USGS estimates on Slope shale oil, gas puts Alaska near top

The U.S. Geological Survey has estimated the potential of undiscovered, technically recoverable onshore shale oil and gas resources on the North Slope, with estimates ranging from zero to 2 billion barrels of oil and from zero to 80 trillion cubic feet of gas.

The starting point is zero because shale oil and gas have not actually been produced on the Slope and it is not known whether hydrocarbons can actually be produced, much less whether the production can be profitable.

The estimate has placed the North Slope as in second place in shale oil potential among known U.S. shale resource areas, behind only the Bakken Shale of North Dakota and ahead of the Eagleford shale of Texas, USGS research geologist Dave Houseknecht said in a Feb. 23 briefing.

In terms of shale gas potential the North Slope ranks fourth in the nation behind the Marcellus shale of Pennsylvania being No. 1, Houseknecht said.

State of Alaska officials were surprised at the modest estimate given the massive size of the known shale formations in northern Alaska. Bob Swenson, the state geologist and director of the state Division of Geological and Geophysical Survey, said he believes the USGS assessment is conservative because only three shale source rocks are considered. There may be other shale source rocks for hydrocarbons on the North Slope that are undiscovered.

“We were not so surprised at the shale oil number, but we were surprised at the shale gas number, because we know the entire National Petroleum Reserve-Alaska is very gas prone,” Swenson said. “We’re going to be taking a close look at the USGS study and particularly the assumptions that were used. They are good scientists, but it’s all about the assumptions you make. This just illustrates how little we know about the North Slope, because for a basin as large as this there are still relatively few penetrations,” through exploration drilling, Swenson said.

Shales like those found on the North Slope are known as “source” rocks – those formations from which hydrocarbons, such as oil and gas, originate, the USGS said in a statement. Conventional oil and gas resources gradually migrate away from the source rock into reservoir formations from which they can be produced, whereas continuous resources, such as shale oil and shale gas, remain trapped within the original source rock, the USGS said.

Swenson said he and other state geologists believe that while oil has seeped from the shales to form the large conventional fields on the Slope, there is still a great deal remaining. However, there are critical questions that must be answered, such as how much of the original oil is still in place and whether the shale rock itself lends itself to “fracturing,” a process that allows the oil and gas to flow through the very tight shale rock.

In a briefing, Houseknecht said the USGS estimate also mapped out the “sweet spot” of shale oil resources as being in an area reaching about 50 miles south of the Beaufort Sea coast, an area where Great Bear Petroleum, an independent company, has obtained leases and is planning two test wells later this spring.

The assessment also found that the shale rock formations studied do not exist in the 1002 area of the northern Arctic National Wildlife Refuge, and that they also “pinch out,” or end, in the northeast National Petroleum Reserve-Alaska and do not extend as far as Point Barrow.

The estimate considered technically recoverable oil and gas resources, which are those quantities of oil and gas producible using currently available technology and industry practices, regardless of economic or accessibility considerations, the USGS said in a press release.

Three source rocks of the Alaska North Slope were assessed in this study: the Triassic Shublik Formation, the lower part of the Jurassic-Lower Cretaceous Kingak Shale, and the Cretaceous pebble shale Hue Shale. These shale formations are known to have generated oil and gas that migrated into conventional accumulations, including the giant Prudhoe Bay field. However, these shales also likely retain oil and gas that did not migrate out.

Shale oil is oil that was generated naturally in source rocks but that never migrated out of them. It should not be confused with “oil shale,” a source rock in which oil has not yet been generated, but that is capable of generating oil if artificially heated, the USGS statement said.

There is a large range of uncertainty associated with these assessment numbers because of the questions associated with estimation of undiscovered, continuous resources in source rocks from which no attempt has been made to produce oil or gas. However, the recent success of shale oil and shale gas development in the Lower 48 demonstrates the technical viability of such resources. Therefore, this new assessment provides an estimate of potential resources that may be technically viable in this frontier region, the USGS said.

“Providing scientifically sound, publicly available assessments of the quantity of new, untapped oil and gas resources in frontier areas is but the first step in weighing their potential contributions to energy supplies as well as the impacts of recovering them,” said USGS Director Marcia McNutt in the briefing.

11/07/2016 - 2:59pm