|
Power for Donlin Creek mine, Bethel, villages might come from local shallow gas, not B.C. coal
Patricia Jones Petroleum News contributing writer
A power study completed in 2002 by Calista Corp.’s Nuvista Light & Power Co. found that a coal-fired power plant would provide the most affordable energy for the people of Bethel and the villages along the upper Kuskokwim River in western Alaska, as well as development of the area’s 28-million ounce Donlin Creek gold prospect, which is being developed by NovaGold Resources and Placer Dome. A key hurdle for developing the remote gold prospect into a producing mine is obtaining affordable power. Calista, the Native regional corporation for the area, has a vested interest in development of Donlin Creek and has been tracking that project’s power needs.
“We were looking at a variety of options, but the cheapest seemed to be shipping coal from British Columbia,” Bob Charles, Calista vice president of government and corporate relations, told Petroleum News in late July.
That study was completed before Holitna Energy applied for shallow gas leases in the region, he said. (See adjacent article.)
The regional power study led to the introduction of legislation by U.S. Sen. Lisa Murkowski, R-Alaska, which would authorize up to $100 million in grants and $50 million in loan guarantees to Calista for development of a regional power plant. (See article in the July 27 edition of Petroleum News.)
Murkowski’s communications director Chuck Kleeschulte told Petroleum News in late July the federal funds could be applied to a gas-fired plant, as well as to the coal-fired plant and wind turbines described in the legislation: “The decision will be made by the people in Calista regarding picking the power plant.”
Charles said Calista is working with Holitna Energy to seek funds for the company’s shallow gas exploration program and is open to the use of gas versus British Columbia coal or wind for a power plant.
“We’re hoping that in a year from now, we’ll know what’s the range of options and that we’ll be able to make a determination about what power source to use,” Charles said. Holitna Energy has two options Holitna Energy’s long-term plan calls for construction of a gas-fired power plant capable of producing 68 megawatts of electricity and transmission lines to carry the power. (See adjacent story.)
Holitna Energy President Phil St. George said cost estimates for that scenario are about $90 million, based on figures obtained from the U.S. Department of Energy. St. George is former vice president of exploration at NovaGold Resources and left that company this past spring to start Holitna Energy.
“We’ve been told transmission lines could cost anywhere from $200,000 to $500,000 per mile,” he said.
Holitna Energy is looking at two different locations for the power plant.
In the first scenario it would be built on or near the Holitna Basin gas fields, close to one of the neighboring villages, St. George said. “Either Sleetmute, Stoney River or Red Devil,” he said. “That way, we’re not developing it with a remote camp situation. There are private lands that could be purchased and houses could go up.”
Under that plan, a transmission line would carry roughly 60 megawatts of power to the Donlin Creek mine project, located 50 miles northwest. Closer to the gold deposit The second option would involve piping gas from the remote basin area to a power plant constructed closer to the mine, probably in or near the village of Crooked Creek.
Either way, St. George envisions providing electricity to rural villages in the area, “one of the poorest region in the country…this would solve their power problems and provide jobs.”
Locals now pay roughly 50 to 60 cents per kilowatt hour for electric power generated by 40 or more diesel generation plants in the region, Charles said.
| 