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Alaska sustainable energy independence

Last Frontier State at the forefront of everything renewable – critical minerals, ideal environment for US clean energy model North of 60 Mining News – June 2, 2023

Coming together to recognize the potential Alaska can bring to the table for the global transition to renewable energy, the 2023 Alaska Sustainable Energy Conference invited leaders in government, academia, industry, and investment from across the globe to participate in discussions and to be educated on the challenges and opportunities that the Last Frontier State presents as it looks forward to the next century of energy.

Alaskans often remark about their home being a state that is behind the curve in technology, accessibility, and development. Laws, regulations, and equipment implemented in the Lower 48 don't often see adoption in the Last Frontier State until years or even decades after they've already begun to change in the South.

This is driven by many factors, such as geographical limitations, technological shortcomings, inadequate infrastructure, necessity expenses as well as lack of access to industry leaders within various markets to provide the expertise needed to spur change.

Yet, with the onset of the renewable energy transition, Alaska has found itself behind the curtain, ready to take the stage, and the ASEC was that stage.

Recognizing the potential of the 49th State, Alaska Gov. Mike Dunleavy organized an assembly of possibility to illuminate what the state can do but, perhaps more importantly, highlight the needs and wants of the now to begin transitioning to energy security and independence.

With a basic understanding that Alaska as a whole has the capability to harness all the energy it needs for itself, the difficulties in taking advantage of that fact ultimately boil down to transportation, economics, and policy.

With a state so large, combined with an indifferent climate, transportation has plagued Alaska as a problem for decades. Often used as an example during the Alaska Sustainable Energy conference, rural communities face exorbitant prices for many common goods those further south take for granted each day.

Economics, while broad, could ultimately be summed up in one question: is it worth it to spend money in Alaska?

Even now, many do not answer this question positively.

Finally, policy – or, more precisely, an unwieldy federal permitting process holds back Alaska's potential. Aptly phrased as the "permitting pandemic" by S&P Global Vice Chairman Dan Yergin during his appearance at the Alaska Sustainable Energy conference, this is something nearly all Alaskans in resource development are familiar with.

Despite the extensive care and consideration taken to protect their home, development is too often hampered by organizations or individuals or the swamp of paperwork that takes a generation or more to complete. And even if permitting somehow manages to work its way through the pipeline, litigation or protestation disrupts the process as public opinion is always taken into account.

Nevertheless, the Alaska Sustainable Energy conference was a gathering of hope and promise.

With energy becoming the commodity of the future, more so than the resources used to provide that energy, this changing viewpoint is shifting the approach to nearly every facet of life, and many are beginning to realize Alaska is where that energy can be provided.

Alaskan energy

According to the U.S. Energy Information Administration, in 2019, Alaska had a total summer capacity of 2,760 megawatts through all its power plants and a net generation of 5,944 gigawatt-hours. At the time, the distribution of energy was provided by 41% natural gas, 27.6% hydroelectric, 14.9 petroleum, 13.6% coal, 2.1% wind, 0.6% biomass, and 0.2% solar.

Despite these seemingly abundant numbers, according to the Energy Information Administration, the average price of residential electricity in Alaska is 22.86 cents per kilowatt-hour as opposed to the national average of 15.96 cents per kWh.

Pair this with the volatile nature of fuel prices that power and heat rural Alaska, with prices running as high as $15 per gallon in some of the state's most remote communities and hundreds of thousands of gallons needed as generally rural areas only receive one shipment per year, it is basically the largest part of a village's fiscal year.

Many rural areas also rely solely on million-gallon diesel tanks to provide the necessary power needs for their communities, so it can be imagined how much energy costs for these places.

While more well-connected towns and villages have begun supplementing their energy needs with wind and solar, this ignores the heat production needed to keep these places warm during the frigid winter months.

In the more populace region of Alaska, a grid known as "the Railbelt" that extends from the Kenai Peninsula through Anchorage and all the way up to Interior Alaska's Fairbanks serves about two-thirds of the state's residents.

For Interior Alaska, coal is still the only truly viable power supply for the region as it provides the necessary heat to survive the negative 40 Fahrenheit or below temperatures in the winter. Quick fun fact, Alaska holds the extreme U.S. record low temperatures for every month except September and October.

While it is admirable to want renewable power generation everywhere, wind and solar cannot do it all.

Thus, the discussions around the Alaska Sustainable Energy Conference were more than just replacing current energy production but supplementing and improving it so that it can cause less damage and provide the most good for people and the environment.

Energy supply was split between modular nuclear reactors that could possibly replace the diesel tanks, geothermal that could provide stable baseload power to backbone intermittent energy production like wind and solar, hydrokinetic, hydroelectric, possible hydrogen production, battery storage, etc.; basically, every technology at the forefront of renewable can be implemented in some form or fashion in Alaska.

Over the years, regional utilities have continued to strive toward more reasonable prices for their members by innovating, by navigating permitting for land development, such as the Bradley Lake hydroelectric plant – the current largest hydroelectric facility in Alaska, accounting for 27% of the state's power – but most importantly by partnering with other utilities to solve problems unique to each region in a concerted effort to combat prices.

However, to meet the zero-carbon goals of the future, development has to happen now and with the roadblocks impairing that development in the form of policy, as it stands now, it will not happen.

Mining to build America

The transition to zero-carbon energy is a noble goal. If resource development and energy consumption can mitigate and even eliminate damage or risk to the only home humanity has, it is a win – no one wants to come home after work to sleep in garbage.

Yet, this noble goal is little more than a pipe dream, with the requirements of the technology contingent on resource development or, more specifically, mining.

Alaska is where it is today due to resource development, and Alaskans want to develop more of its resources and in a way that doesn't turn the state into a landfill.

Alaska serendipitously holds 49 of the 50 minerals and metals deemed critical to the United States and others not on that list, such as copper and silver, but are critical to the low-carbon future.

From zinc and germanium already being produced at the Red Dog Mine in far Northwest Alaska to the cobalt-enriched copper deposits in the Ambler Mining District, the largest graphite deposit in the U.S. found on the Seward Peninsula, rare earths at the Bokan Mountain project on the Southeast Alaska Panhandle, and the thousands of deposits and prospects found throughout everywhere else, the bounty of Alaska is begging to be tapped into, and now is the best time to begin the work.

If a mineral exploration project bears fruit, a mine can provide income for the state in the form of taxes and jobs for locals, but more importantly, an impetus for clean energy that can be strategically built to help rural communities if possible.

While this wouldn't be feasible for every location in the state, for an exploration project such as Nova Minerals' Estelle project roughly 100 miles west of Anchorage, a geothermal power plant at the Crater Peak vent of Mt. Spurr would provide a minimum of 10 megawatts of baseload power to the Railbelt grid as well as a future facility at Estelle if it were ever to begin production.

Incentivizing energy development through the lens of mineral development, while a little roundabout, is perhaps the best current method to capitalize on that energy, as those very minerals and metals would be needed to construct such technologies – so why not create a possible creditable action for such raw material production to further incentivize it?

Mining to power Alaska

If incentive is needed to provide ample motive for development, Alaska need only lean into what it knows – its resources.

Already navigating the rough waters of policy, mining has established that incentive by its very nature. Dozens of mining companies have already made the leap to begin development, despite the red tape it wades through.

Due to the growing pressures of investors looking for conscientious operations, miners are now held to higher environmental, societal, and governance standards – which Alaska has already been implementing for decades.

Even with these expectations, the allure of rich lodes to develop far outweigh the complex regulatory and ESG landscape mining companies must now navigate.

With a mine to be developed, all the factors needed to be considered to complete a supply chain from mine to market could be used in and for itself to further develop the mine if stipulations for energy production with its mined resources were retained toward those clean energy technologies.

Perhaps wishful thinking, but much like the tax credits toward electric vehicles requiring resources to be sourced domestically or from allied nations, it would not be too farfetched to employ a similar system for mining companies if they directed some of their resources to clean renewable energy, therefore accomplishing ESG standards and creating a foundation for future generations to benefit as much as the miner has from the resources the state shares.

With ideal geothermal, tidal, and onshore and offshore locations for wind energy, and all the materials needed to build next-generation energy production, Alaska is easily the scaffolding to build a model for the rest of the United States on how to implement renewable technologies.

Because if it can be built here, it can be built anywhere.

 

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