Trump announces investment in Alaska coal power project
The Department of Interior, the Environmental Protection Agency, the Export-Import Bank and the US Trade and Development Agency announced “historic investments in energy infrastructure, critical minerals, and advanced technologies” from 17 countries. The total value of the announced foreign investments is $56 billion, according to US representatives.
Part of the proposed investment is $1 billion towards a new 1.25-GW coal-fired power plant in Alaska. The agreement for the boilers is with South Korea-based Hyundai Heavy Industries Power Systems. Further, the administration announced that KOREIT, a Korean private equity firm, will also provide a $500 million equity investment in the project.
The project, known as Terra Energy Center (formerly known as Railbelt Carbon), is being developed by Flatlands Energy, a Canadian company.
The coal mine and plant are planned to be built in an area called Susitna Coal Basin, which is about 60 miles northwest of Wasilla. This is part of what is to be the Susitna Industrial Project, located next to the Susitna River, north of the Cook Inlet.
The plan originally called for a proposed 400-MW coal-fired power plant with carbon capture & storage (CCS). The proposed CO2 capture, if it is part of the current plan, would be transported via a 60-mile pipeline to a depleted natural gas field in Beluga.
The coal mine
The proposed coal mine is believed to be in an area called Canyon Creek nearby the proposed power plant. In 2018, 2022 and 2025, Flatlands Energy obtained exploration permits and drilled numerous holes. Older filings show the coal reserve contains 238 million tons of lignite and subbituminous coal (originally explored by Mobil Oil in the 1970s.) Some older geologic studies compare the quality to Powder River Basin coal. There are numerous additional coal reserves in this region.
Flatlands Energy has proposed a reclamation bond in the amount of $62,741 with the State of Alaska to cover the reclamation liabilities surrounding the exploration permit.
It is unknown if Usibelli Coal is involved in this project. Usibelli Coal is the only operating coal producer in Alaska. The 1 million tons-per-year dragline mine is near Healy, Alaska. Coal is delivered to a nearby power plant as well as regional facilities, including the University of Alaska, Fairbanks and some military installations. Previously, Usibelli exported coal via a facility in Seward, served by the Alaska Railroad. However, the shiploader and coal pier were dismantled in 2019 and converted into a cruise ship terminal.
The power plant
The power plant is also being considered to augment the existing 200-MW natural gas combined-cycle plant called the Southcentral Power Project. The plant is owned and operated by Chugach Electric Association Inc. (70%) and Anchorage Municipal Power & Light (30%).
The reason for the coal plant is that the natural gas resource in the Cook Inlet is depleting and the future availability of natural gas, not only for power generation but also residential and commercial heating, has become a concern in the Anchorage region.
Hilcorp Energy of Houston produces most of the Cook Inlet’s gas under a contract that expires in March 2028. Hilcorp has warned both the utilities and the regional natural gas transmission company, Enstar, that it could not guarantee future gas supplies at the same levels.
While there is plentiful natural gas on the North Slope, it would require an 800-mile pipeline that has become a political flashpoint.
LNG has also been cited as a potential solution for the power-generating needs of the Anchorage area. However, the cost of building a regasification facility and the variable cost of LNG has become a concern. Further, transporting LNG from a US facility would be a Jones Act violation that might require purchases from non-US sources.
Why 1.25 GW?
The proposed size is multiples above the current needs of Anchorage. But apparently, Flatlands is also seeking investors for a data center at the Susitna Industrial Project.
The data center is known as Mat-Su (short for Matanuska-Susitna) and is in the Mat-Su Borough (Palmer is the county seat.) On March 11, the mayor of the borough vetoed the plan to find investors for the data center “or other high-tech facility.” It is uncertain whether the Assembly members will vote to override the veto or if the announced investments alter this situation.
There are other opposition groups, including the Susitna River Coalition.
In addition to a data center, Flatlands has ties in a proposed gold mine known as the Donlin gold mine project. Donlin is owned by Nova Minerals, a major investor in Flatlands Energy.
Will this project get built?
The $1 billion announcement by Hyundai is an “agreement in principle,” which is non-binding with an intent to proceed towards a formal contract. It is the first step in what will be a long-term project.
Then there is the permitting and construction of what looks to be a massive project in an area that exemplifies “greenfield” because of the lack of infrastructure and environmental sensitivities. There is obviously political risk, which could prove problematic over the coming years.
Regardless, Flatlands Energy’s Terra Energy Center becomes the first announced coal power plant in the US in over a decade and Anchorage’s need for electric power is becoming a major issue for the region. The only other known coal power project is Basin Electric’s previously announced feasibility study to add a unit to its Dry Fork plant in Wyoming.
Reporting by Andy Blumenfeld, ablumenfeld@opisnet.com