Great Bear Undecided on 2013 Drilling Season

The company caught many by surprise when it snatched up 500,000 acres in a 2010 lease sale.

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But two years after executives told lawmakers the company could pump one million barrels into TAPS a day, it isn’t even close to serious production.

Former Alaska revenue commissioner Patrick Galvin, now deputy general counsel at the company, said Great Bear is analyzing geological data from wells drilled last year.

“We’ve got a lot of information that we’ve obtained from those first two wells and the seismic data, and we’re still in the process of evaluating that,” he said Tuesday evening.

That’s taking place in the San Francisco Bay Area. Galvin would not say how many wells he hopes the company will frack, or whether initial projections were too high.

“We’ve got a lot of acreage and a lot of determinations to make as to what a full field development would look like,” he said.

Great Bear plans on cracking the source rock on the North Slope with a mix of chemicals to release oil. About a quarter of the wells in the state have been hydraulically fractured.

Unlike the Marcellus Shale in the Eastern U.S. – these wells would primarily harvest oil, not gas.

And unlike the Lower 48, some environmental groups are welcoming the possibilities. The water table near the proposed well sites is filled with brackish water, so it couldn’t be consumed by humans.

Lois Epstein, an engineer who works with the Wilderness Society, said the conservation community could get behind this proposal; in part because the operations will be on state land, land she said is less sensitive than federally protected acres.

And as an Alaskan, it’s good to see more oil in the pipeline.

“It could be a good thing for the state of Alaska to increase flows through the Trans Alaska Pipeline by tapping into resources near the existing infrastructure,” Epstein said.

The company’s two existing wells are near the Dalton Highway.

“They’ve chosen it for more than just the geology,” said Cathy Foerster, chair of the Alaska Oil and Gas Conservation Commission. “They’ve chosen it because it’s got some ‘close-ology’ – it’s close to existing infrastructure.”

Foerster said in the past companies have started near existing gravel roads and infrastructure and then moved further away as production scaled up.

“Unless you’re going to find another Prudhoe Bay, you can’t afford to build your own infrastructure. You need to rely on what’s already in place,” she said.

The company has not applied for any permits beyond the ones it has for six well sites along the Dalton Highway.

Foerster said she remains optimistic the project will still pan out even though the state is considering new regulations on fracking. A public comment period on proposed rule changes – like requiring producers to disclose fluids online – just ended.

“We’re not proposing anything that’s out of line with other states that are doing hydraulic fracturing of shale,” she said.

Great Bear’s Pat Galvin said he too remains optimistic about the prospect. But the project appears to be taking longer than expected.

The company’s founder Ed Duncan told legislators two years ago that he’d be pumping oil into TAPS by last summer.