Parnell offers state funds for ANWR seismic work

The state of Alaska could put up $50 million to share costs of seismic exploration and exploration planning for a new oil and gas resource assessment in the coastal plain of the Arctic National Wildlife Refuge, Gov Sean Parnell has proposed.

“The Department of the Interior is now developing a long-range conservation plan for ANWR and it is disappointing to us that an updated oil and gas resource assessment is not included in this,” Parnell said in a press conference May 20.

State Natural Resources Commissioner Dan Sullivan was in Washington, D.C., to make the announcement at the U.S. Chamber of Commerce, while the governor spoke by telephone from Alaska.

“Alaska has always offered its geologic expertise to the department and now we are offering financial resources,” Parnell said.

The state’s offer, which must be approved by the Legislature, is one-third of the estimated cost of a proposed winter three-dimensional seismic program the state is suggesting, said Parnell spokeswoman Sharon Leighow. The remaining funds could come from the federal government of the private sector, she said.

In the 1980s oil and gas companies contributed to a two-dimensional seismic program in ANWR’s coastal plain, a 1.5-million-acre section of the Arctic refuge, which totals 18 million acres overall.

The federal Alaska National Interest Lands and Conservation Act, which created the Arctic refuge in 1980, kept the so-called “Section 1002” coastal plain out of a wilderness designation on most of the refuge because of its oil and gas potential.

The geology of the coastal plain is similar to state lands to the west where oil and gas discoveries have been made in the Point Thomson and Prudhoe Bay regions, and state geologists believe the coastal plain of ANWR has similar potential.

Natural Resources Commissioner Sullivan, who was at the press conference, said the state has presented a detailed proposal for a phased seven-year winter exploration program in the 1002 area, with the seismic program followed by exploration drilling.

Decisions on how the drilling will be funded would come later.

The 187-page proposal has been sent to Interior Secretary Sally Jewell, Parnell said.

“Accurately defining the oil and gas resource potential is a critical part of understanding the value of the 1002 area to the nation,” Parnell said. “The federal government has the responsibility to do this under federal law, but is clearly reluctant to do so. Therefore, we are stepping forward with our expertise and financing to provide a detailed resource evaluation.”

In the proposal, the new seismic program would focus in its first year on the Marsh Creek region of the western 1002 area where a large geologic formation has been detected from earlier work.

In the second year the focus would be in the Hulahula and Jago River areas further east. In the third year the survey would focus on the Sabbath area.

“The 3-D seismic program is designed to accomplish several key goals. It would be vital for validating structural closures identified from the existing 2-D data,” the proposal said.

“In addition, it would reveal structural closures at shallower, more prospective stratigraphic levels. Finally, new 3-D data would be indispensible for recognizing and mapping stratigraphically trapped prospects, and in predicting reservoir quality and oil vs. gas charge,” the proposal said.

Stratigraphic traps are a type of geologic formation that is more difficult to detect with the older 2-D seismic used in the 1980s ANWR survey. Newer 3-D seismic offers more detailed data sets that allow geologists to see potential stratigraphic formations.

For example, the large Alpine field west of the Kuparuk River field is a stratigraphic formation that was largely missed in early exploration using 2-D. When industry began using 3-D seismic the Alpine formation was detected, drilled and is now producing.

Tim Bradner is a reporter for the Alaska Journal of Commerce.