http://www.eia.doe.gov/oiaf/servicerpt/anwr/pdf/sroiaf(2008)03.pdf
Realistic expectations about ANWR needn't come as any surprise to the
media, oil company executives, elected officials or anyone else. The
Energy Information Administration updated their 2004 re****t on the
ANWR 10-02 area in May, 2008 (graph left). Their Analysis of Crude Oil
Production in the Arctic National Wildlife Refuge is abundantly clear
on what we can expect from ANWR.
The era of easy, cheap oil has come and gone. You don't have to take
my word for it, just read what the EIA says about the timing of
production at ANWR. I will only quote the highlights. Look at page 3
of the EIA's re****t for the whole story. This section gets a bit
technical. Sorry about that.
This analysis assumes that enactment of the legislation in 2008 would
result in first production from the ANWR area in 10 years, i.e., 2018.
The primary constraints to a rapid development of ANWR oil resources
are the limited weather =93windows=94 for collecting seismic data and
drilling wells (a 3-to-4 month winter window) and for ocean barging of
heavy infrastructure equipment to the well site (a 2-to-3 month summer
window).
The assumption that ANWR oil production would begin 10 years after
legislation approves the Federal oil and natural gas leasing in the
1002 Area is based on the following 8-to-12 year timeline:
=95 2 to 3 years to obtain leases, including the development of a U.S.
Bureau of Land Management (BLM) leasing program, which includes
approval of an Environmental Impact Statement, the collection and
analysis of seismic data, and the auction and award of leases.
=95 2 to 3 years to drill a single exploratory well. Exploratory wells
are slower to drill because geophysical data are collected during
drilling, e.g., rock cores and well logs. Typically, Alaska North
Slope exploration wells take two full winter seasons to reach the
desired depth...
=95 3 to 4 years to construct the feeder pipelines; to fabricate oil
separation and treatment plants, and trans****t them up from the
lower-48 States to the North Slope by ocean barge; construct drilling
pads; drill to depth; and complete the wells...
[And so on]
In the mean resource case, ANWR production would commence in 2018 if
all of these steps happened without delay. Supposed production would
ramp up slowly, culminating in a peak of 780,000 barrels per day in
2027. Production would then decline to 710,000 barrels per day by
2030 .
As with Jack in the Gulf, the timing of this vision provides no help
in an oil crisis that gets worse by the day. And this is the EIA
making these predictions. The glass is never half empty for Department
of Energy analysts.
What is the mean resource case? You need to know because this is the
sticky point where the public gets mixed up. The EIA explains what the
mean resource case, which is based on a 1998 USGS study, actually
means.
In the mean [probability] oil resource case, the total volume of
technically recoverable crude oil projected to be found within the
coastal plain area is 10.4 billion barrels, compared to 5.7 billion
barrels for the 95-percent probability estimate, and 16.0 billion
barrels for the 5-percent probability estimate. Because the USGS 5-
percent and 95-percent probability oil resource estimates are
asymmetric around the mean estimate, the expected field size
distribution and, in turn, the distribution of projected oil
production are also asymmetric with respect to the mean estimate=92s
field sizes and projected production...
The mean probability estimate refers to a 1-in-2 chance of there being
oil resources at least equal to the size of that estimate; the 95-
percent probability estimate refers to a 19-in-20 chance of there
being oil resources at least equal to the size of that estimate; and
the 5-percent probability estimate refers to a 1-in-20 chance of there
being oil resources at least equal to the size of that estimate.
The bottom line for ANWR, as for all the other unexplored protected
areas in the U.S, is that we are talking about probabilities of how
much recoverable oil will actually be discovered. The USGS presumes
that there is a 95% probability of finding 5.7 billion recoverable
barrels, and a 1 in 2 chance of finding 10.4 billion barrels. Other
assumptions must be made as well. The mean resource case of 10.4
billion barrels is the supposed volume of oil that will ultimately be
recovered. How much of this imaginary oil does the USGS guess will be
produced by 2030?
The 1998 USGS ANWR *****sment assumed an average recovery factor of 37
percent of the original-oil-in-place. This recovery factor is based on
primary (pressure-driven) and secondary (water-injection) recovery
techniques, but does not included tertiary (enhanced oil recovery)
techniques, which can increase oil recovery by an additional 5 to 15
percentage points...
Between 2018 and 2030, ***ulative additional oil production is 2.6
billion barrels for the mean oil resource case...
Using the Geological Survey's 37% recovery factor, the supposed
original-oil-in-place is on the order of 28 billion barrels (10.4 / .
37). The EIA's 2.6 billion barrels is only 25% of the 10.4 billion
barrels that we may ultimately lift out of the ground, so the EIA has
further assumed that most of this hypothetical oil will be produced in
the years after 2030. ANWR is thus the gift that keeps on giving in
the far-off future. All of this not-yet-discovered oil comes too late
to change the fate of the current generation of Americans.
Evaluating ANWR is a crapshoot1 until you've drilled some test wells
and *****sed the oil flows, for "there is little direct knowledge
regarding the petroleum geology of the ANWR region." That's why a
significant part of the delay in developing ANWR comes from drilling
these appraisal wells, as the EIA acknowledges.
It's still possible to drill a dry hole in the age of advanced 3-D
seismic subsurface imaging, or drill a well which doesn't produce oil
flows that justify commercial development. (Failed tests have occurred
several times in the Gulf of Mexico.) One reason people got
inordinately excited about Jack is that the #2 test well did indeed
indicate commercial oil flows.
Press accounts, even fairly good ones like Arctic Drilling Wouldn't
Cool High Oil Prices, assume that the 10.4 billion barrels is "the
most likely scenario," parroting the EIA's production flows for the
mean resource case (US News & World Re****t, May 23, 2008). I have
described this kind of behavior before, where the media "treats a
(probabilistic, geological) abstraction as if it had concrete or
material existence." This is the definition of the verb to reify.
I could make similar remarks for other areas of Alaska, e.g. the
Beaufort Sea, the NPR-A north slope area to the west of Prudhoe Bay,
or the Chukchi Sea, where MMS leasing round #193 recently took place.
At least Shell put their money where their mouth is, paying over
$105.3 million for a single exploration block offshore. The MMS
believes "there is up to 15 billion barrels of recoverable oil
reserves ... beneath the Chukchi Sea." Now you know how to evaluate
this statement=97see ANWR above.
http://www.energybulletin.net/45331.html
|
