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ANS production forecast curves up,
DNR's Crowther tells RDC members
Kristen Nelson Petroleum News
In a Sept. 5 presentation to a Resource Development Council breakfast meeting, John Crowther, deputy commissioner of the Alaska Department of Natural Resources, discussed the department's view on Alaska's resource future, presenting a positive view of the state's resource potential, particularly its North Slope oil resources.
(See chart in the online issue PDF)
Crowther recalled a once popular bumper sticker pleading for another oil boom -- and promising to make good use of it this time.
"The oil boom is here," he said, calling it a really exciting time on the North Slope.
Three forecasts Crowther compared three long-term Alaska North Slope production forecasts by DNR's Division of Oil and Gas -- from 2014, 2019 and 2024.
The production starting point in 2024 is about the same, but in the 2014 forecast, ANS production "was going down a nowhere road" -- forecast to approach 250,000 barrels per day in fiscal year 2033, probably near the operational limit of the trans-Alaska pipeline, he said, and right at the line's economic interest, and to continue down.
Basically, the state's economic lifeline was tapering off by 2033 in the 2014 forecast, he said.
But by 2019, 5 years ago, the forecast showed the decline slowing and staying in a range above 450,000 bpd in 2033.
Crowther attributed the change in the 2019 forecast to steps taken about 10 years ago to provide stability and clarity for operators about how to make investments.
The flattening of the production decline in the 2019 forecast, representing an enormous amount of investment and an enormous amount of success, was a huge accomplishment, he said, considering that the North Slope's primary fields were decades and decades old.
The jump up By the 2024 forecast, however, production through 2033 was trending upward, reaching an average of 640,200 bpd in 2033.
Crowther said it is his assertion -- although he said others might disagree -- that this was only the third time in the state's history that there had been an upward curve in state production: the first following Cook Inlet startup; then following Prudhoe Bay startup; and today.
Looking at graphics posted online by DNR's Division of Oil and Gas, at the 640,200 barrels per day average forecast for 2033, ANS production won't come close to its 1988 peak of 2 million bpd or even to the 1 million bpd and more the state saw through 1999, but the shape of the production curve will be headed in the right direction -- upward.
As far as current North Slope production goes, Alaska Oil and Gas Conservation Commission data show that ANS production -- a combination of crude and natural gas liquids -- continues to drop. Comparing January volumes for the three forecast years, ANS production in January 2014 was 17.82 million barrels, dropping to 16.66 million barrels in January 2019 and 14.76 million barrels this January.
Current activity When the production forecast curves up, the state's core economic engine is going through an up cycle, Crowther said, although he cautioned there are always challenges such as oil prices and federal restrictions.
Four of the areas of current activity driving the positive forecast -- Pikka, eastern and western Slope exploration drilling and activity along the Dalton Highway -- are on state land, giving the state more control, Crowther said, with Willow, on federal land, underway after a herculean effort against a hostile federal administration.
The activity level on the Slope this winter was unprecedented in modern times, Crowther said
--KRISTEN NELSON
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