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This book identifies accumulated environmental, social and economic effects of oil and gas leasing, exploration, and production on Alaska's North Slope. Economic benefits to the region have been accompanied by effects of the roads, infrastructure and activies of oil and gas production on the terrain, plants, animals and peoples of the North Slope. While attempts by the oil industry and regulatory agencies have reduced many of the environmental effects, they have not been eliminated. The book makes recommendations for further environmental research related to environmental effects.
This report discusses the nature and extent of dismantlement, removal, and restoration requirements for oil industry activities that are occurring on both federal and state lands located on the North Slope of the state of Alaska. The state of Alaska, which owns the lands where most of the North Slope's current oil production occurs, has adopted general dismantlement, removal, and restoration requirements that contain no specific stipulations on what infrastructure must be removed or to what condition the lands used for oil industry activities must be restored once production ceases. Alaska's requirements are similar to those of some states but less explicit than those of other states, which create a fixed obligation to fully restore the land according to specific requirements. Until the state of Alaska defines the condition in which it would like its lands returned, there is no way to accurately estimate the cost of dismantling and removing the infrastructure and restoring the disturbed land on Alaska's North Slope. Existing financial assurances, such as bonding requirements, ensure the availability of only a small portion of the funds that are likely to be needed to dismantle and remove the infrastructure used for oil industry activities and to restore state-owned lands. Current dismantlement, removal, and restoration requirements and financial assurances for federal lands on the North Slope vary by agency, but are generally insufficient to ensure that any federal lands disturbed by oil industry activities will be restored.
Alaska's North Slope: Requirements for Restoring Lands After Oil Production Ceases
The US Department of Energy was directed in the National Energy Strategy to establish a federal interagency task force to identify specific technical and regulatory barriers to the development of five undeveloped North Slope Alaska fields and make recommendations for their resolution. The five fields are West Sak, Point Thomson, Gwydyr Bay, Seal Island/Northstar, and Sandpiper Island. Analysis of environmental, regulatory, technical, and economic information, and data relating to the development potential of the five fields leads to the following conclusions: Development of the five fields would result in an estimated total of 1,055 million barrels of oil and 4.4 trillion cubic feet of natural gas and total investment of $9.4 billion in 1992 dollars. It appears that all five of the fields will remain economically marginal developments unless there is significant improvement in world oil prices. Costs of regulatory compliance and mitigation, and costs to reduce or maintain environmental impacts at acceptable levels influence project investments and operating costs and must be considered in the development decision making process. The development of three of the fields (West Sak, Point Thomson, and Gwydyr Bay) that are marginally feasible would have an impact on North Slope production over the period from about 2000 to 2014 but cannot replace the decline in Prudhoe Bay Unit production or maintain the operation of the Trans-Alaska Pipeline System (TAPS) beyond about 2014 with the assumption that the TAPS will shut down when production declines to the range of 400 to 200 thousand barrels of oil/day. Recoverable reserves left in the ground in the currently producing fields and soon to be developed fields, Niakuk and Point McIntyre, would range from 1 billion to 500 million barrels of oil corresponding to the time period of 2008 to 2014 based on the TAPS shutdown assumption.
The Alaska North Slope offers one of the best prospects for increasing U.S. domestic oil and gas production. However, this region faces some of the greatest environmental and logistical challenges to oil and gas production in the world. A number of studies have shown that weather patterns in this region are warming, and the number of days the tundra surface is adequately frozen for tundra travel each year has declined. Operators are not allowed to explore in undeveloped areas until the tundra is sufficiently frozen and adequate snow cover is present. Spring breakup then forces rapid evacuation of the area prior to snowmelt. Using the best available methods, exploration in remote arctic areas can take up to three years to identify a commercial discovery, and then years to build the infrastructure to develop and produce. This makes new exploration costly. It also increases the costs of maintaining field infrastructure, pipeline inspections, and environmental restoration efforts. New technologies are needed, or oil and gas resources may never be developed outside limited exploration stepouts from existing infrastructure. Industry has identified certain low-impact technologies suitable for operations, and has made improvements to reduce the footprint and impact on the environment. Additional improvements are needed for exploration and economic field development and end-of-field restoration. One operator-Anadarko Petroleum Corporation-built a prototype platform for drilling wells in the Arctic that is elevated, modular, and mobile. The system was tested while drilling one of the first hydrate exploration wells in Alaska during 2003-2004. This technology was identified as a potentially enabling technology by the ongoing Joint Industry Program (JIP) Environmentally Friendly Drilling (EFD) program. The EFD is headed by Texas A & M University and the Houston Advanced Research Center (HARC), and is co-funded by the National Energy Technology Laboratory (NETL). The EFD participants believe that the platform concept could have far-reaching applications in the Arctic as a drilling and production platform, as originally intended, and as a possible staging area. The overall objective of this project was to document various potential applications, locations, and conceptual designs for the inland platform serving oil and gas operations on the Alaska North Slope. The University of Alaska Fairbanks assisted the HARC/TerraPlatforms team with the characterization of potential resource areas, geotechnical conditions associated with continuous permafrost terrain, and the potential end-user evaluation process. The team discussed the various potential applications with industry, governmental agencies, and environmental organizations. The benefits and concerns associated with industry's use of the technology were identified. In this discussion process, meetings were held with five operating companies (22 people), including asset team leaders, drilling managers, HSE managers, and production and completion managers. Three other operating companies and two service companies were contacted by phone to discuss the project. A questionnaire was distributed and responses were provided, which will be included in the report. Meetings were also held with State of Alaska Department of Natural Resources officials and U.S. Bureau of Land Management regulators. The companies met with included ConcoPhillips, Chevron, Pioneer Natural Resources, Fairweather E & P, BP America, and the Alaska Oil and Gas Association.