What options for Alaska geothermal?

The state has geothermal resources, but viable development needs the right geology in the right place, and favorable economics

Alan Bailey

Petroleum News

The existence of many volcanoes and some hot springs in Alaska offers tantalizing possibilities for generating heat or electrical power from energy upwelling from deep inside the Earth. So, what is the potential for the state to forge ahead with development of this geothermal resource?

At a Jan. 29 meeting of the Senate Special Committee on Energy in the state Capitol, Bob Swenson, director of Alaska’s Division of Geological and Geophysical Surveys; Gwen Holdmann, director of the Alaska Center for Energy and Power; and Chris Rose, executive director of the Renewable Energy Alaska Project presented some perspectives on the technical, economic and government policy issues that surround Alaska geothermal energy.

“Geothermal heat, where technically and economically accessible, is an excellent form of sustainable energy,” Swenson told the committee.

But although there are vast amounts of geothermal energy within the Earth, below the Earth’s crust, there are relatively few places where all of the required parameters for viable geothermal resource extraction coincide, Swenson said.

Elevated temperatures

The deepest wells that have ever been drilled have only penetrated depths corresponding to the upper sections of typical continental crust, Swenson said.

And drilling is very expensive.

A typical well near the oil infrastructure at Prudhoe Bay on Alaska’s North Slope costs $1,800 per foot, while a well in a more remote area might cost about $3,500 per foot. That translates to costs of $18 million to $35 million for a 10,000-foot well, Swenson said.

Abnormally high temperatures occur at or near the Earth’s surface in situations where the upper surface of the Earth’s mantle, the hot mushy layer beneath the Earth’s crust, lies at relatively shallow depths. This is a situation that occurs in Iceland, which lies on the zone along which the Atlantic Ocean is splitting apart, exposing mantle material right at the surface. As a consequence, Iceland enjoys an abundance of surface or near-surface geothermal heat, Swenson said.

The Earth’s crust above the mantle is also relatively thin in areas where continents are being rifted, or pulled apart, by forces within the mantle. This is a situation that occurs in central Nevada and in southern California, where thermal gradients (the rates at which temperatures increase with depth) are especially high, Swenson said.

Unfortunately, there are no areas of ocean spreading or rifting in and around Alaska, so that on average the thermal gradients around the state are only slightly higher than normal for a continental region, Swenson said.

Active volcanoes

In fact a DGGS investigation of data from oil wells drilled on the Alaska Peninsula discovered large variations in thermal gradients, with especially high thermal gradients near volcanoes.

“So you can assume that these are getting closer to some type of heat source,” Swenson said.

There is a known geothermal source on the side of the Makushin Volcano on Unalaska Island in the Aleutian Islands and the City of Unalaska has been progressing a plan to develop a geothermal power plant. Makushin appears to be the best chance for geothermal power in Alaska, Swenson said.

In Southcentral Alaska there is also a potential geothermal source on the flanks of Mount Spurr, the nearest active volcano to Anchorage. In 2008 the state conducted a successful Mount Spurr geothermal lease sale.

Hot springs

One of these hot springs, the Chena Hot Springs, is the site of a successful geothermal project, involving the heating of greenhouses and the generation of electricity.

Swenson cautioned that, because the hot springs in the Interior are associated with major faults, the springs only occur in specific isolated locations; similar high heat flows do not occur across the entire region.

And, because it is generally necessary to flow fluids through subsurface rocks to transfer geothermal heat to the surface, a successful geothermal energy system requires rock fractures through which the fluid can flow, or rocks such as porous sandstones where the fluids can move through the fabric of the rock itself, Swenson said.

Hydrothermal systems

But experience of operating geothermal power generation in California, for example, revealed that because the natural water supply can run low it is important to inject water back into the geothermal reservoir through injection wells.

“That’s to make sure that the reservoir’s produced sustainably. … The injection part of the system is super, super critical,” Holdmann said.

In California wastewater from sewage plants is now injected into the geothermal reservoirs, she said.

Dual-cycle systems

The Chena Hot Springs geothermal power plant that went online in 2006 in the Alaska Interior uses this type of dual-cycle system and has successfully demonstrated electrical generation from relatively low temperature geothermal water — the water at Chena is at 165 F, about the temperature of hot coffee, Holdmann said.

“Chena has really … rewritten the textbooks,” Holdmann said. “… It’s got significant project recognition.”

In fact, the power output of a dual-cycle geothermal system is not determined so much by the absolute temperature of the geothermal water as by the temperature difference between that water and the ambient temperature at the power plant, Holdmann said. As a consequence, Alaska’s cold climate could give the state an advantage in geothermal power generation.

And success at Chena has opened the way to other intriguing possibilities, such as generating electricity from waste heat, say from diesel generators in village power plants.

It ought also to be possible to generate power from the hot fluids that flow from oil wells — oil and water from wells carry geothermal heat from the oil reservoir. There has been some hesitancy among oil producers to try out the technology on North Slope oil wells, but a private developer in Florida is going to try a pilot project for this type of application, Holdmann said.

Enhanced systems

“It suddenly opens up a much broader area where geothermal is possible,” Holdmann said. “… If we can create these kinds of artificial cycles in different places, now we’re looking at (any) areas that have elevated temperature gradients.”

And that could add to the inventory of potential geothermal sites in Alaska — DGGS has been investigating geothermal gradients across the state, looking for thermal gradient anomalies.

In January 2008 the Alaska Center for Energy and Power proposed to the U.S. Department of Energy the carrying out of a pilot project to test a novel form of enhanced geothermal system, in which liquid carbon dioxide rather than water would be pumped through the geothermal source, Holdmann said. Liquid carbon dioxide potentially has several advantages over water in that it could be pumped more easily through the rocks, would be less prone to cause mineral clogging and would be more buoyant when heated.

“This is just something we proposed,” Holdmann said. “This has not been done anywhere else before.”

Stable pricing

“That’s very attractive to businesses,” Rose said. “… That’s why Iceland’s been so successful in attracting high electric power industry. … They’re shipping bauxite now from Australia to Iceland to make aluminum.”

If retreating sea ice opens new shipping lanes in the Arctic there might be opportunities for Alaska to harness geothermal energy for industrial applications, Holdmann said.

And the elimination of exposure to possible carbon taxes, coupled with long-term reliable energy supplies, open the possibility to build local economies around renewable energy resources, Rose said. In addition, geothermal power can be used to supply electricity base load, because the power supply does not fluctuate in the way that it does from, say, a wind farm.

“There is geothermal potential in the state,” Swenson said. “There are a number of hurdles that we need to pay attention to, but we certainly should make it a part of the energy portfolio of the state over the next 15 to 20 years.”

Evolving incentives for renewable energy

There is, for example, a market for the trade of renewable energy certificates granted to entities that operate renewable energy systems, Rose said. Rural villages that use wind farms have been able to obtain money from the sale of these certificates, he said.

And the U.S. federal government is offering production tax credits for renewables.

“This is by far the most important federal policy that is supporting renewable energy development in the United States,” Rose said.

However, Congress has only been authorizing the tax credits for one or two years at a time, a situation that has led to a lack of long-term tax certainty. That contrasts with Europe where countries tend to engineer 20 years or more certainty into their policies, Rose said.

“There’s a big push in Congress right now to have a longer term production tax credit,” he said.

But because of the stop-start impact of the federal tax credit re-authorization process, individual states have tended to go their own way in developing policies that encourage renewable energy development, Rose said. In 26 states there are mandatory standards for renewable energy, while four states have set less rigorous goals. Some states are collecting surcharges from electricity bills to gather money for renewable energy projects.

Another approach to encouraging renewable energy development is the use of government mandated feed-in tariffs that require utilities to pay above market price to people who feed renewable energy into the electricity grid. A system like this in Germany has resulted in a major growth in the use of solar energy but has increased people’s electricity bills by about 3 percent, Rose said.

But when it comes to progressing pilot and demonstration projects for new forms of energy production in Alaska, Rose urged creation of an emerging energy technology development fund. That would be particularly helpful in developing energy systems of all types for rural communities, he said.

“We have a laboratory in Bush Alaska … where we could perfect these kinds of systems and then be marketing them around the world,” Rose said.

—Alan Bailey