Company planning 400 Megawatt power plant and coal mine near Skwentna asks support from borough

Alaska companies are working on plans for a large coal mine and a 400 Megawatt power plant in the Skwentna area of the western Matanuska-Susitna Borough.

Terra Energy Center, an affiliate of Alaska-based Flatlands Energy, would build carbon capture technology into the power plant, resulting in an environmentally clean coal project, Chad Schleucher, Terra Energy’s general manager, told the Matanuska-Susitna Borough assembly Feb. 4 in a briefing.

The carbon dioxide to be extracted from emissions at the plant would be transported by pipeline to Beluga and stored in unused reservoir space in the gas field under a new state program encouraging carbon capture and storage.

Schleucher asked the assembly Jan. 4 to support the company’s application for a $400 million U.S. Department of Energy clean coal technology grant that the U.S. DOE will make available.

The Alaska Industrial Development and Export Authority, or AIDEA, the state’s development finance corporation, is considering a role in helping finance the power plant, its director, Randy Ruaro, said at an energy briefing in January held by Alaska Gov. Mike Dunleavy.

The coal power plant, assuming a 400 Megawatt capacity, is estimated to cost $2.2 billion in a preliminary cost estimate with an added $1.3 billion needed for the carbon capture facilities, according to materials presented by Terra Energy to the assembly.

Schleucher said Flatlands has been working on its exploration of state coal leases in the area for six years and has identified 521 million tons of subbituminous coal with low sulfur.

The coal is similar to large known resources in the Nenana Coal Fields further north, where Usibelli Mine Inc. now operates Alaska’s only coal mine.

Flatlands, Terra Energy’s affiliate, has also done extensive environmental baseline monitoring in preparation for filing permit applications for the mine, Schleucher said.

Terra Energy expects plans to file its application for the U.S. DOE grant in July, he said.

Terra Energy and Flatlands have been working with the University of Alaska Fairbanks on studies of the economic feasibility of the mining and carbon capture and including the cost of a 60-mile pipeline to move captured CO2 to the Beluga field for injection as well as transmission lines needed to connect with the regional power grid, also at Beluga.

Southcentral Alaska, where half of the state’s population resides, is in need of new power because natural gas, which fuels most generation of power, will be declining in availability because producing gas fields in Cook Inlet are being depleted.

Electric utilities in the region, which include Chugach Electric Association and Matanuska Electric Association, are working on new wind and solar projects to help offset the expected declining gas and are also working on a plan with Enstar Natural Gas Co., the regional gas utility, to import liquefied natural gas.

Schleucher told AEA’s board that so far the studies indicate that power from the proposed coal-fired power plant with carbon capture will be less expensive than wind power projects that require natural gas power generation to kept on standby to assure reliable power.

The remote location of the coal, and site of the plant, are challenges for Terra Energy and Flatlands Energy, however. The location near Skwentna is without road access. However, the proposed mine and plant are well located to serve Southcentral Alaska communities as well as mining projects that are being developed in the region.

Those include the large Donlin Gold project under development by Barrick Gold, as well as gold deposits being ecplored by NovaMinerals, an Australian company.

Lack of a road by itself is not an insurmountable problem, according to people familiar with the project. Chugach Electric built its large Beluga power plant, where the gas field is also located, in the 1960s without a road. There is still no road to the Beluga plant.