JUNEAU -- With some legislators fuming over the pace of in-state gas development and broadly supporting energy diversification, a special House committee summoned the promoters of six large Railbelt projects last week to explain themselves and whether they should be subsidized with public funds.

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Ethan Schutt

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One of the projects -- a wind farm already under construction by Cook Inlet Region Inc. on Fire Island -- is poised to change Anchorage's view to the west and the approach to the city's international airport. The Anchorage Native corporation, owner of the island, plans to prepare sites for 36 wind turbines this summer and have the project in operation by the end of 2011.

Ethan Schutt, a senior vice president at CIRI, told the House Special Committee on Energy that the wind farm is projected to generate as much as 54 megawatts of power. That's enough electricity for about 18,000 homes and a little bit more than the capacity of the natural gas turbines at Chugach Electric Association's International Airport Road power plant in Anchorage, a relatively inefficient 1960s facility now used mainly for backup.

Three other proposed projects, all in early stages of development with no guarantees they will become operational, are near the flanks of Mount Spurr, the active volcano 75 miles west of Anchorage:

• Ormat Technologies Inc. of Reno, Nev., wants to tap directly into the volcano, drawing heat from water brought to the surface and converting it to electricity in on-site turbines. It would generate 50 to 100 megawatts.

• TDX Power, a subsidiary of Tanadgusix Corp., the Native village corporation from Saint Paul, is proposing a $1.7 billion, 330-megawatt hydro project at Chakachamna Lake in the shadow of Spurr.

• CIRI is hoping to implement coal-to-gas technology in a coal field it owns in the same region, using the gas to power a 100-megawatt power plant with perhaps enough extra gas to allow the Agrium fertilizer plant in Kenai to reopen.

The plant was forced to close in 2007 to preserve dwindling Cook Inlet natural gas reserves for power generation and heating.

The committee also heard about the mothballed plans for the Susitna River hydro project and about efforts by the state to encourage an in-state natural gas line from the North Slope to Fairbanks, Anchorage and Kenai.

Natural gas and petroleum taxes have come to dominate the Alaska Legislature this year, with other energy issues not far behind. With a plethora of legislation on taxes, gas lines and House and Senate energy policy bills, hardly a day passes in Juneau when there aren't several hearings and news conferences on the subjects.

At the same time, frustration has been mounting over the lack of movement on an in-state natural gas line to the Railbelt. A growing number of legislators, in particular House Republicans, have expressed concern that the large natural gas project from Alaska through Canada to the Lower 48, envisioned during the Palin administration, will not be built, at least not anytime soon, taking with it the idea of a relatively cheap spur line to the state's population centers.

IMPORTING GAS TO ALASKA?

One of the most outspoken members of that group has been Rep. Jay Ramras, a Republican from gas-starved Fairbanks who's running for lieutenant governor, seemingly on the gas party ticket. Ramras also serves on the energy committee, and at the hearing last week, he showered administration officials and their consultants with his displeasure, at several points accusing them of lacking integrity and of concocting an idea to import overseas gas to Alaska rather than develop and market the state's own reserves.

During his overview presentation, the consultant who drew most of Ramras' ire, Kevin Harper of Kansas-based Black & Veatch Corp., said liquified natural gas might have to be imported to Southcentral Alaska to tide the region over until North Slope gas is available.

"This is the Black & Veatch setup to undermine the in-state gas discussion," Ramras responded. "Importing LNG into Alaska is something that is so unattractive to the overwhelming majority of Alaskans I cannot afford to gloss over it."

"I just want to have gas for my community, Fairbanks," Ramras said during an interjection later. "I just want to get my community to migrate off of diesel."

LONG TERM VS.IMMEDIATE

A key issue in construction of a possible 24-inch diameter gas line to Southcentral Alaska is cost. Most experts say the region's population is too small for the scale of the project. Without a large government subsidy, they say, some additional use of gas besides heating and power generation would be needed to keep per-unit costs affordable. Those ideas include a gas-export plant or industrial or chemical factories like Agrium, any of which are out of direct control of lawmakers.

Bob Swenson, Gov. Sean Parnell's recently appointed in-state gas line project manager, told the Energy Committee that under his agency's "fast-track" schedule, an in-state line wouldn't be operational until 2016 at the earliest.

That's where the other projects come in, each to some degree extending the life of Cook Inlet fields by replacing turbines fired by natural gas with other sources of energy, some of them renewable with zero production of greenhouse gases associated with climate change.

Some of the ideas have been around for years. Hydro projects at Chakachamna and Susitna have been eyed since long before statehood. More than a year ago, then-Gov. Sarah Palin, fresh from her run for vice president, sent emissaries to the Legislature to talk about some of the same energy developments for the Railbelt as were heard last week -- including projects that could restart the Agrium plant, a big jobs issue in Kenai.

While there's been activity on all the projects, only the Fire Island wind farm was portrayed to the committee with a timeline showing no stated unknowns and a near-term completion date.

Rep. Charisse Millett, the Anchorage Republican who chaired the four-hour Energy committee meeting, said afterward that the hearing might lead to grants and other subsidies in the capital budget now being developed in the state Senate.

Shutt, the CIRI vice president, said the Fire Island project relies on federal stimulus money that encourages renewable energy projects. He pledged that the federal money would be used to lower the cost of power to consumers, not to increase CIRI's profits.

If the wind farm achieves its capacity, its 54-megawatt production would make a small dent in the region's power needs.

Phil Steyer, spokesman for Chugach Electric Association, an electric co-op and the state's largest utility, said in an interview that the peak load on the Railbelt power grid is 850 to 900 megawatts, not counting military facilities. Generation capacity is about 1,200 to 1,300 megawatts -- meaning a reserve of roughly 30 percent for usage spikes and maintenance downtime.

CLOSED CIRCUIT

Ormat, the Nevada company studying Mount Spurr's geothermal potential, has already leased 36,000 acres of state land there and plans to drill exploratory wells by 2011.

Paul Thomsen, the company's director of policy and business development, told the committee that Ormat's technology does best with water between 300 and 500 degrees Fahrenheit. The process uses sealed plumbing loops resulting in zero emissions except during maintenance, Thomsen said. One loop pulls hot water from the ground, runs it into a heat exchanger, and returns it back to Earth. The other loop contains a fluid heated in the exchanger, sent to a turbine, then cooled in the air before returning to the exchanger again.

If Ormat finds sufficient water and is able to sign contracts with a utility, it could sell 50 to 100 megawatts of power for between 11 cents and 14 cents a kilowatt hour, he said. State incentives, such as a reduced royalty rate, could produce a lower charge.

Chugach buys power wholesale this year for 7.5 cents a kilowatt hour, Steyer said, down from 9 cents last year due to falling natural gas prices. While Ormat's price might be higher now, it wouldn't be pegged to rising and falling world prices like gas, and could be attractive for the utility.

Eric Yould, the director of special projects for TDX Power, said Chakachamna Lake is sufficiently deep that the hydro project could be completed without building a dam. Instead, a 12-mile tunnel would be drilled under the lake to an underground power plant. Sufficient water is available to produce 330 megawatts at 9 cents a kilowatt hour by 2019, he said.

CIRI's Shutt said the underground coal gasification project could be generating 100 megawatts by 2014. The new technology uses controlled combustion in underground coal beds to produce synthesis gas, which can be burned in an on-site power plant or converted to methane, the main component of natural gas, and shipped by pipeline to Southcentral utilities.

The original multidam Susitna River hydro project collapsed in the mid-1980s under the weight of its price and scale -- $20 billion then. More than $130 million was spent studying the project, and now the Alaska Energy Authority is dusting off some of those plans and taking a new look.

AEA consultant Bob Butera, a civil engineer with HDR Alaska, told the committee that at least one of the Susitna dams proposed in the 1980s -- the expandable Low Watana rockfill dam -- still makes sense. It could produce 600 megawatts of power, cost $4.9 billion, and take 15 years to complete.

The AEA estimated the power cost averaged over 100 years to be 15 cents a kilowatt hour.

Find Richard Mauer online at adn.com/contact/rmauer or call 257-4345.

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