Gas prices are rising sharply and crude oil is becoming scarcer. However, recent studies from the United States Geological Survey have shown that there is quite a massive deposit of unattained natural gas and oil located in the northern sector of Alaska. This huge natural oil reserve even extends into the Arctic Ocean. There are many challenges and problems to this dilemma of whether or not this oil and gas are worth obtaining. The argument for drilling includes big business companies, one of which is
Royal Dutch Shell (Shell Gas). This company is forking out billions of dollars in order to obtain rights to drill. Shell Oil is also interested in developing newer, faster machines and technologies to aid in the drilling. Arguing against this drilling are environmentalists, such as “The
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The following are estimates of the drilling costs in the Central Northern Slope which happens to be the core area of interest:
“Estimated costs, in 2007 dollars, by 5,000-foot depth interval for conventional wells in the accessible central North Slope area are $3.9 million (with vertical depth 5,000 ft), $5.9 million
(7,500 ft), $9.0 million (12,500 ft), and $14.0 million (17,500 ft). Estimated costs of corresponding horizontal wells with 3,000-ft lateral extensions in 2007 dollars are $5.9 million,
$7.7 million, $11.4 million, and $17.0 million” (Economics of Undiscovered Oil and Gas in the
North Slope of Alaska).
Drilling costs are estimated to go down overtime, as later drilling operations will be using fewer resources.
One thing that isn’t explained clearly in the United States Geological Survey is that they don’t acknowledge the different types of landscapes found in the Northern Slope and therefore drilling costs could be far higher because of different types of ground conditions. The royalties gained to the Federal
Government, the Alaska State Government, and Native corporations would be very helpful to help