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Providing coverage of Alaska and northern Canada's oil and gas industry
June 2021

Vol. 26, No.23 Week of June 06, 2021

Stalking water power

Pt 2 of 2: Data-rich GeoAlaska off to good start hunting Mt. Spurr reservoirs

Kay Cashman

Petroleum News

“We’re not going into this blind,” Paul Craig told Petroleum News May 27, referring to the substantial amount of scientific information GeoAlaska LLC has collected for an exploration program under its new Northwest Mount Spurr geothermal license.

The prospecting permit was issued May 24 by Alaska’s Division of Oil and Gas. It gives the company three tracts on 6,376 acres of state land on the southern flank of Mount Spurr, an active volcano that lies some 80 miles west of Anchorage, Alaska’s largest city.

At least one notable expert concurs with GeoAlaska’s theory about where one reservoir of Mount Spurr geothermal energy lies.

In early April, Steve Masterman, director of Alaska’s Division of Geological and Geophysical Surveys, talked to the Alaska Senate Resources Committee about what was learned from previous geothermal exploration in the area; most of this data being in State of Alaska hands because of tax credits offered explorers at the time.

Hot springs at the surface a few miles to the south of Mount Spurr’s active crater point to the existence of a subsurface reservoir of hot geothermal water that would be the prime target for drilling, Masterman told committee members, suggesting that the reservoir might lie several miles from the hot springs.

In particular, he said, a major fault, the Capps Glacier fault, runs east to west on the south side of Mount Spurr. Following extensive surveying activities, Ormat Nevada, the company that acquired most of the tracts sold in the 2008 lease sale, opted to drill three wells into sedimentary strata below shallow volcanic rocks on the south side of the fault. Unfortunately, the wells did not encounter warm or hot rocks or water of any quantity, Masterman said. Ormat eventually relinquished its leases.

New explorers in the region, armed with that knowledge, would have to use geology and geophysics to search elsewhere for the elusive geothermal reservoir, Masterman said.

“So, they have a difficult task in front of them. … They have to try to trace the hot water back from the surface exposure to the reservoir, and drill into that reservoir.”

Finding yields specifics

In its preliminary finding on GeoAlaska’s application, the Division of Oil and Gas provided more specifics on Ormat’s activities: “Following lease acquisition Ormat performed non-intrusive geochemical sampling and geophysical data acquisition during the summers of 2009 and 2010. Using these field results, two shallow (<1,000 ft) exploration wells were drilled in late summer 2010 yielding positive results,” the agency said.

“In summer 2011 a third deep (nearly 4,000 ft) exploration hole was drilled yielding less than desirable results. Temperatures were much cooler than expected, in part because Ormat was unable to drill through the West Foreland conglomerate into the harder (and presumably hotter) basement rock beneath (ORNI-46 2012).”

This was a major setback for Ormat and was the main driver that ultimately led to the company’s decision to relinquish its leases in 2016 and leave Alaska, the Division of Oil and Gas wrote.

Anderson convinces Craig

As mentioned in the first segment of this story, the man who first sold Craig on the acreage he applied for was private consultant Erik Anderson, who is based near Anchorage.

Anderson had advised Raser to apply for a prospecting permit where he thought the reservoir was located, but instead Raser chose the geothermal springs that represented the surface expression.

“Our property wraps around Raser’s acreage to the north and to the west,” Craig said. “Our geological theory is that our tracts hold the source of those springs - the geothermal reservoir.”

“In addition to our emphasis on the Capps Glacier fault … we are also interested in the North Bench fault on our exploration property. That fault appears to be contiguous with the Crater Peak magma conduit and closer to the magma column,” Craig said in a follow-up email to Petroleum News.

“At a proper distance from the magma conduit and at a sufficient depth to encounter water, the BTUs of geothermal energy that may be discovered could be substantial. In summary, GeoAlaska identified multiple geothermal targets when selecting the lands for which the company applied,” he said.

Reanalyzing plethora of data

“There are a plethora of public domain data about the geothermal potential at Mount Spurr,” Craig said.

“We accessed those … and reanalyzed them. In addition, Mount Spurr is one of the most studied volcanos in the world; there are micro-geophones permanently installed all over that mountain. So every time the earth moves just a little bit because of a seismic event the epicenter of that motion is able to be identified. It’s sort of a naturally occurring 3D seismic survey based upon earthquake events. All these little epicenters are knowable by following one specific line for each,” he said.

For GeoAlaska Anderson put together a database of “thousands and thousands of epicenters of seismic activity on Mount Spurr and ran it through a statistical procedure to find the zone of central tendency for all the movement,” Craig said. “It mapped out exactly along the Capps Glacier fault; where we hypothesized it to be.”

Those results, he said, were yet another way to analyze the available data - and were “reassuring” in confirming their theory.

Unlike oil and gas, what GeoAlaska is looking for is fractured rock through which water can flow, so a fault is typically an ideal location to find fractured rock.

“You want water that has flowed past a heat source, so that it’s hot. It doesn’t have to be boiling water,” Craig said. “It just has to be charged with sufficient energy to power what’s called a binary geothermal power plant,” which he hopes to be able to someday build.

Binary cycle power plants transfer the heat from geothermal hot water to another liquid. The heat causes the second, engineered, liquid to turn to steam, which is used to drive a generator turbine.

A geothermal discovery and subsequent power plant at Mount Spurr, Craig said, could potentially supply a significant amount of electricity to the nearest point on the Alaska Railbelt electricity grid, about 40 miles away at the Beluga gas-fired power generation facility on the Cook Inlet coast.

“Once you discover your geothermal source, you engineer the power plant accordingly, so if your water comes to the surface at a particular temperature then you engineer the fluid in the power plant one point lower than the water coming out of the ground,” Craig said.

Essentially the water coming out of the ground, goes back into it.

“Unlike oil and gas where you eventually drain a reservoir, you continually cycle the water through the reservoir, continually extracting heat from the source,” he said.

SIn Kenai Peninsula Borough

Mount Spurr, which is on the west side of Cook Inlet, has an elevation of 11,070 feet and is one of the northernmost peaks in the Aleutian Island-Alaska Peninsula volcanic arc.

Much of GeoAlaska’s prospecting permit area was recently glaciated, and the lower elevations are usually gently sloping with thickets of alder.

The state owns the land within the prospecting permit area. The Bureau of Land Management and Cook Inlet Region Inc. own the remainder of land in the vicinity.

GeoAlaska’s acreage is 40 miles west of the village of Tyonek and lies entirely within the Kenai Peninsula Borough.

Pinning down PP3 reserves

Anderson, who is well-connected with geothermal experts worldwide, introduced Craig to GeothermEx, a Schlumberger company.

At this point, what Craig wants GeothermEx’s help with is establishing “a probable level of sustainable energy production from one or more reservoirs in Mount Spurr - essentially P3 reserves,” which in the oil world is possible reserves, with P3 being a 10%-49% probability. Doing this will involve GeothermEx analyzing the “plethora” of information available on Mount Spurr, as well as some of the data Anderson and Craig have already reanalyzed.

The acquisition of GeothermEx in 2010 places Schlumberger in a unique position to serve the geothermal industry. GeothermEx’s work in hundreds of geothermal fields in more than 50 countries and participation in 70% of all operating geothermal projects worldwide means Schlumberger is well-equipped for geothermal.

Communications protocols

According to the Division of Oil and Gas’ preliminary finding, the current and anticipated level of volcanic activity is not expected to create conditions under which geothermal prospecting would be unduly hazardous. If prospecting were to be undertaken over a period of days or weeks, the Alaska Volcano Observatory, or AVO, “has expressed a willingness to set up communications protocols with prospectors to keep them appraised of any significant changes in the status of the volcano,” the agency said.

Several Alaska state and federal agencies, along with Alaska’s university, conduct research in the area. AVO is an interagency program of the Division of Geological and Geophysical Surveys, Alaska Department of Natural Resources, U.S. Geological Survey, and the University of Alaska Fairbanks Geophysical Institute.

AVO monitors Alaska volcanoes, including Mount Spurr, with the purpose of mitigating hazards by providing timely and accurate information on volcanic activity including unrest and eruptions.

AVO monitors Mount Spurr with web cameras, and other ground-based instruments, including seismometers, infrasound networks, and GPS. This monitoring network can provide warning of impending eruptions and serves to provide geophysical data and visual information during active eruptions.

“Mount Spurr erupted in 1953 but has no history of having erupted before that in recorded history; and then it erupted again in 1992. There’s no way to predict with certainty when it will erupt again; if ever, in the foreseeable future,” Craig said.

“We are aware the USGS is constantly monitoring the volcano - and not just seismic activity; they actually have GPS units permanently attached around the mountain and they can measure very small movements, or expansions, of the mountain itself. When a volcano like Spurr is preparing to erupt it expands measurably. Predicting earthquakes is a failed exercise, but you can more accurately predict when a volcanic eruption is imminent, as long as you’re monitoring the right data,” Craig said.

“We will do everything we can to design all aspects of the project for safety, being environmentally responsible, and also designing the surface facilities so that they are optimally shielded from volcanic activity if it does occur,” he said.






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