WASHINGTON, Jan 29 (Reuters) - Oil and natural gas production at Alaska’s North Slope has been declining since 1988 but the region holds promise if energy prices stay high and Congress opens key areas to exploration, the U.S. Energy Department said in a report released on Tuesday.
Through 2050, the North Slope could yield up to 36 billion barrels of oil and 137 trillion cubic feet of natural gas under optimistic assumptions, the Energy Department said.
That would be enough to meet current U.S. oil demand for about five years and natural gas for a year and a half, but some major obstacles stand in the way of hitting those goals.
Projections assume that a North Slope pipeline is operational by 2016, oil and gas prices near current levels, the opening of parts of the Arctic National Wildlife Refuge and National Petroleum Reserve to oil drilling, and drilling access to the Beaufort and Chukchi seas, the study said.
If those assumptions are met, production from the North Slope could extend well beyond 2050, and require a refurbishment of the Trans Alaska Pipeline System and building of a pipeline to bring natural gas from the North Slope to Lower 48 states.
Plans to build a natural gas pipeline from the North Slope have been delayed for years due to bickering between oil companies like ConocoPhillips (COP.N) and Alaskan officials.
Without opening ANWR — where drilling is currently banned — the total economically recoverable supplies would drop to about 30 billion barrels of oil and 135 trillion cubic feet of gas, the study said.
Through 2015, exploration efforts could add about 2.9 billion barrels of oil and 12 trillion cubic feet of natural gas to economically recoverable ANS supplies, the report said.
Without new field development, the TAPS will hit is minimum flow rate of 300,000 bpd in 2025, and shutting down the line could strand about 1 billion barrels of oil reserves, the study said.
Building a pipeline capable of carrying 4.5 billion cubic feet per day of natural gas from Prudhoe Bay and Point Thomson fields could nearly double revenues to pipeline stakeholders, the report said.
Oil production on the North Slope began in 1977 and peaked at 2.2 million barrels per day in 1988 — about 25 percent of U.S. production at the time. ANS production fell below 900,000 bpd in 2005 but still represents about 17 percent of U.S. domestic production, the report said. (Reporting by Chris Baltimore, editing by Matthew Lewis)