Hilcorp states it is seeking the necessary permits to develop Liberty but has not made a final decision to sanction the project. Why?
Before making a final decision to move forward, we need to ensure we can develop Liberty economically and in cooperation with local residents and regulators.
Shell has seen a lot of attention and opposition for drilling in the Chukchi. Are you concerned that Liberty will see more of the same?
The Liberty project is quite different than Shell’s activity. The Liberty reservoir has already been drilled and oil has been discovered. Hilcorp’s activity is simply a continuation of the process. We will remain open and transparent throughout the permitting process and will not pursue Liberty unless we can do so responsibly.
How far along in the permitting process are you?
The Bureau of Ocean Energy Management (BOEM) has recently deemed our Development and Production Plan (DPP) as complete. The National Environmental Policy Act (NEPA) review process will now begin. Concurrent with the NEPA review will be a parallel effort to prepare and submit additional federal, state, and local permit applications to seek approval to construct the project. Approximately 60 federal, state and local permits and authorizations are required for the project implementation.
What is a DPP?
DPP stands for Development and Production Plan. The DPP describes the subsurface depletion plan, all construction phases of the proposed project, important safety features and practices and provides an Environmental Impact Analysis (EIA) of the project.
What does the NEPA process entail?
NEPA directs federal agencies, when planning or issuing permits for projects like Liberty, to conduct environmental reviews that consider the potential impacts to the environment and communities by proposed actions.
Is there any wildlife in the proposed area of construction? If so, how will you move ahead without affecting them?
In addition to working with the appropriate regulatory agencies to ensure wildlife is protected, we will work under the advisement of locally trained wildlife observers.
Using Proven Technology
Is offshore development riskier than onshore?
Alaska has a 30-year record of safely operating offshore in the Arctic. Endicott, the first offshore development on the North Slope, has been in operation for almost three decades, and now there are three other offshore fields in production: Northstar (2001), Oooguruk (2008) and Nikaitchuq (2011).
Is the technology safe?
Yes. Hilcorp will utilize the construction and operational technology perfected at Alaska’s other offshore facilities. It’s proven to be a safe and effective means for oil & gas development in the Arctic.
Why construct a gravel island?
A number of structural alternatives to a gravel island were considered for offshore drilling at Liberty. None were deemed more suitable for the near-shore, relatively shallow water environment of the Liberty Development.
Do other islands like the one you are proposing exist?
Yes, artificial islands in the Alaska Beaufort Sea date back to the mid-1970s. In the last 40 years, 18 islands have been constructed for exploration and development of oil and gas off the coast of Alaska. The majority of the artificial islands were constructed in shallow water depths less than 20 feet.
Does the winter pack ice pose a danger to the production island?
The industry has learned a great deal about how to safely operate in sea ice. Liberty will incorporate ice-shielding technologies that have proven very effective at other offshore facilities.
Is it safe to transport oil via subsea pipeline?
The subsea pipeline proposed for Liberty is similar to the one in service at Northstar, which has safely operated for 14 years. The line will be buried and will incorporate a pipe-in-pipe technology, in which a smaller line that carries the crude will be enclosed within a larger line. The subsea section of the pipeline will employ a leak-detection system that monitors pressure, volume and temperatures to detect abnormalities and/or releases.
Will the residents of the North Slope benefit from Liberty?
Absolutely. Hilcorp supports the communities in which it serves, provides financial resources for young people to pursue college opportunities and encourages and facilitates philanthropy among its employees. Through its generous corporate philanthropy, scholarship programs and the exceptional Hilcorp Giving Program, Hilcorp has proved to be an outstanding corporate citizen and philanthropic leader in every community in which it has operations. They believe that giving back to the communities in which they operate is important and that through healthy communities and partnerships with meaningful organizations they can achieve long-term success.
The Economics of Liberty
Why is The Liberty Project important?
Liberty is the largest defined — but undeveloped — light-oil reservoir on the North Slope, with an estimated 80-150 million barrels of recoverable oil. Peak production of between 60,000 and 70,000 barrels/day is projected within two years of initial production. The field has a life expectancy of 15 to 20 years. Development of this resource will help offset declining light oil production on the North Slope and contribute to increasing the life span and efficiency of the Trans-Alaska Pipeline.
What are the economic benefits of Liberty?
As the first Outer Continental Shelf oil project in the U.S. Arctic, Liberty will provide important tax and economic benefits to the federal government, State of Alaska and North Slope Borough. It will generate construction jobs — primarily for Alaskans — and good-paying permanent jobs. It will create business opportunities for many Alaska businesses.
Will it impact the Trans-Alaska pipeline?
Yes. New oil is needed to keep the pipeline operating efficiently now that throughput is less than 25 percent of capacity. An additional 60,000-70,000 BOPD from Liberty will be an important addition to keeping the pipeline operational for decades to come.
Will Hilcorp develop Liberty?
That’s yet to be decided. Right now Hilcorp is working to further evaluate the prospect. We won’t fully approve Liberty for development until the proper permits and permissions are in place.