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Federal grants would spur rural Alaska energy development
Kay Cashman, Petroleum News publisher & managing editor
U.S. Sen. Lisa Murkowski, R-Alaska, introduced legislation this month authorizing $150 million in federal funds to spur development of affordable power in Bethel and the villages along the Upper Kuskokwim River in western Alaska. Under the Calista Energy and Economic Revitalization Act, the Secretary of Energy would enter into an agreement with the Calista Corp., a Native regional corporation, to provide up to $100 million in grants and $50 million in loan guarantees to help fund installation of a power project. The federal government would pick up no more than 80 percent of the cost of the project.
Murkowski, a member of the Senate Energy and Natural Resources Committee, said the power plant is intended to produce cheaper coal-fired or wind-fueled turbine power for the communities and for the proposed Donlin Creek gold mine upriver from Bethel, which is owned by NovaGold Resources and Placer Dome. The region, she said, has an unemployment rate of 25 percent, or higher.
The mine could help reduce that percentage but a key hurdle for development of the remote 28-million ounce gold prospect is obtaining affordable power.
A 2002 study by Calista Corp.’s Nuvista Light & Power Co. found that electricity costs along the Upper Kuskokwim River are nearly 10 times the national average, but could be reduced by construction of a coal-fired plant near Bethel. That would be economically feasible, Murkowski’s office said, if development of the Donlin Creek mine proceeds. It is expected to need 25 megawatts of power initially, which would grow to up to 50 megawatts by 2012 and up to 80 by 2016.
The plan calls for the staged development of up to 80 megawatts of coal-fired power and 1.5 megawatts of coastal wind-generated turbine power, plus a large 138,000-volt transmission line to the mine. Shallow gas another possibility for mine Another possibility for power at the mine is shallow gas. Holitna Energy Corp., established in May by former NovaGold Alaska Vice President of Exploration Phil St. George, has applied with the state of Alaska for four shallow gas leases 50 miles southeast of the Donlin Creek gold prospect. He formed Holitna Energy with the express purpose of supplying gas for a power plant for Donlin Creek. (See story in the June 1 edition of Petroleum News.)
But even if the mine is not part of the picture, the Nuvista study says that a 15 megawatt coal-fired power plant is still needed near Bethel to be supplemented by between 1.5 and 10.5 megawatts of wind farm turbine-generated power at coastal villages.
All the power would be distributed through an 859-mile system of single wire ground return transmission lines, Murkowski said.
The bill is headed to the Senate Energy Committee for review.
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