Legislature(2019 - 2020)BUTROVICH 205

02/21/2020 03:30 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 171 INDUSTRIAL HEMP PROGRAM; MANUFACTURING TELECONFERENCED
Moved CSSB 171(RES) Out of Committee
-- Public Testimony --
+= SB 161 GEOTHERMAL RESOURCES TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ SB 150 INTENSIVE MGMT SURCHARGE/REPEAL TERM DATE TELECONFERENCED
Moved SB 150 Out of Committee
-- Testimony <Invitation Only> --
**Streamed live on AKL.tv**
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 155 EXPLORATION & MINING RIGHTS; ANNUAL LABOR TELECONFERENCED
Moved CSSSSB 155(RES) Out of Committee
                  SB 161-GEOTHERMAL RESOURCES                                                                               
                                                                                                                                
4:39:18 PM                                                                                                                    
CHAIR MICCICHE  announced that the  next order of  business would                                                               
be  SENATE  BILL   NO.  161,  "An  Act   relating  to  geothermal                                                               
resources; relating to the  definition of 'geothermal resources';                                                               
and providing for an effective date."                                                                                           
                                                                                                                                
He noted that the committee first  heard the bill on February 10.                                                               
The Alaska  Department of Natural  Resources (DNR)  has responded                                                               
to  committee  questions  and  presented a  map  with  the  known                                                               
statewide geothermal resources and  their proximity to population                                                               
centers.  The   committee  also   requested  a   presentation  on                                                               
geothermal resources in Alaska.                                                                                                 
                                                                                                                                
4:40:07 PM                                                                                                                    
SARA LONGAN,  Deputy Commissioner,  Alaska Department  of Natural                                                               
Resources, Anchorage, Alaska, thanked  the committee for allowing                                                               
the department to readdress SB 161 on geothermal resources.                                                                     
                                                                                                                                
4:40:50 PM                                                                                                                    
At ease.                                                                                                                        
                                                                                                                                
4:44:08 PM                                                                                                                    
CHAIR MICCICHE called the committee back to order.                                                                              
                                                                                                                                
DEPUTY  COMMISSIONER  LONGAN  addressed  slide  2  from  the  DNR                                                               
presentation  on geothermal  resources,  Overview,  and slide  3,                                                               
AGILE Act, as follows:                                                                                                          
                                                                                                                                
        • Slide 2: Overview                                                                                                     
             o AGILE Act                                                                                                        
             o Fundamentals of geothermal systems                                                                               
             o Purpose of this bill                                                                                             
             o DNR geothermal leasing history                                                                                   
             o Sectional summary                                                                                                
             o Analysis of selected sections & responses to                                                                     
               questions                                                                                                        
                                                                                                                                
        • Slide 3: AGILE Act                                                                                                    
             o Senator     Murkowski's    Advanced     Geothermal                                                               
               Innovation Leadership Act of 2019 (AGILE Act)                                                                    
             o Authorizes grants and incentives                                                                                 
             o Establish a repository for geothermal drill data                                                                 
             o Supports   research   into   Enhanced   Geothermal                                                               
               Systems                                                                                                          
             o Supports heat pump improvements                                                                                  
             o Defines geothermal energy as a renewable energy                                                                  
               source                                                                                                           
             o Encourages co-production of geothermal with                                                                      
               hydrocarbons and critical minerals                                                                               
             o Improves federal permit coordination                                                                             
                                                                                                                                
STEVEN   MASTERMAN,   Director,   Division  of   Geological   and                                                               
Geophysical  Surveys,  Alaska  Department of  Natural  Resources,                                                               
Fairbanks, Alaska, addressed slide  4, Fundamental Ingredients of                                                               
Useable Geothermal Energy, as follows:                                                                                          
                                                                                                                                
   • Elevated geothermal gradient                                                                                               
   • Porosity and permeability for the migration of fluids                                                                      
   • Surface access                                                                                                             
   • Sufficiently large thermal system                                                                                          
   • Customers for energy                                                                                                       
                                                                                                                                
4:46:39 PM                                                                                                                    
He addressed  slide 5, Heat Flow  in Alaska. He referenced  a map                                                               
and said the illustration provides a  broad view of the amount of                                                               
energy coming to  the earth's surface across  Alaska. He detailed                                                               
that the  red areas  on the  map indicate  more energy  and green                                                               
areas have less energy. For example,  the North Slope has an area                                                               
of  low  heat or  energy  coming  to  the earth's  surface  where                                                               
sediments are thick and insulates  the surface from heat beneath.                                                               
Along the  Aleutians and along  the Alaska Peninsula  where there                                                               
is a lot of volcanic activity, there's higher heat flow.                                                                        
                                                                                                                                
He  addressed  slide  6,  North  Slope  Geothermal  Gradient.  He                                                               
referenced  a  map and  said  the  illustration shows  geothermal                                                               
gradients with the degree centigrade  per 100 meters of depth. He                                                               
noted  that the  temperature data  came from  the bottom  of bore                                                               
holes drilled into  North Slope oil and gas  fields by producers.                                                               
The temperature data allowed the  division to construct maps that                                                               
show the relative amount of heat  that is coming out of the earth                                                               
and the rate  at which the temperature increases  when going into                                                               
the earth.                                                                                                                      
                                                                                                                                
DIRECTOR MASTERMAN  detailed that the illustration  shows most of                                                               
the  gradients are  3 to  4  degrees centigrade  per 100  meters.                                                               
Going down  1,000 meters results  in the temperature  to increase                                                               
by 30 to 50 degrees centigrade.  He added that the map provides a                                                               
rough estimate  of what sufficient  temperature data  could allow                                                               
across the state.                                                                                                               
                                                                                                                                
He said Chair Micciche asked  in the previous hearing where there                                                               
may be undiscovered thermal energy  sources. He conceded that the                                                               
division  does not  have the  level of  information as  the North                                                               
Slope bore hole temperatures to  provide detailed contours across                                                               
the rest of the state.                                                                                                          
                                                                                                                                
4:48:58 PM                                                                                                                    
He  addressed slide  7, Geothermal  Gradients. He  explained that                                                               
the graph  on the slide  shows examples of  geothermal gradients.                                                               
The colored  band in the  graph is a typical  geothermal gradient                                                               
for  Alaska that  shows subterranean  temperature increases.  For                                                               
example, the  North Slope  reaches a  temperature of  100 degrees                                                               
centigrade at 10,000 feet or 3 kilometers depth.                                                                                
                                                                                                                                
He pointed  out that  the graph  on slide 7  shows two  points of                                                               
reference, one of  the Chena Hot Springs  geothermal system where                                                               
the temperature  is about  60 degrees  centigrade on  the surface                                                               
and about 80  degrees centigrade where the hot  water is entering                                                               
the drill  holes for  power production. The  second point  is the                                                               
Makushin system  where the  temperature is  hotter at  almost 200                                                               
degrees centigrade.                                                                                                             
                                                                                                                                
He  explained that  the  temperature of  a  geothermal system  is                                                               
important for the amount of  energy production. Chena Hot Springs                                                               
is a  cooler system with  production of hundreds of  kilowatts of                                                               
energy. The  Makushin system has  a higher temperature  system at                                                               
an  energy   magnitude  of  tens   of  megawatts   of  electrical                                                               
production.                                                                                                                     
                                                                                                                                
He addressed slide 8, Geothermal Resource Quality, as follows:                                                                  
                                                                                                                                
   • Generation capacity per unit cost depends on several                                                                       
     geologic and economic factors:                                                                                             
        o Temperature (hotter is better)                                                                                        
        o Flow rate (higher flow rates are better)                                                                              
        o Reservoir Framework (uniform porosity better than                                                                     
          fractures)                                                                                                            
        o Recharge   (partially    natural   better    than   all                                                               
          artificial)                                                                                                           
       o Depth (shallower is less expensive, thus better)                                                                       
        o Location,    location    (relative    to    population,                                                               
         transmission system, development costs, etc.)                                                                          
                                                                                                                                
4:52:32 PM                                                                                                                    
DIRECTOR  MASTERMAN addressed  slide  9,  Geothermal Systems.  He                                                               
said the  map on the  slide shows  the distribution of  all known                                                               
hot springs across  the state as well as the  distribution of the                                                               
active volcanoes in the state.                                                                                                  
                                                                                                                                
He  pointed  out there  is  a  belt  of  hot springs  across  the                                                               
interior of the state that  are generally associated with cooling                                                               
granite bodies. He detailed that  hot water in the granite bodies                                                               
is in  fractures. Accessing hot  water requires  intersecting the                                                               
fractures. The granite  bodies are older systems  that are cooler                                                               
and don't  have high temperature  water or productive  volumes as                                                               
the  volcano related  system that  are present  along the  Alaska                                                               
Peninsula and in the Aleutians.                                                                                                 
                                                                                                                                
He  pointed out  that  there are  more  high temperature  systems                                                               
along  the  Aleutians  than  there are  in  the  granite  related                                                               
systems. The volcano  related systems have magma up  close to the                                                               
surface which  is a  hotter material that  can generate  more and                                                               
hotter volumes of hot water.                                                                                                    
                                                                                                                                
He addressed  slide 10,  Alaska's Geothermal  Resources Fairbanks                                                               
Region, as follows:                                                                                                             
                                                                                                                                
   • Chena                                                                                                                      
        o 80 degrees Celsius at 260 meters                                                                                      
        o Reservoir approximately 130 to 145 degrees Celsius                                                                    
                                                                                                                                
He said slide  10 shows where the hot springs  are in relation to                                                               
Fairbanks. Chena Hot  Springs is close and there are  a couple of                                                               
others that  are fairly close  to population centers.  The Circle                                                               
Hot Springs  northeast of  Fairbanks is  close to  Central, Manly                                                               
Hot  Springs is  close to  Manly;  their systems  are similar  in                                                               
temperature  to  Chena Hot  Springs  with  slightly higher  water                                                               
flows that may  be able to produce slightly  larger quantities of                                                               
electricity.   The   slide   also   shows   projected   reservoir                                                               
temperature   that  is   a  theoretical   value   based  on   the                                                               
geochemistry  of the  water that  is coming  to the  surface. For                                                               
example,  the  evidence  for  Chena  Hot  Springs  suggests  that                                                               
drilling  deep enough  will intersect  waters that  are somewhere                                                               
between  130  and 145  degrees  Celsius,  temperatures that  will                                                               
allow for more power generation.                                                                                                
                                                                                                                                
DIRECTOR  MASTERMAN detailed  that the  Chena Hot  Springs has  a                                                               
400-kilowatt  capacity.  In  a 2007  report,  Chena  Hot  Springs                                                               
indicated that  the cost of  producing power went from  $0.30 per                                                               
kilowatt hour  to $0.05  per kilowatt  hour with  production from                                                               
the geothermal system.                                                                                                          
                                                                                                                                
4:55:43 PM                                                                                                                    
He  addressed  slide  11, Alaska's  Geothermal  Resources  Seward                                                               
Peninsula, as follows:                                                                                                          
                                                                                                                                
   • Pilgrim                                                                                                                    
        o 92 degrees Celsius at 120 meters                                                                                      
        o Reservoir approximately 150 degrees Celsius                                                                           
                                                                                                                                
He said the  most interesting hot spring in  the Seward Peninsula                                                               
is  the Pilgrim  Hot Spring.  The  hot spring  has a  theoretical                                                               
power capacity  of 4  megawatts of electrical  power or  about 50                                                               
megawatts for  using the  energy as heat.  He noted  that geology                                                               
will  play an  essential role  in developing  the Pilgrim  system                                                               
because the  hot fluids are coming  out of the bedrock,  they are                                                               
getting into the sands and  gravel, migrating laterally, and then                                                               
coming  up to  the surface.  He noted  that drilling  through the                                                               
sands  and gravels  right  under the  hot  springs will  actually                                                               
result  in accessing  cooler rock  underneath.  The system's  hot                                                               
water source  is not known,  but that's where geology  comes into                                                               
play. The system  could provide energy to Nome  or Graphite One's                                                               
potential mine towards Teller.                                                                                                  
                                                                                                                                
He addressed  Alaska's Geothermal Resources Alaska  Peninsula, as                                                               
follows:                                                                                                                        
                                                                                                                                
   • Makushin 190 degrees Celsius at 590 meters.                                                                                
                                                                                                                                
He explained  that the Makushin system  is on the same  island as                                                               
Dutch Harbor  and Unalaska.  The system  could produce  power for                                                               
the  communities' fish  processing facilities.  There is  a group                                                               
investigating  system  development  with  scenarios  calling  for                                                               
modular  generation  in  6  megawatt increments  with  18  or  24                                                               
megawatt  plants that  could produce  power as  low as  $0.14 per                                                               
kilowatt hour, a  cost that is competitive  with the communities'                                                               
current electrical production from diesel fuel.                                                                                 
                                                                                                                                
DIRECTOR  MASTERMAN noted  that there  are other  systems in  the                                                               
area, including one in Akutan  that could also generate power for                                                               
their fish processing facilities.  Further to the northeast there                                                               
are systems at False Pass, Cold Bay, and King Cove.                                                                             
                                                                                                                                
4:58:29 PM                                                                                                                    
He addressed  Alaska's Geothermal Resources Southeast  Region, as                                                               
follows:                                                                                                                        
                                                                                                                                
   • Estimated reservoirs:                                                                                                      
        o Goddard - 140 degrees Celsius                                                                                         
        o Baranof - 95 degrees Celsius                                                                                          
        o Bailey Bay - 150 degrees Celsius                                                                                      
        o Tenakee - 65-100 degrees Celsius                                                                                      
                                                                                                                                
He said  there are a  number of  hot springs in  Southeast Alaska                                                               
that are of  potential interest. Two that are  most well situated                                                               
are the  ones investigated  for producing  power near  Sitka, the                                                               
Goddard and Baranof hot springs.  The granite related systems are                                                               
fracture based  and nonvolcanic. The systems  along the Aleutians                                                               
have  an added  advantage of  being  in volcanic  rocks that  are                                                               
sometimes  quite a  lot more  porous and  permeable and  can make                                                               
better reservoirs  and produce higher  volumes of water  for more                                                               
power.                                                                                                                          
                                                                                                                                
He addressed slide 14, Key Points, as follows:                                                                                  
                                                                                                                                
   • Geothermal heat, where technically and economically                                                                        
    accessible, is an excellent form of sustainable energy.                                                                     
   • Hydrothermal systems are the most common form of energy                                                                    
     extraction from geothermal heat.                                                                                           
   • Complex geologic parameters necessary for a viable                                                                         
     geothermal resource, all present at one location, is rare.                                                                 
   • Alaska contains several potential geothermal resources.                                                                    
   • New technologies that will help expand geothermal                                                                          
     development into less favorable geology are on the horizon.                                                                
                                                                                                                                
5:01:42 PM                                                                                                                    
CHAIR   MICCICHE  asked   that   the  department   wrap  up   its                                                               
presentation  at   the  next  committee   meeting  due   to  time                                                               
constraints.                                                                                                                    
                                                                                                                                
DEPUTY  COMMISSIONER  LONGAN  replied that  the  department  will                                                               
accommodate the committee's schedule.                                                                                           
                                                                                                                                
CHAIR MICCICHE [held SB 161 in committee.]                                                                                      
                                                                                                                                

Document Name Date/Time Subjects
SB 161 DNR Response to Committee Questions 2.20.2020.pdf SRES 2/21/2020 3:30:00 PM
SB 161
SB 161 2020_GeothermalMap_optimized.pdf SRES 2/21/2020 3:30:00 PM
SB 161
SB 161 Presentation to SRES Geothermal 02.21.2020.pdf SRES 2/21/2020 3:30:00 PM
SB 161
SB 150 ver A.pdf SRES 2/21/2020 3:30:00 PM
SB 150
SB 150 Sponsor Statement ver. A revised 02.21.2020.pdf SRES 2/21/2020 3:30:00 PM
SB 150
SB 150 Support Document - Hunting License Surcharge Revenue CY17-CY19 02.10.2020.pdf SFIN 3/12/2020 9:00:00 AM
SRES 2/21/2020 3:30:00 PM
SB 150
SB 150 Support Document - IM Species Determinations 02.10.2020.pdf SFIN 3/12/2020 9:00:00 AM
SRES 2/21/2020 3:30:00 PM
SB 150
SB 150 Support Document - IM Activities and Spending FY19 02.10.2020.pdf SRES 2/21/2020 3:30:00 PM
SB 150
SB 150 ADF&G IM Stories of Success 01.2014.pdf SFIN 3/12/2020 9:00:00 AM
SRES 2/21/2020 3:30:00 PM
SB 150
SB 150 Written Testimony- Alaska Professional Hunters Assn Inc 02.05.2020.pdf SFIN 3/12/2020 9:00:00 AM
SRES 2/21/2020 3:30:00 PM
SB 150
SB 171 Draft CS ver. M.pdf SRES 2/21/2020 3:30:00 PM
SB 171
SB 171 Explanation of Changes ver. A to M 02.20.2020.pdf SRES 2/21/2020 3:30:00 PM
SB 171
SB 150 Fiscal Note-DFG-DWC-02.14.2020.pdf SRES 2/21/2020 3:30:00 PM
SB 150