Petroleum News: Alaska could play pivotal gas role

USGS: State holds 17% of the U.S. natural gas reserves, 20% of the nation’s estimated undiscovered conventional gas resources
By Alan Bailey
With U.S. natural gas consumption growing beyond current rates of domestic supply, Alaska seems poised to become a key natural gas larder for the United States. But just where does Alaska lie in the league table of U.S. natural gas provinces? Where in the state would the natural gas come from? And could the gas be produced viably?
These were some of the questions that U.S. Geological Survey geologist Dave Houseknecht addressed during his talk at the Pac Com conference in Anchorage on Feb. 23.
37 tcf in reserves
In Alaska there are 37 trillion cubic feet of natural gas reserves — gas known to exist in known reservoirs, Houseknecht said. That represents about 17 percent of the total U.S. reserves of 218 tcf, he said.
And Alaska probably holds about 20 percent of U.S. undiscovered conventional natural gas — undiscovered gas estimated to lie within potential geological traps. Even after adding estimates of unconventional gas such as shale gas and coalbed methane to the U.S. total, Alaska probably holds about 15 percent of the national total, Houseknecht said.
“So Alaska’s gas is significant in terms of the national perspective, particularly considering the accessibility of those resources that we consider to be undiscovered in the Lower 48 in many parts of the country,” he said.
And although there are important natural gas reserves in the Cook Inlet area of southern Alaska, the bulk of Alaska’s reserves lie in northern Alaska. Prudhoe Bay with reserves of 24.5 tcf contains a large portion of those reserves. Point Thomson is the second largest known accumulation with reserves of 8 tcf.
Northern Alaska also dominates the numbers when it comes to estimates of undiscovered resources —more than 200 tcf of undiscovered conventional natural gas may exist in the region, including resources on the outer continental shelf.
“The primary attention is in northern Alaska, even though there are significant and important undiscovered resources close to population centers elsewhere in the state,” Houseknecht said.
Assessment uncertainty
Because assessing volumes of undiscovered gas involves making assumptions about geology and other factors, assessment estimates tend to be moving targets. Houseknecht pointed out, for example, that the 2002 USGS assessment of potential oil and gas in the National Petroleum Reserve-Alaska assumed that the oil and gas composition in the Alpine field would typify the hydrocarbon composition in the same geologic setting across NPR-A.
However, results later released from exploration drilling at the Spark and Rendezvous prospects to the west of Alpine proved that assumption wrong — the API gravity of the oil and gas-oil ratios both increase to the west of Alpine. Those results suggest that there may be more gas and less oil in NPR-A than the USGS assessment of the area indicated. But, until more data becomes available, the implications of the results won’t really be known, Houseknecht said.
Gas sources
However, there are some general features of the petroleum geology of northern Alaska that point to some parts of the region being more favorable for natural gas generation than others. And Houseknecht particularly focused on how the characteristics of two major hydrocarbon source rock systems in the region might affect natural gas generation.
The petroleum generating kerogens in source rocks tend to favor gas production in situations where the rocks were laid down on or near land, Houseknecht said. In rocks laid down in marine environments, on the other hand, the kerogens tend to favor oil production.
The first of the source rock systems, the Triassic Shublik-Otuk and Jurassic lower Kingak system, originated from erosion of an ancient landmass to the north of the present North Slope into an ocean in the area of the North Slope. That ancient geography would favor formation of terrestrial gas-generating kerogens to the north and marine oil-generating kerogens to the south.
The ancient disposition of land and sea reversed before the formation of the second and younger source rock system, the Cretaceous Pebble Shale, Gamma Ray Zone and Hue Shale system. These rocks were laid down when a landmass to the south eroded into a newly forming ocean to the north, thus favoring terrestrial gas-generating kerogens in the south and marine oil-generating kerogens to the north.
But the temperatures that the source rocks reach when they become buried deep underground also impact oil and gas production. When source rocks heat up during burial oil tends to form when temperatures reach a certain point. Higher temperatures at deeper burial depths can then crack the oil to produce natural gas.
Along the Beaufort Sea coast of northern Alaska both source rock systems straddle a high structure in the regional geology known as the Barrow Arch. South of the Barrow Arch the source rocks dip deep under massive thicknesses of strata in what is known as the Colville Basin. North of the Barrow Arch the source rocks also slope down under younger rocks on the Beaufort Sea continental shelf. Increasingly deep burial both north and south of the arch would tend to have heated the source rocks through the oil generation window into the gas generation window.
Taking all of these geologic factors together leads to the widely held view that the Brooks Range Foothills and southern North Slope should be more gas prone than oil prone. The geologic factors also predict a more oil prone zone along and on either side of the Barrow Arch. However, the Triassic, Jurassic and Cretaceous source rocks may become more gas prone on the Beaufort Sea continental shelf, especially where burial depths become particularly high towards the edge of the continental slope of the Arctic Ocean.
Houseknecht has also told Petroleum News that there is evidence from onshore oil seeps of an unidentified source rock somewhere in the Tertiary stratigraphic sequence. That rock would lie at higher stratigraphic levels than the other source rock systems and may, therefore, have remained in the oil generation window for some distance offshore under the Beaufort Sea.
Economics
But, with the potential for large volumes of undiscovered natural gas under the North Slope, the Chukchi Sea and the Beaufort Sea, how much of that gas might viably be developed?
USGS has done an economic assessment of undiscovered conventional natural gas in the central North Slope, an area where initial development is most likely to occur because of the proximity of both the existing oil infrastructure and a potential gas export pipeline. The assessment focused on natural gas from gas fields, rather than gas that might be associated with oil in oil fields.
Using an estimated range of gas accumulation sizes and assuming a gas development scenario that includes a future North Slope gas line, the USGS analyst plotted estimated economically recoverable gas volume for gas prices ranging from $2 per thousand cubic feet to $10 per thousand cubic feet.
The mean or average estimated economically recoverable volumes showed gas production starting to become economic at prices a little more than $3 per thousand cubic feet. Economically recoverable volumes increase rapidly to about 25 tcf at $6 per thousand cubic feet. At $10 per thousand cubic feet volumes peak out at about 27.6 tcf, about 83 percent of the total technically recoverable volume.
“Those are fairly significant numbers because for the first time we’ve been able to say that the lion’s share of the technically recoverable gas that we estimate to be present is probably going to be economically recoverable close to infrastructure,” Houseknecht said.
The percentage of technically recoverable gas that can be recovered economically decreases as you move further away from the oil and gas infrastructure, Houseknecht added. He also pointed out that the estimates “are highly dependent on the economic parameters that are associated with the existence of a gas pipeline.”
Non-conventional resources
Houseknecht also talked about some of the non-conventional natural gas resources in northern Alaska, such as gas hydrates, overpressured gas and coalbed methane. Together, these resources contain the potential to produce vast volumes of natural gas. But the technical feasibility and economics of developing the non-conventional resources still remain substantially unknown.
For example, huge quantities of natural gas lie trapped in known gas hydrate deposits in the north central North Slope.
“Currently a partnership of the Department of Energy, BP, the University of Arizona, Alaska DNR, USGS and the Bureau of Land Management is focused on two separate projects, one of which is attempting to characterize the resource and then find out whether it is recoverable … and the other of which is trying to do an assessment of recoverable gas from hydrates,” Houseknecht said.
There’s also a real possibility of overpressured natural gas resources in low-permeability sandstone, or perhaps in shale, deep in the central part of the Colville Basin, between the Brooks Range foothills and the coastal plain, Houseknecht thinks. He cited evidence of overpressure and gas resources from the sonic logs and drill stem tests from the Tulugak well in the central North Slope.
“So we believe the potential exists for a large but as yet non-assessed resource for low-permeability, over-pressured, basin-centered gas beneath the North Slope,” Houseknecht said.
This would be analogous to the overpressured natural gas that is driving quite a bit of exploration in the Rocky Mountains basin, he said.
Coalbed methane is another intriguing possibility in northern Alaska — the North Slope of Alaska has probably more coal resources than the whole of the rest of the United States combined, Houseknecht said. But coalbed methane drilling further south in the state has so far proved disappointing and permafrost in the north will reduce the gas content of the coal, he said.
“We are attempting right now to do an assessment of coalbed methane content of these North Slope coals and the results of that should be released probably within a year,” he said.
But with the likelihood of more than 200 tcf of technically recoverable conventional gas in Alaska, Houseknecht sees strong potential for future gas development.
“It’s a big resource base,” he said. “It’s just a question of when will infrastructure be present to send it to market and how close are those resources to infrastructure to make them economic.”

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.