A federal assessment of economically recoverable oil in the National Petroleum Reserve-Alaska concludes that only 500 million barrels are available at current market prices.
The assessment also found that natural gas -- plentiful in the NPR-A -- would have to sell for at least $8 per cubic foot to make its extraction worthwhile.
The U.S. Geological Survey study released Wednesday was the newest dimension to a revision made public last fall that found much less recoverable oil in the reserve than previously thought.
So long as per-barrel oil prices remain above $90, industry can profitably recover that 500 million barrels, according to USGS spokesperson Jessica Robertson. If oil prices were to drop to $72 per barrel, the amount of oil that could be recovered without losing money would drop to 273 million barrels, Robertson added.
Currently, oil is trading between $109 and $120 per barrel, depending on which market you follow.
As recently as 2002, the NPR-A was considered a much larger oil patch. The federal government estimated about 9 billion barrels of technically recoverable oil. Last year's revision by USGS scientists concluded that number was about 90 percent too optimistic and that actually there was only about 896 million barrels, Robertson said.
"Technically recoverable resources are those that could potentially be produced using current technology and industry practices. More could be technically recoverable in the future. But currently, this is what we expect," Robertson said. "Economically recoverable resources are those that could be sold at a market price that covers the cost of discovery, development, production and transportation to market."
Bob Swenson, Alaska's top geologist agrees that the assessment provided by USGS was "reasonable" and seemed fair based on the data the Feds use to determine how much resource is recoverable in the NPR-A. But Swenson and the Alaska Department of Natural Resources disagree about how much oil actually is there.
"We believe very strongly that the numbers they are using are very pessimistic on the side of oil ... They're not currently using 'unconventional resources' in the oil part of the petroleum system -- including shale oil, tight reservoir, low permeability," he said, before acknowledging that the state did not collect data on the NPR-A.
The USGS revision also noted that the oil's recovery would likely come as natural gas was pumped from the NPR-A.
Trillions of cubic feet of natural gas are thought to exist underneath the NPR-A. If gas prices are at $8 per cubic feet, scientists predict 18 trillion cubic feet of undiscovered gas could be recovered. That number jumps to 32 trillion cubic feet with prices trading at $10.
Today's natural gas prices were trading around $4.
Contact Eric Christopher Adams at eric(at)alaskadispatch.com
[EDITOR'S NOTE: This article was updated May 4 to include response from the Alaska Department of Natural Resources on the federal government's revised assessment of the amount of economically recoverable oil in the National Petroleum Reserve-Alaska.]