There always has been natural gas in association with the oil in Alaska. With no ready market, it is pumped back in the ground. Estimates of gas reserves vary, but there are at least 35 trillion cubic feet in the vicinity of Prudhoe Bay. Another 100 trillion are estimated as potential for all the other areas, including the Beaufort and Chukchi seas and ANWR. For conversion to oil equivalent, one roughly divides by 6,000. So the total likely is about 22 billion barrels of oil equivalent. That is close to the light oil estimate for Alaska. The point is that the gas is a world-class resource and presently without a market.
The perceived solution has been a gas pipeline to the Lower 48. At least it was until shale gas came along. All of a sudden cheap shale gas rendered the Alaskan gas completely unnecessary. Fortunately for everybody, the bickering delayed the decision to this point when it is truly passé. According to the National Energy Technology Laboratory (National Energy Technology Laboratory [NETL], 2009), a gas pipeline would require daily throughput of 4.5 billion cubic feet per day for 35 years. That translates into a reserve of about 59 trillion cubic feet, which you will note is more than the readily accessible 35 trillion mentioned earlier. But in the end that is hardly the point. The Lower 48 is expected to be self-sufficient, and there is already concern regarding prices staying too low. Alaskan gas would not help that. But there is a remedy that leaves us with a TAPS that is saved rather than played on a trumpet solo.
The Gas to Liquids Option
A full discussion of gas to liquids in the context of cheap gas is in the following chapter, “Transport Liquids from Gas: Economical Now.” But in short, it involves first reacting the methane with oxygen to produce a synthesis gas, a combination of carbon monoxide and hydrogen.
This reaction is straightforward, and the reaction products can also be obtained with coal as a starting point. The tricky part is then catalytically converting this mixture into long-chain hydrocarbons, also as described in chapter 14. During World War II, virtually the entire war effort was run on
90 Part III. Economics of Production and Use
transport fuel using the Fischer-Tropsch (F-T) process. The Germans had domestic coal but not oil. Closer to the present day is the optimization of this process by the South Africans. During the apartheid-driven embargo, South African oil companies were forced to develop fuel with domestic sources. Today Sasol is arguably the leading purveyor of this technology, although the likes of Shell would certainly argue that point.
ExxonMobil, one of the big Prudhoe Bay property owners, has a process for taking synthesis gas to methanol and thence to gasoline, the so-called MTG process. But whether F-T is used or MTG, the prospect of a liquid fuel from Alaskan gas is real. The gas itself ought to be priced very low. This is particularly the case if it is gas associated with oil production. Using it means not incurring the cost of putting it back in the ground. One could even argue, tongue planted close to the cheek, that the price is negative.
The key question is how much gas capacity is needed to support a
commercial scale GTL plant. A plant producing 100,000 barrels a day would be materially useful to keep TAPS open. The gas required for this is about 1 billion cubic feet per day. That is a far easier target than the 4.5 billion required for a gas pipeline, even were it to make economic sense, which it does not due to shale gas in the Lower 48. A comfortable target would be a 200,000-bpd GTL facility.
Things start to get interesting if one combines 200,000 bpd GTL output with a like quantity of heavy oil. In some ways this is near sacrilegious! GTL- produced liquids are incredibly clean; they are free of sulfur and all manner of impurities present in the same liquids from oil refining. But, getting past this squeamishness, the light fractions from a GTL plant would be very well suited to blending with heavy oil to make the latter transportable.
There are issues one would have to deal with. Sometimes when heavy oil is mixed with certain light hydrocarbon fractions, some of the carbon in the heavy oil will precipitate out as asphaltenes. You don’t want that happening in the pipeline. But this sort of thing is well understood and simply needs to be handled. In fact, one option would be to use light molecules associated with the natural gas to deliberately precipitate the asphaltenes prior to shipping. A commercial process exists for doing this and is known as the ROSE process. In that case the GTL-derived product would simply be sent down the pipeline in batches between other oil batches.
The Trans Alaska Pipeline System is critical for US energy security. It must be kept open. There is currently a lot of rhetoric to the effect that this specter is
being used by oil interests to open up environmentally sensitive areas. A future that combines production of heavy oil, blended with a liquid from natural gas, is one that we can all live with. This solution ought to keep the pipeline open for decades. If the shale oil option is realized, that would just be icing on the proverbial cake. That would merely raise the flow in TAPS back to the glory days’ numbers. Alaska gas pipeline: rest in peace. A lone bugler can play “Taps.”
ChAPTeR 14