A Delicate Balance Between Gas & Oil

A clear explanation of the fine balance between producing crude oil or natural gas from a field, from the Anchorage Daily News (Wesley Loy), published June 10, 2007:

A delicate balance between Slope’s gas, oil
When Slope’s gas is tapped, its oil must be protected, commissioner warns

Over the Memorial Day weekend, Cathy Foerster and her husband flew to St. Paul Island, in the middle of the Bering Sea, and saw an abundance of Lapland longspurs, gray-crowned rosy-finches, rock sandpipers and even a great knot blown in from Asia. “I confess — Jane Hathaway and I are birders,” said Foerster, a Texas-raised oil engineer and a fan of that old TV show “The Beverly Hillbillies.”
Lately, Foerster has a bird of a different kind on her mind — the North Slope oil reserves, or what she calls our “bird in the hand.”
Her message is that Alaskans need to take great care not to kill that bird by rushing to produce our “bird in the bush” — the natural gas that sits in the same fields as the oil.
Foerster, 52, a member of a state agency called the Alaska Oil and Gas Conservation Commission, has been on the speaking circuit lately, talking with considerable urgency to the Legislature, industry groups, even a local Lions Club.
Ignoring for a moment some complex technical details, her message is pretty simple: If we build a multibillion-dollar natural gas pipeline and start shipping gobs of gas, as many Alaskans have so long desired, we risk stranding millions upon millions of barrels of valuable crude oil deep underground. Forever.
And that could cost Alaska dearly.
The good news is Foerster and other experts see ways to avoid this costly tradeoff — in short, a way to enjoy our bird in the hand and catch the bird in the bush too.
Foerster and her fellow members on the oil and gas commission — lawyer John Norman and geologist Dan Seamount — are key state decision-makers in planning for a gas pipeline to the Lower 48.
One of the agency’s main jobs is to prevent waste — that is, it aims to make sure every possible drop of oil and molecule of natural gas are wrenched from the rocks.
Two fields hold the bulk of the North Slope’s estimated 35 trillion cubic feet of gas: Prudhoe Bay, the nation’s largest oil field, with about 24 trillion cubic feet, and the undeveloped Point Thomson field to the east with perhaps 8 trillion.
At Prudhoe, gas plays a huge role in producing oil — and that’s why state regulators and the oil industry must think carefully before piping away the gas, Foerster said.
UNDER PRESSURE
The geologic structure that holds Prudhoe reserves is built kind of like a layer cake — a layer of water on the bottom, a layer of oil next, topped by what is called the gas cap.
Over its nearly 30-year history, drillers have pierced those layers with some 2,600 holes. Production wells send a mixture of oil, gas and water to the surface, where they are separated.
Now here’s the most important thing, the point Foerster wants you to hear: Most of that gas is shot back down into the ground, where it serves to keep pressure in the oil field and to keep the oil from migrating upward into “dry” rock, where it tends to stick like glue.
The pressurizing gas forces out more oil. It’s like the aerosol in the can, Foerster said. The fizz in your soda pop.
To impatient Alaskans, Prudhoe’s gas isn’t going to market and thus isn’t generating tax dollars and worker paychecks. But it’s indirectly creating great wealth.
“That gas up there, it’s doing all the heavy lifting to get the oil out,” Foerster said.
STRANDING AN OIL FORTUNE
With Gov. Sarah Palin courting companies to build a gas line, the oil and gas commissioners are taking steps to determine how much natural gas can be siphoned off without significantly harming oil production.
Prudhoe, which is entering old age, still holds an oil fortune — an estimated 2 billion barrels. The commission wants to make sure as much of that as possible is produced before significant gas is removed, Foerster said.
The agency recently hired an engineering consultant, Blaskovich Services Inc. of Aptos, Calif., to help study the impact of major gas sales on Prudhoe.
The commission in 1977 set a limit on how much gas producers could withdraw — 2.7 billion cubic feet per day. The thinking then was that a gas pipeline would be built right away, and nobody expected Prudhoe would still be producing oil today, Foerster said.
Commissioners believe they might have to adjust this limit in light of the significant oil remaining in Prudhoe, the need for gas to help push it out, and the fact that builders want a pipeline capable of carrying as much as 4.3 billion cubic feet a day.
Commissioners have scheduled a June 19 hearing to discuss the consultant’s report.
A decision on how much gas can leave Prudhoe is years away. First, the commissioners need to know when a gas pipeline will start operating, what volume of gas it will carry and how much oil is left in the field.
Gordon Pospisil, technology and resource manager for BP Exploration (Alaska) Inc., which runs the Prudhoe field, said he doesn’t see a big oil sacrifice coming.
“We’re very well-positioned to maximize oil recovery and produce the gas,” he said.
AN ACE IN THE HOLE
One major recommendation from consultant Blaskovich is for oil companies to produce as much oil as possible from Prudhoe before a gas pipeline comes online. That’s not expected for at least eight years.
The consultant also said it’s important to avoid oil field breakdowns, such as last year’s corrosion-related pipeline leaks, which can interrupt oil production.
The equation is simple: The more oil that’s produced now, the less left stranded once major gas shipment begins.
Pospisil said his company has done many things to juice oil production now. These include drilling more wells to tap the oil, installing bigger compressors to force gas back underground, and flooding the field with billions of gallons of seawater to flush out oil.
An important thing to remember, he said, is that Prudhoe engineers already have achieved “a world-class production level” from the field, recovering 11.5 billion barrels, or about 50 percent of all the oil originally trapped in Prudhoe’s porous rocks.
Once gas production begins, field engineers will have a potential ace in the hole — carbon dioxide, which will be separated from the natural gas coming out of the ground. Engineers believe they can shoot this waste gas underground to force out oil, Pospisil said.
While some tradeoff in oil production is almost certain, Foerster agrees Prudhoe likely will be ready for a gas pipeline, so long as oil is produced steadily before gas line startup.
THE POINT THOMSON PUZZLE
When it comes to Point Thomson, Foerster is worried.
State officials and industry players agree the gas in Point Thomson — about a quarter of the North Slope total — is vital to make a pipeline project costing $20 billion or more pencil out.
But the Point Thomson field is different from Prudhoe, and not as well understood. Much technical analysis is needed to determine the effect of producing its gas, Foerster said.
Most people regard Point Thomson as a gas field, but what concerns the oil and gas commissioners is the fate of its sizable reserves of liquid hydrocarbons — estimated at several hundred million barrels.
“We’re talking about an Alpine field or two,” said Foerster, referring to Alaska’s third-largest oil field.
The question has been complicated by legal wrangling in which the state is trying to revoke leases Exxon Mobil Corp. and other companies hold for failure to develop Point Thomson since its discovery 30 years ago.”

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