Tapping the Well of Innovation in Alaska’s Oil Patch

Data management is at least as important to the petroleum industry as pipes and elbow grease. Forrest Burkholder, president of SAExploration, shared with the panel how wireless networks have streamlined seismic scans that seek hidden oil deposits.

Prior to ten years ago, measurement stations were connected using cable, Burkholder explains. “That crew would have a little over 600 miles of wire,” he says. “It’s a giant network that’s on the ground. You need all those wires connected. All those connections have to be working in order for us to collect data.” Wires were at risk of being buried in the snow, and vehicles that laid the cable were heavy and cumbersome.

New, lighter vehicles can distribute hundreds of wireless nodes, which Burkholder describes as one-and-a-half pound devices. The data they collect cannot be relayed in real time, but that’s a tradeoff for what he calls a 5 percent increase in efficiency.

“Seismic’s just like a factory,” Burkholder says. “We’ve got nodes, receivers that we need to put down on the ground. We’ve got to lay them out, pick them up. Those have to be moving all the time. And we’ve got the sources in the middle, the vibrators that are putting the source into the ground. So there’s always a bottleneck somewhere.”

Without wired networks as a bottleneck, the improved efficiency spread across more than a dozen vehicles adds up to two or three days’ extra work in a season.

Combing Underground

The innovations with the biggest impact on the oil and gas industry are, naturally, new drilling technologies. For example, the rotary steerable drilling technique has opened new possibilities for BlueCrest.

“We’re able to push and turn and move these wells anywhere we want them to go,” Johnson explains. That allows his company to develop an oil and gas field in Cook Inlet, 3 miles offshore from Anchor Point, using an onshore rig.

Johnson notes that, even twenty years ago, directional drilling could reach 3 miles, but it wasn’t very effective. Now, rotary steerable drilling can bend the well up inside the deposit, with multiple branches like the teeth of a comb. “Our last well was equivalent to seven wells, if we drilled from the surface,” Johnson says, “but we are accomplishing the same technique by drilling it from on shore, all the way out.”

The next leap forward for BlueCrest is a hole that forks laterally, like a trident. “That well will actually be the equivalent of twenty-one wells drilled from the surface,” Johnson says. “This well will have 72,600 feet of measured depth” with all branches combined, compared to typical surface wells of 7,000 feet or 17,000 feet.

“Pretty phenomenal,” he adds.

The BlueCrest rig was the most powerful in Alaska when it arrived. It has since been surpassed by Doyon Drilling Rig 26, being used by ConocoPhillips to produce a section of the Alpine oil field from underneath the Colville River Delta. “The Beast,” as it’s known, can tap 154 square miles of reservoir from one pad, Johnson explains, compared to 50 square miles from a lesser rig.

Feedback Loop

Oil and gas innovations still have a role in the future, even as conventional fossil fuels go the way of the dinosaurs.

Developing the new resource of methane hydrate, essentially natural gas frozen in water ice, could benefit from Alaskans’ experience, according to Zsolt. Methane hydrate is thought to be abundant in seafloor deposits, but Zsolt points out that permafrost is much more accessible. Exploration wells have been drilled for more than a decade, and Zsolt says ASRC Energy Services is ready for more. “We’re moving into an exciting phase of it this year,” he says. “That is one of the biggest and most innovative things that we’re working on.”

Methane hydrate has the potential to unlock 54 trillion cubic feet of natural gas, says Zsolt. However, the abundance of gas is not Alaska’s problem; rather, Alaska has trouble utilizing the conventional gas resource it already has.

The solution, Zsolt says, is blue hydrogen. That is, stripping CH4 into hydrogen, which can be burned or catalyzed for electricity, and then dumping the carbon, in the form of CO2, back into the ground, just as natural gas is currently re-injected into North Slope wells. Capturing the carbon at the point of production is a simpler way of reducing greenhouse gas emissions than trying to scrub it out of the atmosphere after it’s burned.

“There’s $14 billion in Biden’s infrastructure bill that just came out to support efforts like this,” Zsolt says. “We’re excited to find that there’s actually a really awesome coalition in Alaska that’s going to be responding to the Department of Energy’s request for information on the carbon capture programs in the infrastructure bill.” That coalition includes the Dunleavy administration, the University of Alaska, the private sector, and other stakeholders.

[Zsolt presented a similar case at a GCI webinar last month.]

In a way, though, pivoting away from petroleum is a negative feedback loop. Innovating post-petroleum technologies becomes harder precisely because petroleum is out of style.

In addition to major financial institutions steering clear of oil investments, the next generation of innovators seem to have a similar distaste for the old, dirty business. As Burkholder sees it, “You look at the current environment that we’re in and the negativity around our entire industry and the reluctance of many younger people that are emerging from tech schools and colleges, et cetera, and their reluctance to enter the oil and gas industry.” He anticipates a “brain drain” that could slow the development of new technology in the oil sector.

Furthermore, “Low oil prices make it a little bit harder to invest big sums of money in new technologies and new processes,” says Zsolt, “especially if we think low prices are going to be endemic.” While fossil fuels are easily available, alternatives are less attractive.

Zsolt figures fossil fuel prices will be artificially raised with carbon pricing regimes, such as a surtax or cap-and-trade. Thus, “Technology to reduce carbon is going to be stimulated significantly by overall higher weighted cost of carbon.” Zsolt was careful not to take a position on carbon pricing, pro or con, while speaking to the AOGA audience.

However, he explains that a radical change is inevitable. For the Alaska energy industry to keep up with other oil provinces aiming for net zero by 2050, “We’re gonna need to cut two-thirds of our carbon emissions out of our upstream operations in the next thirty years,” Zsolt says. “I’m gonna tell you, that’s a tall order, but the solution to this problem is innovation, in part.”