The Commission acts to prohibit the physical waste of crude oil and natural gas, ensure a greater ultimate resource recovery, and protect the correlative rights of persons owning oil and gas interest in lands subject to Alaska's police powers. It also administers the Underground Injection Control(UIC) program for oil and gas wells in Alaska, and oversees metering operations to determine the quality and quantity of oil and gas produced in the state. The Commission holds hearings and adjudicates decisions, which require the combined expertise of petroleum geology and petroleum engineering.
Physical waste can occur at the surface from the failure of surface and subsurface equipment or below ground from construction defects or inappropriate reservoir management practices. Surface waste is prevented by reviewing each drilling proposal to ensure proper well design (i.e., casing/tubing program, cement program, casing setting depth, and automatic surface safety valves). The well control equipment (i.e., mud system, diverter, blowout prevention equipment.) and hydrogen sulfide and methane gas detection equipment are also reviewed. Well logging programs, production practices, shallow geohazards, abnormally pressured zones, and plugging and abandonment procedures are examined as well. The Commission's field inspection staff then verifies that operations are conducted in accordance with state statutes, regulations and approved procedures. Hydrocarbons not recovered can have have a great impact to the state's economy since it directly affects the revenues to the State. Ultimate recovery is increased by ensuring proper reservoir management practices, and hinges on Commission decisions about well spacing, completion techniques, stimulation practices, production rates, injection fluid type and rates, injection well pattern, gas/oil/water ratios, and pressure maintenance efforts. Findings and conclusions of the Commission are rendered in pool rules and conservation orders.
Maximizing ultimate recovery is similar to preventing waste, but requires detailed understanding of the physical parameters of the reservoir (e.g. porosity, permeability, stratigraphy, faulting, reservoir pressure, drive mechanism, fluid properties and effects of intermixing fluids in stimulation and secondary and enhanced recovery), and its production performance over time (i.e., production decline curve analysis). State of the art simulation and reservoir modeling augment the Commission's management activities.
Correlative rights, or the right of opportunity to produce an owner's just and equitable share of a reservoir, are protected by establishing drilling units and preventing competitive development within a reservoir. The latter is achieved by voluntary or compulsory unitization.