Legislature(2019 - 2020)BUTROVICH 205

02/18/2019 03:30 PM Senate RESOURCES

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Audio Topic
03:30:19 PM Start
03:30:52 PM Presentation: Oil and Mining Solutions at the University of Alaska
04:20:43 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
"Oil & Mining Solutions at the University of
Alaska" by Dr. Bill Schnabel, Dean, UAF College
of Engineering & Mines
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                       February 18, 2019                                                                                        
                           3:30 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Chris Birch, Chair                                                                                                      
Senator Lora Reinbold                                                                                                           
Senator Click Bishop                                                                                                            
Senator Scott Kawasaki                                                                                                          
MEMBERS ABSENT                                                                                                                
Senator John Coghill, Vice Chair                                                                                                
Senator Cathy Giessel                                                                                                           
Senator Jesse Kiehl                                                                                                             
COMMITTEE CALENDAR                                                                                                            
PRESENTATION: OIL AND MINING SOLUTIONS AT THE UNIVERSITY OF                                                                     
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
DR. WILLIAM SCHNABEL, Dean                                                                                                      
College of Engineering and Mines                                                                                                
University of Alaska-Fairbanks                                                                                                  
Fairbanks, Alaska                                                                                                               
POSITION STATEMENT: Presented the examination of the Oil and                                                                  
Mining Solutions at the University of Alaska.                                                                                   
ACTION NARRATIVE                                                                                                              
3:30:19 PM                                                                                                                    
CHAIR CHRIS BIRCH called the  Senate Resources Standing Committee                                                             
meeting to order  at 3:30 p.m. Present at the  call to order were                                                               
Senators Kawasaki, Bishop, Reinbold, and Chair Birch.                                                                           
^PRESENTATION:  Oil and  Mining  Solutions at  the University  of                                                               
  PRESENTATION: Oil and Mining Solutions at the University of                                                               
3:30:52 PM                                                                                                                    
CHAIR   BIRCH  announced   that   the  committee   will  hear   a                                                               
presentation  from the  University of  Alaska on  oil and  mining                                                               
solutions. He read the following statement:                                                                                     
     As we  all know, Alaska holds  tremendous potential for                                                                    
     oil,   gas,   and   minerals  development.   The   U.S.                                                                    
     Geological  Survey (USGS)  estimates the  potential for                                                                    
     nearly 40 billion barrels of  oil and over 200 trillion                                                                    
     cubic feet  of natural  gas in  Arctic Alaska,  and the                                                                    
     Department of  Commerce reports  that Alaska  is ranked                                                                    
     as one of  the top 15 locations in the  world for known                                                                    
     resources  of  important  minerals like  zinc,  silver,                                                                    
     gold, copper, and  rare earth metals; but,  in order to                                                                    
     develop these  resources and  maximize benefits  to the                                                                    
     state  and to  our economy,  we will  have to  overcome                                                                    
     technical obstacles  to development and we  will need a                                                                    
     skilled workforce.                                                                                                         
     Here  today to  show us  how our  university system  is                                                                    
     working to  do both  is Dr.  William Schnabel,  Dean of                                                                    
     the   University   of   Alaska-Fairbanks   College   of                                                                    
     Engineering and Mines.                                                                                                     
3:31:56 PM                                                                                                                    
DR.  WILLIAM SCHNABEL,  Dean, College  of Engineering  and Mines,                                                               
University  of Alaska-Fairbanks,  Fairbanks, Alaska,  provided an                                                               
overview  of his  educational background.  He explained  that his                                                               
duties  as dean  are to  oversee the  university's education  and                                                               
research missions.                                                                                                              
He  said  the  University  of   Alaska  (UA)  has  three  primary                                                               
missions:  teaching,   community  service,  and   research.  Many                                                               
missions  at  the  UA  are focused  on  industrial  and  resource                                                               
development because Alaska is a resource development state.                                                                     
3:34:18 PM                                                                                                                    
He addressed  student success and detailed  graduation rates from                                                               
2009-2018  for   engineering  and  engineering   related  science                                                               
degrees. Over  2,700 students have graduated  with engineering or                                                               
computer science degrees from  UA-Anchorage and UA-Fairbanks over                                                               
the past decade. He noted  that the state will need approximately                                                               
600  new  engineers  or  computer   scientists,  but  the  UA  is                                                               
graduating approximately 270 students per year.                                                                                 
DR. SCHNABEL opined that industry  in Alaska wants Alaska-trained                                                               
engineers.  Alaska-trained  engineers  generally are  people  who                                                               
grew up  in the state  and UA  graduates know that  most resource                                                               
development  is outdoors,  out where  there is  permafrost, cold,                                                               
and a  remote environment.  He pointed  out in  a photo  where UA                                                               
students where  outdoors in the wilderness  with their geological                                                               
engineering professors learning their trade.                                                                                    
He said there is a big  advantage for industry in having students                                                               
that are trained  in Alaska. Universities in the Lower  48 do not                                                               
know about  permafrost and conditions like  Alaskans do. Students                                                               
that graduate from  the UA and go into  the engineering workforce                                                               
tend  to stay  in  the state.  Companies that  invests  in a  new                                                               
employee from  Alaska will  find that the  employee will  tend to                                                               
stay in Alaska, a fact that is important to industry.                                                                           
3:37:52 PM                                                                                                                    
SENATOR KAWASAKI  noted that Dr. Schnabel  said approximately 600                                                               
engineers   are   needed   annually   and   UA   was   graduating                                                               
approximately  270  per year.  He  asked  why  UA cannot  get  to                                                               
graduating 600 engineers per year.                                                                                              
DR. SCHNABEL  answered that  there are only  so many  students in                                                               
Alaska. The UA  has a lot of capacity to  grow and the university                                                               
wants to  move in that direction.  An area of growth  would be to                                                               
increase  the number  of  female  engineering students;  however,                                                               
colleges  across   the  nation  average   only  20-percent-female                                                               
students in  engineering colleges.  A way  to get  more engineers                                                               
into  the workforce  is  to  encourage young  girls  to get  into                                                               
SENATOR REINBOLD  asked how many  women were in  UA's engineering                                                               
3:39:41 PM                                                                                                                    
DR.  SCHNABEL   replied  approximately   15-17  percent   of  the                                                               
engineering student body is female.                                                                                             
He  opined that  engineering  is a  profession  that people  find                                                               
fulfilling.  Engineers  trade in  the  question  of, how  you  do                                                               
things, so the  job of an engineer  is to see a need  and then to                                                               
visualize what needs to be  built, constructed, or developed from                                                               
their vision,  and then going  through a step-by-step  process of                                                               
creating the thing they visualized.  Engineers that UA trains end                                                               
up having high paying jobs and fulfilling careers.                                                                              
CHAIR BIRCH asked how the  proposed budget cuts might affect UA's                                                               
engineering programs, noting that a 41-percent cut was proposed.                                                                
3:42:01 PM                                                                                                                    
DR.  SCHNABEL  answered that  a  41-percent-budget  cut would  be                                                               
devasting to UA's  engineering college. He said  virtually all of                                                               
the UA's funding goes towards salaries and programs.                                                                            
SENATOR REINBOLD  asked if  research has  been done  in combining                                                               
the UA's three systems into one  system. She said she was told by                                                               
the previous  UA president that the  university's union contracts                                                               
were  driving up  costs.  She  noted that  the  UA's Eagle  River                                                               
campus is in the black because  local buildings are used like the                                                               
local high school's  building. She said she did not  want to hurt                                                               
UA's engineering  program but asked  for the UA to  be innovative                                                               
at a  high level to  find ways to  address its budget.  She noted                                                               
that the  UA accounted for  $14 billion  to $16 billion  from the                                                               
state's savings over the past 5 years.                                                                                          
DR. SCHNABEL  answered that the  UA has  looked at the  option of                                                               
combining the  Anchorage and  Fairbanks engineering  colleges and                                                               
the numbers  did not  indicate that  much money  if any  would be                                                               
saved by  combining into one school.  He said he could  not speak                                                               
for combining the  entirety of the UA's colleges,  but noted that                                                               
having separate presences in Anchorage  and Fairbanks makes sense                                                               
from the engineering side.                                                                                                      
3:45:22 PM                                                                                                                    
He  referenced  UAF's  "Mining  and  Geological  Engineering"  as                                                               
   • Vital workforce and professional expertise for developing                                                                  
     Alaska's resources.                                                                                                        
   • Dates back to the University's founding.                                                                                   
   • Job placement rate nearly 100 percent after graduation.                                                                    
   • Over 65 students currently enrolled in mining and                                                                          
     geological engineering.                                                                                                    
He noted  that UA's research is  tied to the goals  of the state.                                                               
The engineering  college is interested  in development, so  a lot                                                               
of research projects are closely tied  to the goals of the state,                                                               
which helps industry  in solving some of  their issues, therefore                                                               
students benefit by  working on the very problems  they are going                                                               
to  face  in  the  working world.  Also,  students  benefit  from                                                               
working directly  with companies that  they might work  for after                                                               
CHAIR BIRCH asked what the  starting salary is for an engineering                                                               
DR. SCHNABEL answered that starting  salaries are in the $100,000                                                               
range for  mining and geological engineering  graduates. There is                                                               
high demand for engineers and  the mining industry pays qualified                                                               
people well.                                                                                                                    
CHAIR BIRCH  noted that University of  Alaska-Southeast (UAS) has                                                               
a  program that  provides  technology training  for local  mines:                                                               
Coeur  Alaska-Kensington Gold  Mine  and the  Hecla Greens  Creek                                                               
Mine. He asked if UAF was affiliated with the UAS program.                                                                      
DR.  SCHNABEL   answered  that  the   University  of   Alaska  is                                                               
affiliated with the two mines.                                                                                                  
3:49:20 PM                                                                                                                    
He  noted  that both  the  mining  and petroleum  industries  are                                                               
interested in the  UA doing research as well as  tackling some of                                                               
their  specific problems.  The UA  is good  at doing  experiments                                                               
with multiple scenarios  in a lab environment because  there is a                                                               
place  for  research with  respect  to  optimizing processes.  He                                                               
reiterated  that students  benefit  from doing  research for  the                                                               
industry that they will ultimately be working in.                                                                               
He addressed "Artic  mine water remediation at Red  Dog Mine" and                                                               
detailed as follows:                                                                                                            
   • Goal:                                                                                                                      
        o Use bacteria from the mine site to remedy acid mine                                                                   
          water at Red Dog Mine.                                                                                                
   • Benefits:                                                                                                                  
        o Ecologically sound remediation method,                                                                                
        o Supports resource development in the arctic on state                                                                  
          and ANCSA land holdings.                                                                                              
He explained that the biological  treatment process is used where                                                               
sulfate-reducing  bacteria  anaerobically  takes sulfate  in  the                                                               
water and transforms  it into sulfides which allows  metals to be                                                               
precipitated out. The  bacteria used in the  process is generally                                                               
found on  site in a  cold weather  environment that works  in low                                                               
pH.  The hope  is to  create  a biological  treatment process  by                                                               
helping  to  improve the  mine  tailings'  water that  ultimately                                                               
reduces treatment costs for the mine.                                                                                           
3:52:45 PM                                                                                                                    
SENATOR  REINBOLD  asked if  the  anaerobic  bacteria process  is                                                               
dangerous to humans.                                                                                                            
DR. SCHNABEL answered  that when working with any  bacteria it is                                                               
important to  be careful  with respect to  human health.  He said                                                               
his gut  answer is no, the  bacteria are not dangerous  to humans                                                               
because it is found on site.                                                                                                    
SENATOR  REINBOLD  opined  that larger  quantities  of  anaerobic                                                               
bacteria may present a different challenge.                                                                                     
DR. SCHNABEL addressed "Increasing flotation yield" as follows:                                                                 
   • Goal:                                                                                                                      
        o Improving metal recovery in the mineral processing                                                                    
   • Benefits:                                                                                                                  
        o Directly improves mine economics,                                                                                     
        o Helps sustain a key economic driver in the state.                                                                     
He  summarized that  flotation is  a way  to concentrate  ores by                                                               
separating  what  you want  from  what  you  don't want.  Ore  is                                                               
crushed into a  power, a slurry is made, the  slurry is placed in                                                               
flotation  tanks,  bubbles  and additives  are  added,  agitation                                                               
occurs, and  the result  is some minerals  will float  and others                                                               
will not. Flotation  is highly dependent on the  chemistry of the                                                               
ore. When  going through a  mine's ore body, the  ore's chemistry                                                               
changes.  The objective  is to  work  with a  mine's current  ore                                                               
chemistry  to optimize  yields. UA  can provide  mines with  hard                                                               
data that allows mines to maximize their yields.                                                                                
3:55:43 PM                                                                                                                    
He  addressed "Opportunity  and  demand for  skilled workers"  as                                                               
   • World-class underground surface-mine-training facility.                                                                    
 • Alaska Miners Association identified priority occupations:                                                                   
        o Mill process operators,                                                                                               
        o Mechanics,                                                                                                            
        o Underground miners.                                                                                                   
   • UA maximizes industry partnerships, federal grants, and                                                                    
     philanthropic giving to train Alaskans for resource jobs.                                                                  
DR.  SCHNABEL addressed  "Training mill  operators" and  detailed                                                               
that  the  UAF  created  a dynamic  mill  simulator  that  allows                                                               
students  to use  a  computer simulation.  The  UAF designed  and                                                               
developed the  nation's only  mine-mill simulator.  The simulator                                                               
is   used  by   the   mining  industry   both  domestically   and                                                               
3:58:48 PM                                                                                                                    
He addressed "Petroleum engineering" as follows:                                                                                
   • Education for oil and gas development in the home of the                                                                   
     largest oil field in North America.                                                                                        
   • Ninety-eight percent of UA's graduates placed in oil and                                                                   
     gas industry after graduation.                                                                                             
   • Over 65 students currently enrolled at UAF.                                                                                
He said the  UA's petroleum engineering program  is important for                                                               
several reasons:                                                                                                                
   • Produces engineers across the state.                                                                                       
   • Engineers are serving state government and the legislature                                                                 
     to help advise on current issues for policymaking.                                                                         
CHAIR BIRCH  asked how many  engineers remain in the  state after                                                               
DR. SCHNABEL  replied that most  of the mining graduates  stay in                                                               
Alaska while  a higher percentage  of petroleum engineers  go out                                                               
of  state. The  petroleum industry  generally moves  their people                                                               
around a lot.                                                                                                                   
4:00:48 PM                                                                                                                    
He  addressed  "Heavy  oil  enhanced  oil  recovery"  project  as                                                               
   • First ever field pilot on Alaska's North Slope to validate                                                                 
     use of polymer floods.                                                                                                     
   • Potentially produce 10 percent more heavy oil than current                                                                 
     technology used on the North Slope.                                                                                        
He  said heavy  oil  is an  important resource  to  the State  of                                                               
Alaska. There  is approximately 25-billion  barrels of  heavy oil                                                               
stranded on the  North Slope. Heavy oil is very  viscous and hard                                                               
to  get out  of  the  ground. Using  heat  to  extract heavy  oil                                                               
impacts permafrost. Injecting  or flooding with polymer  is a way                                                               
to get  heavy oil out  of the  ground. Flooding water  laced with                                                               
polymer will  stick together and  push the heavy oil  through the                                                               
ground.  Hilcorp Energy  is interested  in testing  flooding with                                                               
polymer in  a cold environment  and partnered  with the UA  via a                                                               
$9-million  grant from  the  U.S. Department  of  Energy. The  UA                                                               
flooding studies  are underway  with an  injection well  at Milne                                                               
Point on the North Slope.                                                                                                       
CHAIR  BIRCH noted  polymer usage  in  the Trans-Alaska  Pipeline                                                               
System  (TAPS) as  a drag  reducing lubricant  agent to  increase                                                               
output above the pipeline's design capacity.                                                                                    
4:04:16 PM                                                                                                                    
DR.  SCHNABEL addressed  "Energy  Research  Consortium of  Alaska                                                               
(ERCA)" as follows:                                                                                                             
   • Pair industry with university researchers and assets.                                                                      
   • Collaboratively address research needs and gaps.                                                                           
   • Further technology that shapes the future of energy.                                                                       
   • Fully utilize the expertise of UA.                                                                                         
He said  the consortium addresses  problems that everyone  in the                                                               
industry really needs to see  solved. The consortium commenced in                                                               
2017 and three problem themes were identified:                                                                                  
   1. Coastal and offshore issues.                                                                                              
   2. Changing permafrost with respect to oil production.                                                                       
   3. Subsurface imaging using geophysics to image reservoirs.                                                                  
4:06:46 PM                                                                                                                    
He noted  that the consortium  chose oil and  changing permafrost                                                               
to focus on and detailed issues as follows:                                                                                     
   • Well-casing stability and damage due to soil compaction.                                                                   
   • Permafrost effects on roads, pads, pipelines, and                                                                          
     permafrost ramifications from well heat.                                                                                   
   • Research funding consideration by two major companies.                                                                     
He  summarized  that the  permafrost  issue  revolves around  the                                                               
affects  from  moving  hot  liquids  through  wellbores  that  is                                                               
surrounded  by soil  that  needs to  be  frozen. The  oil-and-gas                                                               
industry is working  with UA because nobody in the  U.S. has more                                                               
institutional knowledge about building on permafrost.                                                                           
SENATOR REINBOLD asked  if Dr. Schnabel could share  the names of                                                               
the two companies that are interested in the permafrost project.                                                                
DR. SCHNABEL  answered that  he would rather  not at  the current                                                               
time until a formal agreement is reached.                                                                                       
4:09:46 PM                                                                                                                    
He addressed "Coal gasification" and  noted that Alaska has a lot                                                               
of distributed coal resources.  Coal gasification conversion into                                                               
Syngas   has   the   potential  to   power   diesel   generators,                                                               
infrastructure  that is  already in  place in  many rural  Alaska                                                               
communities.  The   challenge  is   coal  gasifiers   are  proven                                                               
technologies on the gigawatt (equal  to one billion watts) scale,                                                               
but rural Alaska  communities operates on the  kilowatt (equal to                                                               
one  thousand watts)  scale.  The  UAF is  working  on a  project                                                               
funded  by the  U.S.  Department  of Energy  to  look  at a  coal                                                               
gasifier on the megawatt (equal to one million watts) scale.                                                                    
He noted  that UAF is at  the end of a  front-end engineering and                                                               
design  study to  look at  if a  coal gasifier  will work  at the                                                               
university.  The U.S.  Department  of Energy  has some  potential                                                               
funding available  if UAF  thinks the coal  gasifier is  going to                                                               
work.  The potential  is to  use Usibelli  coal for  gasification                                                               
into Syngas  in the  campus' large  power generator.  The project                                                               
would prove  the potential  to use Syngas  on the  megawatt scale                                                               
which is a step closer to the kilowatt scale.                                                                                   
He  addressed  "Prospective  research: Employing  Coal-Syngas  to                                                               
promote renewable energy sources,"  and detailed potential Syngas                                                               
use to reduce air emissions in Fairbanks.                                                                                       
4:15:05 PM                                                                                                                    
He addressed "Resource industry training programs" as follows:                                                                  
   • The UA has trained over 1,500 workers for oil-and-gas and                                                                  
     mining industries in the past 5 years via the Mining and                                                                   
     Petroleum Training Service (MAPTS) and the Alaska Process                                                                  
     industries Careers Consortium.                                                                                             
   • Eighty-five percent of MAPTS graduates are still employed                                                                  
     after graduation.                                                                                                          
CHAIR BIRCH asked  him to address the role  of community colleges                                                               
for the oil-and-gas and mining industries.                                                                                      
DR. SCHNABEL  answered that  the UA  offers associate  degrees in                                                               
programs  offered  for Occupational  Safety  and  Health via  the                                                               
community college and university systems.                                                                                       
4:17:02 PM                                                                                                                    
SENATOR REINBOLD noted Dr. Schnabel's  final statement, "A strong                                                               
engineering workforce  is critical to Alaska's  economic future."                                                               
She said  she has a  problem with the state's  educational system                                                               
that recently  aligned its  math standards  to the  Common Core's                                                               
New Math.  She opined that  the Common Core's math  standards are                                                               
detrimental to creating engineers.                                                                                              
DR. SCHNABEL  replied that  he is not  familiar with  the state's                                                               
math standards. He  opined that math is critical  to a successful                                                               
engineer.  He  admitted  that  some  students  coming  into  UA's                                                               
engineer  program have  trouble with  math, some  don't, but  the                                                               
ones that end up graduating all get through UA's math program.                                                                  
SENATOR  REINBOLD encouraged  Dr.  Schnabel to  be  aware of  the                                                               
state's Common  Core math standards  and its potential  impact on                                                               
future engineers.                                                                                                               
CHAIR BIRCH thanked  Dr. Schnabel for his  presentation. He noted                                                               
that the low percentage of  female engineer students was the same                                                               
when he attended UAF's engineering program.                                                                                     
DR. SCHNABEL  shared that he  observed a recent  math competition                                                               
for middle schoolers and half  were girls who were really excited                                                               
to be good at math.                                                                                                             
4:20:43 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair  Birch adjourned  the Senate  Resources Standing  Committee                                                               
meeting at 4:20 p.m.                                                                                                            

Document Name Date/Time Subjects
University of Alaska Oil & Mining Solutions Presentation 2.18.19.pdf SRES 2/18/2019 3:30:00 PM