Legislature(2009 - 2010)BUTROVICH 205

03/12/2009 11:00 AM Senate ENERGY


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11:05:31 AM Start
11:06:23 AM Presentations: Richard Peterson, Cook Inlet Coal-to-liquids Project
11:30:58 AM Marvin Yoder, Compact Nuclear Generation
11:44:52 AM Dominic Lee and Blue Energy Canada, Inc. - Turnagain Arm Tidal Project
12:05:05 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Presentations: Richard Peterson, Cook
Inlet Coal-to-Liquids Project
Marvin Yoder, Compact Nuclear Generation
Dominic Lee and Blue Energy, Turnagain
Arm Tidal Project
                    ALASKA STATE LEGISLATURE                                                                                  
               SENATE SPECIAL COMMITTEE ON ENERGY                                                                             
                         March 12, 2009                                                                                         
                           11:05 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lesil McGuire, Chair                                                                                                    
Senator Lyman Hoffman                                                                                                           
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Albert Kookesh                                                                                                          
Senator Bert Stedman                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Alternative Energy Presentations                                                                                              
Richard Peterson, Cook Inlet Coal-to-Liquids Project                                                                            
Marvin Yoder, Toshiba 4S Compact Nuclear Generation                                                                             
Dominic Lee and Martin Burger, Blue Energy, Turnagain Arm Tidal                                                                 
Project                                                                                                                         
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to consider                                                                                                  
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RICHARD PETERSON                                                                                                                
Cook Inlet Coal-to-Liquids (CTL) Project                                                                                        
POSITION STATEMENT: Gave presentation on Beluge CTL proposal.                                                                 
                                                                                                                                
MARVIN YODER                                                                                                                    
MyiT Solutions, LLC                                                                                                             
POSITION STATEMENT: Presented the Toshiba 4S compact nuclear                                                                  
generation proposal.                                                                                                            
                                                                                                                                
DOMINIC LEE                                                                                                                     
Little Susitna Construction Company, Inc.                                                                                       
Turnagain Arm Tidal Project                                                                                                   
POSITION STATEMENT: Commented on his participation in the                                                                     
Turnagain Arm Tidal Project.                                                                                                    
                                                                                                                                
MARTIN BURGER, Founder and Director                                                                                             
Blue Energy Canada, Inc.                                                                                                        
POSITION STATEMENT: Presented  Blue Energy Canada's participation                                                             
in the Turnagain Arm Tidal Project.                                                                                             
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
11:05:31 AM                                                                                                                   
                                                                                                                                
CHAIR  LESIL  MCGUIRE  called the  Senate  Special  Committee  on                                                             
Energy  meeting to  order at  11:05 am.  Present at  the call  to                                                               
order  were  Senators  Hoffman,  Wielechowski  and  McGuire.  She                                                               
announced that they  have three presentations on  the agenda. The                                                               
first  is Richard  Peterson with  a  Cook Inlet  Beluga Area  CTL                                                               
project; Marvin  Yoder, Compact  Nuclear Generation;  Dominic Lee                                                               
and Blue Energy, Turnagain Arm Tidal Project.                                                                                   
                                                                                                                                
                                                                                                                                
^Presentations:  Richard  Peterson,  Cook  Inlet  Coal-to-Liquids                                                               
Project                                                                                                                         
11:06:23 AM                                                                                                                   
CO-CHAIR MCGUIRE said they are  continuing the Energy Committee's                                                               
quest to  see what  energy projects  are out  there and  what the                                                               
state can  do to help  them. She announced that  Richard Peterson                                                               
would give his presentation first.                                                                                              
                                                                                                                                
RICHARD PETERSON, Cook Inlet  Coal-to-Liquids (CTL) Project, said                                                               
the Beluga CTL  project came out of looking at  GTL for the North                                                               
Slope. He  pointed out that  the reason that CTL,  BTL (bio-mass-                                                               
to-liquids and  GTL (all  from Fischer-Tropsch)  are economically                                                               
justified for  the U.S. is  because Senator Ted Stevens  got $500                                                               
million/year   for   this   particular    project   in   a   2005                                                               
transportation bill.                                                                                                            
                                                                                                                                
11:08:42 AM                                                                                                                   
(Slide 2)  One of  the reasons  this project  works for  the Cook                                                               
Inlet is  because it will use  over 17 million tons/year  of coal                                                               
and  is close  to a  local coal  resource. The  CTL process  also                                                               
needs  a lot  of  cooling water  - eliminating  a  lot of  places                                                               
throughout the  U.S. -  and access  to an  electric grid  for the                                                               
waste heat  to be transmitted  as energy.  In this case  they can                                                               
make 200-400 mgW of waste heat that could be sold.                                                                              
                                                                                                                                
MR. PETERSON  said he started  his life out  on a CTL  project in                                                               
North  Dakota that  converts coal  into methane-pipeline  quality                                                               
gas.  This project  could do  that also.  He said  that the  mine                                                               
would employ 1,600 people and provide 7,000 other indirect jobs.                                                                
                                                                                                                                
He explained  if the amount  of energy the project  would produce                                                               
were  put  into  the  state's  small  energy  market  that  would                                                               
adversely  affect  Flint  Hills  and  Tesoro,  because  they  are                                                               
refiners  of transportation  fuel;  so they  looked at  exporting                                                               
their product.  One of the advantages  Cook Inlet has is  that it                                                               
has an  export terminal at  Drift River that could  move products                                                               
to the Pacific Rim.                                                                                                             
                                                                                                                                
MR. PETERSON  stated that  only two  technology providers  in the                                                               
world actually have operating Fischer-Tropsch  plants - SASOL and                                                               
Shell. Neither of  those two companies will come to  the U.S. and                                                               
look at a  project unless there is an available  way to deal with                                                               
CO.  The cap and trade program would cost  them a minimum of $180                                                               
  2                                                                                                                             
million/year. However,  with the depleted  oil and gas  fields in                                                               
the Cook Inlet  they have a way  to get rid of some,  if not all,                                                               
of that.                                                                                                                        
                                                                                                                                
11:11:58 AM                                                                                                                   
The other issue is that the  transport vessels are massive, and a                                                               
Fischer-Tropsch reactor is  42 ft. in diameter  and 160-180 tall,                                                               
and is made up of 6000 tons  of steel. The reactors are only made                                                               
in two  locations of the  world -  Korea and Japan.  Having those                                                               
made and  transported here would  reduce the capital cost  of the                                                               
plant  significantly, but  building  a plant  in this  particular                                                               
location is still estimated to cost $10-12 billion.                                                                             
                                                                                                                                
He said the plant would have  to supply fuel for the local market                                                               
and  the biggest  local  market  in Alaska  is  jet  fuel. It  is                                                               
imported now, but  that could be supplemented  with their product                                                               
without impacting the existing refineries.                                                                                      
                                                                                                                                
Lastly, he  said that  inadequate storage for  gas and  diesel in                                                               
the  Anchorage  area  results sometimes  in  considerably  higher                                                               
prices than  people are  paying in  the Lower  48. They  have the                                                               
ability  with their  storage to  supplement that  and potentially                                                               
lower the price  that average citizens pay for gas  and diesel at                                                               
the pump.                                                                                                                       
                                                                                                                                
11:13:18 AM                                                                                                                   
(Slide  3)  The   Beluga  coal  fields  are   located  on  Tyonek                                                               
properties on the  western side of the  Cook Inlet, approximately                                                               
10-12 miles from  the existing Beluga coal fields  that are owned                                                               
by the  Chuitna Group  and Barrick Gold.  The area  is considered                                                               
very  rural with  gravel roads  and  no connection  to any  major                                                               
transportation artery. The  only way to get there is  by ferry or                                                               
airplane.                                                                                                                       
                                                                                                                                
Hopefully, a road  would actually be built down the  west side of                                                               
the Cook Inlet  some day to allow people to  live there. In fact,                                                               
the  state has  purchased a  400-ft. wide  right-of-way from  the                                                               
existing road  system all  the way  down to  Tyonek to  make this                                                               
happen.                                                                                                                         
                                                                                                                                
11:14:34 AM                                                                                                                   
(Slide 4)  He said  roughly 1.3  billion tons  of coal  "has been                                                               
seen  by  a drill  bit"  that  are economically  mineable.  Under                                                               
current  technology,  that  will  make a  minimum  of  2  billion                                                               
barrels of  finished fuels or  put another way, it's  almost like                                                               
finding a 6 billion/barrel oil field.                                                                                           
                                                                                                                                
11:14:54 AM                                                                                                                   
(Slide 5) He  explained that the Fischer-Tropsch  CTL process has                                                               
three steps.  The first  step makes syngas  out of  coal, natural                                                               
gas or bio-mass.  The next step makes  a Fischer-Tropsch paraffin                                                               
long-chain molecule;  the third  step needs a  choice of  fuel to                                                               
make  -  gasoline,  kerosene,  jet  fuel,  naphtha  -  and  those                                                               
molecules get  fractionated into  that product -  just like  in a                                                               
typical refinery.                                                                                                               
                                                                                                                                
11:15:41 AM                                                                                                                   
(Slide 6) Pictures of facilities  around the world: SASOL Sacunda                                                               
facility at  150,000 BPD CTL,  South African Mossgas  facility at                                                               
47,000 BPD  GTL, Shell  Bintulu in Malaysia  15,000 BPD  GTL, and                                                               
CHOREN Freiberg in Germany at 500 BPD BTL.                                                                                      
                                                                                                                                
(Slide  7)  At the  end  of  the day  you  end  up with  a  clear                                                               
synthetic transportation  fluid that  looks like and  tastes like                                                               
water; you can  even drink it. It's  CPA-approved, non-toxic, can                                                               
be made  USFDA approved for  food grade;  it has zero  sulfur and                                                               
zero aromatics. He  just heard at a  seminar that Fischer-Tropsch                                                               
fuels are the fuel of the future for the military.                                                                              
                                                                                                                                
CHAIR MCGUIRE asked him to expand on that big announcement.                                                                     
                                                                                                                                
MR.  PETERSON said  that the  military  is looking  at two  pilot                                                               
programs that will buy a  50/50 mixture of Fischer-Tropsch middle                                                               
distillate jet fuel  and conventional JP8 jet fuel  in Alaska and                                                               
Hawaii. This would mean about  70 million gallons/year for Alaska                                                               
that really works  out to about 35,000 barrels/day,  a very small                                                               
portion of Flint Hills' and Tesoro's total refining capacity.                                                                   
                                                                                                                                
This same kind of program will  be held in Hawaii that is looking                                                               
at  something like  70,000 barrels/day  of product.  The military                                                               
has decided that  Fischer-Tropsch fuels are going to  be its fuel                                                               
of the  future, but they want  industry to produce it  - and from                                                               
domestic feedstock. Then the military will buy it from them.                                                                    
                                                                                                                                
11:19:07 AM                                                                                                                   
CHAIR  MCGUIRE asked  the bidding  process for  rights under  the                                                               
pilot project.                                                                                                                  
                                                                                                                                
MR. PETERSON explained that a competitive  RFP will be put out in                                                               
another month or two. It will  look at all sorts of issues: plant                                                               
location,  background and  performance history  as a  producer of                                                               
this type of product, technology, and so on.                                                                                    
                                                                                                                                
Virtually nobody in the U.S. does  this yet. But he has seen some                                                               
ways in which  this program can get done -  for example, BP's GTL                                                               
plant in  Nikiski -  but unfortunately that  uses natural  gas as                                                               
its  feedstock, and  the military  is  now required  to buy  only                                                               
alternative  fuels  that  have  a  lower  carbon  footprint  than                                                               
petroleum-based  fuels. So  Fischer-Tropsch  fuels  will have  to                                                               
come from biomass or sequester  CO to  get below the footprint of                                                               
                                  2                                                                                             
a typical crude oil refinery.  They have looked at different ways                                                               
of putting  a bio-gasifier at  the Nikiski sight and  using local                                                               
dead  and dying  spruce trees  as feedstock  or possibly  getting                                                               
biomass from Hawaii.                                                                                                            
                                                                                                                                
11:21:04 AM                                                                                                                   
MR. PETERSON said  it's next to impossible to  get an appreciable                                                               
amount of  Alaska biomass  for a  10-15 year  contract on  a firm                                                               
basis because the  trees are either on federal or  state land and                                                               
permits  can't be  obtained to  cut and  replant them.  He didn't                                                               
know if it would ever get resolved.                                                                                             
                                                                                                                                
CHAIR MCGUIRE asked  if barley or other organic  biomass could be                                                               
used.                                                                                                                           
                                                                                                                                
MR. PETERSON replied  those organics can always be  used, but the                                                               
issue comes  down to the  transportation costs when  the distance                                                               
exceeds 40-50 miles.                                                                                                            
                                                                                                                                
11:22:42 AM                                                                                                                   
(Slide 8) showed the advantages of a CTL project in Cook Inlet.                                                                 
                                                                                                                                
(Slide  9) showed  pictures of  Fischer-Tropsch  reactor and  the                                                               
Drift River Terminal  that can be used to export  products out to                                                               
the Pacific Rim.                                                                                                                
                                                                                                                                
11:23:37 AM                                                                                                                   
(Slide 10) showed price volatility in  the market and how hard it                                                               
is to finance a $6-8 billion facility.                                                                                          
                                                                                                                                
11:24:19 AM                                                                                                                   
(Slide 11) showed the results of the energy credits program.                                                                    
                                                                                                                                
MR. PETERSON  said that Northwest  Alaska probably has  more coal                                                               
than the rest  of the United States and maybe  more than the rest                                                               
of the  world combined. Their  initial proposal was to  build GTL                                                               
plants at  Prudhoe Bay and  gasify the  coal into syngas  and run                                                               
products for the next 300-plus  years down the Alaska pipeline to                                                               
Valdez.                                                                                                                         
                                                                                                                                
11:25:22 AM                                                                                                                   
(Slide 13) The  biggest obstacle to developing CTL  or any energy                                                               
project in  this state is  carbon emissions. Several  coal owners                                                               
have mentioned  that they  will just export  their coal  to those                                                               
countries that don't care about emissions.                                                                                      
                                                                                                                                
11:27:17 AM                                                                                                                   
(Slide 14)  His next  big question is  if man-made  CO  is really                                                               
                                                      2                                                                         
causing global  warming. He  was amazed to  find out  that Alaska                                                               
has  signed an  agreement to  not debate  global warming,  but he                                                               
said we  need to be at  the forefront of this  debate. People say                                                               
there is  no such thing  as clean coal technology.  "They're just                                                               
flat misinformed."                                                                                                              
                                                                                                                                
11:28:44 AM                                                                                                                   
(Slides  15/16/17)  In making  syngas  all  the poisons  must  be                                                               
removed and that  is why the plants cost so  much money. Fischer-                                                               
Tropsch CTL is gasification with  capture. He said our kids don't                                                               
understand that CO  is  an essential ingredient for  life on this                                                               
                  2                                                                                                             
planet. It  has been shown  that the  earth is greening  with the                                                               
increase in atmospheric CO.  Current estimates are that the earth                                                               
                          2                                                                                                     
has increased plant growth by 15 percent.                                                                                       
                                                                                                                                
11:29:04 AM                                                                                                                   
(Slides 18/19)  How to lower  their CTL footprint by  looking for                                                               
biomass  outside  of  Alaska:  California   has  a  process  that                                                               
converts municipal solid  waste (MSW) into what  looks like giant                                                               
rabbit pellets that  can be co-fired with coal. If  he does that,                                                               
he  can  get  the  credit  for  reducing  his  carbon  footprint.                                                               
California  has offered  him  $100/ton  for the  MSW  and he  can                                                               
convert  it to  pellets  for $60/ton  and it  can  be shipped  to                                                               
Alaska  for $20/ton.  It  can  possibly get  here  in a  positive                                                               
financial  context and  they  might  be able  to  get credit  for                                                               
reducing their CO footprint.                                                                                                    
                 2                                                                                                              
                                                                                                                                
11:30:14 AM                                                                                                                   
(Slides 21-22)  Keeping our  resources in Alaska  is a  much more                                                               
economical use of our coal than if it were exported to China.                                                                   
                                                                                                                                
CO-CHAIR MCGUIRE  thanked him for his  presentation and announced                                                               
Marvin Yoder to give the next one on compact nuclear generation.                                                                
                                                                                                                                
^Marvin Yoder, Compact Nuclear Generation                                                                                       
11:30:58 AM                                                                                                                   
MARVIN YODER,  MyiT Solutions,  LLC, presented  a power  point on                                                               
the Toshiba  4S compact nuclear  generation project. He  began by                                                               
showing a  picture of  a nuclear  battery and  a reactor  for the                                                               
Toshiba 4S plant that comes in either a 10 mgW or a 50 mgW size.                                                                
                                                                                                                                
(Slide 2)  The core is  seven feet tall and  a couple of  feet in                                                               
diameter; the  rest is a  casing. Most nuclear plants  have their                                                               
cores removed  every 18 -  24 months and have  a new one  put in.                                                               
So, technicians  and expensive  equipment are  needed on  site to                                                               
handle the  nuclear materials. The  reason they call this  core a                                                               
battery is  because it is  sealed up and  will last for  30 years                                                               
without  any  of  that  -  no  need  for  technicians  and  heavy                                                               
equipment. At the end of 30 years,  the whole tube goes out to be                                                               
cleaned up someplace else.                                                                                                      
                                                                                                                                
11:33:01 AM                                                                                                                   
(Slide  3)  Overview of  plant  that  sits  mostly about  60  ft.                                                               
underground: The steam  turbines are to the side  and the reactor                                                               
is protected way down on the bottom.                                                                                            
                                                                                                                                
11:33:22 AM                                                                                                                   
(Slide  4)  Diagram of  the  heat  transport  system: It  is  all                                                               
passive! The  system doesn't have any  fans or pumps; all  of the                                                               
sodium  coolant is  moved with  electro-magnets.  Two towers  for                                                               
convection cooling  - all air -  no water. The entire  plant runs                                                               
without any mechanical systems, so  when problems occur you don't                                                               
have to worry about auxiliary power and things like that.                                                                       
                                                                                                                                
11:34:15 AM                                                                                                                   
(Slide 5)  Passive decay heat  removal diagram and  the secondary                                                               
outlet.                                                                                                                         
                                                                                                                                
11:34:37 AM                                                                                                                   
(Slides  6/7)  Passive  shutdown   for  unprotected  events:  The                                                               
nuclear reactor is basically called  a negative heat coefficient.                                                               
In a  traditional steam plant, once  the steam has been  used, it                                                               
cools off and  condenses and returns back to  whatever is heating                                                               
it. So,  you keep  heating the  water up, it  turns to  steam, it                                                               
runs the generator and it comes back.                                                                                           
                                                                                                                                
With the nuclear  plant, the hotter the return  water, the slower                                                               
the  plant runs  -  the opposite  of what  one  would think.  The                                                               
cooler the  return water is, the  quicker it runs. If  a plant is                                                               
running at 600 Centigrade and the  system is totally shut off and                                                               
no water is coming back, the plant  will begin to heat up. But at                                                               
a  certain  point  -  about  200 seconds  -  this  negative  heat                                                               
coefficient  kicks in  and the  plant starts  to cool  down. This                                                               
means that if everything is shut off  or if there is some kind of                                                               
accident,  it will  shut itself  off. This  concept was  actually                                                               
tested in the  1980s at the Idaho National Lab  by the Department                                                               
of  Energy. This  model  was also  run with  one  of the  cooling                                                               
towers  missing; so  it will  shut  itself off  even without  the                                                               
entire cooling system available.                                                                                                
                                                                                                                                
11:36:37 AM                                                                                                                   
(Slides  7/8)  He  reviewed the  main  design  features:  passive                                                               
safety, no onsite  refueling for 30 years,  low maintenance, high                                                               
inherent  security,  low  pressure  with pool  design  and  guard                                                               
vessel,  negative coolant  temperature coefficient  promotes safe                                                               
and  stable  operation,  large   margin  to  coolant  boiling  or                                                               
cladding failure, reliable redundant  scram systems to remove the                                                               
heat, smaller excess reactivity with  metallic fuel core design -                                                               
limited  potential  for  reactivity insertion  accident,  passive                                                               
reliable  and diverse  shutdown  heat removal  systems amount  of                                                               
radioactive material (about one gallon) after 30 years.                                                                         
                                                                                                                                
11:38:59 AM                                                                                                                   
(Slide 9)  Nuclear safety compared to  other fuels is by  far the                                                               
safest for the period of 1969-1996.                                                                                             
                                                                                                                                
11:39:23 AM                                                                                                                   
(Slide 10) Graph  of tests to support 4S design  to date - design                                                               
features,  verification  items,  required  testing,  and  status.                                                               
Toshiba has purchased Westinghouse;  so they are heavily involved                                                               
in this.                                                                                                                        
                                                                                                                                
11:40:47 AM                                                                                                                   
(Slide 11)  Cost for Alaska:  Capital costs  for 150 mgW  heat is                                                               
about 2  cents kW over  30 years, another  1 cent to  operate it,                                                               
and another  penny for  fuel -  and then  a special  federal fund                                                               
that all  nuclear plants  contribute to to  take care  of nuclear                                                               
waste. It  already has  billions of  dollars, but  the government                                                               
hasn't figured  out how to  deal with  nuclear waste yet.  All in                                                               
all they assume  a 50 mgW plant will operate  at about 6-10 cents                                                               
kW. A smaller plant would probably cost double that.                                                                            
                                                                                                                                
11:41:53 AM                                                                                                                   
(Slide 12)  The Department of  Energy was established in  1977 to                                                               
get the U.S. off of foreign oil  and the joke is that we are more                                                               
dependent than we were when it was established.                                                                                 
                                                                                                                                
11:42:15 AM                                                                                                                   
(Slide  13) Chart  of  Emission-free energy  in  the U.S.  showed                                                               
nuclear at 76  percent, hydro at 20 percent, wind  at .7 percent,                                                               
solar at .1 percent and  geothermal at 1.4 percent. Nuclear power                                                               
has  experienced a  hiatus for  the last  30 years,  and wind  is                                                               
still less  than 1  percent even  with all  the emphasis  on wind                                                               
energy.                                                                                                                         
                                                                                                                                
11:42:58 AM                                                                                                                   
(Slide 14)  Energy crisis: we  are too dependent on  foreign oil:                                                               
the cost of energy is driving  up the cost of living and damaging                                                               
the  economy, too  much carbon  footprint, and  over consumption.                                                               
Nuclear is the  only energy that meets three of  those criteria -                                                               
no  carbon  footprint,  lower  cost,   and  domestic  supply.  He                                                               
supported the state diversifying its energy sources.                                                                            
                                                                                                                                
11:44:25 AM                                                                                                                   
CO-CHAIR MCGUIRE  thanked him for his  presentation and announced                                                               
Dominic Lee and Martin Burger to be the next presenters.                                                                        
                                                                                                                                
^Dominic Lee and  Blue Energy Canada, Inc. -  Turnagain Arm Tidal                                                               
Project                                                                                                                         
11:44:52 AM                                                                                                                   
DOMINIC   LEE,  Little   Susitna   Construction  Company,   Inc.,                                                               
introduced  Martin Burger,  and  John Eliason,  CEO, Blue  Energy                                                               
Canada, Inc.                                                                                                                    
                                                                                                                                
MR.  LEE said  their project  is called  the Turnagain  Arm Tidal                                                               
Project and  uses the  Davis Turbine Power  System. It  can solve                                                               
the  whole energy  problem  in  the Railbelt  for  6-8 cents  kWh                                                               
without CO,  without state funding, and with Chinese financing of                                                               
          2                                                                                                                     
$2.8 billion in  place, Mr. Lee stated. Mr.  Burger would explain                                                               
the proposal.                                                                                                                   
                                                                                                                                
11:46:21 AM                                                                                                                   
MARTIN BURGER,  Founder and Director,  Blue Energy  Canada, Inc.,                                                               
said he has been in the  energy research business for the last 25                                                               
years and  that the level  of "innovation dysfunction"  is acute.                                                               
He  has investigated  about 500  different technologies  all over                                                               
the  world in  25 years,  and  has found  that tidal  power is  a                                                               
technology that  is just  now coming to  the forefront  in places                                                               
like the  UK and the  EEU. Investment levels are  now approaching                                                               
$300-400 million  and a race is  on for tidal power  to establish                                                               
primacy in the energy industry.                                                                                                 
                                                                                                                                
Alaska has  two men, Steven  Haagenson, Executive  Director, AID-                                                               
AIDEA  Energy,  Department  of  Commerce,  Community  &  Economic                                                               
Development  (DCCED),  and  David Lockhard,  Engineer,  AID-AIDEA                                                               
Energy,  DCCED, who  can provide  expertise and  one of  the best                                                               
tidal  resources in  the world;  Blue Energy  has the  technology                                                               
that will  be used one day.  With Mr. Lee's friends  in Asia they                                                               
are at a very critical opportunity.                                                                                             
                                                                                                                                
11:48:15 AM                                                                                                                   
He urged them to step up  tidal energy efforts. Alaska could lead                                                               
the way  in a new trillion  dollar sector in the  Pacific Rim. It                                                               
could mean  scientific job  creation, manufacturing  leverage and                                                               
economic development. The  state already has people  who can sort                                                               
out  the different  technology methods  like R.W.  Beck, who  has                                                               
risk-mapped this technology.                                                                                                    
                                                                                                                                
MR. BURGER stated that Cook  Inlet has 30-foot tides. Seawater is                                                               
a  non-compressible  fluid  medium  and  provides  a  predictable                                                               
source of  sustainable energy.  The wind  speed equivalent  of an                                                               
eight-knot current  is almost two hurricane  Mitchells at 300-400                                                               
kilometers per hour.                                                                                                            
                                                                                                                                
France has an ocean-going dam  at LaRance Inlet. Canada has built                                                               
a smaller-scale device and these  projects have proved that civil                                                               
works  can  be  engineered  in   these  environments  to  produce                                                               
electricity.  His  aerospace   finesse  vertical  access  turbine                                                               
design provides  a much  more efficient build  and a  much better                                                               
ecological footprint than these earlier efforts produced.                                                                       
                                                                                                                                
MR. BURGER  discussed his developments  using graphs.  His design                                                               
(graphic 5)  has one moving part  that turns at about  25 rpm; it                                                               
is a  simple elegant  solution. Another  graphic showed  a stream                                                               
device that  they have built  eight of  over the years.  They are                                                               
positioned  now to  scale up  the  technology where  it could  be                                                               
useful especially in rural Alaska.                                                                                              
                                                                                                                                
A   tidal  bridge   design  provides   renewable   power  and   a                                                               
transportation system in  terms of a bridge. He  said that bridge                                                               
builders of  the world have  already approached Blue  Energy that                                                               
has accumulated pre-commercial $40-50  billion in buildable tidal                                                               
power projects.  They are building  quite an order book;  so when                                                               
it goes, it will go fast.                                                                                                       
                                                                                                                                
11:55:07 AM                                                                                                                   
He  estimated that  Cook Inlet  has 100,000-200,000  mgW, a  very                                                               
large part  of Alaska's energy future  - one way or  another. The                                                               
only question  is when to  bring it on  line, and there  are some                                                               
very  compelling  reasons  to  accelerate  that  process.  So  he                                                               
recommended that  they support the  efforts of Mr.  Haagenson and                                                               
Mr.  Lockhard  and  include  a  $10 million  budget  to  do  some                                                               
feasibility work.                                                                                                               
                                                                                                                                
In the Panhandle, he is  privy to some transmission line capacity                                                               
developments  that will  be available  in  three-five years.  And                                                               
tidal power  resources there  will be able  to feed  the southern                                                               
markets in  Canada and  the intertie  with British  Columbia into                                                               
Washington State and as far down  as San Diego. The capacities of                                                               
our transmission lines  will go up dramatically and  the cost for                                                               
laying marine cables will go down as well.                                                                                      
                                                                                                                                
The Cook  Inlet could  be developed -  opportunities exist  for a                                                               
bridge beyond the  oil terminal in Knik Arm and  Mr. Lee's vision                                                               
for a  road-link from the  Anchorage Airport over to  Fire Island                                                               
and  the Kenai  Peninsula  where 22,000-35000  mgW  of power  are                                                               
available. Homer  has opportunities  as well  and across  the Bay                                                               
mining   developments   are   under  consideration   with   large                                                               
electrical  load  requirements.  Tidal  power  could  be  a  very                                                               
effective solution there.                                                                                                       
                                                                                                                                
MR. BURGER  said price is in  the 6-8 cent price  range, but like                                                               
wind, the cost curve started at 55  cents and is now down to less                                                               
than 4 cents. His development will  start in the 10-12 cent range                                                               
and be down to less than 2-3  cent range. So, 6-8 cents gives the                                                               
state about a 50-percent saving on the existing power bill.                                                                     
                                                                                                                                
11:59:13 AM                                                                                                                   
He  showed an  aerial  view of  Cook Inlet  that  had a  causeway                                                               
developed from Fire  Island across the mud flats to  the east and                                                               
a roadway  bridge between the  west side  of Fire Island  over to                                                               
Pt.  Possession with  two turbine  banks in  the deeper  parts of                                                               
those channels.  Dredging for the project  could provide material                                                               
for the state's silt management in Cook Inlet.                                                                                  
                                                                                                                                
11:59:31 AM                                                                                                                   
He said that  the firm of R.W. Beck is  anxious to accelerate the                                                               
tidal  power  agenda in  Alaska.  In  response to  an  interested                                                               
investment  banker it  has already  risk-mapped  the Blue  Energy                                                               
technology. R.W.  Beck could also  assist AIDEA in  realizing the                                                               
state's  immense,  exciting  tidal  resources in  a  very  timely                                                               
fashion. Lockheed  Martin has approached Blue  Energy about being                                                               
part  of the  team building  for developments  in Alaska.  He has                                                               
previously  recommended to  Senator Dyson  and Mr.  Lockhard that                                                               
they employ Triton  Consultants out of Vancouver;  Penn State and                                                               
Blue Energy are  forming a research partnership, and  they have a                                                               
long rich history with the  U.S. Admiralty and the U.S. Admiralty                                                               
in Puget  Sound that  has offered  up its  resources to  see this                                                               
technology move forward.                                                                                                        
                                                                                                                                
12:02:07 PM                                                                                                                   
He described further support within  and around Blue Energy - Jon                                                               
Ellison,  CEO, Dr.  Sergey Barmichev,  the top  Russian aerospace                                                               
design engineer,  and trained  group of  engineers from  UBC, and                                                               
Paul  Gill, ASME  chair in  B.C. to  name a  few. Obviously,  any                                                               
developments  in  Cook  Inlet  would  respect  the  environmental                                                               
sensitivities of  the maritime  and marine  life. They  enjoy the                                                               
advice  on  these  matters  from  Dr.  Hazel  Henderson  and  Mr.                                                               
Goldsmith from the Ecologist Magazine in the UK.                                                                                
                                                                                                                                
He summarized  that they haven't  yet built a large  project such                                                               
as they  have proposed for Cook  Inlet, but he assured  them that                                                               
he has  done this for over  20 years because of  his own passions                                                               
for greater energy harmony and a high regard for the ecology.                                                                   
                                                                                                                                
He proposed to  increase the Stevens budget $10 million  to for a                                                               
$4.5  million feasibility  study for  the state's  tidal resource                                                               
assessments,   socio-impacts   and  environmental   studies.   He                                                               
reminded the committee  that Mr. Lee's Asian  funding would bring                                                               
the   needed   resources   to   proceed   with   larger   project                                                               
developments.                                                                                                                   
                                                                                                                                
12:03:21 PM                                                                                                                   
In  conclusion,   he  said  this   is  a   well-behaved  scalable                                                               
technology within  present-day construction practices.  The state                                                               
already has  contractors and personnel  that can  participate and                                                               
provide  a lot  of expertise;  Blue Energy  would bring  the core                                                               
parts of  the design to Alaska  and actually build the  foils for                                                               
the Pacific  Rim markets. Alaska  would form, at least,  the seat                                                               
for the  opportunity for the  Pacific Rim and early  action could                                                               
even see leadership provided from  Alaska with these technologies                                                               
for the whole world.                                                                                                            
                                                                                                                                
MR. BURGER said  that regulators have had a  problem with cutting                                                               
through the  red tape and "come  to grips with the  scale of it."                                                               
Tiny devices are good for rivers and streams, but when you get                                                                  
to the Cook Inlet scale, it's unprecedented.                                                                                    
                                                                                                                                
12:05:05 PM                                                                                                                   
CO-CHAIR MCGUIRE  thanked them  all very much  for flying  in and                                                               
giving  the  committee  their  ideas.   There  being  no  further                                                               
business to come before the  committee, she adjourned the meeting                                                               
at 12:05.                                                                                                                       

Document Name Date/Time Subjects
Peterson - Coal to Liquid - 03-12-09.pdf SENE 3/12/2009 11:00:00 AM
Lee - Turnagain Tidal - 03-12-09.pdf SENE 3/12/2009 11:00:00 AM
Yoder - Nuclear - 03-12-09.ppt SENE 3/12/2009 11:00:00 AM