Mixed Feelings On A New Company’s Plans To Drill in Cook Inlet

A Texas-based company will begin drilling for oil in Cook Inlet next year using extended-reach oil wells.

Download Audio:

BlueCrest Energy plans to drill from shore about six miles north of Anchor Point. Informational meetings were held in Homer and Anchor Point this week. The participants seemed split between hope for an economic jump start and worry for the project’s safety.

BlueCrest held three meetings in the three communities closest to the proposed site, Ninilchik, Anchor Point and Homer. BlueCrest inherited the Cosmopolitan Project from a long line of predecessors. Pennzoil, Arco, Conoco Phillips, Pioneer and Buccaneer all tried to reach the reserves in question. They all failed. When Buccaneer took its shot, BlueCrest already owned a 75 percent interest in the project and they decided to buy the other 25 percent after Buccaneer fell into huge amounts of debt.

As full owner, BlueCrest plans to drill onshore wells, some as deep as 25,000 feet, straight down and two and a half miles out beneath the ocean floor to tap reserves in the cosmopolitan fields. Extended Reach Drilling (ERD) is directional drilling of very long, horizontal wells.

“We are not drilling offshore for oil. All of the oil development is from an onshore land rig.”

Larry Burgess, the Health, Safety and Environmental Manager for BlueCrest, says drilling from shore will leave very little risk of spills in the inlet.

Although onshore drilling was far more welcome than the prospect of offshore wells, Anchor Point and Homer residents still had concerns.

“[I am] Ken Lewandowski, I live in Cottonwood Subdivision which is in the backyard, the side yard of the Stariski plant that they plan on building.”

Lewandowski says there’s only one road in and out of his subdivision, where BlueCrest plans to drill.

“They literally tore up an ambulance coming down the hill in the winter time. Without having any access whatsoever to get out of our subdivision safely all year round and not having any kind of access to the facility leaves me to believe there’s a problem that’s going to happen in the future for sure.”

Lewandowski says living in that home was originally part of his retirement plan, but after learning about the Cosmopolitan Project, he’s looking for an exit strategy. He wants BlueCrest to compensate all four homeowners in the subdivision for the inconvenience.

“I spoke with this gentleman, Larry, a couple of minutes ago and he assured me that we’re going to sit down again and I’m looking forward to our next meeting.”

Other big concerns during the meeting included fire danger, spill prevention, noise, water use, and mode of transportation. Burgess was prepared with an answer for nearly every issue. But, no answer could stem worry over the risk of trucking oil. Burgess says there are only three real options to get the oil from the plant up to the Tesoro refinery in Nikiski. By truck, by ship, and by pipeline.

“If we have one barge running up and down Cook Inlet once or twice a week, that’s much less traffic with oil moving than if we’re running four or five trucks a day. On the other hand we’re looking at 400 barrels per truck as opposed to 50,000 barrels in a barge.”

BlueCrest would rather risk the 400 barrels on the road. A pipeline was the most popular option at both meetings. It’s the safest and most efficient mode of transport but it’s also expensive.

“More vehicles on the road, just by sheer probability is less safe than barging or a pipeline. That doesn’t mean it’s unsafe. It just means it’s less safe than the other options.”

BlueCrest plans to eventually produce about 17,000 barrels per day and Burgess says that’s nowhere near enough to justify a pipeline to Nikiski. Initially BlueCrest expects to have one or two trucks on the road each day. As production climbs the company plans to look at transportation alternatives.

Outside of safety concerns, the other big question on people’s minds was what benefits BlueCrest would bring to the Southern Peninsula.

Long-term Anchor Point residents Emmitt Trimble and Buzz Kyllonen were around to see the long procession of companies attempt the cosmopolitan project. Trimble says BlueCrest might be the people to get the job done.

“It’s going to be nice to see that income generated in this community when we don’t have a lot of economic growth or development here. It’s going to be nice to have somebody join the rest of us tax payers in paying those property tax bills.”

Kyllonen agrees with Trimble. But, he says they’ll keep an eye on BlueCrest.

“I think they’re on the right track and we’ll have to wait and see. But, I think they’ve done their homework and I’m optimistic.”

Burgess says BlueCrest needs feedback and he urges peninsula residents to share any comments and concerns they might have regarding this project. The company plans to start full scale construction in August.