Legislature(2023 - 2024)BARNES 124

03/02/2023 10:15 AM House ENERGY

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Audio Topic
10:15:21 AM Start
10:16:35 AM HB74
10:42:10 AM Presentation: Green Hydrogen and Alaskan Geothermal
11:16:15 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 74 GEOTHERMAL RESOURCES TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
+ Presentation: Green Hydrogen and Alaskan TELECONFERENCED
Geothermal by Paul Fuhs, CEO, Alaska Hydrogen
Industries
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE SPECIAL COMMITTEE ON ENERGY                                                                              
                         March 2, 2023                                                                                          
                           10:15 a.m.                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative George Rauscher, Chair                                                                                           
Representative Tom McKay                                                                                                        
Representative Stanley Wright                                                                                                   
Representative Mike Prax                                                                                                        
Representative Calvin Schrage                                                                                                   
Representative Ashley Carrick                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Josiah Patkotak                                                                                                  
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 74                                                                                                               
"An Act relating to geothermal resources; relating to the                                                                       
definition of 'geothermal resources'; and providing for an                                                                      
effective date."                                                                                                                
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PRESENTATION: GREEN HYDROGEN AND ALASKAN GEOTHERMAL                                                                             
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB  74                                                                                                                  
SHORT TITLE: GEOTHERMAL RESOURCES                                                                                               
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR                                                                                    
                                                                                                                                
02/15/23       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/15/23       (H)       ENE, RES                                                                                               
02/23/23       (H)       ENE AT 10:15 AM BARNES 124                                                                             
02/23/23       (H)       -- MEETING CANCELED --                                                                                 
02/28/23       (H)       ENE AT 10:15 AM BARNES 124                                                                             
02/28/23       (H)       Heard & Held                                                                                           
02/28/23       (H)       MINUTE(ENE)                                                                                            
03/02/23       (H)       ENE AT 10:15 AM BARNES 124                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
PAUL CRAIG, President                                                                                                           
GeoAlaska, LLC                                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Gave invited  testimony during  the hearing                                                             
on HB 74.                                                                                                                       
                                                                                                                                
GUY OLIVER, PhD, Leader                                                                                                         
Geoscience and Exploration                                                                                                      
Ignis Energy                                                                                                                    
Houston, Texas                                                                                                                  
POSITION STATEMENT:   Gave invited  testimony during  the hearing                                                             
on HB 74.                                                                                                                       
                                                                                                                                
GEOFF SIMPSON, Landman                                                                                                          
Cyrq Energy                                                                                                                     
Boulder, Colorado                                                                                                               
POSITION STATEMENT:   Gave invited  testimony during  the hearing                                                             
on HB 74.                                                                                                                       
                                                                                                                                
PAUL FUHS, CEO                                                                                                                  
Alaska Hydrogen Industries                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION STATEMENT:   Testified in  support of  HB 74 and  gave a                                                             
PowerPoint presentation,  titled the "Green Hydrogen  and Alaskan                                                               
Geothermal."                                                                                                                    
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
10:15:21 AM                                                                                                                   
                                                                                                                                
CHAIR  GEORGE  RAUSCHER called  the  House  Special Committee  on                                                             
Energy meeting to  order at 10:15 a.m.   Representatives Carrick,                                                               
Prax,  McKay, and  Rauscher were  present at  the call  to order.                                                               
Representatives Wright and Schrage arrived  as the meeting was in                                                               
progress.                                                                                                                       
                                                                                                                                
                  HB  74-GEOTHERMAL RESOURCES                                                                               
                                                                                                                                
10:16:35 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER announced  that the first order  of business would                                                               
be HOUSE BILL  NO. 74, "An Act relating  to geothermal resources;                                                               
relating  to  the  definition   of  'geothermal  resources';  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
10:17:33 AM                                                                                                                   
                                                                                                                                
PAUL CRAIG, President, GeoAlaska,  LLC, stated that GeoAlaska has                                                               
geothermal  exploration  permits  on Mount  Spurr  and  Augustine                                                               
Island.  He said that GeoAlaska  and Ignis Energy have worked out                                                               
an  agreement   to  partner  together   in  efforts   to  develop                                                               
geothermal  energy  at these  sites.    He expressed  GeoAlaska's                                                               
support for HB  74, as it is a necessary  step in the development                                                               
of geothermal  resources.  He  argued that the current  length of                                                               
time for permits  under current statute is too  short to discover                                                               
the feasibility of  geothermal plants.  He said  that the current                                                               
instability of  royalty structures  also makes it  more difficult                                                               
to  secure  investors.   He  stated  that the  oldest  geothermal                                                               
project in the  world was created in 1904 in  Tuscany, Italy, and                                                               
it is still producing geothermal energy today.                                                                                  
                                                                                                                                
10:26:40 AM                                                                                                                   
                                                                                                                                
GUY  OLIVER,  PhD,  Leader,  Geoscience  and  Exploration,  Ignis                                                               
Energy, expressed Ignis  Energy's support for HB  74, as written.                                                               
He  explained  that  Ignis  Energy   is  a  worldwide  leader  in                                                               
connecting different  sources of  energy with  geothermal sources                                                               
of energy  in order to  meet energy demand.   He said  that Ignis                                                               
has been doing work in Alaska for  over 20 years, with the aim to                                                               
greatly  increase  the  development of  Alaska's  "underutilized"                                                               
geothermal resource  potential.  He  said that the extra  time to                                                               
explore provided  in HB 74  would be  a vital step  in increasing                                                               
geothermal power, especially because  the weather patterns in the                                                               
state limit  the work that  can be  done during certain  parts of                                                               
the year.                                                                                                                       
                                                                                                                                
10:33:11 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE PRAX  asked when the  projects at Mount  Spurr and                                                               
Augustine Island could be expected to start producing energy.                                                                   
                                                                                                                                
DR. OLIVER answered that, according  to plan, geophysical data is                                                               
expected this year, with  a test well by the summer  of 2024.  He                                                               
stated that  the total  time to start  producing energy  would be                                                               
five or six years from now.                                                                                                     
                                                                                                                                
10:36:14 AM                                                                                                                   
                                                                                                                                
GEOFF SIMPSON, Landman,  Cyrq Energy, stated that  Cyrg Energy is                                                               
a  subsidiary of  Macquarie Infrastructure  and Real  Assets, the                                                               
largest  infrastructure company  in the  world.   He stated  that                                                               
Cyrg  has  10  ongoing  geothermal  projects  around  the  world,                                                               
including in Alaska.   He expressed Cyrq Energy's  support for HB
74.                                                                                                                             
                                                                                                                                
10:38:37 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER opened public testimony on HB 74.                                                                                
                                                                                                                                
10:39:09 AM                                                                                                                   
                                                                                                                                
PAUL FUHS, CEO, Alaska Hydrogen  Industries, testified in support                                                               
of HB 74.  He stated  that geothermal energy would be sustainable                                                               
in the  long-term, and  the provisions in  the bill  changing the                                                               
royalty structure would create stability for geothermal energy.                                                                 
                                                                                                                                
10:40:32 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER,  after ascertaining  that there  was no  one else                                                               
who wished to testify, closed public testimony on HB 74.                                                                        
                                                                                                                                
[HB 74 was held over.]                                                                                                          
                                                                                                                                
10:40:45 AM                                                                                                                   
                                                                                                                                
The committee took an at-ease from 10:40 a.m. to 10:42 a.m.                                                                     
                                                                                                                                
^PRESENTATION: GREEN HYDROGEN AND ALASKAN GEOTHERMAL                                                                            
      PRESENTATION: GREEN HYDROGEN AND ALASKAN GEOTHERMAL                                                                   
                                                                                                                              
10:42:10 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER announced  that the final order  of business would                                                               
be a presentation on green hydrogen and Alaskan geothermal.                                                                     
                                                                                                                                
10:42:31 AM                                                                                                                   
                                                                                                                                
PAUL  FUHS, CEO,  Alaska Hydrogen  Industries, gave  a PowerPoint                                                               
presentation,  titled  "Alaska  Geothermal, Green  Hydrogen,  and                                                               
Associated   Industrial  Processes   and  Products"   [hard  copy                                                               
included  in  the committee  packet].    He  stated that  he  had                                                               
overseen the  building of  a geothermal well  during his  time as                                                               
mayor of  Dutch Harbor.  He  stated that the earth's  core is the                                                               
same  temperature  as the  sun,  and  heat radiates  through  the                                                               
earth's mantle,  allowing for the  ability to  produce geothermal                                                               
energy.                                                                                                                         
                                                                                                                                
10:44:20 AM                                                                                                                   
                                                                                                                                
MR.  FUHS continued  to  slide  3 and  slide  4, overviewing  the                                                               
possible geothermal  sites in the  Aleutian Islands  and Alaska's                                                               
strategic marine shipping  position.  He provided a  map with the                                                               
locations and showing  the heat flow.  He pointed  out that these                                                               
positions allow  for materials and  goods to flow  easily through                                                               
the islands,  increasing geothermal opportunities.   He continued                                                               
to slide  5 and slide  6, stating that the  geothermal production                                                               
system is  binary.  Heat is  exchanged to produce steam  and spin                                                               
the turbines,  which creates electricity,  and the water  is then                                                               
reinjected into  the ground to  be heated  again.  He  showed the                                                               
Mammoth  Geothermal  Plant in  California,  which  has an  energy                                                               
output  similar to  that  of the  Bradley  Lake Hydroelectric  in                                                               
Alaska.                                                                                                                         
                                                                                                                                
10:47:03 AM                                                                                                                   
                                                                                                                                
MR. FUHS continued  to slide 7 and slides 8,  showing images of a                                                               
magnetotelluric geothermal  imaging graph and a  hydrolyzer plant                                                               
in  Denmark.    He  stated   that  the  most  expensive  part  of                                                               
geothermal  production is  the exploration  for a  good location.                                                               
He pointed  out that the  green areas in  the image are  the less                                                               
resistant areas,  more easily allowing  the necessary  process of                                                               
water going  back into the ground.   He stated that  a hydrolyzer                                                               
plant separates  the water  from the hydrogen  in the  process of                                                               
restoring the water into the plant production area.                                                                             
                                                                                                                                
MR.  FUHS  continued  to  slide   9  and  slide  10  showing  the                                                               
[projected]  geothermal and  tidal sites  in False  Pass and  the                                                               
[projected]  Makushin  geothermal  plant  in Dutch  Harbor.    He                                                               
stated that  the hydrogen producing  parts of the plant  could be                                                               
adjusted to fill whatever current  energy ends there are in False                                                               
Pass.   He  stated that  the geothermal  plant would  be able  to                                                               
produce energy at  a cost as low as 4.5  cents per kilowatt-hour,                                                               
and the  currents sales agreement  with Dutch Harbor is  12 cents                                                               
per  kilowatt-hour.    He pointed  out  challenges  that  involve                                                               
changing  regulations, and  he advised  that the  continuation of                                                               
geothermal  development   would  rely  on  the   state  providing                                                               
stability to the projects.                                                                                                      
                                                                                                                                
10:54:23 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE PRAX  asked whether Alaska Hydrogen  Industries is                                                               
working with the Alaska Energy Authority.                                                                                       
                                                                                                                                
MR. FUHS responded in the affirmative.                                                                                          
                                                                                                                                
10:55:14 AM                                                                                                                   
                                                                                                                                
MR. FUHS  continued to  slide 11 through  slide 13,  showing more                                                               
images  of   geothermal  plants  and  geothermal   imaging.    He                                                               
expressed  the opinion  that Unimak  Island includes  an area  of                                                               
state land  that has the  potential to house facilities  for both                                                               
geothermal  and tidal  energy production,  while Adak  Island has                                                               
great geothermal  energy potential.   He suggested that  the City                                                               
of Adak  has an infrastructure  which would make  getting started                                                               
there  easier.   He  showed an  additional  sample of  geothermal                                                               
imaging representing  the type  of area  that would  best support                                                               
the production of geothermal energy.                                                                                            
                                                                                                                                
MR.  FUHS continued  to slide  14 and  gave a  brief overview  of                                                               
hydrogen  programs  provided by  the  U.S.  Department of  Energy                                                               
(DoE).   He stated that because  of the population size,  DoE had                                                               
previously rejected  a grant in  Alaska, but the  Alaska Hydrogen                                                               
Working  Group  is  working  on  a proof  of  concept  to  garner                                                               
interest for future projects.                                                                                                   
                                                                                                                                
MR.  FUHS continued  to slide  15 through  slide 17  and gave  an                                                               
overview  of hydrogen  electrolysis.   He stated  that separating                                                               
the  hydrogen and  oxygen anodes  works to  generate electricity.                                                               
He compared hydrogen electrolysis  with burning natural gas, with                                                               
the difference  being the  amount of  carbon dioxide  placed into                                                               
the atmosphere.                                                                                                                 
                                                                                                                                
10:59:54 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE   MCKAY   commented   on  the   high   temperature                                                               
mentioned, and he questioned the temperature in Fahrenheit.                                                                     
                                                                                                                                
MR.  FUHS   suggested  that  the  temperatures   in  Celsius  and                                                               
Fahrenheit would  cross over at  some point.   He stated  that 30                                                               
percent  of  the methane  would  be  burnt  to produce  the  high                                                               
temperatures.                                                                                                                   
                                                                                                                                
11:00:40 AM                                                                                                                   
                                                                                                                                
MR.  FUHS continued  to slide  18 and  slide 19  and stated  that                                                               
steel is  one of the  greatest sources of carbon  dioxide because                                                               
of the amount  of burning involved in the process.   He said that                                                               
Kobe Steel,  LTD, has a plant  in South Carolina with  a tower to                                                               
expose iron to hydrogen without burning  it.  He added that steel                                                               
is  the  most  recycled  material,   and  this  process  has  the                                                               
potential to increase the number of times it can be recycled.                                                                   
                                                                                                                                
11:03:17 AM                                                                                                                   
                                                                                                                                
MR. FUHS  continued to  slide 20  and slide 21  and gave  a brief                                                               
overview of hydrogen-based  fuels.  He stated  that ammonia works                                                               
well  as a  fuel and  can be  stored at  temperatures that  other                                                               
types  of  fuel  cannot.    Methylcyclohexane  is  an  artificial                                                               
chemical  created  by  taking hydrogen  from  the  air;  although                                                               
carbon is  being put into  the air, it  was taken out  to produce                                                               
the  fuel.   He added  that  this is  already used  to raise  the                                                               
octane level of gas station fuel.                                                                                               
                                                                                                                                
MR.  FUHS continued  to slide  22 through  slide 25  and gave  an                                                               
overview  of fuel  density and  transportation.   He stated  that                                                               
using less dense fuels would allow  ships to carry more cargo and                                                               
make fewer  stops.   He showed an  experimental ship  design that                                                               
would allow for the more efficient transport of liquid hydrogen.                                                                
                                                                                                                                
MR. FUHS  continued to slide 26  and slide 27, pointing  out that                                                               
there  is a  market for  hydrogen-based  products in  Japan.   He                                                               
expressed the understanding  that Japan is seeking  to reduce its                                                               
fossil  fuel  output  and  look for  nuclear  alternatives.    He                                                               
suggested that  Alaska could help  by implementing  policies that                                                               
would  support  the  development of  renewable  fuels,  including                                                               
providing  financial support  for  the  upfront costs  associated                                                               
with  geothermal energy  production.   He  added  that the  state                                                               
should continue  to provide support  for fossil  fuel production,                                                               
expressing the  opinion that people  living in Artic  regions are                                                               
being made to  "pay" for fossil fuel usage around  the world.  He                                                               
suggested  that Alaska  should also  support  the development  of                                                               
mineral  resources, as  these minerals  are needed  to build  the                                                               
equipment for renewable energy production.                                                                                      
                                                                                                                                
11:11:09 AM                                                                                                                   
                                                                                                                                
CHAIR RAUSCHER  asked how the  purification process for  iron ore                                                               
works.                                                                                                                          
                                                                                                                                
MR. FUHS  answered that large magnets  are used to pull  the iron                                                               
out, and then the iron is sent to hydrogen-based steel plants.                                                                  
                                                                                                                                
11:12:41 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE MCKAY  asked if there are  any significant sources                                                               
of iron ore in the state.                                                                                                       
                                                                                                                                
MR. FUHS  answered that two  of the  biggest sources of  iron ore                                                               
are Brazil and  Canada.  In response to a  follow-up question, he                                                               
said that any coal of the quality necessary to produce steel is                                                                 
on the North Slope.                                                                                                             
                                                                                                                                
11:16:15 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Special Committee on Energy meeting was adjourned at [11:16]                                                                    
a.m.                                                                                                                            

Document Name Date/Time Subjects
House Energy Committee 3.2.2023 pdf-compressed.pdf HENE 3/2/2023 10:15:00 AM
Alaska Green Hydrogen Geothermal