The geologist who helped oil companies tap into shale formations in the lower 48 thinks Alaska will be the center of the next hydraulic fracturing boom.
“The oil is there,” Paul Basinski told Bloomberg. “Now it’s a question of how quickly we can get it to flow and whether we can get the economics to work.”
Fracking has gotten off to a slow start in Alaska, and drilling there tends to be more expensive than, say, Texas. But new technology is bringing costs down and could make fracking viable in the Last Frontier state.
Another big problem, however, is infrastructure. Basinski says it’s difficult moving millions of gallons of water and sand used in the fracking process to remote areas in Alaska. Major oil companies, like Conoco, are already buying up Alaskan land for fracking and will have to find ways to get supplies in and oil out in a cost-effective way.
Alaska is a particularly good spot for drilling as the Beaufort and Chukchi Seas contain an estimated 23.6 billion barrels of oil and 104.4 trillion cubic feet of natural gas. Developing offshore drilling is supported by 73 percent of Alaskans, according to a 2014 poll. Studies by industry groups estimate that offshore drilling would create 840,000 American jobs and nearly $200 billion in revenue for the government by 2035.
Opening up the reserve to oil drilling would create an estimated 736,000 new American jobs, according to an economic analysis. As much of Alaska’s land is controlled by the federal government, fracking there could bring big financial benefits to taxpayers. A Yale University study in 2007 showed that the oil beneath the Arctic National Wildlife Refuge (ANWR) could be worth $374 billion at oil prices only a little above today’s.
There is a 95 percent probability that at least 5.7 billion barrels of oil are recoverable in ANWR, according to the Energy Information Administration (EIA).
However, offshore oil drilling platforms and import facilities are too costly an investment when at its currently remarkably low prices. Major players like Exxon-Mobil have actually lost money in the U.S. offshore drilling business for six straight quarters. Fracking has the potential to significantly reduce the costs of drilling oil in Alaska.
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