Recent decision could set in motion Augustine Island geothermal energy

By Brian Smith

Morris News Service – Alaska

A recently released document has given the thumbs up for companies to take the first step in a potential geothermal energy project on Augustine Island, which hosts the volcano of the same name.

A Jan. 14 document from Alaska Department of Natural Resources Division of Oil and Gas determined it is in the state’s best interest to investigate the island’s geothermal energy potential signaling the first regulatory step needed to see any future developments to fruition.

The document examined the effect of uses, impacts to wildlife, habitat and the existing uses of the island located near Kamishak Bay on the west side of Lower Cook Inlet, about 60 miles southwest of Homer. It also gives the department’s blessing to offer the 65,992 acres across 26 tracts located on and surrounding the island up for lease during a coming state sale.

Kathleen King, a natural resource specialist with the Division of Oil and Gas, said the department in 2007 called for applications of interest in Augustine and Mount Spurr geothermal energy at the same time.

“We got a bunch of comments in and a bunch of applications as far as Augustine and we proceeded to write this finding given everything that could happen, the benefits, the potential, things that could go wrong,” she said. “When we weigh those things we have to determine if it is in the best interest of the state to go forward. So that’s what this document does.”

King said the department intends to offer the island’s tracts for lease at the next state sale, usually held in the spring that also includes Cook Inlet oil and gas leases.

DOG Deputy Director Jonne Slemons said geothermal isn’t a particular emphasis of the department; rather officials are just responding to an elevated private interest in the resource. Whether a company chooses to lease and develop a project is “a business and a science decision on the part of those types of companies,” she said.

The decision document does not make any statements about the feasibility of the energy resource on the island and indicates related subsurface and geological data aren’t yet available, save for Alaska Volcano Observatory geohazard and volcanology field studies.

“We are not geothermal experts,” Slemons said. “We don’t have that kind of scientific technical expertise at our disposal, but the companies that do this kind of thing do. So they are the ones that need to make that commercial decision as to whether it is in their best interest to go ahead and invest money in exploration and development.”

The document also mentions potential hazards of exploring on a volcanic island, including ash clouds, fallout, pyroclastic flows, lahars, floods, earthquakes and lava flows. Augustine has seen six major eruptions during the last 200 years, according to the document.

“I can’t say and nobody can until they are out there,” King said when asked if geothermal exploration on the island is safe. “We continually say throughout this finding that whoever is out there exploring, you’re at your own risk.”

Geothermal energy systems usually consist of many wells spaced over a “hydrothermal reservoir,” the document indicates.

“The permeability and porosity of the host rock will determine the appropriate spacing of geothermal wells. Producing wells are connected to power plants through gathering lines,” the document reads. The technology used to harvest the natural heat is based on temperature, pressure, the amount of steam and water available, all of which are examined during exploration.

“Geothermal resources discovered on Augustine Island may be converted to electric power using a binary cycle, flashed steam, dry-steam plant, or another method, depending on the temperature and other resource characteristics,” the document reads.

However getting the power to the Southcentral grid is another question. Several comments included in the document questioned any project’s feasibility considering its remote location.

“That really doesn’t come into the decision,” King said. “All we are focused on really is the resource, and whether or not it is there and viable. How the operator or lessee gets the final resource to the processing plant, the transportation of it is considered further on down the line.”


Mount Spurr geothermal moves ahead

Paul Thomsen, ORMAT Technologies director of policy and business development, said his company’s geothermal project located on Mount Spurr is continuing after initial exploration wasn’t what the company hoped.

After ORMAT received leases in 2008, it conducted initial 2010 exploration and core hole drilling that showed promising results. A 2011 production well was drilled, but the company did not reach the depth it hoped and did not find the resource it expected, said Thomsen during a trip last week to Juneau to speak to the legislature.

This year, the company decided to reanalyze its work and consider testing new targets in the middle of its leases, he said. With that decision came additional internal work to make sure the resource could be drilled safely, if the company could build a power facility there in the future and if would be able to get insurance for the operation.

“The answers to those questions were all positive and so we are looking to send geologists back in 2013 to do what we call non-intrusive exploration,” he said. “So not any drilling but to do field sampling and so forth to delineate where future core holes could be located.”

After that testing, the company will reassess if they want to drill core holes and production wells, he said.

“We are very confident there is a geothermal resource there, it is just really tapping into it,” he said.

Thomsen said he wasn’t aware of any interest his company had in the Augustine prospect and hadn’t heard of any other companies interested.

“In general the continued support for geothermal development is encouraging and we’re going to do everything we can to try to bring online successful project,” he said. “The more people doing that, the better the odds of having a successful project in Alaska.”

Brian Smith is the city editor for the Peninsula Clarion.