SB 161-GEOTHERMAL RESOURCES  4:39:18 PM CHAIR MICCICHE announced that the next order of business would be SENATE BILL NO. 161, "An Act relating to geothermal resources; relating to the definition of 'geothermal resources'; and providing for an effective date." He noted that the committee first heard the bill on February 10. The Alaska Department of Natural Resources (DNR) has responded to committee questions and presented a map with the known statewide geothermal resources and their proximity to population centers. The committee also requested a presentation on geothermal resources in Alaska. 4:40:07 PM SARA LONGAN, Deputy Commissioner, Alaska Department of Natural Resources, Anchorage, Alaska, thanked the committee for inviting the department to again discuss SB 161 on geothermal resources. 4:40:50 PM At ease. 4:44:08 PM CHAIR MICCICHE called the committee back to order. MS. LONGAN discussed the following from slide 2 from the DNR presentation on geothermal resources, Overview, and slide 3, AGILE Act: • Slide 2: Overview o AGILE Act o Fundamentals of geothermal systems o Purpose of this bill o DNR geothermal leasing history o Sectional summary o Analysis of selected sections & responses to questions • Slide 3: AGILE Act o Senator Murkowski's Advanced Geothermal Innovation Leadership Act of 2019 (AGILE Act) o Authorizes grants and incentives o Establish a repository for geothermal drill data o Supports research into Enhanced Geothermal Systems o Supports heat pump improvements o Defines geothermal energy as a renewable energy source o Encourages co-production of geothermal with hydrocarbons and critical minerals o Improves federal permit coordination STEVEN MASTERMAN, Director, Division of Geological and Geophysical Surveys, Alaska Department of Natural Resources, Fairbanks, Alaska, reviewed the parameters of a geothermal system on slide 4, Fundamental Ingredients of Useable Geothermal Energy: • Elevated geothermal gradient • Porosity and permeability for the migration of fluids • Surface access • Sufficiently large thermal system • Customers for energy 4:46:39 PM MR. MASTERMAN discussed slide 5, Heat Flow in Alaska. He referenced a map and said the illustration provides a broad view of the amount of energy coming to the earth's surface across Alaska. He detailed that the red areas on the map indicate more energy and green areas have less energy. For example, the North Slope has an area of low heat coming to the earth's surface where sediments are thick and insulate the surface from heat beneath. Along the Aleutians and the Alaska Peninsula where there is a lot of volcanic activity, there's higher heat flow. MR. MASTERMAN displayed slide 6, North Slope Geothermal Gradient. He referenced a map and said the illustration shows geothermal gradients with the degree centigrade per 100 meters of depth. He noted that the temperature data came from the bottom of bore holes drilled into North Slope oil and gas fields by producers. The temperature data allowed the division to construct maps that show the relative amount of heat that is coming out of the earth and the rate at which the temperature increases when going into the earth. MR. MASTERMAN detailed that the illustration shows most of the gradients are 3 to 4 degrees centigrade per 100 meters. Going down 1,000 meters shows the temperature increases by 30 to 50 degrees centigrade. He added that the map provides a rough estimate of what sufficient temperature data could allow across the state. He said Chair Micciche asked in the previous hearing where there may be undiscovered thermal energy sources. He conceded that the division does not have the level of information as the North Slope bore hole temperatures to provide detailed contours across the rest of the state. 4:48:58 PM MR. MASTERMAN TURNED TO slide 7, Geothermal Gradients. He explained that the graph shows examples of geothermal gradients. The colored band in the graph is a typical geothermal gradient for Alaska that shows subterranean temperature increases. For example, the North Slope reaches a temperature of 100 degrees centigrade at 10,000 feet or 3 kilometers depth. He pointed out that the graph shows two points of reference, one of the Chena Hot Springs geothermal system where the temperature is about 60 degrees centigrade on the surface and about 80 degrees centigrade where the hot water is entering the drill holes for power production. The second point is the Makushin system where the temperature is almost 200 degrees centigrade. MR. MASTERMAN explained that the temperature of a geothermal system is important for the amount of energy production. Chena Hot Springs is a cooler system with production of hundreds of kilowatts of energy. The Makushin system has a higher temperature system at an energy magnitude of tens of megawatts of electrical production. MR. MASTERMAN discussed the following from slide 8, Geothermal Resource Quality: • Generation capacity per unit cost depends on several geologic and economic factors: o Temperature (hotter is better) o Flow rate (higher flow rates are better) o Reservoir Framework (uniform porosity better than fractures) o Recharge (partially natural better than all artificial) o Depth (shallower is less expensive, thus better) o Location, location (relative to population, transmission system, development costs, etc.) 4:52:32 PM MR. MASTERMAN displayed slide 9, Geothermal Systems. He said the map on the slide shows the distribution of all known hot springs across the state as well as the distribution of the active volcanoes in the state. He pointed out there is a belt of hot springs across the interior of the state that are generally associated with cooling granite bodies. He detailed that hot water in the granite bodies is in fractures. Accessing hot water requires intersecting the fractures. The granite bodies are older systems that are cooler and don't have as high temperature water or productive volumes as the volcano related system that are present along the Alaska Peninsula and in the Aleutians. He pointed out that there are more high temperature systems along the Aleutians than in the granite related systems. The volcano related systems have magma close to the surface which is a hotter material that can generate more and hotter volumes of hot water. MR. MASTERMAN displayed slide 10, Alaska's Geothermal Resources Fairbanks Region: • Chena o 80 degrees Celsius at 260 meters o Reservoir approximately 130 to 145 degrees Celsius He said slide 10 shows where the hot springs are in relation to Fairbanks. Chena Hot Springs is close and there are a couple of others that are fairly close to population centers. The Circle Hot Springs northeast of Fairbanks is close to Central, Manly Hot Springs is close to Manly. Those systems are similar in temperature to Chena Hot Springs with slightly higher water flows that may be able to produce slightly larger quantities of electricity. The slide also shows projected reservoir temperature that is a theoretical value based on the geochemistry of the water that is coming to the surface. For example, the evidence for Chena Hot Springs suggests that drilling deep enough will intersect waters that are somewhere between 130 and 145 degrees Celsius, temperatures that will allow for more power generation. MR. MASTERMAN detailed that the Chena Hot Springs has a 400- kilowatt capacity. In a 2007 report, they indicated that the cost of producing power went from $0.30 per kilowatt hour to $0.05 per kilowatt hour with production from the geothermal system. 4:55:43 PM MR. MASTERMAN discussed slide 11, Alaska's Geothermal Resources Seward Peninsula. • Pilgrim o 92 degrees Celsius at 120 meters o Reservoir approximately 150 degrees Celsius He said Pilgrim Hot Spring is the most interesting hot spring on the Seward Peninsula. It has a theoretical power capacity of 4 megawatts of electrical power or about 50 megawatts if using the energy as heat. He noted that geology will play an essential role in developing the Pilgrim system because the hot fluids are coming out of the bedrock and getting into the sands and gravel, then migrating laterally and coming up to the surface. He noted that drilling through the sand and gravel right under the hot springs accesses cooler rock underneath. The system's hot water source is not known, but that's where geology comes into play. The system could provide energy to Nome or Graphite One's potential mine towards Teller. MR. MASTERMAN displayed slide 12, Alaska's Geothermal Resources Alaska Peninsula: • Makushin 190 degrees Celsius at 590 meters. He explained that the Makushin system is on the same island as Dutch Harbor and Unalaska. The system could produce power for the communities' fish processing facilities. There is a group investigating system development with scenarios calling for modular generation in 6 megawatt increments with 18 or 24 megawatt plants that could produce power as low as $0.14 per kilowatt hour, a cost that is competitive with the communities' current electrical production from diesel fuel. MR. MASTERMAN noted that there are other systems in the area, including one in Akutan that could also generate power for their fish processing facilities. Further to the northeast there are systems at False Pass, Cold Bay, and King Cove. 4:58:29 PM MR. MASTERMAN turned to slide 13, Alaska's Geothermal Resources Southeast Region: • Estimated reservoirs: o Goddard - 140 degrees Celsius o Baranof - 95 degrees Celsius o Bailey Bay - 150 degrees Celsius o Tenakee - 65-100 degrees Celsius He said there are a number of hot springs in Southeast Alaska that are of potential interest. Two that are most well situated are the ones investigated for producing power near Sitka, the Goddard and Baranof hot springs. The granite-related systems are fracture based and nonvolcanic. The systems along the Aleutians have an added advantage of being in volcanic rocks that are sometimes quite a lot more porous and permeable and can make better reservoirs and produce higher volumes of water for more power. MR. MASTERMAN reviewed slide 14, Key Points: • Geothermal heat, where technically and economically accessible, is an excellent form of sustainable energy. • Hydrothermal systems are the most common form of energy extraction from geothermal heat. • Complex geologic parameters necessary for a viable geothermal resource, all present at one location, is rare. • Alaska contains several potential geothermal resources. • New technologies that will help expand geothermal development into less favorable geology are on the horizon. 5:01:42 PM CHAIR MICCICHE asked the presenters to finish the presentation at the next committee meeting, due to time constraints. MS. LONGAN replied the department will accommodate the committee's schedule. [SB 161 was held in committee.]