Legislature(2009 - 2010)BUTROVICH 205
03/12/2009 11:00 AM Senate ENERGY
| Audio | Topic |
|---|---|
| Start | |
| Presentations: Richard Peterson, Cook Inlet Coal-to-liquids Project | |
| Marvin Yoder, Compact Nuclear Generation | |
| Dominic Lee and Blue Energy Canada, Inc. - Turnagain Arm Tidal Project | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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 |