State of Alaska issues final BIF for Mount Spurr, division says yes to lease sale

Alaska’s Division of Oil and Gas has issued the final best interest finding for a geothermal lease sale on 16 tracts of state land on the southern flank of the Mount Spurr volcano, on the west side of the Cook Inlet.

“I conclude that the potential benefits of the Mount Spurr Geothermal Lease Sale No. 3, as conditioned, outweigh the possible adverse impacts, and that the sale will best serve the interests of the State of Alaska,” said Kevin Banks, acting division director, in the final finding document. Tom Irwin, commissioner of the Department of Natural Resources concurred with Banks’ conclusion.

As a consequence of comments received from the public the division has incorporated some changes to its preliminary findings document that it issued in December. Changes include some new stipulations for geothermal exploration and some new information about the region that may be impacted by the exploration.

Although the finding opens the way to hold a geothermal lease sale, there’s no word yet on a sale date — the division told Petroleum News June 18 that it is working on the lease sale schedule following the decision in the best interest finding.

According to the best interest finding, the minimum bonus bids on sale tracts will be $1 per acre.

If geothermal exploration takes place following the lease sale field crews would likely do initial reconnaissance, with electrical and electromagnetic surveys being used to find prospective locations. Deep drilling at a prospect would be required to test for the presence of a geothermal water source.

Hot water from that source might then be sufficient to power an on-site project, perhaps by boiling a secondary, volatile fluid that can drive a turbine. A geothermal development at Mount Spurr would probably involve the construction of a power transmission line from the power plant to the nearest point on the Southcentral electricity grid, at Beluga on the northwest side of the Cook Inlet.

— Alan Bailey