Geothermal drilling at Pilgrim hot springs could aid Nome

A private company is drilling a geothermal test well at Pilgrim hot springs about 50 miles east of Nome, and if the flow of hot water is sufficient for power generation, a plant and transmission line might be built to supply electricity to the Bering Sea community of about 3,600 residents.

Pilgrim Hot Springs LLC, an affiliate of Potelco, Inc., hopes to develop the project, said Ethan Berkowitz, a former state legislator who is helping coordinate the project.

Nome Joint Utilities System is the intended customer. Potelco is a subsidiary of Quanta Services, a major U.S. supplier of power generation technology and services.

Berkowitz said the University of Alaska Fairbanks’ Alaska Center for Energy and Power, or ACEP, has been engaged in preliminary research to support the project.

ACEP has expertise in small geothermal development. Its director, Gwen Holdmann, helped develop a similar warm-temperature geothermal project at Chena Hot Springs that is now operating to supply power and heat to a resort and greenhouse operation.

Drilling of a 1,000-foot test production well at Pilgrim started Sept. 3, with MW Drilling Co. of Anchorage as contractor. The drill rig was moved to the site from Nome over an existing road after it was brought to the Seward Peninsula community from Anchorage, Berkowitz said.

The immediate goal is a production test of hot water to see if the flow can be sustained.

“We’ll know in about two weeks, or mid-September, whether this project is a go or no-go,” Berkowitz said.

The presence of a geothermal resource at Pilgrim hot springs has been known for decades, Berkowitz said. Initial test drilling was done in the 1970s and 1980s to assess the potential for power generation, but the project did not proceed at that time because at the time the technology was not available to produce power with warm geothermal water. Geothermal projects typically use hot water.

What changed this that was the success of Chena Hot Springs resort developer Bernie Karl, who worked with Holdmann in devising a technology that would work with water temperatures below the boiling point.

The geothermal water at Chena Hot Springs was about 165 degrees when the power plant was developed. It is now about 178 degrees following a deepening of two wells there. At Pilgrim hot springs, the water is warmer, about 190 degrees, and the higher temperature should make the technology concepts developed for Chena Hot Springs work even better there, Berkowitz said.

Aside from whether the warm water flow can be sustained, a major question is whether the project will support the cost of a 50-mile, long-distance transmission line to Nome. Initial estimates put the cost of the line at half a million dollars per mile. This means the overall project could require an investment of about $40 million, Berkowitz said.

A 2 megawatt project would be the minimum size needed to support the investment, but Berkowitz is hopeful that the geothermal resource might be sufficient for as much as 5 megawatts of power to be developed over a longer term.

Elsewhere, a project of that size and with such a long transmission line would likely not be profitable, he said, but in Nome consumers pay almost 40 cents per kilowatt hour for power generated by diesel fuel, which is expensive to begin with is even more expensive after being barged to Nome.

Meanwhile, the project has been on a fast track. Berkowitz said he got people together and started things moving in February. One advantage is that the land at Pilgrim is owned by a consortium of Alaska Native village corporations from the Seward Peninsula region.

Privately owned land allows for faster decisions than might be made by a public landowner, such as the state or federal government.

Also, some of the landowners have made financial contributions to the project, mostly in the form of support for UAF’s research. More important, the local ownership has helped create local support for the project, Berkowitz said.

Holdmann said ACEP has been interested in Pilgrim hot springs for several years.

“We always felt this was a viable resource particularly after the work done at Chena Hot Springs,” she said. “The higher temperature at Pilgrim makes it a no-brainer,” in terms of producing electricity, although this by itself don’t mean the power can be transmitted to Nome and sold profitably.

In its initial work at Pilgrim, ACEP was able to draw on expertise developed at the UAF Geophysical Institute that helped in evaluation of lower-temperature geothermal. The geophysical institute developed this to measure underground heat associated with magma flow.

“We were able to apply this to geothermal,” Holdmann said. “The imaging of heat flow was not new but the process of using and adapting it to do quantitive estimates was new.”

The test drilling in the 1970s and 1980s was also done with the involvement of the university, the state and the U.S. Department of Energy, but it was done before the new analytical tools were available, and also before the systems to produce power with lower temperatures was developed at Chena Hot Springs.

However, there are still unknowns about Pilgrim, Holdmann said. One is that it isn’t yet clear just where the geothermal heat is coming from, she said, and the geology is complex.

For example, water was found at near boiling temperatures at one depth with cool rock right below, which meant the hot water was coming from somewhere else.

Berkowitz said certain chemical signatures in the water at Pilgrim indicate that it was once much hotter, and that it may have cooled in transit from other places.

Things were simpler at Chena Hot Springs, where there is decay of radioactive isotopes in local granite rock below the area. The radioactivity is low level, common and occurs in nature, but the underground heat is enough to warm the water, she said.

“We like to joke that Bernie Karl is sitting on Alaska’s only nuclear power plant,” Holdmann said, but she added that there is nothing unsafe and no radiation in the water.

Things appear to be more complicated at Pilgrim and other known hot springs on the Seward Peninsula.

“I’m an engineer, not a geologist,” Holdmann said, but said she is informed there may be magma flowing at shallow depths resulting from volcanic activity in the region.

Holdmann said there are several warm-water hot springs in Alaska that could be sources of power for local communities. One is Elim, a village on Norton Sound coast southeast of Nome, where there are two hot springs relatively close to the village.

A power project at Elim will be challenging because of the small population, about 300, and the distance to the geothermal prospects (7 miles and 15 miles), and the lack of a road.

“Unfortunately, the better of the two prospects is the further one,” Holdmann said.

Still, the Elim community is very determined, she said. The community is hoping to develop local fisheries, and affordable power is important to that. There are also hot springs near Shungnak, in northwest Alaska, and at Manley and Circle and other locations in the Interior, she said.

“One thing we’ve learned in that we can’t apply any of the numbers from Lower 48 geothermal to evaluate these kind of warm-temperature projects,” Holdmann said.

They are different than conventional geothermal because the wells are typically shallower and the overall capital investment is lower.

In contrast, the Mt. Spurr geothermal project near Anchorage, with leases near Mr. Spurr, a volcano with a recent eruption history, is more conventional, with hot water, and would require a large investment. Ormat, an experienced California-based geothermal developer, is exploring the resource but has not yet determined that a power generation project is possible.

Holdmann said the Nome community was discouraged after the test drilling in the 1970s and 1980s did not result in a project. This created a certain amount of local skepticism when the university and the private company resumed work early this year.

That is not the case now, and a recent, unsolicited $5,000 donation from the Nome Chamber of Commerce, demonstrates that.

“That’s the largest donation they’ve made to anything,” Holdmann said of the Nome chamber.

She credited Berkowitz for helping overcome the initial local skepticism.

“He’s a lot like Bernie Karl, at Chena Hot Springs, in some ways,” she said. “He brings such energy and enthusiasm that it just spreads a positive attitude. Like Bernie, he won’t take ‘no’ and instead asks, ‘how can we make it happen?”

There have been other local contributions. The City of Nome contributed $300,000 to help provide the local match for Department of Energy research funds. Overall, the federal government has provided $3.8 million in funding for preliminary work.

“I really think this is a great example of how the university and government agencies can help with the early, high-risk work,” to pave the way for private companies to do the actual development,” Holdmann said.

Tim Bradner can be reached at [email protected].

Updated: 
09/12/2013 - 11:38am