot more than 200 million barrels of
condensate, but the current estimate is for 200 million barrels.
That is a little less than the oil that has been produced in 50
years from Swanson River. "Again, this is not chump change."
CHAIR GIESSEL recognized Senator Huggins.
MS. FOERSTER said the AOGCC has the task of encouraging that the
gas gets produced while also making sure that that oil and
condensate isn't wasted or lost forever in the reservoir.
"Allowing the gas to be produced before the oil is gone and the
condensate is gone will reduce the recovery of the oil and the
liquids," she said. "But not allowing the operators and the
State of Alaska to take advantage of what might be the only
window of opportunity to sell that gas would also be wasteful
and certainly wouldn't encourage greater ultimate recovery of
that resource." The effects of gas sales on the losses versus
the timing and getting the ultimate recovery of that gas had
been studied since before she came to the commission in 2005.
3:19:44 PM
SENATOR MICCICHE asked her to talk a little about oil and gas
recovery techniques that might increase the production of gas in
the later years of the reservoir.
MS. FOERSTER answered that the Prudhoe Bay operators had been
doing a good job of implementing those techniques. Prudhoe Bay
is a big reservoir with a gas cap and a big healthy thick oil
rim underlain by an aquifer. As secondary recovery, the operator
has been injecting water into the aquifer at the base and
reinjecting gas into the gas cap for pressure maintenance. So,
if they pulled out the oil and didn't reinject the water and the
gas, then the pressure would drop and the reservoir energy that
allows that oil to come to the surface would deplete over time
and the "sweep efficiency" of sweeping through all the little
pore spaces and rocks to get as much out as possible would be
less. The operator has also injected enriched gas into the oil
reservoir, itself, an enhanced oil recovery (EOR) technique, to
scoop more oil off the rock.
The AOGCC will ensure that those sorts of things and others
continue to happen between now and the start of gas sales and
even after, so that everything possible is done to accelerate
oil production and ensuring the safety of the remaining oil
reserves on into gas sales.
She related that the Prudhoe Bay operator tried, and has had
good success with, a pilot to test injecting water (which being
heavier than both oil and gas, is usually injected at the
bottom) into the gas cap to see if when there isn't enough gas
to keep the pressure up, water can be used instead - or if it
will mix in with the oil, because it's heavier and ruin
recoveries of the oil. Because the pilot has been successful,
water injection is being expanded.
SENATOR COSTELLO asked if the commission has the ability to
revise its ruling if new technology comes to light and where
their authority comes from. She also wanted to know when the
review would happen.
MS. FOERSTER replied that the commission's authority is in
statute and it will keep an eye on developments between now and
the start of major gas sales. Some reports and studies are due
to the commission at certain points during that time and they
will look for very specific performance of both the cycling of
the Point Thomson liquids and gas and the continuation of the
Prudhoe Bay acceleration of reserves. Based on what is seen, the
commission can call a hearing and reconsider; it can say all
bets are off.
SENATOR COSTELLO asked if the results from the recycling report
don't come back to AOGCC's satisfaction, what recourse they
have.
MS. FOERSTER answered that right now ExxonMobil's premise is
that full field cycling wouldn't get much more condensate out of
the ground than just going straight to gas blowdown, but if the
cycling pilot demonstrates that is not true - the pilot operates
better than people thought it would, that the condensate yield
is richer, or sweep efficiencies are better in the field - then
people could say no, you can't sell the gas from Pt. Thomson
until you cycle for longer. But the Prudhoe Bay operator has
been doing a great job of accelerating oil reserves, so maybe
the commission should increase the offtake allowable at Prudhoe
Bay and let it do all the heavy lifting until Point Thomson has
taken advantage of all the liquids. She said they feel pretty
confident that will not be the case, but the commission has to
"leave ourselves a parachute."
3:25:31 PM
MS. FOERSTER said the commission has convinced themselves, after
consulting with well-respected world-class consultants, that the
quality of the Prudhoe Bay models are much better than anything
the AOGCC could do, and they don't have the money to do it,
anyhow. It took 50 years for hundreds of brilliant engineers,
geologists and geophysicists to put the Prudhoe Bay model
together and it's pretty darn good. Nothing would be gained by
"gaming it." After looking under the hood, pulling things apart
and putting them back together with consultants, staff is
convinced they are valid and should be trusted - they are good
to use.
AOGCC staff have signed confidentiality agreements and played
with the BP and ExxonMobil experts tweaking and playing with
things in the model to see what happens, and have come to some
good feelings about the best ways to optimize both liquid and
gas recovery from Prudhoe Bay and Point Thomson. All the
recommendations are based on those studies.
When she first started at the AOGCC Ms. Foerster thought it
would be very hard for BP and ExxonMobil to convince them to
approve major gas sales from either of those fields and that is
still true, but at Pt. Thomson it's on ExxonMobil's back to
prove cycling first isn't the best answer for greater ultimate
hydrocarbon recovery. She has also been saying that the
operators won't get fully behind North Slope gas sales until the
timing is right for them, and because of the resource ownership
and their technical experience, when the timing is right for
them the timing is going to be ripe for the state, too.
At the public hearing on August 27, she said that all four of
the Prudhoe Bay owners presented testimony in support of major
gas sales from Prudhoe Bay starting in 2025. There were some
differences between what ConocoPhillips and Chevron proposed and
what BP and ExxonMobil proposed, but those had more to do with
commercial agreements. On September 1, the Pt. Thomson owners
did something similar. The commission left the records open on
both hearings until the middle of September, because the
operators had some unanswered questions to get back to the
commission on. She said then they closed the record and on
October 15 the commission issued the order allowing the 3.6 bcf
offtake 2025 for Prudhoe Bay and 1.1 bcf in 2025 from Point
Thomson.
3:30:30 PM
In five years, BP must provide a report on their oil recovery
acceleration activities and what they have gotten for their
efforts.
MS. FOERSTER explained that the commission authorized CO
2
injection for Enhanced Oil Recovery (EOR) purposes based solely
on positive study results. They have been charged with coming
back with a study on the different places that they were
considering injecting the CO that is going to be a byproduct
2
from gas production.
She explained that CO is a commonly used fluid for EOR, but it's
2
not always good. If it helps you it helps a lot, but if it
doesn't help it can harm you, so work needs to be done to
determine if CO can be an oil recovery enhancer or detractor.
2
Those studies have to be done before injection can be
implemented.
The commission was also asked to consider granting approval for
CO disposal, and although the AOGCC has authority to grant EPA
2
class 2 (oil field products) disposal, CO that has gone past the
2
custody transfer point and into a plant is no longer a class 2
fluid and therefore outside of AOGCC jurisdiction. So, they
couldn't say yes or no.
3:33:25 PM
As part of granting Point Thomson all of their pool rules, Ms.
Foerster said the commission granted them an offtake allowable
of 1.1 bcf/day, but only after five years of a continuous
cycling pilot and no less than one year before start of major
gas sales. The ruling has no sunset clause, because the
commissioners didn't want to signal concern to lenders. But a
bad outcome on any of the three studies could cause
reconsideration of their rulings. This is not intended to be a
threat to anybody. Rather it's intended to be a promise to the
citizens of the State of Alaska that the commission is
continuing to keep an eye on this.
SENATOR WIELECHOWSKI asked if there is any loss at Prudhoe Bay
from their ruling increase to 3.6 bcf/day.
MS. FOERSTER answered that there will be less oil recovered from
Prudhoe Bay because major gas sales start, but it will be a
small fraction of what is left in the ground in 2025. Now
Prudhoe Bay has 2.5 billion barrels. In 2025 they are hoping for
much less, 1 billion barrels, and it will be a small fraction of
that. However, the oil equivalent of 22 tcf/gas is more than all
of that 2.5 billion barrels.
SENATOR WIELECHOWSKI asked if they look at the monetary value to
the state or btu.
MS. FOERSTER answered that the AOGCC looks at btus, but it
varies somewhat from field to field depending upon the quality
of the oil and the richness of the gas. The general average
equalizer used is 6 mcf/barrel.
MR. SEAMOUNT added that even with the loss of oil at the end of
field life, the oil pipeline won't be running, because there
won't be enough oil. Just like they do in Texas, people will
come in with stripper wells and try to get what's left out.
There will be some loss, but total hydrocarbon recovery will be
better than not starting now.
MS. FOERSTER continued that there will be losses, but they are
acceptable losses if the choice is between stranding 22 tcf/gas
and leaving .5 billion barrels in the ground. BP doesn't want to
lose the value of the oil, either, and they are doing
accelerating EOR.
3:37:09 PM
SENATOR WIELECHOWSKI asked if ExxonMobil still takes the
position that it's better to blowdown Pt. Thomson. He requested
that she talk about what that means and the model AOGCC uses to
analyze how much can be taken off without hurting the state's
interest.
CHAIR GIESSEL recognized Senator Kelly.
MS. FOERSTER explained that Point Thomson is primarily a gas
condensate that is very complex. It's over-pressured, for one
thing - you have to wait if you're drilling muds or you will
have blowouts. So, the cost of drilling those wells with those
pressure variations are accelerated. The reservoir itself has a
gas cap that is condensate-rich with an oil rim underneath. For
both of those reasons, Point Thomson is technically an oil
field. Before the last three wells were drilled, the picture was
very different - another reason the commission is keeping an eye
on it.
She explained that the Prudhoe Bay model is very dependable, but
the Point Thomson model is based on a handful of wells rather
than a few thousand. So, every time a well is drilled the model
will change. Before the three wells were drilled, the model of
the reservoir said there was a richer condensate yield than what
they think now. It also says that the highly viscous oil rim at
the bottom is only 40-50 feet thick instead of 200 feet, as they
previously thought. She added that before they didn't have
enough wells that penetrated deeply enough to get a grasp on how
thick the oil rim was.
As they worry about liquid recovery, they worry first about the
oil, because once anything is done to the gas cap it jeopardizes
the oil. So, 50 feet of oil in an area as big as Point Thomson
isn't chump change, but if the oil is highly viscous and 9,000-
10,000 feet deep in over-pressured really expensive wells,
producing it isn't economically or technically feasible.
MS. FOERSTER explained in order to get that viscous oil out of
the ground, long horizontal wells have to be drilled and then be
produced slowly, because a really viscous oil rim with gas above
it and water below it - water is more viscous than gas but it
flows easily relative to viscous oil - and it would be no time
before the oil was gone. Think about a container with an inch of
peanut butter in it and a foot of gas above it and a foot of
water below it and sticking a straw with some holes in it into
the middle of the inch section and start sucking on it, it would
probably be about five seconds before all you were getting was
air and water. ExxonMobil would be challenged in trying to
produce that oil. It would probably cost $50-$100 million to
drill one well, and typically an injector and producer pair are
drilled to keep the pressure. So, that $100-200 million for a
producer/injector for a few barrels a day for a week, a month or
two, and then be dead. Would you make that investment?
MS. FOERSTER said an operator can't be made to do something that
is going to cost them money and never make them a cent. That is
what the current model looks like for the viscous oil. So, the
AOGCC is comfortable that with current technology and current
costs it can't be done.
SENATOR WIELECHOWSKI asked if she was saying basically that
there is no economically recoverable oil at Point Thomson.
MS. FOERSTER repeated that the oil rim at Point Thomson is not
economically recoverable - at any price - even $1,000/oil.
3:43:28 PM
Finding no questions, Ms. Foerster went on to talk about the
condensate. Before the latest wells were drilled, she said AOGCC
had some 1970s vintage drill stem tests (extrapolation from a
representative sample of the fluid) that can be used to try to
predict recoveries of condensate and were optimistic about
recoveries, but now it looks like there is going to be a lot
less than that. This is part of the picture. The other part is
when doing cycling you are trying to get the liquids out without
dropping the pressure, because in a condensate field when the
pressure drops below the dew point (every field has its own),
the condensates start dropping out in the reservoir. When they
start dropping out, two bad things happen: one is that they stay
there and two is that they drop out near the well bore so they
start decreasing the permeability of gas and oil and start
clogging up the pore spaces and reduce well productivity. Point
Thomson has lower than expected condensate and it is right at
the dew point, so the minute "a puff of gas gets out," it drops.
They couldn't ask for anything worse to produce liquids.
A third thing that happens is the permeability of the reservoir
and compartmentalization or not of the reservoir affects the
sweep efficiency of a cycling project. If permeability is too
good, the fluids will go straight from the injector well to the
producer well instead of sweeping out in a circular flow. From
all that is known now, this model is wrong. Current data
indicates that full scale cycling isn't economical and that just
by putting in enough producers in the right places a significant
portion of the condensate will come out just by blowing it down.
SENATOR WIELECHOWSKI asked if the cycling pilot would work on
Point Thomson.
MS. FOERSTER answered no; AOGCC staff participated with BP,
ExxonMobil, ConocoPhillips and Chevron in both models and spent
a lot of time tweaking the Point Thomson model to optimize the
design of the cycling with a world-class consulting firm behind
them. Some of the smartest minds in the world worked on it.
3:48:31 PM
SENATOR COGHILL asked what the timeline is for the cycling
wells.
MS. FOERSTER answered the hope is to start cycling up some time
next year. It was thought that just two wells would be needed
for the small-scale cycling project, but now an additional well
will be drilled. The cycling will continue until such time as
they have major gas sales or until they convince themselves and
the AOGCC that they are losing money. The same wells being used
for cycling will be used for production.
SENATOR MICCICHE asked if globally she knew of a low pressure
condensate reservoir that has been produced effectively with
water flood only, the question being if the gas cap is removed
from Point Thomson, is there any hope for future recovery by
other enhanced means.
MS. FOERSTER answered no gas reservoir has been produced with
water flooding, but there are successful gas cycling projects
around the world, but not with as complex and high pressure of a
reservoir as Pt. Thomson has. Part of ExxonMobil's cost
challenge is the reservoir with close to 10,000 psi pressure
would need compressors that could get it up higher than that to
push it down, and those aren't cheap.
MS. FOERSTER said there is no gas condensate reservoir in the
world that has been produced through gas cycling that has the
challenges that this one does, and a lot of the gas they are
hoping to sell would be burned up just fueling the project.
CHAIR GIESSEL said a requirement of the Pt. Thomson settlement
agreement was to remove the condensates first, and by 2016. The
pipeline is in to remove those condensates and ExxonMobil is
projecting 10,000 barrels/day.
MS. FOERSTER said she's hearing the same thing. The best answer
would be the one ExxonMobil gives.
CHAIR GIESSEL asked if ExxonMobil can't remove gas for
commercialization until 2025, based on conservation, what they
will do for the next 10 years if the condensate can't be cycled
and secured.
MS. FOERSTER said that was their call, but she understood their
plan is to cycle until major gas sales start up. The choices are
cycle or shut in.
3:54:15 PM
SENATOR COGHILL asked if CO is being used at Prudhoe Bay.
2
MS. FOERSTER answered that the gas has some CO and all of the
2
gas being produced at Prudhoe Bay that is not being used for
fuel is being reinjected into the gas cap. This is the produced
gas, but the enriched gas - with some lighter ends of the
liquids or the heavier ends of the hydrocarbon gas - goes into
the oil part of the reservoir. CO is sometimes used instead of
2
hydrocarbon gas as an EOR.
SENATOR COGHILL asked if that is happening right now.
MS. FOERSTER answered no; but it happens all over the world in
the right reservoirs. It hasn't been proved to work at Prudhoe
Bay, yet. All the CO at Prudhoe Bay is being injected into the
2
gas cap where its sole use is for pressure maintenance.
3:55:45 PM
SENATOR WIELECHOWSKI asked if the 200 million barrels of
condensate is economically recoverable and if there is a lot
more undiscovered condensate there.
MS. FOERSTER answered as the field is delineated, they will
learn if it's a little bit bigger or a little bit smaller or
something they don't anticipate. Things are still getting found
at Prudhoe Bay. A lot more will be known about the field once
the production starts.
SENATOR WIELECHOWSKI said he had also heard talk about going
from 10,000 barrels/day to 70,000 barrels/day and asked how
likely that would be.
MS. FOERSTER responded that would be if they did a full field
syphon project and the likelihood is less than 10 percent based
on what is known now. The AOGCC would not have granted an
offtake if they thought the likely scenario was going to be full
field cycling, but they can and will make a change if it is
warranted.
SENATOR WIELECHOWSKI asked when the 1.1 bcf/day offtake is
allowed to start and how much condensate will be lost.
MS. FOERSTER answered that a tiny bit of that gas would be used
for fuel the minute the cycling project is started. She didn't
have a good number on the associated losses, but she would get
one.
SENATOR COSTELLO asked if AOGCC had ever done its own reservoir
modeling and what criteria the commission uses to determine the
reservoir modeling is so good.
MS. FOERSTER replied that the Pt. Thomson consultant AOGCC hired
actually did build a model based on all available well data, and
it pretty closely replicates ExxonMobil's. It's easier to make a
model when there is limited data and no production, so the cost
and difficulty of the Point Thomson model was not a concern to
AOGCC as the cost and difficulty of the Prudhoe Bay was. To make
a model based on thousands of wells and 50 years of production
is more challenging and it would cost millions to replicate it.
Even if it cost only $1,000, that would be $1,000 that doesn't
have to be spent if they are confident that the model is
technically valid, and staff have checked all of their
assumptions and inputs and did special cases and what-ifs. If
that can be done for free, a nickel is too much to spend on
their own model.
4:00:28 PM
SENATOR COSTELLO asked if she is aware of any innovation or
technology being developing to make reservoir modeling less
costly and time consuming.
MS. FOERSTER answered that some things just take time: data
needs to be acquired, computers need to have inputs; one has to
history match and fact check.
CHAIR GIESSEL asked if the gas pipeline is built sooner than
2025, what the AOGCC would do.
MS. FOERSTER answered that they would reevaluate their decision.
This is not a threat but a promise: they have only one chance to
do this and they want to do it right.
CHAIR GIESSEL recognized Representatives Hughes and Vazquez.
CHAIR GIESSEL thanked Ms. Foerster for her work and for
detailing the decisions.
4:02:45 PM
ADJOURNMENT
CHAIR GIESSEL, finding no further business, adjourned the Senate
Resources Standing Committee meeting at 4:02 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AOGCC Presentation to SRES-10-26-2015.pdf |
SRES 10/26/2015 3:00:00 PM |
AK LNG |