Alaska Proposes Changes to Hydraulic Fracturing Rules

The Alaska Oil and Gas Conservation Commission (AOGCC) has proposed to adopt changes to rules governing hydraulic fracturing activity in the state.

AOGCC said Dec. 20 it proposed regulations changes in Title 20, Chapter 25 of the Alaska Administrative Code. AOGCC plans to add new regulations, including requirements for landowners, surface owners and operators within one-quarter mile of a wellbore being notified of hydraulic fracturing activity. The new regulations will include:

• Pre and post hydraulic fracturing water well water sampling and analysis
• Chemical disclosure of hydraulic fracturing fluids
• Wellbore integrity requirements
• Containment of hydraulic fracturing fluids

For workover operations, an application for sundry approvals must be submitted to and approved by AOGCC in order to enter a well and conduct the perforation or reperforation of casing; stimulation; the pulling of tubing; alteration of the casing; repairs to a well; and re-entering a suspended or abandoned well to the extent these operations are not covered by a permit to drill. Sundry approvals issued under this subsection will expire two years after the approval date.

Oral and written comments on the proposed regulations will be accepted through Feb. 4, and may also be submitted at a Feb. 5 hearing to be held in Anchorage.

Multiple motivators are behind AOGCC's decision to update its hydraulic fracturing regulations, AOGCC Commissioner Cathy Foerster told Rigzone. AOGCC is active with the Interstate Oil and Gas Compact Commission and the Ground Water Protection Council, which are both involved with STRONGR, the State Review of Oil & Natural Gas Environmental Regulations.

"They have recommended that states review their regulations for adequacy of changes in technology and public concerns," Foerster said.

At present, Alaska does not have any regulations for requiring the disclosure of hydraulic fracturing fluids. Right now, Alaskan operators are voluntarily entering their information into the national registry website FracFocus, but there are no guarantees that existing or new operators will continue to do so.

"One of the main motivators for me is that our regulations for hydraulic fracturing are scattered throughout existing regulations," said Foerster.

By having hydraulic fracturing regulations in one section, the public can more easily understand the regulations.

The U.S. Geological Survey (USGS) last year completed its first ever assessment of northern Alaska's technically recoverable shale oil and shale gas resources. The results of the assessment were released in February 2012. Aggregated estimates for all three source rocks range from 0 to 2 billion barrels of oil and 0 to 80 trillion cubic feet of gas (Tcf), according to a paper presented the USGS at the Arctic Technology Conference in Houston last month.

Three significant source rocks are located beneath much of the Alaska North Slope – the Triassic Shublik formation, the lower part of the Jurassic-Lower Cretaceous Kingak Shale, and the Brookian shale which includes the Cretaceous pebble shale unit and Cretaceous-Lower Tertiary Hue Shale. The Shublik system is estimated to contain up to 928 million barrels of oil and up to 72 Tcf of gas; the Brookian contains up to 955 million barrels of oil and 4 Tcf of gas; and the Kingak contains up to 117 million barrels of oil.

The estimated probability of oil and gas being technically recovered from the source rocks is 95 percent for the Shublik, 90 percent for the Brookian, and 40 percent for the Kingak.

A large degree of uncertainty is associated with the assessment numbers, since no attempt has been made to produce oil and gas from these resources, from which no attempt has been made to produce oil and gas, USGS noted.

"However, the success of shale oil and gas development in the Lower 48 states demonstrates the technical viability of such resources," the USGSG said in a Feb. 24, 2012 statement. "Therefore, this new USGS assessment provides an estimate of potential resources that may be technically viable in this frontier region."

Although these source rocks are known to have generated oil and gas that migrated into conventional accumulations, including the super-giant Prudhoe Bay field, the first attempt to produce hydrocarbons directly from the three source rocks was initiated in 2012, according to a paper presented at the Arctic Technology Conference.

The Washington Post reported in August 2012 that Alaska is pursuing unconventional shale oil development to fill its pipeline. Companies involved in exploring Alaska's shale potential include Great Bear Petroleum, Riverstone Holdings, a private equity company involved with Great Bear, and Royale Energy.

If Alaska's shale resource potential becomes commercial, the AOGCC will face a challenge in hiring enough staff to continue to provide the current level of regulatory coverage, Foerster noted. At present, the AOGCC has five engineers and five inspectors on staff, with a job vacancy currently open for each.