In Lower Cook Inlet, 60 miles southwest of Homer, active and spectacular Augustine Volcano stands as the state's latest hot prospect for geothermal energy.
The Division of Oil and Gas intends to offer explorers the chance to bid for leasing rights on the entirety of Augustine Island, its tidelands and surrounding waters, nearly 66,000 acres of state-owned land in all.
It's volcano power for sale, Alaska style.
The geothermal lease sale is scheduled for May 8, coinciding with an offering of new oil and gas drilling rights around Cook Inlet, where Alaska's oil boom began, and the Alaska Peninsula, which has been little explored.
The U.S. Geological Survey calls geothermal "the plus side of volcanoes," and Augustine is just one site being examined in Alaska.
A 2010 state law sets a goal of 50 percent of the state's energy coming from renewable sources by 2025 including hydropower -- which is the big one -- but also wind, solar, plant-based biomass, tidal and geothermal power.
So far, Alaska's only geothermal plant producing electricity is at Chena Hot Springs Resort near Fairbanks, and it was mainly privately funded.
Harvesting super-hot water from a volcanic field and using it to generate electricity or as a direct heat source is an alluring but risky and complicated venture.
While Alaska's vast geothermal resource -- more than in any other state -- is visible in the form of volcanos, hot springs and steamy fumarole fields, much of it is in remote areas, expensive to develop and too far from infrastructure and population centers to easily be put to practical use, said Chris Rose, executive director of the Renewable Energy Alaska Project, an advocacy group.
Rose, geothermal boosters, and state officials said the potential remains.
"Alaska is a geothermal rich state because of the Ring of Fire as well as other breakouts," said Bob Pawlowski, legislative and policy adviser for the Division of Oil and Gas.
Some environmentalists are concerned about developing remote Augustine, which is about 180 miles southwest of Anchorage.
The volcano last erupted in 2006. It has experienced six major eruptions in the last 200 years, as well as a number of earthquakes, both of which could pose a risk to workers and facilities, according to the state.
PROSPECTING MOUNT SPURR
The state's most promising spot for a big geothermal project likely is Mount Spurr, "just because it's the closest next to the Railbelt grid, where five-sevenths of the people live," Rose said.
While Spurr is about 80 miles from Anchorage, the distance to the western Cook Inlet natural gas-fired power plant at Beluga, and its transmission lines to the Railbelt, is half that, he said.
A branch of Ormat Technologies Inc., one of the world's leading geothermal power-generating companies, acquired 36,000 acres of leases on Spurr's southern flank in 2008 for $3.5 million. But it hasn't gotten the results it hoped for during surveying and exploration in 2010 and 2011.
A well drilled to nearly 4,000 feet encountered a reservoir with a maximum temperature of just 140 degrees, far below the boiling point of water. Then the drill pipe twisted off deep underground, halting the work, the company said in a 2012 report to the state.
Drillers also encountered less-than-desirable rock rather than expected granitic bedrock, which conducts heat and holds fractures open to allow hot water to flow, the report said.
The remote drilling sites in the volcanic field can only be reached by helicopter, which often was grounded by fog and high winds, the report said.
There's also the large amount of seasonal snowmelt, which can send ice-cold water into the ground and cool what's below. That means a reservoir hot enough for energy production could be deeper than expected, Ormat says.
Last year, Ormat regrouped. It now is looking farther west, close to the active volcanic vent of Crater Peak, where "shallower, more economically viable geothermal resources are more likely to be located," the report said.
Geothermal is a small part of Alaska's renewable energy mix.
Since the Alaska Energy Authority began awarding grants for renewable energy development in 2009, $13.4 million out of $202.5 million has gone for five different geothermal projects, including exploration at Mount Spurr, Pilgrim Hot Springs and Akutan Volcano, according to the authority.
No geothermal projects made the cut for state renewable energy grant funding last year or this year, according to the energy authority, which recommends individual projects to the Legislature for funding.
The state supported Ormat's early work with a $2 million energy authority grant. Another $2 million grant, plus $12.5 million in a direct legislative appropriation, hinges on exploration results that show potential for production, Emily Ford, authority spokeswoman, said in an e-mail.
Ormat is privately funding its work for now, she said.
POWER OF HOT SPRINGS
Once a thermal reservoir is found, the technology is old school, Rose said. Water trapped underground can be much hotter than the boiling point and will flash into steam once it's no longer under pressure.
"That steam is what drives the turbines," Rose said. "You're using the same kind of steam turbine technology you would use with a coal plant. Instead of using a fossil fuel, you are using the heat from the Earth."
In geothermal projects with lower-temperature water, pumped-up water is used to vaporize a second fluid with a boiling point below that of water, and that spins the turbines.
That's how it is working at Chena Hot Springs Resort near Fairbanks. Its geothermal power plant came on line in 2006 in a test of the bounds of technology.
As it turns out, those hot springs aren't that hot --- the reservoir being tapped was less than 165 degrees, about the temperature of a piping hot cup of coffee.
"That's actually the lowest temperature operating geothermal system in the entire world," said Gwen Holdmann, who oversaw the Chena power plant construction and now serves as director of the Alaska Center for Energy and Power at the University of Alaska Fairbanks.
Holdmann's home near Fairbanks is off the electrical grid and she generates her own power through solar, wind and a diesel generator.
The key is the big temperature gap between the pumped up hot water and the ready supply of very cold water needed to complete the cycle and turn the vapor back to a fluid, she said.
The geothermal power plant dramatically lowers energy costs for the resort and saves tens of thousands of gallons of diesel fuel a year, according to Chena and the Alaska Energy Authority.
The hot water also is used to run a year-round greenhouse growing lettuce, berries, tomatoes and more and heat the resort buildings, Chena says.
Most of the project was privately funded. The U.S. Department of Energy provided an early $1.4 million exploration grant, and the Denali Commission and state of Alaska provided some funds, Holdmann said.
Geothermal power is reliable, year-round and causes little environmental damage, Holdmann said. The pumped-up water may be highly mineralized and must be reinjected carefully so as not to pollute drinking water or cool the geothermal reservoir, she said.
Holdmann now is working on developing power from Pilgrim Hot Springs, about 37 miles from Nome or 55 miles by road. Sophisticated geologic mapping with technology from UAF pinpointed favorable drill spots, she said.
Five deep wells and 51 shallow wells were drilled in 2011 and 2012. Results are promising: The reservoir contains the highest temperatures in Alaska outside the volcanic region, she said.
"There's got to be a pretty substantial resource there, to be economic to develop," Holdmann said.
In volcanic Iceland, developers have been able to pipe hot water from the source more than 20 miles to Reykjavik and using it directly to heat homes, melt snow, and dry food. Geothermal energy provides 98 percent of the power for heat in Iceland, though much less of the electricity, Rose said.
"They are using the same water multiple times as the temperature degrades," said Rose, who visited Iceland last year on a trip organized by the Institute of the North.
Now the state wants to test the geothermal potential of Mount Augustine, which is far from a population base.
"The geographic, technological, and economic aspects of proposed development are major factors influencing transportation systems for the potential geothermal resource and the electrical power generated from it," Bill Barron, director of the Division of Oil Gas, said in a document supporting the lease sale.
If electricity were generated there, Rose said, it might have to be transmitted by undersea cable to the Kenai Peninsula.
Perhaps a high-power industry, such as an Internet server farm, could be established near the volcano. In Iceland, he said, developers are bringing projects to the geothermal source.
Reach Lisa Demer at firstname.lastname@example.org or 257-4390.