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Ninilchik Residents Present Fracking Questions

The 60 or so people at the Ninilchik Fairgrounds on June 14 were there out of curiosity and concern over BlueCrest Energy’s plans for oil production in the Cosmopolitan Unit off Anchor Point.

Larry Burgess, Health, Safety and Environment manager for BlueCrest Energy, told the crowd the company wants to be a good neighbor.

“Most of the people who work for us are from here. We don’t want to hurt this environment, we live here,” Burgess said.

Burgess gave an overview of the company’s plans. From BlueCrest’s pad overlooking Cook Inlet, at Mile 151 of the Sterling Highway, it will directionally drill oil wells located 3.5 miles offshore in Cook Inlet and about 7,000 feet below the surface. First oil was produced from an existing well March 31, and BlueCrest is now sending 250 to 300 barrels a day in tanker trucks up the highway to the Tesoro refinery in Nikiski.

A new drill rig is arriving in parts and should be assembled and operational in August.  By December or January, the company hopes to utilize hydraulic fracturing — permits dependent — on half of its 20 wells underneath the inlet. Full expected production capacity of 10,000 barrels a day could be reached in five years. The project is expected to produce for 30 years. 

There’s a lot in there causing residents’ concern. One thing is the increased traffic. Burgess says there could be nearly three dozen trucks on the highway each day once peak production is reached.

“We’re hoping that we don’t have a big impact. That could be a problem coming in and out of that driveway, not only for us but for people on the highway.” Burgess said.

But, Burgess says, the Alaska Department of Transportation estimates the tanker trucks will only account for a 1.6 percent increase in traffic on Kalifornsky Beach Road, and 1.3 percent on the Sterling Highway.

He says a pipeline would be the safest way to transport the oil, but that simply isn’t economical for BlueCrest to build. Once maximum expected production is reached, the company will look at shipping the oil up the inlet via a small tanker.

“BlueCrest is opposed to putting oil in the water, but that may be the safest way to transport oil because trucking probably provides the most risk,” Burgess said.

Water contamination was another concern for residents, both in terms of the area drinking aquifer and Cook Inlet waters. Burgess stresses that the fracking activity takes place far offshore and underground. And the drill bore will use steel pipe sealed with cement, inside another steel pipe surrounded with more cement to prevent fluids from leaking into the ground

A few people asked about risk from earthquakes. Burgess says the fault lines in Cook Inlet are too deep — at 70,000 feet — to impact oil and gas activity.

“The actual fracking process is virtually impossible to affect drinking water or Cook Inlet,” Burgess said.

He says the entire fracking process will take a week, then the fracking fluid is produced back out of the drill hole, and will be taken to a permitted disposal well.

“There’s only 20 wells and only 10 producers. Of those 10 wells that are fracked, it’s done once in their entire lifetime and never done again,” Burgess said.

BlueCrest is looking at obtaining the water for fracking from abandoned gravel pits, but hasn’t yet settled on a source, and also hasn’t yet decided which disposal well will be used. Nor has it determined exactly which chemicals it will use in its fracking fluid. Burgess says BlueCrest will release that information once the frack design is complete, well ahead of the fracking process.

BlueCrest hasn’t yet submitted its application for a permit to conduct fracking operations. Once submitted, Burgess estimates the Alaska Oil and Gas Conservation Commission taking about a month to review the permit. Until AOGCC makes its decision, the permit is not available to the public.

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