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Oilfield regulators to consider if BP wastes North Slope propane

Alex DeMarban

State oilfield regulators on Tuesday plan to hear arguments over whether Prudhoe Bay Unit operator BP Exploration is wasting propane.

The hearing stems from a request by Harold Heinze, former director of the Alaska Natural Gas Development Authority. He asked the Alaska Oil and Gas Conservation Commission to investigate.

The commission originally planned to hear arguments in May, but BP requested a delay because an expert witness was not available, said Cathy Foerster, one of three AOGCC commissioners.

BP has said it doesn't waste propane, a valuable product that comes to the surface along with crude oil as a component of natural gas. The company uses propane to pressurize the Prudhoe Bay reservoir and other fields to push more oil to the surface. Some propane is stripped from the gas for use as a solvent to help release oil from the underground rocks. Some of it is used as a refrigerant in the extraction process.  

Heinze thinks it's possible too much propane is being reinjected and not helping push oil to the surface -- as much 75,000 barrels of propane daily. All that propane will one day be wasted when oil production stops, he's argued.

The Alaska Natural Gas Development authority has developed plans to market North Slope propane to help lower high Alaska energy costs. The plan needs only a fraction of that the propane Heinze believes may be wasted.

Heinze served as the authority's chief executive for eight years before becoming a contractor for the Matanuska Electric Association late last year.  Previously, he was president of ARCO Alaska and served under Alaska Gov. Wally Hickel as commissioner of the Department of Natural Resources. He requested the investigation as a "concerned citizen," not on behalf of the natural gas authority.

The hearing is scheduled for 9 a.m. on Tuesday at the commission's downtown office.