First oil flows from Alaska reserve set aside in 1923

Rising from the edgeless, wind-scoured,snow-covered tundra on Alaska's North Slope lies a 450,000 kilogramdrilling rig pulling the first commercial oil from a reserve setaside nearly a century ago.

ConocoPhillips is the first oil company to draw crude from theNational Petroleum Reserve-Alaska, an area the size of Indiana, whichPresident Warren G. Harding dedicated as an emergency oil supply forthe U.S. Navy in 1923.

Getting to this point took compromises with Alaska Natives whilekeeping environmental concerns in mind. The Bureau of LandManagement, which controls the reserve, in 2013 identified about 4.8-million hectaresthat could be available for development while settingaside 4.5-million hectaresto protect wild animals and grazing lands.

The drilling rig first began pulling up oil in October, and atpeak production will produce 16,000 barrels a day from the
Colville-Delta 5 field, or as it's more commonly known, CD5. It alsowill serve as a launch pad for another nearby fields in Alaska'sArctic.

The Colville-Delta 5 field itself is an extension of theConocoPhillips' Alpine field, located about eight kilometres to the east.

"We've spent more than a dozen years trying to achieve thepermits to do the development, to complete the development," JimBrodie, the capital projects manager for ConocoPhillips in thereserve, said of the $1 billion project earlier this month afterreporters toured the North Slope facility last month. "It's asizable investment."

The project included a 10-km gravel road, four bridges overchannels of the Colville River, including one 425-metreexpanse, 50 km of pipelines, and kilometresof communications and electricalinfrastructure that tie the field back to the main Alpinefacilities. Oil that is being brought up goes back to Alpine forprocessing, and then is sent 1,300 km down the trans-Alaskapipeline for shipment out of Valdez.

The oil is being drilled on surface land which is owned byKuukpik Corp., an Alaska Native village corporation for the nearbycommunity of Nuiqsut, located about 40 km south of the ArcticOcean, or 1,000 km north of Anchorage.

Village residents who live a subsistence lifestyle objected tothe original plans for one of the bridges over the Colville River tothe oilfield, worried that it might interfere with fishing access.

Brodie said ConocoPhillips pulled its permit package to come upwith an alternate plan, working "with the community and the eldersand established a new location for the Nigliq Channel Bridge, whichcaused a reroute of the road and it was at considerable expense toConocoPhillips but at the same time we got the support from thecommunity and it enabled the project to move forward."

The Inupiat village agreed with the new plan and now welcome thefinancial opportunities that oil brings to the native community interms of taxes and jobs.

"We worked with ConocoPhillips to make sure that CD5 isdeveloped responsibly and make sure that it's a win-win," saidIsaac Nukapigak, president of Kuukpik Corp.

Development in the petroleum reserve hasn't drawn the usual protests from environmental groups.

Nicole Whittington-Evans, Alaska regional director for TheWilderness Society, said her group has been mostly concerned withhow the development will proceed: Will it involve roads or not? Howfar westward will the sprawl continue?

"Those are the types of things that we're concerned about rightnow, and we have focused on trying to ensure that the leastenvironmentally damaging developments move forward," she said.

ConocoPhillips continues preparations to drill in the moreingloriously named Greater Mooses Tooth 1 despite oil prices beingin the tank. First oil from there could be as soon as December 2018,and could produce 30,000 barrels a day at peak production.

Steve Thatcher, ConocoPhillips' Alpine operations manager, saidoil prices are cyclical and will rebound.

"For these kinds of projects, if we can invest in them now, itmakes a lot of sense for when the oil price is the other extreme,"he said.