Alaska shale deposits.

• Author: Jordan, Darryl
• Position: OIL & GAS

Alaskans know the National Petroleum Reserve-Alaska (NPR-A) as an important asset. The Greater Moose's Tooth (GMT) development, operated by ConocoPhillips, is estimated to add 30,000 to 40,000 barrels per day into the Trans Alaska Pipeline System(TAPS). NPR-A was set aside by President Warren Harding in 1923. The increase is an important change to declining TAPS throughput, roughly a half million barrels of oil per day last year to an average 520,000 barrels per day today. A second project, GMT-2, further into the fringe of NPR-A, is still progressing and in the permitting stages. A third project, Willow, was announced in January as a light oil discovery with a possible 100,000 barrels per day.

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Compared to the crude oil production reported in the US Energy Information Administration's Annual Energy Outlook 2017, these new developments in NPR-A are small; 10 million barrels per day are expected to be produced in the United States in 2017--half from unconventional sources. In 2010, Alaska crude oil production equaled the unconventional oil produced in the United States and six years later the unconventional resource is out-producing Alaska by a factor of 10. The percentage is even more lopsided if discussing gas from unconventional sources.

The amount of oil or gas developed from unconventional sources in Alaska is nearly zero. It is as if Alaska was totally caught by surprise that oil could be produced in a manner other than drilling a conventional oil well. In Alaska history this is not true. Oil shale, one of the unconventional sources for crude oil, actually led to the formation of NPR-A.

Creation of Reserves

In 1910, the Pickett Act was passed and allowed the president to withdraw land in California and Wyoming for possible oil production for the US Navy. While President Harding set aside NPR-A in 1923, it is William Howard Taft, Harding's predecessor, who both initiated the US government railroad in Alaska and created through executive order the Naval Petroleum and Oil Shale Reserves (NPOSR). Over a century ago, oil shale was being sheltered for the protection of the United States and projection of power through the US Navy warships. By 1923, petroleum and oil shale reserves in California, Wyoming, Colorado, Utah, and Alaska had been set aside under NPOSR.

Prior to becoming president, Taft was the 42nd Secretary of War, and later Harding nominated Taft to be the 10th Chief Justice (the only person to have led both the Executive and Judicial branches of the US government). The Secretary of War was third in line for succession to the presidency, if necessary, at a time when the president's Cabinet would retain control of the Executive Branch of the US government, rather than pass to politicians of the Legislative Branch. Taft was also part of the Sherman Antitrust lawsuit that would break up Standard Oil into as many as thirty-two companies, including companies that later became Standard Oil of California, Standard Oil of Ohio (bought by BP), Chevron, ExxonMobil, and ConocoPhillips--all familiar names in Alaska.

It would be Standard Oil of California that would set the record for drilling to 5,034 feet, the then-deepest and most expensive well in Alaska in the years 1923-1926. Alaskans understand conventional oil development. Drill...