US approves oil-drilling plan for Alaska forest
Date: 16-Dec-02
Country: USA
Author: Yereth Rosen
Cassandra Energy Corp., an Anchorage-based independent, has federal
permission to conduct new exploration at an old oilfield site east of
Prince William Sound that produced about 154,000 barrels in the early
part of the 20th century.
The company plans to drill directionally from private land into
mineral estates owned by Chugach Alaska Corp., a regional Native
corporation.
The 5.9 million-acre (2.4-million hectare) Chugach is the country's
second-largest national forest, after southeast Alaska's Tongass. The
Chugach hugs Prince William Sound and covers much of the Kenai
Peninsula, comprising mountains, glaciers, islands and dense spruce
and hemlock stands.
Cassandra still needs various permits from the state of Alaska before
it may start drilling, said Bill Stevens, the company's chief
executive. He said he hopes to start exploratory drilling in the
spring.
Although nearly 50 wells were drilled at the oil field from 1901 to
1930, none were deeper than 2,300 feet (700 metres).
Stevens said that leads him to believe that there is much more oil at
lower depths.
"It's pretty well a standard rule that shallow fields generally
overlay deeper fields," he said. In addition, oil seeps at the area
hint at deeper riches, he said.
'HIGH-QUALITY SOURCE'
"The quality of the oil that still seeps out of the ground from the
natural seeps is from a deeper source, and a pretty high quality
source," he said.
It is possible that there is a large reservoir yet to be tapped at
Katalla, Stevens said.
"We figure there's 200 (million) to 600 million barrels that would be
accessible from the private land," he said.
Katalla production came to a halt in 1933 when the field's refinery
burned down, said Ken Hodges, Cordova District Ranger for the Chugach
National Forest.
There were sporadic exploration attempts at Katalla from the 1960s to
the 1980s, with no commercial finds, Hodges said. But even the most
recent drilling, a mid-1980s effort by a now-bankrupt company called
Alaska Crude, was far shallower than the area targeted by Cassandra.
If commercial quantities of oil are discovered at Katalla, the
question will be how to ship the product, Hodges said.
The site, 56 miles (90 km) southeast of the fishing town of Cordova,
is far from any current Alaska oil operations. The closest operating
oil fields are in the Cook Inlet area, more than 200 miles (320 km) to
the west.
Any plan for commercial output, including pipelines or tankers, will
need an environmental impact statement, he said.
The efforts to revive oil production at have drawn fire from Cordova
environmentalists and from some area Natives.
They say new oil drilling would threaten the Copper River, the source
of a world-famous salmon fishery, and would bring more ecological
damage to a region already harmed by the 1989 Exxon Valdez spill.