Legislature(2013 - 2014)BARNES 124
03/03/2014 08:00 AM House ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Merged Energy Solutions | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
JOINT MEETING
HOUSE SPECIAL COMMITTEE ON ENERGY
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, TRADE, AND
TOURISM
March 3, 2014
8:04 a.m.
MEMBERS PRESENT
HOUSE SPECIAL COMMITTEE ON ENERGY
Representative Doug Isaacson, Co-Chair
Representative Pete Higgins
Representative Shelley Hughes
Representative Benjamin Nageak
Representative Andy Josephson
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, TRADE, AND
TOURISM
Representative Shelley Hughes, Chair
Representative Pete Higgins
Representative Lance Pruitt
MEMBERS ABSENT
HOUSE SPECIAL COMMITTEE ON ENERGY
Representative Charisse Millett, Co-Chair
Representative Neal Foster
HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT, TRADE, AND
TOURISM
Representative Lynn Gattis
Representative Bob Herron
Representative Craig Johnson
Representative Kurt Olson
Representative Harriet Drummond
Representative Geran Tarr
COMMITTEE CALENDAR
PRESENTATION: MERGED ENERGY SOLUTIONS
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
R. MICHAEL SMITH, CEO
Merged Energy Solutions
Los Angeles, California
POSITION STATEMENT: Provided a presentation by Merged Energy
Solutions.
KURTIS ZELL, Development Coordinator
Merged Energy Solutions
Los Angeles, California
POSITION STATEMENT: Provided a presentation by Merged Energy
Solutions.
ACTION NARRATIVE
8:04:12 AM
CO-CHAIR DOUG ISAACSON called the joint meeting of the House
Special Committee on Energy and the House Special Committee on
Economic Development, Trade, and Tourism to order at 8:04 a.m.
Representatives Higgins, Nageak, Hughes, and Isaacson of the
House Special Committee on Energy were present at the call to
order and Representative Josephson arrived as the meeting was in
progress. Representatives Higgins and Hughes of the House
Special Committee on Economic Development, Trade, and Tourism
were present at the call to order and Representative Pruitt
arrived as the meeting was in progress.
^PRESENTATION: MERGED ENERGY SOLUTIONS
PRESENTATION: MERGED ENERGY SOLUTIONS
8:05:48 AM
CO-CHAIR ISAACSON announced that the only order of business
would be presentations by Merged Energy Solutions on the Multi-
Industrial Greenhouse Facility and Transforming Alaska.
8:07:05 AM
R. MICHAEL SMITH, CEO, Merged Energy Solutions, informed the
committee Merged Energy Solutions (MES) was founded in 2007 and
has evolved from a revenue-based company into a company that
creates new technologies to bring new energy into the [power]
system. Further, in response to restrictive federal and state
laws limiting some endeavors, the company has developed the
multi-industrial greenhouse (MIG). In 2007, the company
intended to develop solar energy and biomass gasification energy
systems. In Southern California the air quality management
division (AQMD) laws were very restrictive on gasification, and
as a revenue-driven company, MES discovered the performance of
solar energy was unsatisfactory on its own. Thus, in order to
comply with AQMD laws, the company began work to improve
gasification technology to mitigate emissions. After research
and testing MES found the carbon dioxide (CO2) and polluting
carbon (NOx) emissions produced by the gasification process
could be utilized by building an atypical greenhouse that is
hermetically sealed. Mr. Smith directed attention to the
PowerPoint presentation entitled, "Multi-Industrial Greenhouse
Facility," and said the mission of MES is to renew and build a
sustainable Earth by empowering and educating people throughout
the world. The company collaborates with nature and technology,
and realizes there are food security issues, and so incorporates
food, clean water, and more by building state-of-the-art clean
energy and agricultural projects such as the multi-industrial
greenhouse [slide 1]. An MIG facility is "going through the
paperwork" for a site in Riverside, California. The facility is
comprised of the following components: concentrated solar
thermal, which was chosen because of its longevity, efficiency,
and disposal; advanced biomass gasification; geo thermal; high-
density vertical farming; aquaculture; water desalination and
purification; and an academy of advanced technical science
[slide 3]. The concentrated solar panels are located on top of
the MIG, which is built in four quadrants, each with a glass
roof [slide 4]. The MIG is hermetically sealed, and each
environment is computer-controlled so as to grow different
plants.
CHAIR HUGHES asked when the facility will be built.
MR. SMITH said the facility is in the permitting and
environmental impact report (EIR) process at this time. The
facility will be operating in mid-2016.
REPRESENTATIVE HIGGINS asked how the facility is financed.
MR. SMITH said private money is financing the $300 million
project because it was difficult to get government funding.
REPRESENTATIVE HIGGINS was pleased that private funds were
obtained because that indicates the project is feasible.
MR. SMITH confirmed that the design does not use solar
photovoltaic (PV) because that system would have to be
subsidized to be profitable. The chosen design has a very
attractive return and obtained private money, using a public-
private financing arrangement as the facility is located on
public land with a 50-year lease-purchase agreement. In
response to Chair Hughes he said the land is from the City of
Riverside, which is a municipality. In further response, he
said the facility could operate in the Antarctic if there were a
fuel source.
8:22:06 AM
CO-CHAIR ISAACSON inquired as to the type of fuel needed.
MR. SMITH said MES has 14 new patents on power source
technologies such as a water gravity system that generates power
from running water.
REPRESENTATIVE HUGHES asked whether the facility would be
economic in another climate.
MR. SMITH said yes, depending on the size of the facility. He
returned attention to concentrated solar thermal and explained
that the system uses a mirror and focuses all of its direct
light to a heating element filled with magnesium oil, which then
transfers its heat to a boiler, then to steam, then to a co-
generator to produce electricity [slide 5]. The system is very
efficient, but very large in size; however, MES has made the
technology smaller so as to function in the MIG facility.
CO-CHAIR ISAACSON asked for the wattage produced from the
smaller panels.
8:26:46 AM
MR. SMITH related the smaller panels create 20-40 megawatts
maximum. The facility site in Riverside is 120 acres, but the
systems are scalable and the technologies will work
independently, although multi-use is cost effective and more
efficient. He described the principles of how concentrating
solar thermal works [slide 6]. Unlike solar PV, this system is
not feasible for individual residential installations at this
point. In response to Co-Chair Isaacson, he said the excess
heated water can be diverted to a storage tank instead of to a
generator.
REPRESENTATIVE HUGHES inquired as to whether the reflection of
the sun off of snow helps a solar energy system.
MR. SMITH said no, because solar panels need direct sunlight in
order to absorb rays from the sun. The mirrors are installed on
a computerized tracking system to follow the sun all day.
REPRESENTATIVE HIGGINS asked where the system has been tested in
cold climates, and observed that regions of Alaska have very
short periods of light in the winter.
8:34:03 AM
MR. SMITH clarified that the facility does not rely solely on
solar thermal, but operates in combination with the advanced
biomass gasification (ABG) which can use municipal solid waste
(MSW) or any biofuel as feedstock to produce energy day and
night. The ABG system solves several problems by creating
energy and diverting trash from landfills, thereby saving water
contamination from methane. The ABG system first separates the
waste, and then uses the remainder for feedstock [slides 7 and
8]. Some systems are incinerators, which put carcinogens into
the air, but ABG uses heat, liquid, and feedstock to burn and
liquefy most of the waste to produce synthetic gas (syngas),
ash, and purified water. The syngas can then be used to
generate electricity or to make synthetic diesel fuel - which
burns 98 percent clean - and other byproducts at a rate of 55
gallons of synthetic diesel fuel for every single ton of MSW.
Another byproduct is ash that can be used in concrete, asphalt,
fertilizer, or as a soil conditioner. Also, for every 50
gallons of fuel, 100 gallons of purified water is produced. The
feedstock for the system can be agricultural, such as dead trees
or wood chips, or MSW [slide 9]. In Southeast Asia, MES is using
water hyacinth for feedstock.
8:44:57 AM
MR. SMITH summarized other MES technologies: geo-thermal
technology has been advanced with new drilling techniques [slide
10]; using three technologies, a MES 150-acre MIG facility can
generate 20-40 megawatts (MW) - while consuming 3-4 MW - and can
power 2,400 homes; the facility is impervious to an
electromagnetic pulse (EMP) attack, earthquakes, tsunamis, and
other disasters [slide 11]. Regarding advanced high-density
vertical farming and aquaculture systems, he said MES uses no
pesticides, man-made fertilizers, or genetically modified
organisms (GMOs) in its advanced high-density vertical farming
system, resulting in healthier products [slides 12-14]. The
high-density vertical farming system is combined with
aquaculture and uses water infused with fish fertilizer and
other nutrients. No hormones are used in the aquaculture system
and the fish swim against a current to stay healthy. Using
these techniques, the 120-acre facility can produce an amount
equivalent to that of 3,000 ground acres, and of a higher
quality.
8:51:36 AM
MR. SMITH directed attention to MES's water desalination
technology [slide 15]. Typical water desalination processes
deposit brine back into the ocean that can kill nearby
organisms. The MES system uses a plasma reactor that separates
many of the molecules attached to water so that when the water
passes through the nano-filtration system the water is cleaner
and better tasting. The system does not use chlorine or
fluoride in stored water. He stressed that this is not a
reverse osmosis system; in fact, the water is run through a
gasification system that separates the salts and dissolves all
of the brine [slide 16]. In response to Co-Chair Isaacson, he
explained that the "good" salts are used to generate a revenue
stream and the "bad" salts are used in fuel. Mr. Smith returned
to the MES system of aquaculture, explaining that opposing flow
technology causes the fish to swim against a current thereby
producing a healthy fish [slide 17]. In response to Co-Chair
Isaacson, he said national research labs agree. Typical fish
farms do not have other systems working with them; if using all
of the components of the MIG system, pure water is constantly
supplied and the fish excrement is extracted.
8:57:58 AM
REPRESENTATIVE NAGEAK asked whether the aquaculture system only
uses freshwater.
MR. SMITH acknowledged that MES has not raised saltwater fish,
but would be interested in doing so. He concluded that the
production of produce and fish is a natural combination in order
to grow healthy products, save land, and reduce water
consumption [slides 18-20]. Mr. Smith then directed attention
to the Academy of Advanced Technical Science (TAATS), and
expressed his company's belief that what is lacking today in
education is the knowledge of combining technology and
agriculture [slides 21 and 22]. Most students today are
inclined toward technology and are unaware of agriculture, thus
TAATS allows interested students to learn new technologies,
combine agricultural techniques with advanced technology, and
develop new ideas; in fact, there is the possibility of TAATS
becoming an extension course at the University of California,
Davis. In closing, Mr. Smith summarized that an average 120-
acre MIG will employ three shifts of 540 people - with others in
supporting services - for a total of 3,000 jobs [slide 24].
Annual production will be: 9 million gallons of synthetic fuel;
40 MW of electricity; 90 million pounds of organic produce,
which is enough to feed 300,000 people; 5 million pounds of
fish; and 1.5 million gallons of potable water per day [slide
23].
9:04:24 AM
REPRESENTATIVE HUGHES asked for the annual operating costs of
the facility.
MR. SMITH answered $2.7 million per year. In further response
to Chair Hughes, he said the operating costs are approximately
one-third of the total cost of traditional farming, aquaculture,
and fuel production methods.
CO-CHAIR ISAACSON estimated that producing 9 million gallons of
synthetic fuel with $2.7 million in operating costs would earn
$34 million from one revenue stream.
MR. SMITH offered to provide a summary of cost breakdowns; on a
gross revenue basis, annual revenue estimates are $34 million
from agriculture and $30 million from energy.
9:08:03 AM
REPRESENTATIVE NAGEAK requested additional information on how to
compare revenue streams with those of existing industry.
MR. SMITH gave an example of fish that costs an average of $6
per pound, and that the MIG can produce and sell fish for $4 per
pound, meaning the business model stands at an approximate 25-26
[percent] return on investment. However, the MES business model
is not to generate a lot of money, but to develop the ability to
provide food, power, and water in an economical fashion.
CO-CHAIR ISAACSON acknowledged the relevancy of this topic to
Alaska and the country.
9:10:44 AM
CO-CHAIR ISAACSON passed the gavel to Chair Hughes.
CHAIR HUGHES expressed her interest in receiving more
information about the facility in the future.
9:13:03 AM
KURTIS ZELL, Development Coordinator, Merged Energy Solutions,
informed the committee he is a resident of Alaska and is very
familiar with the aviation industry here. Mr. Zell posed the
question of how to build infrastructure for energy,
transportation, economics, mining, or other industry, in
Alaska's remote areas. He suggested the use of airships is
applicable for the oil and gas and timber industries, and for
alternative shipping methods. Other uses include disaster
relief and medical response. He directed attention to the
PowerPoint presentation entitled, "Transforming Alaska," adding
that airships bring opportunities for new jobs building
airfields, because Ted Stevens Anchorage International Airport
could only accommodate five airships, and he suggested new
fields in Palmer or Willow would be needed [slides 2-4].
CHAIR HUGHES asked for background information on Sky Lift
Aeronautics.
9:17:49 AM
MR. SMITH, speaking as the chairman of Sky Lift Aeronautics,
said a MES project in the "north Pacific" needed transportation
for fuel to an area where tanker ships could not be used. That
project led to Sky Lift Aeronautics partnering with Lockheed
Martin Corporation (Lockheed) to obtain the worldwide rights to
the marketing, sales, and leasing of the aircraft.
CO-CHAIR ISAACSON observed that mining in Alaska is in the
Interior and the Far North, and pointed out that Fairbanks
International Airport is very large and accommodating. He asked
if the ships are not suited for very cold weather, and why the
focus is on Southcentral.
MR. SMITH said there is no need to focus on one area providing
there is sufficient population to staff the maintenance, repair,
and operations (MRO) station. The airships operate most
efficiently in cold weather, and remain operational within a
temperature range of -40 degrees to 160 degrees Fahrenheit.
CO-CHAIR ISAACSON encouraged the presenters to look at the
Interior for staging the aircraft.
9:22:55 AM
REPRESENTATIVE NAGEAK inquired as to the size of the aircraft.
MR. SMITH responded that at this time the aircraft are designed
in three variants: the 500-ton hybrid aircraft will have a
payload of 300 automobiles, and its dimensions are 742 feet
long, 394 feet wide, and 202 feet high; the dimensions of the
100-ton model are 423 feet long, 185 feet wide, and 117 feet
high; the dimensions of the 25-ton model are 276 feet long, 157
feet wide and 75 feet high.
REPRESENTATIVE NAGEAK related that the high cost of freight is
hurting those who live in rural Alaska villages, and he gave an
example of the cost of shipping meat. The high cost of shipping
prevents opportunities for every kind of economic growth, and he
encouraged the presenters to consider a route that would service
all eight villages on the North Slope, thereby reducing costs to
the residents.
MR. SMITH pointed out the advantages of the hybrid aircraft over
fixed-wing aircraft are the costs of fuel and operation. The
cost of operation is about one-eighth, and the dynamics of this
type of aircraft - equipped with 450-cubic-inch Mercedes engines
powered by diesel fuel - allows for more efficiency than
transportation by fixed-wing aircraft or barge. Further, the
hybrid aircraft cost less money and have twice the capacity of
most fixed-wing aircraft.
9:29:19 AM
MR. ZELL, in response to Chair Hughes, explained after the
agreement with Lockheed is finalized, Lockheed will build the
25-ton model and the aircraft will be seen in Alaska by
February, 2015. In further response to Chair Hughes, he
clarified that the only aircraft of this type that Lockheed has
built is an 80-foot-long hybrid which is not in commercial or
military application, but is an experimental aircraft.
REPRESENTATIVE HIGGINS asked for the altitude and weather
conditions under which the aircraft can fly.
MR. ZELL answered that the ceiling is 20,000 feet and ideally
the airships fly at 10,000-15,000 feet. Almost any type of
weather condition is acceptable except for extreme headwinds,
which are not expected at flying altitude. Mr. Zell said the
manufacturer expects to increase the horsepower of the engines
to address the issue of strong winds. He returned to mining
applications such as those needed for the proposed Pebble Mine,
the NOVAGOLD Donlin Gold mine, and the mines in Nome [slide 5].
He stressed that shipping, transportation, and freight
applications would make sense for rural Alaska, and airships
would serve as safe alternatives to ice road trucking to and
from the North Slope [slides 6 and 7].
CO-CHAIR ISAACSON asked for the range of an airship.
9:33:59 AM
MR. ZELL responded that a 25-ton aircraft has a range of about
1,400 nautical miles carrying a net payload of about 40,000-
50,000 pounds. He cautioned that the flight time would be
regulated by the certification from the U.S. Department of
Transportation, Federal Aviation Administration (FAA). In
further response to Co-Chair Isaacson, he confirmed that the
aircraft could "cover" Alaska and upper Canada; in fact, the
100-ton model will have a range of about 3,000 nautical miles
and the 500-ton model will have a range of about 6,000 nautical
miles.
CO-CHAIR ISAACSON surmised the 100-ton model should travel from
Fairbanks to the end of the Aleutian Island chain.
MR. ZELL said correct.
9:35:53 AM
REPRESENTATIVE HIGGINS asked about the safety of the airships.
MR. ZELL said the manufacturer has performed many tests. The
helium is compartmentalized inside the balloon part of the
airship, thus it can maintain loft with a certain number of
breaks in the skin as a result of gunfire. In further response
to Representative Higgins's question related to combustion, he
said he was unaware of any "massive" problems caused by
electrical strikes. In response to Chair Hughes, he confirmed
that hydrogen is highly explosive but helium is not. In
response to Representative Nageak, he said the speed of the 25-
ton model is about 70 knots.
MR. SMITH assured the committee that lightning has no adverse
effect on the airship as it is not constructed of aluminum
framing, but in each lobe of the aircraft there is a ballonet,
which holds three internal bladders filled with air. Helium is
used for a structural element and creates the framing in an
aerodynamic shape, and the [exterior] fabric is a polymer, which
is impervious to lightning. The only metal used is attached to
the bottom of the vehicle.
9:41:30 AM
MR. ZELL returned to the presentation and advised MES believes
the airships could transport oil and liquefied natural gas (LNG)
from Prudhoe Bay to Valdez in a more efficient and
environmentally friendly method than through a pipeline [slide
10].
CHAIR HUGHES referred to slide 9 and asked for an explanation of
the scenes depicted.
9:42:54 AM
MR. ZELL said the airship depicted is either the 25-ton or 100-
ton model; better renderings are on slides 29-33. In further
response to Chair Hughes he said the pilot sits in the front.
He then pointed out the airship can land on the ground, water,
or snow, and only requires a 1,500 foot "strip" for landing and
takeoff.
REPRESENTATIVE HIGGINS asked how much helium is needed for the
25-ton model.
MR. ZELL was unsure. Returning to the transportation of oil and
gas, he provided an image of an airship designed to transport
LNG [slide 15]. He suggested that airships could be a viable
alternative for the transport of goods, people, and freight
throughout Southeast Alaska, rural areas, and the Aleutian
Islands in support of tourism, with the additional option of
using the airships as cruise ships [slide 16]. There was
discussion about airships as a possibility for tourism and for
the transport of passengers, but the company is waiting for
guidelines from FAA regarding passenger service.
9:51:25 AM
MR. SMITH, in response to Chair Hughes, said FAA will require
that the airships are in operation for one year before approving
a passenger load. At this time the 25-ton model is approved for
up to 15 passengers. In further response, he confirmed that the
500-ton model will carry 2,200 passengers.
MR. ZELL restated the multiple applications for the aircraft:
tourism; disaster relief; emergency medical response; as part of
the Alaska Marine Highway System; support for the oil and gas
industry; and to lower the cost of in-state and out-of-state
shipping, especially for rural Alaska.
REPRESENTATIVE PRUITT asked whether an airship could lift a
drill-rig out to a site, and how the cost would compare to the
cost of normal transportation over an ice road.
MR. ZELL was unsure of the weight of a drill-rig; however, the
airship can be used as a crane, thus portions of a rig could be
transported outside of the cargo bay. He said he was unsure of
what producers pay to transport drill-rigs by conventional
shipping methods.
9:58:14 AM
REPRESENTATIVE PRUITT inquired as to whether MES has potential
clients in Alaska. He asked when and where MES is prepared to
provide services.
MR. ZELL closed by saying that MES is moving forward quickly and
aggressively with its manufacturer. The timeline is to have the
airship flying within 12 months. There has been contact with
logistics and mining companies in Alaska who are interested in
the future of the airship.
10:00:00 AM
MR. SMITH added that MES has had discussions with Lynden Air
Cargo and others, and as soon as the agreement with Lockheed is
finalized, MES will present its full marketing strategy to all
of the interested clients in Alaska.
10:02:07 AM
ADJOURNMENT
There being no further business before the committee, the joint
meeting of the House Special Committee on Energy and the House
Special Committee on Economic Development, Trade, and Tourism
was adjourned at 10:02 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| ENE -PRESENTATION - MES-MIG Presentation (03-03-14).pptx |
HENE 3/3/2014 8:00:00 AM |
|
| ENE - PRESENTATION - Transforming Alaska (6).pdf |
HENE 3/3/2014 8:00:00 AM |
|
| ENE - AGENDA - Joint Hearing with HEDT&T (03-03-14).pdf |
HENE 3/3/2014 8:00:00 AM |