Gasification could drive development of coal
Much of this will remain inaccessible and undeveloped for years to come, but several billion tons are accessible and could be developed as markets develop on the North Slope and in Interior and Southcentral Alaska.
Cost and logistics pose tremendous hurdles, but potential developers have some new and innovative approaches.
Arctic Slope Regional Corp., for example, is working with Teck Cominco Inc., operator of the Red Dog Mine north of Kotzebue, on a possible mine-mouth power plant at a coal deposit ASRC owns 90 miles north of the mine.
Teck Cominco is interested in new sources of power for a future expansion of mining activity in the region and a possible new ore processing technology the company is developing.
The plans are delayed, for now, because recent low zinc prices have slowed the mining company’s plans for expansion, but ASRC and Teck Cominco continue to work on the power plant.
A power plant could help get an Arctic coal mine into production, paving the way for exports of coal from the region.
Meanwhile, across Cook Inlet from Anchorage lie 2 billion tons of coal, enough energy to fuel the Alaska Railbelt electric grid for hundreds of years.
The coal in the Beluga coal field has been known for decades. Tens of millions of dollars have been spent on exploration, development planning, environmental work and permitting. Despite all that, the coal remains in the ground.
However, the owners, the Texas-based entrepreneurs, William H. Hunt and Richard Bass, and Placer Dome, a major mining company, would like to see the coal developed and are working on multiple approaches.
One is to follow the ASRC strategy of developing a coal mine to fuel electrical generation. That promise is enhanced as the cost of natural gas rises.
If natural gas is priced at $2.25 to $2.50 per million British Thermal Units, coal sold for $1/MMBtus to a new coal-fired power plant could generate electricity for about the same price to the consumer, according to Bob Stiles, president of DRVen Corp., which manages the Chuitna coal project in the Beluga coal field west of Anchorage for its owners.
"Chugach Electric is already paying about $2 to $2.25, so we’re getting close to where coal is a competitive option," Stiles said.
The more intriguing possibility, however, is a plan that would bypass the need for a conventional coal-fired power plant through gasification of the Beluga coal, so that it could be used in the existing Chugach Electric power plant at Beluga.
Stiles’ group is studying that option. The natural gas-fired turbines at Beluga would need some modification but none insurmountable.
A side benefit is that the coal gasification unit could be matched with a modest gas-to-liquids unit that could make 5,000 to 10,000 barrels per day of "clean" diesel fuel, soon to be required in Alaska. The two systems would work well together because the gas-to-liquids unit would provide an outlet besides the power plant for coal gas. The unit could absorb the swings in seasonal gas demand for power generation.
The U.S. Department of Energy and its consultants are researching the gasification and gas-to-liquids combination. Stiles believes it holds promise not only in Beluga but also the huge, isolated coal deposits on the western North Slope.