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Providing coverage of Alaska and northern Canada's oil and gas industry
June 2011

Vol. 16, No. 25 Week of June 19, 2011

Ormat moves ahead on Mt. Spurr drilling

Following the successful completion of a small bore drilling program in 2010 to seek a geothermal energy source under the flanks of Mount Spurr, an active volcano on the west side of Alaska’s Cook Inlet, Ormat Technologies plans to drill some additional intermediate-depth core holes during the summer of 2011, the company told the Pacific Section, American Association of Petroleum Geologists, on May 10. And in early June the Alaska Oil and Gas Conservation Commission issued the company with a permit for drilling at the Mount Spurr geothermal prospect.

Ormat hopes to be able to establish a geothermal power plant at Mount Spurr, to deliver electricity into the Alaska Railbelt electricity grid. The company has been conducting ground and aerial surveys, surface sampling and small bore drilling on 15 state geothermal leases at Mount Spurr and has said that its exploration has indicated the likely existence of a geothermal source adequate for power generation. In January Ormat told the Alaska House Resources Committee that it had drilled two core holes to depths of about 1,000 feet in 2010, and that it planned to drill to depths of about 4,000 feet in 2011, with the possibility of drilling a geothermal production well in 2012. In its presentation to AAPG, the company said that the purpose of the 2011 drilling would be to define a geothermal reservoir with appropriate temperatures, subsurface fluids and rock permeability.

However, the company has also said that it needs a power purchase agreement with a Railbelt power utility, to underpin the further funding of its Mount Spurr project. Power from Mount Spurr would likely cost a little more than the power the geothermal energy would currently replace in the Railbelt grid, but the cost of the geothermal power would remain constant over a 20-year period, the company has said.

—Alan Bailey






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