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New Estimates of Petroleum Resources of the Arctic National Wildlife Refuge 1002 Area
Released: 5/17/1998

Contact Information:
U.S. Department of the Interior, U.S. Geological Survey
Office of Communication
119 National Center
Reston, VA 20192
David Houseknecht (Technical) 1-click interview
Phone: 703-648-6470

Ken Bird (Technical)
Phone: 650-329-4907

Trudy Harlow (Public Affairs)
Phone: 703-648-4460

A new fact sheet from the U.S. Geological Survey provides results of the latest assessment of petroleum resources in the 1002 area of the Arctic National Wildlife Refuge, including new estimates of how much petroleum may be present. The 1002 area, defined by the Alaska National Interest Lands Conservation Act of 1980, includes most of the coastal plain of the Arctic Refuge and covers about 1.5 million acres.

Results of the USGS assessment of petroleum resources of the Arctic Refuge will be released at 5:00 p.m. (Mountain Time) Sunday, May 17, 1998, at the annual technical convention of the American Association of Petroleum Geologists to be held at the Salt Palace Convention Center, Salt Lake City, Utah. Dr. Kenneth J. Bird will give a 20-minute technical presentation on the Arctic Refuge petroleum assessment, including results, at the Convention in Ballroom B/D, on Tuesday, May 19, 1998, at 3:50 p.m. (Mountain Time).

During the decade since the USGS last assessed the petroleum resources of the 1002 area, several developments have influenced the scientific understanding of its oil potential. Numerous exploration wells have been drilled and several oil fields have been discovered near the 1002 area; new geological data have become available; new advances in processing older seismic data have been developed; and the economics of North Slope oil development have changed significantly. A team of USGS scientists spent nearly three years analyzing the wealth of scientific data stemming from these developments and incorporating their conclusions into the new resource estimates. These estimates are of undiscovered petroleum resources and should not be confused with petroleum reserves, which are resources that have been discovered and proved recoverable.

To assess volumes of undiscovered petroleum, the USGS started with basic geological observations and, using established assessment techniques, derived an estimate of in-place resources, the amount of petroleum that may be present in accumulations larger than 50 million barrels without regard to recoverability. Next, a recovery factor was applied to estimate technically recoverable resources, the amount of petroleum that may be recoverable using current technology without regard to cost. Finally, the costs associated with finding, developing, producing, and transporting the petroleum were applied to estimate economically recoverable resources, the amount of petroleum that can be recovered at a given well head price.

Each step of this analysis was conducted using probability distributions rather than single numbers. In other words, the results are expressed as resource volumes inversely related to probability--the higher the estimated volume of petroleum, the lower the probability that it is present. The inherent uncertainty associated with estimating how much petroleum might be present, before any exploration has been done, is best conveyed by use of such probabilistic results.

The USGS estimates that the 1002 area of the Arctic Refuge contains between 11.6 and 31.5 billion barrels of oil (BBO) as in-place resources (95% and 5% probabilities). This means there is a 95 percent probability (a 19 in 20 chance of occurrence) that more than 11.6 BBO are present, and a 5 percent probability (a 1 in 20 chance of occurrence) that more than 31.5 BBO are present. By comparison, the USGS estimates that were made a decade ago were 4.8 and 29.4 BBO (95% and 5% probabilities). The general increase in estimated oil resources results from improved resolution of reprocessed seismic data, which allowed the identification of a larger number of potential petroleum accumulations, and new information regarding petroleum occurrences in nearby wells drilled since the previous study.

Technically recoverable resources are estimated to be between 4.3 and 11.8 BBO (95% and 5% probabilities). Quantities of technically recoverable oil are not expected to be uniformly distributed throughout the Arctic Refuge 1002 area. The new USGS study indicates that about 85 percent of the technically recoverable oil may be concentrated in the western part of the 1002 area. In contrast, a decade ago the USGS estimated that most resources may be located in the eastern part of the 1002 area. Different rock formations are present across the 1002 area, and new information suggests that oil potential may be greater in those formations present in the western part of the area.

Results of the economic analysis are presented as curves relating market price to the volume of oil that may be profitably recovered (see attached figure). Using the mean, or expected, value of technically recoverable resources, the USGS estimates that no oil is economically recoverable at a market price below about $15 per barrel, approximately 2.4 BBO are economically recoverable at $18 per barrel, and approximately 3.2 BBO are economically recoverable at $20 per barrel. These amounts are expected to occur in numerous accumulations, rather than in one large accumulation.

Results of the new USGS assessment of petroleum resources of the Arctic National Wildlife Refuge 1002 area are available in a six-page executive summary (USGS Fact Sheet 040-98), which can be accessed on the Internet at http://energy.usgs.gov/factsheets/ANWR/ANWR.html. A volume of technical papers, including detailed presentation of results and documentation of the scientific basis for the assessment, will be published in CD-ROM format (USGS Open File Report 98-34) later this year. Requests for the fact sheet and/or the CD-ROM may be directed to gd-anwr@usgs.gov.

The factsheet is also available from the USGS EarthFax (Fax-on-Demand) system by calling 703-648-4888. Select option 1 and request document 2600.

Note to News Media: During the AAPG convention, May 18-20, Dr. Kenneth Bird and Dr. David Houseknecht will be available for interviews concerning the petroleum assessment of the Arctic Refuge. To arrange an interview with Dr. Bird or Dr. Houseknecht from May 18 to 20, contact Pat Jorgenson at 415-716-7861. After May 20, contact Dr. Bird or Dr. Houseknecht at their offices.

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