Alaska's ANWR and NPRA Might Soon Open for Exploration

Acting with a goal of "geopolitical security,” U.S. Secretary of the Interior Ryan Zinke has begun a heavy push to open Alaska's oil-rich, yet off-limits, federally-owned areas after decades of legislation and land management policies have kept some of them essentially out of reach.

In a May 31 secretarial order, Zinke called for opening of parts of the National Petroleum Reserve – Alaska (NPRA) to lease sales and for updating resource assessments of both NPRA and the Arctic National Wildlife Refuge (ANWR) coastal plain. The order follows two bills introduced to the Senate and the House earlier this year calling for exploration in ANWR.

While the areas to be leased in NPRA were not yet announced at press time, the U.S. Geological Survey (USGS) has been directed to produce new assessments of technically recoverable oil and gas resources for both NPRA and ANWR. It is not yet clear whether the federal government will wait for the assessments or if it will choose to fast-track a lease sale in NPRA.

"We are very optimistic,” said Andy Mack, commissioner of the Alaska Department of Natural Resources. "The prospect of these areas for leasing and production is extremely exciting for Alaska. It will attract investment and hopefully lead to successful drilling and production and throughput in the Trans-Alaska Pipeline System.”

Now that the secretarial order has opened more doors in NPRA, there is reason to believe that after decades of failed attempts by previous administrations and politicians to make ANWR accessible for exploration, this time could be the clincher. With a Republican-controlled Congress and a president who is taking a "California or bust” approach toward energy development, new assessments of ANWR might become a political catalyst for one of the largest, unexplored, potentially productive onshore regions in the country to show the world its worth.

Alaska's Federal Lands

Established in 1923, NPRA is the largest block of federally managed land in the country. In the USGS' 2010 assessment of its 22.8 million acres, it estimated that NPRA contains 895 million barrels of technically recoverable oil and 52.8 trillion cubic feet of natural gas. Yet in 2013, the previous administration made approximately 11 million of those acres unavailable for leasing. The Department of the Interior (DOI) reports that this acreage contains an estimated 350 million barrels of oil and 45 trillion cubic feet of natural gas.

Image Caption

Heavily oil-stained Oligocene sandstone exposed on Marsh Creek anticline, ANWR 1002 Area. Katakturuk River is in the background. Photos by David Houseknecht.

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Acting with a goal of "geopolitical security,” U.S. Secretary of the Interior Ryan Zinke has begun a heavy push to open Alaska's oil-rich, yet off-limits, federally-owned areas after decades of legislation and land management policies have kept some of them essentially out of reach.

In a May 31 secretarial order, Zinke called for opening of parts of the National Petroleum Reserve – Alaska (NPRA) to lease sales and for updating resource assessments of both NPRA and the Arctic National Wildlife Refuge (ANWR) coastal plain. The order follows two bills introduced to the Senate and the House earlier this year calling for exploration in ANWR.

While the areas to be leased in NPRA were not yet announced at press time, the U.S. Geological Survey (USGS) has been directed to produce new assessments of technically recoverable oil and gas resources for both NPRA and ANWR. It is not yet clear whether the federal government will wait for the assessments or if it will choose to fast-track a lease sale in NPRA.

"We are very optimistic,” said Andy Mack, commissioner of the Alaska Department of Natural Resources. "The prospect of these areas for leasing and production is extremely exciting for Alaska. It will attract investment and hopefully lead to successful drilling and production and throughput in the Trans-Alaska Pipeline System.”

Now that the secretarial order has opened more doors in NPRA, there is reason to believe that after decades of failed attempts by previous administrations and politicians to make ANWR accessible for exploration, this time could be the clincher. With a Republican-controlled Congress and a president who is taking a "California or bust” approach toward energy development, new assessments of ANWR might become a political catalyst for one of the largest, unexplored, potentially productive onshore regions in the country to show the world its worth.

Alaska's Federal Lands

Established in 1923, NPRA is the largest block of federally managed land in the country. In the USGS' 2010 assessment of its 22.8 million acres, it estimated that NPRA contains 895 million barrels of technically recoverable oil and 52.8 trillion cubic feet of natural gas. Yet in 2013, the previous administration made approximately 11 million of those acres unavailable for leasing. The Department of the Interior (DOI) reports that this acreage contains an estimated 350 million barrels of oil and 45 trillion cubic feet of natural gas.

Zinke's order calls for the lawful review and development of a revised Integrated Activity Plan for NPRA that strikes an "appropriate” statutory balance of promoting development while protecting surface resources. It also calls for an evaluation on "efficiently and effectively maximizing the tracts offered for sale” during the next NPRA lease sale, which has not yet been announced.

"This is land that was set up for the sole intention of oil and gas production, however years of politics over policy put roughly half of NPRA off-limits,” Zinke said in a May 31 press release from the DOI. "Working with the Alaska Native community, Interior will identify areas in the NPRA where responsible energy development makes sense and devise a plan to extract resources,” he said. "We will do it in a way that both respects the environment and traditional uses of the land as well as maintains subsistence hunting and fishing access.”

In 1980, the Alaska National Interest Lands Conservation Act established ANWR, a 19-million acre area of mainly majestic mountains and upland meadows in the eastern Brooks Range. In Section 1002 of that act, however, Congress deferred a decision on future management of ANWR's 1.5-million acre coastal plain, commonly known as the "1002 Area” in recognition of its "enormous” oil and gas potential and its importance as wildlife habitat, stated the USGS in its most recent 1998 assessment of the area.

"I am a geologist,” Zinke said. "Science is a wonderful thing. It helps us understand what is going on deep below the surface of the earth. We need to use science to update our understanding of the 1002 Area of the Arctic National Wildlife Refuge as Congress considers important legislation to responsibly develop there one day.”

Many Native Americans who rely on tax revenue and royalties from oil and gas development strongly support Zinke's efforts. North Slope Borough Mayor Harry Brower, Jr., an Inupiat whaling captain, stated, "North Slope Borough residents recognize the importance of oil and gas to our local economy and the ability of our Borough and city governments to provide public services.”

Opening the 1002 Area to exploration requires approval from Congress, and Alaskan politicians are already marching toward that goal. U.S. Sen. Lisa Murkowski and U.S. Rep. Don Young, both R-Alaska, introduced bills in January in the Senate and House, respectively, that call for the 1002 Area of ANWR to open for the benefit of their state and the nation.

"Opening up the 1002 Area would attract all the usual suspects already exploring on the North Slope,” explained David Houseknecht, AAPG Member and senior research geologist for the USGS. "But it also would attract a much broader audience of domestic and international companies.”

North Slope Potential

NPRA has long been thought to have significant oil and gas potential. That is why former President Warren Harding set the area aside in 1923 as the Naval Petroleum Reserve No. 4 when the Navy was converting its fuel source from coal to oil.

When northeastern NPRA was opened to leasing in 1999 and 2002, areas adjacent to Teshekpuk Lake were included, and 10 wells were drilled on that acreage by the industry – motivated mainly by the 1994 Alpine discovery, Houseknecht said. After disappointing results, those leases were relinquished and the Obama administration took the land off the leasing table in 2013.

Yet, after the relatively recent announcements of significant discoveries by Armstrong Oil and Gas, ConocoPhillips Alaska and Caelus Energy Alaska in the more shallow Nanushuk and Torok formations, there is an increasing certainty that a major fairway stretching from the Colville River Delta to the west margin of Smith Bay could hold the next hydrocarbon boom for Alaska.

Armstrong and its partner, Repsol, have reported 1.2 billion barrels of recoverable oil in its Pikka discovery, which was announced in 2015. Caelus estimates its 2016 find in Smith Bay at nearly 6 billion barrels of oil in place. If its anticipated recovery rate of 30 to 40 percent is correct, its producible oil potential would be between 1.8 and 2.4 billion barrels. CononoPhillips reported last January that its Willow discovery in the Greater Mooses Tooth Unit may contain more than 300 million barrels of recoverable oil.

"These lowstand shelf margins where these big discoveries have been made run north-south over eastern NPRA and then turn to the west near the coast,” Houseknecht explained. "They all trend right under the area currently not available for leasing.”

He added, "Almost the entire area that is currently off limits will be prospective for stratigraphic traps to the western coast of Smith Bay. If a lease sale were held tomorrow, a lot of companies currently on the North Slope and companies that haven't explored the Slope in the last couple of decades, I pretty much guarantee would show up in force to participate in that lease sale.”

Needed: Updated Information

To develop an accurate understanding of the resources present in NPRA and in the 1002 area of ANWR – where resources are virtually unknown save for a small amount of data from 2-D seismic collected in 1984-85 – Houseknecht is quickly budgeting for the reprocessing of existing seismic data as well as accessing 3-D seismic.

"It is clear that there is potential for these stratigraphic traps to produce hundreds of millions or even billions of barrels of oil,” he said. "But these traps are very subtle seismically. Using 2-D seismic makes it impossible to identify and map these stratigraphic trap geometries.”

Mack said the Alaska government is working to release 3-D seismic data of the Nanushuk and Torok plays collected by the industry near NPRA. He said he believes they will be ready for public consumption in less than a year, citing "manpower” and "internal challenges” as the main reasons for the delay in their release. "It's very exciting information,” he said of the data.

If ANWR's doors were to be opened and a lease sale to occur, industry likely would want 3-D seismic data for parts or all of the 1002 Area first, Houseknecht said. In the meantime, he is working to enhance the existing 2-D seismic data in ANWR and well data from just outside its boundary. Field work both in the 1002 Area and just outside its boundaries in the Wilderness Area is now occurring to locate the presence – or absence – of source rocks, source rock quality, geochemistry of oil from seeps and oil-stained rocks, timing and geometry of structures, and the quality of potential reservoirs.

Although excited about the potential of the industry's resurgence in Alaska, Mack emphasized the commitment his state has to the environment. "We want to look at these resources and demonstrate that we can be very careful and methodical about developing them,” he said. "We have explored in NPRA safely in the past, and that was a remarkable feat, and we can do that again in NPRA and in ANWR.”

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