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Vol. 15, No. 46 Week of November 14, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

The Explorers 2010: Ormat Nevada

Not all resource drilling in Alaska is for oil or natural gas. Ormat Nevada, a subsidiary of Reno-based Ormat Technologies Inc., is planning to drill wells to measure the geothermal potential around Mount Spurr, west of Tyonek. After 15 years of scoping out the state, Ormat arrived in Alaska in September 2008, picking up 15 tracts in a state geothermal lease sale, the first since 1986. Ormat bills itself as the only vertically integrated geothermal company in the world, building its own equipment and operating more than 4,000 megawatts of geothermal power, mostly in Nevada, California and Hawaii.

This past summer, Ormat began a field program in Alaska, conducting geophysical surveys over its leases to find the best drilling sites. In August, the company proposed a four well program. These slim holes, less than 4 inches in diameter, measure underground temperatures and collect information about subsurface rocks in the area, information Ormat will use to decide whether to move ahead on geothermal development. If Ormat eventually sanctions a project, it would only need some 40 miles of transmission lines to connect into the westernmost point of the existing grid in Beluga. That could add significant geothermal power to the Southcentral power grid, reducing natural gas use.

Ormat got a lift in April when the Legislature passed a bill to reduce royalty rates for geothermal power. In September, the company got two drilling permits from the Alaska Oil and Gas Conservation Commission. Under good circumstances, Ormat said it could drill all four slim holes within 30 days, but inclement weather could delay some drilling until next year. The company holds some 35,800 acres of state geothermal leases.

Current exploration focus:

Cook Inlet: Ormat Nevada is drilling “slim holes” near Mount Spurr on the western side of the Cook Inlet basin to gather information for geothermal development in the region.



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