Companies will soon be able to bid on opportunities to tap a volcanic island in Cook Inlet to generate renewable energy.
Alaska officials have scheduled a geothermal lease sale covering a little more than half of Augustine Island, which consists almost entirely of 4,133-foot Augustine Volcano. The state Division of Oil and Gas will start accepting bids on April 3 for leases, the division said in its sales notice.
The lease sale is offering 24 tracts spread out over 55,700 onshore and offshore acres. The onshore acreage comprises the north side of the island. The southern side of the island is not available. Anchorage-based GeoAlaska already holds licenses there and has an exploration program underway.
Augustine, about 175 miles southwest of Anchorage and about 70 miles west of Homer, is one of the active, ash-spewing volcanoes that have occasionally disrupted air traffic and communities in the Cook Inlet region.
Its last explosive eruptions came in a series from late 2005 to early 2006 and resulted in diversions of air traffic, according to the Alaska Volcano Observatory, the federal-state office that monitors Alaska’s numerous active volcanoes. A previous series of explosive eruptions in 1986 sent ash to Anchorage.
Additionally, Augustine has been shaken at various times by swarms of earthquakes that are signs of unrest, most recently in 2016, according to the Alaska Volcano Observatory.
The division scheduled the lease sale after three different companies expressed interest in exploring Augustine’s geothermal resources.
Geothermal energy is the heat within the ground. It is considered renewable because it is produced continuously by geological processes.
Alaska has abundant geothermal resources. One source is the string of active volcanoes that stretch from Southeast Alaska to the Aleutian Islands, including Augustine and other Cook Inlet volcanoes.
“We’ve got a lot of potential. We do have a lot of volcanoes,” said Sean Clifton, a policy and program specialist at the Division of Oil and Gas.
Other sources of geothermal energy are the hot springs that thread through much of the state, from Southeast Alaska to the Bering Strait region.
It is too early to know whether companies will take the new opportunity to explore Augustine, Clifton said.
More broadly, there are signs of strong interest in geothermal development, he said. That is despite the change in presidential administrations from the pro-renewable policies of former President Joe Biden to the fossil-fuel emphasis of President Donald Trump, he said.
Some federal geothermal incentives remain in place, Clifton noted. “There are still federal programs that I don’t think are threatened by any of the recent changes in the new administration at the federal level,” he said.
And Alaska’s terms for this lease sale should be attractive to bidders, he said. He cited the “really low royalties” paid to the state, set at 1.75% for the first 10 years and 3.5% for the years thereafter, and “really low rental rates,” set at $3 per acre.
To date, there has been limited Alaska geothermal energy development.
The best-known site is the Chena Hot Springs Resort near Fairbanks, where all power is generated by the springs’ heat. Geothermal energy has also been used sporadically since the early 1900s for small-scale farming at Pilgrim Hot Springs near Nome. Farming there was revived in recent years.
Attempts to harness geothermal energy at some Alaska volcanoes have not yet resulted in any energy production for communities.
Along with Augustine, 11,069-foot Mount Spurr, about 80 miles west of Anchorage, and 5,905-foot Makushin Volcano, 16 miles from Unalaska, have been subjects of exploration projects over recent years. Some projects are ongoing.