Geothermal lease sale planned anew for Mount Spurr, Alaska

Mount Spurr from Kenai Beach, Alaska (source: sf-dvs / flickr, Creative Commons)

The Alaska Division of Oil and Gas has announced that a geothermal lease sale is being prepared for the rights to explore the geothermal resources of Mount Spurr, northwest of Anchorage, Alaska. If the plan pushes through, this will be the fourth competitive lease sale held for the geothermal resources of Mount Spurr, with the last one held in 2008.

The date for the lease sale is yet to be confirmed, but the leases would be for 10-year terms which is typical for the leases offered by the division.

The announcement follows the awarding of noncompetitive permits to two companies – GeoAlaska LLC and Raser Power Systems LLC – in 2021 for the geothermal exploration of specific parcels on Mount Spurr.

Ormat Technologies Inc. had previously conducted an exploration drilling program in Mount Spurr after being awarded the lease in 2008. However, Ormat dropped the program in 2015, stating that the geothermal resource was insufficient.

According to the analysis issued by Division Director Derek Nottingham, financial incentives under the Inflation Reduction Act of 2022 will help make the results of this new geothermal lease more successful. “In sum, federal energy policy has shifted significantly since the noncompetitive permits were issued in 2021, which has generated renewed interest in geothermal exploration,” according to the document.

Paul Craig, President of GeoAlaska LLC, stated that the 10-year terms for the new lease makes sense. The permits granted for Mount Spurr in 2021 had terms of only two years with a one-year extension. Given the long development period of geothermal, this was not a realistic timeline. Craig did not confirm whether or not GeoAlaska will participate in the upcoming lease sale.

GeoAlaska currently holds a geothermal exploration permit for Augustine Volcano granted by the Division of Oil and Gas in 2022. The company had also recently formed a partnership with Ignis H2S Energy Inc. for the exploration and development of geothermal resources in Alaska.

Source: Alaska Beacon