'Realizing the Promise' of Alaska's arctic OCS: NPC report shares key findings and recommendations.

• Author: Bradner, Mike
• Position: National Petroleum Council - Oil and gas resources

The offshore Alaska Arctic contains huge potential oil and gas resources that will be needed because, in the long run, the present boom in shale oil production will not be sustained. Moreover, the technology exists today to access much of this resource potential, based on decades of experience in the petroleum industry with Arctic offshore drilling. These are two conclusions in "Arctic Potential: Realizing the Promise of U.S. Arctic Oil and Gas Resources," a major study released in late March of Arctic offshore potential and technology problems by the NPC (National Petroleum Council), a prestigious US industry and government advisory body.

However, the study also notes that there are significant challenges created by the Arctic environment, such as remoteness and high costs, and economic problems created for industry because of short drilling seasons due to the presence of ice. More flexibility in government rules can offset some of these problems, the study authors found.

Another key recommendation of the report is that public confidence in the industry's ability to contain and clean up Arctic spills must be boosted. To do this, the study recommends continued research, including field demonstrations, on spill cleanup procedures like in-situ burning of spilled oil, and that government agencies join industry in that research.

426 Billion Barrels

Overall, the Arctic is estimated to hold 426 billion barrels of oil equivalent (the combined energy value of both oil and natural gas), of yet-to-be discovered conventional hydrocarbon resources. This represents 26 percent of the remaining global undiscovered conventional resource potential, according to the NPC report. About 30 percent of this is estimated to be in liquids, such as crude oil.

While Russia dominates this resource potential in natural gas, the United States (meaning Alaska) and Russia are about equal in expected liquid hydrocarbon potential. The Alaska Arctic is estimated to hold 34 billion barrels of liquid resources while Russia is estimated to hold 36 billion barrels of liquids. Russia's potential gas resources are huge, however, at 260 billion barrels-of-oil equivalent compared with 60 billion barrels-of-oil equivalent for the United States. In the report, the NPC notes the potential of Canada, Greenland, and Norway are dwarfed by the United States and Russia.

Arctic Difference

A key finding of the NPC is that the Arctic environment, while challenging, is generally well...