New Shale Discovery In Alaska
For many years geologists have known that the oil found in Alaska’s major fields, such as Prudhoe Bay, probably came from deeper shale “source rocks.” The new shale oil and gas discovery in Alaska being reported by the US Geological Survey is not really “new,” since North Slope shale formations such as the Shublik shale have been known about for decades. However recent developments in drilling technology have now made it possible to finally exploit shale source rocks under the North Slope oil fields. The USGS has released an estimate of how much oil and gas may be contained in Alaska’s shale formations.
The agency estimates that there could be as much as 80 trillion cubic feet of natural gas and as many as two billion barrels of oil locked in the tight shale formations under northern Alaska. The report also stated that if the figure of 2 billion barrels (on the high side) holds up, this amount would keep the Alaska Pipeline (which has a capacity of 600,000 bbl/d) full for a decade or more.
This information comes from a “fact sheet” of the report, since the entire USGS report has yet to be released. Interior Sec. Ken Salazar stated that “Alaska’s energy resources hold great promise and economic opportunity for the American people, and we will continue to expand our scientific understanding of existing resources;” So far, no companies are yet drilling the North Slope shale and there are many unknowns to be dealt with. According to the Alaska Dispatch, Great Bear Petroleum and Halliburton plan on exploring the shale this coming winter, and Royale Energy has plans to begin exploration next winter. The shale formations which hold the most promise for containing oil and gas are the Triassic Shublik Formation, the lower Jurassic-Lower Cretaceous Kingak Shale, and the Cretaceous era Hue Shale. According to the report, “these source rocks occur at depths that range from less than 3,000 feet along the northern coast to more than 20,000 feet in the Brooks Range foothills.” Also, to clarify the probability that these source rocks held economic quantities of oil and gas, the fact sheet added the following: “USGS estimates of potential, technically recoverable shale-oil resources in northern Alaska (95- to 5-percent probability) range from zero to 2 billion barrels of oil.”
These formations are most likely the source rock for the giant Prudhoe Bay field, which is the largest oilfield ever discovered in the United States. USGS geologists note that source rocks do not always contain oil, since in some formations the hydrocarbons have long ago migrated upward out of the rock. However, there are apparently strong indications that North Slope source rocks may still contain a great amount of trapped gaseous and liquid hydrocarbons based on initial surveys.
Below is a map of possible oil and gas bearing shale formations in northern Alaska.
For the Alaska Shale discovery to be profitable in the current market situation, it would have contain large volumes of liquid hydrocarbons, such as crude oil, condensate and natural gas liquids. As the map above indicates, it is believed that much of the Alaska shale contains only natural gas, and a large part is listed as “unknown”. The market for natural gas is so depressed at the current time that companies are even shutting in some gas wells and moving rigs away from what were once thought to be incredible new shale gas discoveries, such as the Haynesville shale and Marcellus shale. Another factor is that drilling costs have always been higher in Alaska, and one thing that might delay horizontal shale drilling in Alaska is that many companies already have their hands full with more lucrative plays, such as the Eagle Ford Shale in Texas and new Tuscaloosa Marine Shale discovery.