Alaska adds geothermal option to upcoming oil, gas lease sales

Mon Feb 4, 2013 7:41pm EST
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By Yereth Rosen

ANCHORAGE, Alaska Feb 4 (Reuters) - Alaska will offer potential developers the chance to explore geothermal resources at an active volcano in Cook Inlet, the state's oldest producing oil and gas basin, state officials said on Monday.

The geothermal lease sale on May 8 will coincide with oil and gas lease sales, the state Department of Natural Resources said. The state will offer oil and gas exploration rights around Cook Inlet and the Alaska Peninsula, an area of southwestern Alaska that has had only limited petroleum exploration.

The geothermal piece is 66,000 acres at Mount Augustine, a 4,134-foot island volcano 180 miles southwest of Anchorage and 60 miles southwest of the Kenai Peninsula town of Homer.

The volcano's most recent explosive eruptions were in 2006, sending ash clouds that disrupted air traffic in Anchorage. Other recent eruptions were in 1986, 1976, 1971 and 1963-64, according to the federal-state Alaska Volcano Observatory.

The volcano poses risks to explorers including earthquakes, landslides and mudflows, volcanic gas and ash releases, explosions and lava flows, the department's presale report said.

But its location, near the state's most populated region, offers potential advantages, since geothermal energy could "help satisfy the increasing demand for electricity and energy sources" in south-central Alaska, the report said.

Geothermal plants capture power created by steam from liquid boiled deep underground, and a push for cleaner energy sources has led to a partial revival in the U.S. West.

Alaska's last geothermal lease sale was in 2008. Nevada-based Ormat Technologies spent $3.3 million for leases at 11,070-foot Mount Spurr, a volcano 80 miles west of Anchorage.   Continued...