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

Vol. 26, No.14 Week of April 04, 2021

Cook Inlet geothermal exploration proposed by Paul Craig’s GeoAlaska

Alan Bailey

for Petroleum News

Alaska’s Division of Oil and Gas has issued a preliminary finding, proposing the issuance of a permit to GeoAlaska LLC for geothermal exploration on state land tracts on the southern flank of Mount Spurr, an active volcano about 80 miles west of Anchorage. The permitted tracts are adjacent to land tracts for another geothermal exploration permit, recently issued to Raser Power Systems LLC. The state’s finding is subject to revision based on public comments on the permit proposal.

The proposed permit involves three land tracts covering 6,376 acres on the south flank of Crater Peak, the volcano’s most recently active crater, and on land at the foot of the volcano and extending south to the Chakachatna River. GeoAlaska, based in Anchorage, is owned by Paul Craig, an Alaska energy investor.

Craig has confirmed to Petroleum News that GeoAlaska was formed in May 2020 to identify and develop geothermal energy resources in Alaska. The company’s management and technical team has been encouraged by support over the past year at the federal and state levels for geothermal development, he said.

“GeoAlaska’s team is very appreciative of the state’s efficient and diligent work and looks forward to interfacing with government agencies regarding permitting, after the company has been issued a license to explore,” Craig said.

Extendable two-year permit

The division would initially issue the permit for two years. However, the agency may extend the permit for a further year if GeoAlaska has been unable to discover a viable geothermal resource despite reasonable diligence in conducting exploration activities. The state’s preliminary finding includes specifications of some general mitigation measures needed to ensure that exploration activities do not have unacceptable impacts on environmental and cultural resources. Exploration activities within the land tracts would require an approved plan of operations and all relevant permits.

As an active volcano, Mount Spurr clearly represents an area of geothermal heating, with potential for geothermal power generation. And the area of proposed geothermal exploration lies only about 40 miles from the Beluga gas-fired power generation facility, the nearest point on the Alaska Railbelt electricity grid. There were three explosive eruptions from Crater Peak over a period of four to seven weeks in 1992, the preliminary finding says. More recently, in 2004 and 2006, increased seismic activity and heat flux were observed at Mount Spurr’s summit. There is weak geothermal activity, including warm seeps, springs and fumaroles, in a zone that extends from south of Crater Peak to north of Mount Spurr, the finding says.

A study conducted in the 1980s determined that the temperature in a warm spring and seeps on the southwest side of Crater Peak was 40 C, with a total warm water flow for the valley bottom estimated at 1,000 liters per minute, the preliminary finding says.

Previous exploration

In a previous Mount Spurr exploration effort, following a 2008 lease sale, Ormat Technologies, a Lower 48 geothermal company, conducted aerial surveys, gravity and electromagnetic measurements, and some exploratory drilling in state leases between 2008 and 2011. The company failed to find a viable geothermal resource and subsequently relinquished the leases.

But the results of this exploration project do not preclude the possibility of finding a viable geothermal resource at some location not tested during previous exploration efforts. For example, Ormat did not pursue exploration options in the more westerly part of the prospective area, closer to the volcanic center, the preliminary finding says.

However, persistent ice cover and dangerous topography at high elevations on Mount Spurr have caused the state to limit its leasing opportunities to the mountain’s southern flank - the land tracts involved in the proposed permit are subsets of the tracts offered in the 2008 lease sale, the preliminary finding says.


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