A Texas oil company is moving forward with plans to build a gravel island that would serve as a platform for at least five extraction wells six miles off the Alaskan coast. According to the Associated Press, this would be the first petroleum production project in federal Arctic waters.
Hilcorp Alaska LLC, a subsidiary of Hilcorp Energy Co., which is based in Houston, proposes trucking 83,000 cubic yards of gravel by ice road to a hole cut in the sea ice. The gravel will be dumped into 19 feet of water, forming the so-called 23-acre “Liberty Island,” in the Beaufort Sea. The work area will encompass 9.3 acres, protected by a barrier wall.
Standard rotary drills would extract oil. Hilcorp would move oil by a 5.6-mile undersea pipeline to shore and overland to the trans-Alaska pipeline.
Hilcorp projects a peak production rate of up to 70,000 barrels of oil per day within two years of initial production. Over 15 to 20 years, the company predicts it would yield 80 to 150 million barrels of oil.
The U.S. Bureau of Ocean Energy Management is assessing the proposed island’s environmental effect, in Foggy Island Bay, 15 miles east of Prudhoe Bay, the largest oil field in North America—a review which may not be completed until at least 2017.
There are at least four other oil fields in production from gravel islands off the Alaskan coast, Hilcorp spokeswoman Lori Nelson told the AP. “It’s proven to be a safe and effective means for oil and gas development in the Arctic,” she said. “Alaska has a 30-year record of safely operating offshore in the Arctic.”
Alaska Gov. Bill Walker gave Hilcorp his blessing in an October 14th letter to the bureau, writing, “With the recent announcement by Royal Dutch Shell regarding its Outer Continental Shelf development, the importance of Liberty Reservoir project has only increased.”
At the end of September, Royal Dutch Shell PLC, facing widely-publicized opposition after drilling an exploratory well further ashore, in the Chukchi Sea, announced that it would cease drilling offshore in the Arctic “for the foreseeable future.”
Walker, a former oil and gas attorney, has been a fan of Hilcorp since even before he was elected. Last year, Alaska Dispatch News reported, after Hilcorp announced that it was acquiring 15 percent of London-based oil giant BP’s production in Alaska (including a 50 percent interest in the Liberty fields), Walker, then a gubernatorial candidate, said, “Our future will depend on companies like Hilcorp coming up and doing what the bigger companies are not doing in some of the legacy fields.”
However, according to Lois Epstein of the Wilderness Society, because Hilcorp will be drilling in federal waters, Alaska will not receive any of the revenue. Alaskans would be the ones most directly effected by a spill, though.
Earlier this month, Hilcorp’s billionaire owner, Jeff Hildebrand, gave each of his 1,381 employees a $100,000 bonus after the company doubled its output to more than 150,000 barrels daily, Forbes reported.
“Mr. Jeff Hildebrand, and our president Greg Lalicker, they are such amazing motivators,” Amanda Thompson, a Hilcorp receptionist for 10 years, told Fox 4 News. “Somedays I just kind of look down the hall and say I cant believe these are my bosses and they’re the best.”