In Alaska, energy has long meant one thing: oil. Extraction and production in Alaska’s oil rich North Slope has been the powerhouse of the state’s economy for decades. In recent years, however, the once-mighty Alaskan oil industry has been in steep decline. Despite a few years of improvement in 2016 and 2017, with many experts predicting a renaissance for Alaskan oil, production levels have returned to their previous downward slide in the last two years. Now, Alaskan oil production set to hit its lowest fiscal-year level since the pipelines’ first year online, in 1977.
“North Slope crude production averaged 499,103 barrels per day through June 24 for the 2019 state fiscal year, which ends June 30. The last time North Slope wells pumped that little oil was 1977 when oil first started flowing through TAPS in late June; production averaged 10,500 barrels per day in 1977, according to Revenue Department figures,” reports the Anchorage Daily News. These numbers are dismal when compared to the Trans-Alaska Pipeline System’s glory days in the late ‘70s and ‘80s, when North Slope oil production “jumped to 789,600 barrels per day in 1978 and peaked at 2.1 million per day in 1988.”
With Alaskan oil production in severe decline, showing few signs of improving in the immediate future, some Alaskans are looking for a new way for the state to participate in the energy industry. Look no further than Alaska’s unique geography and biosphere for at least one answer with serious forward-thinking potential: geothermal energy.
Geothermal Energy Could Help Alaska Diversify Away From Oil
Alaskan State Senator Lisa Murkowsky has been one of the biggest advocates for harnessing the potential geothermal power of Alaska’s volcanoes along the Aleutian Islands and plentiful hot springs in the state’s interior and Southeast regions. Gwen Holdmann, Director of the Alaska Center for Energy and Power has studied the geothermal energy industry in Iceland, and agrees with Senator Murkowski that Iceland is a great example for the potential and viability of geothermal energy production. Related: Hedge Funds Unexpectedly Set The Stage For An Oil Rally
Translating the Icelandic approach to geothermal energy production to Alaska’s geography is no simple feat, however. Holdmann says that the main roadblock for building up geothermal energy in Alaska is the state’s massive proportions. “At the end of the day, if you're looking at economic development of these resources, you need to have some sort of a load within a reasonable distance to make it worth developing or some way to attract industry to that location,” she was quoted as saying by Alaskan news network KTUU.
Holdmann’s organization, the Alaska Center for Energy and Power, has done a lot of research into possible ways of circumventing Alaska’s distance-related challenges and the “distances between heat sources and population centers.” Looking at Iceland’s success in using geothermal resources for agriculture and food production--"Iceland has been really successful in producing about fifty percent of the food that's consumed in Iceland domestically mostly using geothermal heat and geothermal energy," said Holdmann--the ACEP has determined that one way for Alaska to harness its geothermal potential could be through food production at the source of geothermal energy for export to other remote reaches of the state. “That's one of the things that we've worked with Pilgrim Hot Springs out in Western Alaska on is having local food production, and then exporting that food to other parts of the region," Holdmann went on to say.
This is just the tip of the iceberg for the potential of geothermal in Alaska’s energy production future. As the state learns that it can no longer depend solely on oil production as a pillar of its energy industry, not to mention the state’s entire economy, it will have to think more seriously about the other resources that Alaska’s unique geography has to offer. If taken seriously, and with the proper investment in research and development, geothermal could be a gamechanger for the Last Frontier.
By Haley Zaremba for Oilprice.com
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