Oil and Gas Exploration Since 1944
The high potential for significant discoveries of oil and gas in ANWR has long been recognized. Early explorers of the region, such as Leffingwell at the turn of the century, found oil seeps and oil-stained sands. However, since ANWR was established in 1960, exploration in the region has been restricted to surface geological investigations, aeromagnetic surveys, and two winter seismic surveys (in 1983-84 and 1984-85) conducted as part of the ANILCA-permitted evaluation of oil and gas potential. No exploratory drilling has been accomplished in the area except for one well commenced in the winter of 1984-85 on Kaktovik Inupiat Corporation and Arctic Slope Regional Corporation lands southeast of Kaktovik just outside the ANWR Coastal Plain.
In contrast, approximately 420 exploration wells have been drilled in the region (388 onshore and in the 3 mile territorial waters of the state, and 32 in offshore federal waters). This exploration effort west of ANWR has resulted in discovery of the largest oil field in North America along with several other discoveries of significance.
Oil and gas exploration in the arctic began in earnest in 1944 in the Naval Petroleum Reserve No. 4 (now National Petroleum Reserve-Alaska, NPR-A), which lies in northwestern Alaska, under a program conducted by the Navy. As a result of those drilling efforts (a total of 36 wells), several small, subeconomic oil and gas fields were discovered.
There was a hiatus in exploration from 1953 until 1974, when the Navy resumed exploration. The program was subsequently transferred to the Department of the Interior in 1977, and by 1980, 24 additional wells had been drilled in NPR-A. The first NPR-A lease sale was held in 1982, but to date there have been no significant discoveries.
Outside NPR-A, the pattern of petroleum exploration and development on the North Slope and in the Beaufort Sea has been influenced more by the availability of land (and its antithesis-land freezes) than geologic potential. The picture of petroleum development in the mid-1990s shows major producing fields, yet to be produced fields and significant discoveries west of ANWR (both onshore and offshore) and major discoveries in the Canadian Beaufort Sea and Mackenzie Delta area to the east. These occur in similar geologic trends and sedimentary deposits to those that lie beneath ANWR.
Exploration by oil companies on federal and state lands east of the Colville River in the 1960s culminated in the discovery in 1968 of the Prudhoe Bay oil field, the largest in North America, with original producible reserves of 9.6 billion barrels. Production, however, was delayed until concerns regarding Native land claims and the potential environmental impacts of the proposed Trans-Alaska Pipeline could be resolved. Pipeline construction started in 1974 and Prudhoe Bay production began in 1977. The adjacent Kuparuk River field (with reserves of 2.5 billion barrels) came on line in 1981, followed by the smaller Lisburne and Milne Point fields in 1985, and several smaller fields adjacent to the Prudhoe Bay field in the early 1990s.
Exploration offshore in the Beaufort Sea began in the mid-1970s on state leases in shallow water. In 1978, the Endicott field was discovered near the Sagavanirktok River Delta and construction of production facilities began in 1985. The field, with estimated recoverable reserves of 500 million barrels, began production in October 1987, nine years after its discovery.
In 1995, the North Slope oil fields and Endicott are together producing about 1.7 million barrels of oil per day, or approximately 25 percent of the U.S. domestic production. However, Prudhoe Bay, which accounts for over three-quarters of North Slope production, began its decline by 1988, and no more new fields have yet been discovered with the potential to compensate for that decline.
The pace of exploration in federal OCS waters accelerated following the Joint State-Federal Lease Sale in 1979. Subsequently, there have been four additional federal sales in the Beaufort Sea-Sale 71 in 1982, Sale 87 in 1984, Sale 97 in 1988 and Sale 124 in 1991. Drilling activity following these sales has resulted in three announced discoveries, one of which is located approximately 12 miles offshore ANWR. A state lease sale within the 3-mile limit along the seaward boundary of ANWR in Camden Bay was held in 1987, and a second offshore state sale stretching from Camden Bay to the Canadian border occurred in 1988. The state has scheduled another lease sale for 1999 that will include all of the acreage within state waters that lie offshore ANWR, stretching from the Canning River to Canada..
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