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OCR for page 41
~ GEOLOGICAL Sol KING ED
HYDROCARBON Resource Base
I~T~ODUCT10~
The coastal region of the North Slope of Alaska produces more petro-
leum than any other area of the United States. The supergiant~ Pru&oe
Bay field, many times larger than any other U.S. oil field, is one of five
reservoirs that produce oil (Table 3-~.
Although the Pru&oe field tends to overshadow the others, Kuparuk is
a giant field in its own right, much larger than fields in the lower 48 states,
and "lithe" Milne Point would rank as a major field in Oklahoma or Texas.
GOAL Al O LOGY OF THE B"UFO~T ED CHUKCHI
OUTDO CO~TI~TAL SHELVES
The outer continental shelf (OCS) norm of Alaska stretches for more than
~ ,000 On from the border with Canada on the east to the International Date
Line on the west. Along the margin of the Beaufort Sea, its width from the
shoreline to the slope break at a water depth of 200 m ranges from 70 to
160 km. West of Point Barrow it widens into the broad Chukchi shelf, a
triangular region about 500 On on a side. The region is therefore compara-
ble in area to the Gulf of Mexico offshore region from Pensacola, Florida,
westward to He Mexican border.
'A "giant" field is usually considered as ~ 500 x 106 bbl. "Supergiant" has been
used differently by different writers, but all agree on ~ 5 x 109 bbl.
41
OCR for page 42
42 OCS DECISIONS: ALASKA
TABLE 3-1 Producing Fields of the Pnadhoe Bay Area
Estimated Estimated
Field TotalReserves Recoverable
Pn~dhoe Bay 22 Bbbla 12+Bbbl
Kupawk 6.4 Bbbl 2-3 Bbbl
Endicott 1 Bbbl 400 Million bbl
Lisburne 2 Bbbl 200 Million bbl
Milne Pointb 500 ? Million bill 10() Million bbl
abl= barrel; bbl= barrels; Bbbl= billion barrels (109 barrels)
bMilne Point is not currently producing. It may be reactivated in the near
fixture.
Source: BP Exploration (Alaska) Inc., 1991.
The shelf is the geological extension of the North Slope of Alaska and is
underlain by a variety of sedimentary strata, including many formations Hat
constitute source rocks and reservoir rocks for petroleum and natural gas.
These range in age from Silurian to Tertiary (see Figure 3-! for He
generalized geological dine scale) and are arranged in complex stratigraphic
packages that document several major Earth events (Hubbard et al., 1987;
Grantz et al., 1990; Haimila et al., 1990), including mountain building,
uplift, and deep erosion; crustal stretching that formed deep basins that
captured organic-rich sediments; and overprinting deformations that resulted
in many types of geological structures that could be of! and gas traps.
The Department of He Interior's Minerals Management Service (MMS)
report on He Chukchi Sea Planning Area (MMS, 19871) summarizes the
stratigraphy as follows:
Three major stratigraphic sequences are recognized in north-
western Alaska. (~) He Franldinian sequence (Precambrian to
Middle Devonian metasedimentary rocks), which comprises
He acoustic and economic basement complex throughout most of
northern Alaska; (2) He Ellesmerian sequence (Devonian to
early [sic] Cretaceous), which is composed of northerly sourced
elastic and carbonate rocks; and (3) He Brookian sequence
(early [sic] Cretaceous to Tertiary), which comprises a ciastic
OCR for page 43
Em Period Epoch Mililon ream
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Pennlan
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Mississipplan (Lower CarboniferousJ
360 365
Devonian
Silurian
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Cambrian
405 - 15
435 440
_495-51 0
570
PRECAMBRIAN
FIGURE 3-1 Generalized geological time scale.
GEOLOGICAL SE7TING 43
1
OCR for page 44
44 OCS DECISIONS: ALASKA
wedge that was shed generally northward away from the Brooks
Range orogen. The Ellesmerian sequence is separated from the
underlying basement by the Ellesmerian unconformity (KU) and
from the overlying Brookian sequence by the Lower Cretaceous
unconformity (LCU). Offshore, the Ellesmerian seismic se-
quence is subdivided into lower and upper parts by a Permian
unconformity (PU). The Brookian seismic sequence is subdi-
vided into lower and upper parts by the mid-Brookian uncon-
formity (mBU) of Late Cretaceous to Tertiary age.
The generalized stratigraphic sequence is illustrated in Figure 3-2; that
of the National Petroleum Reserve is shown2 in Figure 3-3. The structures
that are known to be oil-productive in the Pru~hoe Bay region extend north-
ward offshore and to the west and northwest. The of! industry studies the
subsurface geology of this vast region and sorts out the region's complexi-
ties to locate exploratory wells. The area's complexities suggest that many
test wells will be needed before the amount of oil and gas there can be
estimated accurately. Known onshore occurrences, however, make it likely
that the offshore region contain significant quantities of of! and gas that can
be developed if the economic obstacles due to the operating problems in the
hostile arctic environment can be overcome. Indeed, the number and ver-
tical distribution of oil-bearing strata in the Pru~hoe Bay region (Figures 3-
4a and 3-4b) and the probable extension of many of these formations
suggest that the North Slope of Alaska and the adjacent continental shelf
contain large reserves and that this region will continue to be explored and
developed for some time. The similarity of the geology of the North Slope
to several over passive continental margins adds to our confidence in this
interpretation.
Al T~OL[UM GEOLOGY
Resource estimates of He offshore areas of Alaska emphasize a
The National Petroleum Resewe-Alaska is a large area of the north coastal area
of Alaska extending from Point Belcher on the west to the margin of the Prudhoe
Bay area on the east.
OCR for page 45
GEOLOGICAL SEITING 45
AGE MY LITHOSTRATI GRAPHY S E I S M I C HYDROCAR BON
BP SOUT H NORTH S E Q U E N C E DISCOVERI ES
QUAT W1~__QU ~
O ~z ~-MU- ~CANADIAN BEAUFOR
I`J ~.. : :::.~: SAGAVANIRKTOK FM --- ~ z ~ TAGLU
- ::: ~ o , ( M A C K E N Z I E D E L T. A )
. ' ::.:: . :: ::.:. .:. :--======~ ~ cn UGNU
c ~. ~ COLVILLE GR ~ · WEST SAK
O I O O - _~ ;, m ml m ~ RB'FuT_- · u M I AT
~ PEBBLE ~ ~ =~ - E ·(MACKENZIE DELTA)
O ~,~ E QLUCE uC 1' P O I N T T H O M S O N
O c' ~ K U P-A R ~ ~ R I V E R F M M I L N E P T . /
o: == KINCAK F~ ~ z ~ BARROW GAS FIELD
~ -200 ~ y y ~
_ _ ~ _ <~ J cn ~ P Ff U D H O E BA Y
z 5 ~ 6~ : . . E C H O O K A F ~ .
~ ~ ~ ~ ~ ~ ~ PRUDHOE BAY
O ~ -300 ~ L I SB ~ ~ O 0 ~
C . -4 OO ~ ~ ~ EN D I COT T
l ~5 ~ ~, ~ E R U O K P U K F ~ .
· OIL FIELD ~T DEPOSITIONAL
GAS FIELD ~ UNCONFORMITY
OIL AND GAS ~ EROSIONAL
Fi£LD
~L UNCONFORMITY
,-. .,
~ SANDSTONE
SHALE
CONGL OMERATE ~ LIMESTONE
ARGILLITE ~DOLOMITE
FIGURE 3-2 Generalized lithostratigraphic column showing the relationship
of onshore rock units in northern Alaska to offshore seismic sequences in
the Beaufort Sea Planning Area. Significant hydrocarbon discoveries in
northern Alaska and Canada are shown by their reservoir formations.
Source: Craig et. al, 1985.
OCR for page 46
46 OCSDECISlONS: ALASKA
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OCR for page 47
- GEOLOGICAL SE171NG 47
72°
7oo
68° _
Arctic
North Chukchi
~ Basin t
:, 4~ li~? ~
Ocean Physiographic province
· ~boundary
Normal faull
,r~ ~at/)rO/-y ~ Sstroclura' trough
~ ' / (/ T
-~.. :_. , . . Stal p
,~ ~ .
Hor~e y Lisburne j . /~_ -~|' '`~'
~\
o 100 Miles
O I 160 Kilomelers
Range
:; \
on, (,
, . . . . .
FIGURE 34a Generalized structural features and geological framework of
onshore and offshore northern Alaska. Source: Adapted from Thom~s
etal.,l991.
~ 72 e ~East
Oc South ~ Barrow
Barrow
\ Barrow
l
158 Beaufort Sea '49 ;:,eai Point
Gwydyr Island Mcintyre
x~G Barrow Barrow Sandpiper \ | /Prudhoe / Point Thomson
OCR for page 48
48 OCS DECISIONS: ALASKA
substantial energy endowment in Me region. The estimates are, of course,
widely variable depending on what method is used and We amount and
quality of geological information-but all current estimates generally agree
that about 25% of the country's undiscovered of! resources are offshore
Alaska. This potentially huge energy endowment has attracted drilling in
most of the offshore Alaska basins on leases previously obtained from Me
federal government. The initial exploratory drilling programs also have led
to consideration of additional lease sales, Me subject of this report: Navarin
Basin, Sale 1073; Chukchi Sea, Sale 126; and Beautort Sea, Sale 124.
None of Me offshore explorations had revealed oil in quantities large
enough for commercial production until October 1992, when ARCO an-
nounced an apparently commercial discovery in its No. ~ Kuv~um well in
Me eastern Beautort Sea, about 97 On east of Pru~hoe Bay and 26 On
offshore on federal acreage. Although only the discovery well has been
Milled to date, many industry sources believe that the new field could con-
lain reserves of ~ billion barrels or more. The real extent of Me field and
Be number of barrels in it will be determined by confirmation and delinea-
tion wells. Meanwhile, regardless of Be absolute field size, Me ARCO
discovery highlights the reserve potential of offshore Alaska.
Cllukch! Sea
The Chukchi Sea province, approximately 400 Ian long and 240 km
wide, is off the coast of Alaska between Barrow and Cape Lisburne. The
province is limited on Be north by Be Chukchi Borderland, considered too
far norm and in waters that are too deep to be drilled feasibly in Be near
future (Thomas et al., 1991~. The province is bordered on Be east by Be
edge of Be Arctic Platform and on Be west by Be margin of Be Chukchi
Platform. To Be south and southeast the province is bordered by Be
Herald Arch and Be seaward extension of Be Brooks Range (MMS, 1989~.
The Chukchi Sea province is composed of Tree primary sedimentary
basins: the Colville Basin, the Central Chukchi Basin, and Be Norm Chuk-
chi Basin. The Colville Basin contains about 6,100 m of Brookian sedi
3 Although MMS canceled arK1 deferred the Navarin Sale for further review until
1996, a short description of the area is included in this report.
OCR for page 49
GEOLOGICAL SEINING 49
meets in a northwest-to-southeast-trending foredeep trough north of the
Brooks Range orogen. The Central Chukchi Basin is a north-trending off-
shore extension of the Arctic Alaska Basin. It contains 12,200 m of
Ellesmerian and Brookian sediments. The North Chukchi Basin contains
more than 13,715 m of lower and upper Brookian elastics (MMS, 1989,
1991a).
The stratigraphic sequences appear to be offshore extensions of the
western North Slope stratigraphy. As at Crusoe, the underlying Frank-
linian sequence of metamorphosed Cambrian to Middle Devonian rocks are
the lower limits of possible petroleum deposits in the Chukchi province.
The Ellesmerian and Brookian sections provide the source rocks and
reservoir potential for petroleum in the area. The rocks of the Ellesmerian
section (late Devonian to early Cretaceous in age) are shallow-water
limestones and marine and nonmarine sandstones and shales derived from
a northerly source. No COST (continental offshore stratigraphic test) well
has been drilled in the province to provide public information about the
likely sources and reservoirs of the Ellesmerian section, but seismic data
indicate that the source of the offshore section was from the west (MMS,
1989~. The Cretaceous to Tertiary Brookian section is composed, onshore
and offshore, of deltaic sediments derived from the Brooks Range to Me
south.
Geochemical studies from onshore areas show that the Ellesmerian and
Brookian sections contain source rocks that could provide significant quan-
tities of of! to potential reservoir beds, most of which seem to be in He
Lisburne and Sadlerochit groups of the Ellesmerian section. They produce
prolifically onshore and are believed to have similar capabilities at various
places offshore. The shallower Brookian sequence, which is productive on-
shore and in the Canadian Beaufort, is also expected to have gooc! offshore
potential.
Tens of thousands of Odometers of high-quality seismic surveys avid grid
spacings as close as i.6 x I.6 km (! mile x ~ mile) in some areas have
been obtained in He province. MMS, for example, had acquired 73,000
miles of common Kept point (CDP) seismic profiles over He area by He
end of 1987. This extensive net of seismic control enabled He identification
of many structural and stratigraphic traps. Structural traps are common
throughout He area and could predominate in He Central Chukchi and
North Chukchi basins. Bow fold- and fault-related structural traps are
present; some of these are complicated by unconformities (erosional gaps)
OCR for page 50
50 OCS DECISIONS: ALASKA
in the Ellesmerian and Brookian sections. Stratigraphic traps could pre-
dom~nate along the flanks of the Arctic and Chukchi platforms.
The first federal lease sales were conducted in the Chukchi province in
1988. Bids for OCS Sales 97 and 109 totaled $~8 and $478 million,
respectively. From 1989 through 1991, Shell Oil drilled five wells on
structural prospects in the Colville and Central Chukchi basins. Detailed
descriptions of the wells, with the exception of the Klondike No. ~ drilled
in 1989, have not been released, but there is no report that any of the wells
found a commercial quantity of oil or gas.
General statements from the industry indicate that, although the wells did
not contain commercial accumulations, some oil is present and is effectively
trapped in the structures. Source rocks were identified; particularly the
Shublik Formation of the Ellesmerian sequence. High-quality reservoir
rocks were not as widespread as had been hoped. However, the five initial
test wells provide only a very sparse sampling of the stratigraphy of the
province, and subsequent wells located with more emphasis on stratigraphy
could identify potential reservoir rocks.
Results of the first drilling phase are still being evaluated, but they appear
to provide encouragement for further exploration of the province. The key
elements of oil accumulations have been confirmed and only the finding of
better quality reservoir rock remains for discovering commercial accumula
tions.
Operations in He severe offshore arctic environment are difficult and
operational flexibility is necessary for a successful drilling program. Costs
are very him and cost-sharing industry partnerships might be necessary.
The 1991 OCS Sale 126, in which only $7 million was bid by industry,
reflects He difficulties of drilling in the Chukchi province. It also reflects
depressed of! prices and opposition to OCS exploration.
Nevertheless, all the elements for oil accumulations have been confirmed
in the Chukchi province. The next phase of exploratory drilling might find
the I-billion-barrel field, considered to be He minimum economic field size
that could establish the Chukchi as a prolific of! province.
Beaulort Sea
The Beaufort shelf is in the offshore area of Alaska between He
Canadian border on tile east and Barrow on He west, generally parallel to
OCR for page 51
GEOLOGICAL SETTING 51
the coast. It is approximately 560 km long and 96 km wide. It lies off-
shore of He Arctic National Wildlife Refuge (ANWR) to He east and He
National Petroleum Reserve, Alaska (NPRA), to He west. The area of in-
terest is bounded on He soup by He Barrow Arch and on He norm by a
shelf edge and slope into the deep Canada Basin (Figure 34a) (Thomas et
al., 1991~. The shelf can be divided into two major provinces, separated
by a highly faulted Hinge Line (MMS, 1989~: The Arctic Platform lies
south of He Hinge Line and the Brookian Basin lies norm (MMS, 1990~.
The northern limit for prospecting in He Brookian Basin is the deep water
of He Beautort Basin (Thomas et al., 1991~.
The province can be divided into six primary centers of sediment
deposition: Northeast Chukchi Basin, Nuwuk Basin, Arctic Platform, Arc-
dc Basin, Dinkum Graben, and vile Basin. The Franldinian crystalline
metamorphic rocks are He seismic and economic basement of He province.
Overlying this basement is He Ellesmerian sequence, which provides He
source and reservoir rocks of He Pru~hoe Bay and other North Slope fields.
The Northeast Chukchi Basin is structurally isolated from the better
known Ellesmerian sequence to the east below the Beautort Sea, and the
rocks in this basin are so far unproductive. They are considered a separate
sequence. The Ellesmenan sequence, denved from a northern source, thins
as it laps onto He ancestral landmass to He norm. "Thick wedge-shaped
layers of Ellesmerian sequence rocks are present in He southern part of the
province; they become thinner to the north and are absent entirely in the
northern part" (MMS, 1990~. The sequence is generally present on He
Arctic Platform and He Nuwuk and Kaktovik basins, but is missing to He
north in the Arctic Basin. Because He Ellesmerian section produces most
of the oil in He North Slope fields, He areas where these sediments are
present are considered to be the most promising for of} exploration. Uplift
of He Arctic Platform in early Cretaceous time terminated deposition of the
Ellesmerian sediments; and erosion of the youngest Ellesmerian strata
produced an unconformity that truncated the section.
Rift zone grabens (fault basins), such as He Dinkum Graben, developed
within the Arctic Platform. The rifts were filled avid a Hick Lower
Cretaceous elastic section, known as the rift sequence. By He late
Cretaceous, Brookian sediments, derived from the Brooks Range to He
soudl, were deposited over die Arctic Platform, into tile Nuwuk and
Kaktovik basins, and over He Hinge Line and shelf edge to a thickness of
12,200 m in the Arctic Basin to He norm.
The province has been covered by tens of thousands of kilometers of
OCR for page 56
56 OCS DECISIONS: ALASKA
Slope, both onshore and offshore, offer the best opporumides for
oil discoveries in the giant and supergiant categories.
QU - ITITATIV~ I STIES
A relatively small number of assessments of the oil and gas potential in
the Chukchi Sea and Beaufort shelf basins were made available to the
committee. The benchmark estimates were those prepared by MMS and
included in the 1989 report of the Department of the Interior, "Estimates of
Undiscovered Conventional Oil and Gas Resources in the United States A
Part of the Nation's Energy Endowment" (USGS/MMS, 1989~. MMS's
estimates come from continuing studies by the service that use a sophisti-
cated computer-based probabilistic method called PRESTO (Probabilistic
Resource Estimates-Offshore). MMS's estimates are presented in several
forms: risked and unrisked, technically recoverable, and economically re-
coverable; and as a range of values reflecting three confidence levels (95 %,
arithmetic mean, and 5%~. The 1989 estimates of risked recoverable of}
and gas are listed in Table 3-2.
Another quantitative estimate of the total oil potential of the Alaska
offshore region is contained in a report by Fisher et al. (1992), in which the
mean potential is described as 2 billion barrels, assuming advanced technol-
ogy and a price of $20/barrel; 4 billion barrels, assuming existing technol-
ogy and a price of $27/barrel; and X billion barrels, assuming advanced
technology and a price of $27/barrel. One must therefore assume an
estimate of an implied unconstrained potential in excess of ~ billion barrels.
This number is essentially twice that of the 1989 MMS study, presumably
incorporating more recent evaluations by Me industry.
The committee also had unpublished presentations made to it by represen-
tatives of ARCO, Chevron, and Mobil. Quantitative estimates were
provided in the form of a bar chart, from which the committee derived
Table 3-3.
These numbers suggest Mat at least some companies consider die mean
resource potential to be considerably greater clan close estimates contained
in the MMS or the DOE studies cited by Fisher et al. (1992~. The ranges
OCR for page 57
Table 3-2 1989 Estimates of Recoverable Oil and Gas
GEOLOGICAL SEWING 57
Crude Oil, Bbbl
Natural Gas TCF
95% Mean 5% 95% Mean 5%
Beaulort Shelf 0.49 1.27 3.74 2.14 8.26 12.81
Chukchi Seas 0.00 2.22 7.19 0.00 6.33 16.87
a The approximate 50% discounting of the values for the Chukchi Sea is based
on the assigned 0.5% risk that hydrocarbons will not be present in the region. (As
oil and gas are discovered in the region, this risk would be removed.) The totals
reported for the two basins would be approximately 3.5 Bbbl (billion barrels) and
14.6 TCF (trillion cubic feet) (mean values). Based on the 1989 report about one-
third of the undiscovered recoverable oil resources of the United States were
estimated to be located in Alaska; 20% of which would exist in the offshore basins.
Source: USGS/MMS, 1989.
Table 3-3 Quantitative Estimate of Total Oil Potential for Beautort and Chukchi
Crude Oil, Bbbl
Natural Gas, TCF
5% 5%
Mean Probability Mean Probability
Beaufort Shelf 11 30+ 15 65+
Chukchi Seas 4.3 21.7 15 73
~-
aThe approximate 50% discounting of the values for the Chukchi Sea is based
on Be assigned 0.5% risk that hydrocarbons will not be present in the region. (As
oil and gas are discovered in the region, this risk would be removed.) The totals
reported for Be two basins would be approximately 3.5 Bbbl (billion barrels) and
14.6 TCF (trillion cubic feet) (mean values). Based on the USGS/hIMS 1989
report about one-third of the undiscovered recoverable oil resources of the United
States were estimated to be located in Alaska; 20% of which would exist in the
offshore basins.
Source: ARCO, Chevron, and Mobil, unpublished data, 1992.
OCR for page 58
58 OCSDECISlONS: ALASKA
of estimates are also shown to be greater by the much larger 5% values
both for oil and gas, pointing out the large uncertainty in all current
estimates. It is also noteworthy that in contrast to the MMS estimates, Me
potential of the Beaulort shelf is rated by some as being greater potential
than that of the Chukchi Sea.
The company presentations to the committee provided important insight
to the petroleum industry's perspective of the region. The finding of
relatively rich, thermally mature rock (a sediment rich in carbonaceous
matter is good source rock only after it is heated to convert the organic
materials into fluid hydrocarbons; the rock is then called "thermally
mature") in the Chukchi Sea and of pooled of} in subeconom~c quantities
plus the descriptions of the typical exploration plays in bod1 regions all tend
to verify the potential of Be Beaulort shelf and Chukchi Sea regions. The
economic difficulty in developing small accumulations of of! also was
emphasized.
The diversity of the several estimates is not unusual considering the
relatively small amount of exploration in the region. As discussed below,
the MMS estimates were prepared wig a conservative bias imposed by
methodology, and Hey are the only fully documented and published results
available. They are science based, Key use properly documented me~odol-
ogy, and Hey are derived from a comprehensive data base. The compa-
nies' methods were not explained and could have introduced differences in
addition to Hose that result from differing geological opinion.
ADEQUACY AND ~[LIABILI~ OF [STI~T[S
In 1991, He National Research Council (NRC) Committee on Undiscov-
ered Oil and Gas Resources produced an evaluation of the Department of
the Interior's 1989 assessment procedures used in assessing the nations
resources of of} and gas (NRC, 199Ib). MMS's activities in the Alaska
OCS were reviewed in Hat document, and the report can be used as a
starting point for consideration of the status of information in Alaska. It
must be noted that the focus of the 1991 report was not on the mainstream
activity of tract evaluation for lease sale purposes, but rawer on He
"exploration- play"-leve! assessments that constituted He national assess-
ment. Because the same basic methods and programs were used by MMS
for kact-evaluation and explorabomplay-level assessments (modified for He
OCR for page 59
GEOLOGICAL SETTING 59
larger purpose), many of the observations in the 1991 report are relevant
to the task of this committee. The next sections recapitulate some of the
99 ~ report' s observations.
Data Base and 52eelonal Studies
The Anchorage, Alaska, office of MMS has an excellent data base
consisting of modern, high- quality seismic lines and structure maps for
most of the area of current interest; data from exploration wells; and
regional geological studies. Mapping is continuous, with revisions done by
a competent and well-motivated staff. Individual prospects are identified
and probable reservoir characteristics are compiled in an orderly fashion.
One possible deficiency, common to several MMS offices, was a dearth of
geochemical studies related to source rock abundance, organic carbon types,
and thermal maturity.
Methods
The NRC Committee on Undiscovered Oil and Gas Resources found
fault with several aspects of the way in which data and geological judgment
were incorporated into the PRESTO model that is used to estimate re-
sources. The PRESTO software is specifically designed to use prospect
data to perform a variety of assessment tasks. Because there is considerable
uncertainty associated wig most of the data used as input, geologists must
formulate probability distributions of reservoir variables and subjectively
estimate several levels of risk. Concerns of the committee included the
following:
· There was an apparent inconsistency in He me~ods used by different
geologists and engineers to assign maximum and minimum values to Me
distributions. Although forms had been developed to assist in Me compila-
tion of data, Were did not appear to be enough training in probability
me~ods to ensure adequate results.
· The assignment of risk appeared to be poorly understood and unevenly
applied. The multiplicity of risk levels (including economic thresholds) was
considered overly complex, possibly leading to "double discounting" in
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60 OCS DECISIONS: ALASKA
some cases. Although guidelines for assigning risk had been developed, the
assignments appeared arbitrary in some cases and mechanical in others. No
studies of the independence versus the dependence of risk variables had
been done. Because risk assignment has such a profound effect on the final
resource estimates, additional training was recommended.
Several input variables were assigned inappropriate, arbitrary limits.
These included limiting the allowable values of prospect areas and vertical
fir-up; rejecting prospects from consideration that had less than 30 m of net
play, that were at depths of less than 91 m, or that were smaller than one-
half a lease block. Prospects that were judged to be subeconomic (if as-
signed appropriate risk) were not modeled in the conditional case.
Some stratigraphic and conceptual plays were not considered ade-
quately. The structural plays dominated the assessment, based on the map-
pable prospects. It appeared that "unseen" prospects, too small to be inciu-
ded in the existing seismic grid, were largely ignored.
There was too heavy a reliance on the use of mean values instead of
on descriptions of the full range of estimates that reflect the associated
uncertainty in the final reporting of estimates. There also was speculation
that the expression of "conditional estimates" could be confusing or
misleading to the users of estimates.
The Committee on Undiscovered Oil and Gas Resources concluded that
the likely effect of the deficiencies in the application of methods was an
understatement of the resources, although the committee was unable to
verify this conclusion. Industry presentations to the present committee
tended to verify Mat MMS's estimates are conservative; this committee did
not attempt a detailed comparison. (It may be noted that many of the
previously noted shortcomings have been addressed by MMS.)
The present committee's charge has a very different focus from that of
the committee that reported in 1991. Our focus relates to the adequacy of
resource-potential information to support studies of environmental issues and
concerns associated win offshore leasing. Specifically, this committee was
asked to focus on the adequacy of resource information made available in
EISs and SIDs (secretarial issue documents) associated wig lease sales.
The committee recognizes Mat Me estimates prepared by MMS and
provided in EISs are an adequate, albeit conservative, estimate of Me
quantities of oil likely to exist within a given lease area. The EISs, how-
ever, do not contain the detailed information Mat was used to generate these
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.
GEOLOGICAL SEl l MING 61
"bottom line" estimates, such as the number, magnitude, distribution, or
characteristics of the individual areas assessed. There is no information
regarding risk factors and economic criteria used in the lease~ecision
process. Because the gas resources likely to be present in the area were
deemed uneconomic, no measure of this component is included in the ElSs.
Presumably, the proprietary nature of some of the input data used in
assessment precludes complete disclosure of some elements of the output
estimates. This is unfortunate because the very comprehensive of} and gas
leasing~ecision process used by MMS generates a lot of data and informa-
tion that could be invaluable to those attempting to quantify Be risks
associated wig environmental impacts.
The practice of resource assessment has matured with the development
of programs like PRESTO and others that have led to probability-based
estimates now being the "norm" rather than the exception. In most modern
estimating procedures, not only the magnitude, but also Be marginal
probabilities or risks of occurrence associated with them are quantified.
PRESTO effectively considers interrelated risks and input data in a simula-
tion process that reflects the needs of industry for exploration in developing
an estimate. If environmental scientists are to make comparable analyses,
it win be necessary to continue or expand the simulation process to include
quantification of both the likelihood and the magnitude of a variety of risks.
They then could use the additional data from the assessment process in their
analyses. Several of He data elements that could be required by environ-
mental scientists include Be following:
· The degree of concentration or dispersion of the resources. Are Hey
likely to occur in numerous small-to-intermediate size fields or in a
relatively few large deposits?
· The anticipated size of a typical deposit, along wid1 some reservoir
characteristics, such as field area, depth, temperature, and pressure.
· Product mix. Is gas likely to be associated or produced with any of!
encountered?
· Risk information. What is He likelihood Hat gas and of} will be en
countered in any given exploratory well?
· Forrnadon fluids. Is there information on the nature of formation flu-
ids that could be encountered?
· The type of drilling or production facility likely to be used.
Most of He items listed above are considered, used, or generated in He
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62 OCSDECISlONS: ALASKA
assessment process. If a mechanism were devised to provide greater
disclosure of resource assessments, it might assist materially in Me develop-
ment of better models for environmental studies.
[~GI~I~G GEOLOGY
Several types of geological engineering studies will be required as sites
are selected for exploratory drilling. Even more extensive studies will be
necessary if enough petroleum are discovered to warrant development.
These studies are required by leasing agreements, follow accepted engineer-
~ng shards, and are mentioned briefly in MMS's final EISs. The selec-
tion of the exact sites for exploration and production facilities will, of
course, depend on Be petroleum companies' estimates of the distribution of
the resources and on Be development plans for producing the fields. Two
general types of studies win be required: foundation studies beneath and in
the vicinity of the proposed exploration or production facility and studies
along possible routes for subsea pipelines to bring the of! and gas to onshore
h~sportadon facilities. Because these studies are not only required but also
are essential to protect equipment and personnel, industry will pursue them
thoroughly.
Investigations in and around a drill site or production facility concern
foundation stability, including the likelihood of slumping, the presence of
subsea permafrost and gas hydrates, and physical properties of the forma-
tions. Such studies are required by leasing agreements and are part of cur-
rent engineering practice; Hey are mentioned briefly in MMS's final EISs
from Beaufort Sale 124 and Chukchi Sale 126. Slumping is a possible
hazard in the Chukchi and Beaufort regions, but foundation difficulties can
be overcome by proper design of the drilling platform or island.
Detailed studies also will be required for tile route of any proposed
pipeline. For much of die route, the pipeline will need to be placed below
the seafloor and below Be reach of ice scouring, including deep ice keels.
The extent of permafrost beneath a veneer of soft sediment and Be local
presence of consolidated sediment and rock will require appraisal. If Mere
is a choice of routes, studies of Be geology could dictate Be actual paw.
Where pipelines come ashore to join shore installations or other pipe-
lines, geological conditions will require evaluation. For example, Heir
effect on shorelines, beaches, bars, lagoons, and areas of focused ice action
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Ever ~_r~ ~ r SEITING 63
will require study; the route and design of the pipeline will depend on these
studies being considered.
In 1983, the NRC Marine Board reviewed what was known about Be
topics covered by such studies and concluded that there was "no area where
lack of seafloor technology would preclude safe operations offshore or delay
offshore development" (NRC, 1983b3. The report noted also that the arctic
seafloor poses special engineering challenges and that Were are subject areas
in which more information is needed. Seafloor conditions that wall greatly
influence the design and economics of offshore activities include thaw
subsidence (associated with the presence of subsea permafrost), sedimentary
erosion and transport, ice gouging of the seafloor, and the soil mechanics
of silts.
Details and an extensive reference list can be found in the 1983 report.
This committee notes that there have been no recent major advances in
many of the subjects.
Permoirost and Thaw Subsidence
Information about the strength of highly saline, warm subsea permafrost
and about thaw subsidence is limited. This will undoubtedly dictate conser-
vative design of offshore facilities. Subsea permafrost is a significant prob-
lem on large areas of Be Beautort shelf where its properties are extremely
variable. The subsea permafrost appears to be thinner and limited to within
2 hen of the coast in the Chukchi Sea; it apparently is absent in Be Bering
Sea except for the most rapidly retreating coastal segments of Norton
Sound. Even in the Beautort, detailed information on Be distribution of
subsea permafrost is limited. Recent studies in both the United States and
the Canadian portions of Be Beautort have produced advances in electrical
and high-resolution seismic methods for mapping subsea permafrost. These
techniques will undoubtedly prove useful to future oil development.
Sedimental erosion and Transoort
Because of the ice content of coastal sediments, rapid coastal erosion and
movement of large amounts of sediments are common and highly variable.
This is particularly true in the Beaufort Sea, where coastal erosion is a
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64 OCS DECISIONS: ~S~
major problem. Quantitative information on these processes will be neces-
sary for regions where causeways or pipeline crossings are anticipated.
Sediment transport studies would contribute knowledge also in coastal-
erosion problems and Me infilling of ice gouges. (See U.S. Geological
Survey Map I-~82-H, USGS, 1992b.)
Soll Mechanics of Silts
Silt-sized materials are common at many Alaskan OCS sites, and their
properties are not understood as well as are those of sands and clays. Site-
specific studies will need to characterize Me specific properties of these
materials. Another somewhat unusual characteristic of the seabed sediments
in the Beaufort is that they are commonly overconsolidated; Hey are more
compacted than would be expected. Because the mechanics of overcon-
solid~ation are not well understood, it is difficult to predict tile distribution
and the behavioral physical reactions of the material. Site-specific studies
should pay particular attention to He response of these materials to cyclic
loading and to the effects of freeze-and-~aw cycles on their strength and
permeability.
In most cases, series by MMS and industry have established an adequate
framework for preliminary offshore designs of exploration and production
facilities. As a result, wid1 the few exceptions mentioned above, additional
regional studies of the seafloor of He region are not warranted und} specific
drilling production sites are selected. At that time, however, careful, site-
specific foundation and pipeline route investigations will be needed.
The geology of the Chukchi and BeauLort seas is reasonably well known
and adequately discussed in MMS's final EISs. No additional regional stud-
ies of the seafloor in die vast Arctic region are warranted und} drilling sites
are selected. At Hat time, careful foundation and pipeline- route investiga-
tions watt need to be done. This should be ensured by industry for design
and safe execution and by government for environmental protection.
CO~CLUS10~ AND Q[CO~DAT10~
The specific conclusion and recommendation for this chapter follows.
For He general and overall conclusions of this report, see Chapter S.
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- GEOLOGICAL SETTING 65
Conclusion: lithe committee concludes that MMS has developed resource
eshrnates based on adequate data and modern techniques that give credible,
but conservative, estimates of OCS oil and gas resources. The extensive
resources, a significant portion of which remains in He nation, ensure that
there will be continued interest in leasing, exploration, and development.
The geological and resource-base information developed by MMS can
provide a useful foundation for assessing the effects of exploration and de-
velopment on Be biological, physical, and human environments.
Recommendation: Expand geological and resource base information
in ElSs. Additional infonnati~n that would assist environmental scien-
tists in quantifying risks should be released arm included in ElSs.
Alternative: Call attention to the geological reports that address Me
potential size and distribution of of! and gas resources and make Rem
readily available.
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Representative terms from entire chapter:
north slope
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