Alaskan regulators consider new well-fracturing rules

ANCHORAGE, Alaska Thu Feb 21, 2013 7:43pm EST

ANCHORAGE, Alaska Feb 21 (Reuters) - Companies that use hydraulic fracturing to extract oil or gas in Alaska would have to disclose the chemicals they pump into the ground, notify everyone nearby and test water quality before and after they do it under new rules proposed by state regulators.

The rules are being considered by the Alaska Oil and Gas Conservation Commission even though the state does not yet have any of the shale oil or gas production that have proven controversial elsewhere in the nation.

Fracturing technology has been used for decades in Alaska, but without the complications associated with the shale boom farther south, said commission member Cathy Foerster.

Alaska's oil and gas is produced entirely from conventional rock formations, which are porous and permeable. And with the North Slope's permafrost, remoteness from residential areas and other characteristics, most Alaskan operators are able to avoid the conflicts that have arisen in the lower 48 states, she said.

But shale production could be in Alaska's future, she added, as could concerns over the large amount of fracturing that is required to draw hydrocarbons out of non-permeable, non-porous shale rock.

One company, Anchorage-based Great Bear Petroleum LLC, holds leases to about 500,000 North Slope acres and is planning several exploration wells to test shale-oil prospects south of the nation's two largest oil fields.

The company is targeting shale rock that was the geological source of oil in the porous rock that holds the giant Prudhoe Bay and Kuparuk reservoirs, Foerster said.

"If there's any correlation between the conventional rocks and the source rocks, then we ought to have something fabulous. But who knows?" Foerster said.

According to a U.S. Geological Survey report issued a year ago, the North Slope could hold up to 2 billion barrels of shale oil and 80 trillion cubic feet of shale gas. It was the first-ever USGS estimate for North Slope shale resources.

The AOGCC aims to have clear fracturing regulations in place before anything happens, Foerster said. Apart from the proposed well-water testing before and after any fracturing procedures, landowners and well operators within a quarter mile of the sites must be notified and the fracturing chemicals must be disclosed.

The AOGCC wants more comprehensive disclosure than what the companies already voluntarily disclose to a national database, Foerster said. "We want to be able to monitor things a little more closely so we can have a good feel for what's going on."

The commission has scheduled an April 4 hearing on the proposed rules. Foerster said she hopes they will be in place by the end of the year, after the required public and legal review.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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