Saturday, September 21, 2013

Utilities, state say $1B needed for grid upgrades

Tim Bradner
Alaska Journal of Commerce

The $359 million, 180-megawatt Southcentral Power Project owned by Chugach Electric Association and Municipal Light and Power held its grand opening earlier this year. The project is part of more than $1 billion in upgrades either under construction or completed in the regional electric grid.

Electric utilities in the Interior-Southcentral region known as the “railbelt” are studying plans for $1 billion in necessary upgrades to the regional electrical grid. This is on top of $1 billion in new power generation plants that have been built or are under construction, state and utility officials told an energy conference Sept. 16.

“The generation system is keeping pace with growth, but the transmission system is not,” Gene Therriault, deputy director of the Alaska Energy Authority, told the World Oil and Gas Congress meeting in Anchorage.

Matanuska Electric Association General Manager Joe Griffith said there are bottlenecks in a creaky transmission system.

“We can get power through the system, but not always when it is needed,” to allow utilities to optimize and run equipment most efficiently, he said.

Therriault cited an example with Golden Valley Electric Association, in the Interior.

“GVEA owns a share of Bradley’s (hydro) power but it can’t get it when it needs it,” to offset high-cost power, he said.

About $402 million in upgrades are needed in the southern part of the railbelt power grid, from Healy to Homer, and about $481 million in improvements are needed on the northern end, from Healy to Fairbanks. Another $20.5 million in projects are also needed in the Anchorage area.

The projects, and costs, are outlined in a consultant study completed in May 2013 for the AEA.

Therriault said the energy authority is discussing a plan for the utilities to finance the upgrades with debt, possibly revenue bonds sold by AEA’s sister agency, the Alaska Industrial Development and Export Authority, or AIDEA. That agency has new authority to finance energy projects and infrastructure with long-term, low-interest debt.

Despite the costs, the benefits of improving the system will be considerable for ratepayers, ranging from estimates of $146 million per year to $241 million per year.

The estimates assume the upgrades are funded with 30-year debt at 5 percent, and no direct financial contribution from the state.

Decisions on the upgrades will likely include an agreement among the utilities for a single system operator to coordinate the dispatch of power through the grid, he said.

Hopes are the plan can be agreed on by the end of the year, Therriault said, so that legislators can be briefed when the Legislature convenes its annual session in January.

If the planned large hydro project is built at Watana, on the upper Susitna River, its power cannot be efficiently distributed until the transmission system is upgraded, Therriault said.

Griffin said the transmission upgrades are really the unfinished business of agreements by the state and railbelt utilities in 1985 to finance the Bradley Lake hydro project near Homer. The dam was built, but oil prices, and state revenues, unexpectedly plunged, so the transmission upgrade to go with Bradley Lake was never finished.

“It was left to finish later at a far higher cost,” Griffin said.

The utilities have stretched their wallets with hefty expenditures on new power plants.

“We are out of debt capacity,” he said. “The state will have to help us.”

Consumers will ultimately pay for the new generation upgrades and, if it is financed with bonds, the transmission upgrades, through higher rates to pay off the debt.

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Friday, September 6, 2013

Pioneer sees good results from North Slope fracturing wells

Tim Bradner
Alaska Journal of Commerce

Pioneer Natural Resources is pleased with results of its large-scale fracturing of producing wells at the Oooguruk field on the North Slope.

Three producing wells were fractured in the first half of 2013 with production doubling in two wells and tripling in a third.

“We’re very pleased with the results, and we plan to fracture four more wells next year,” Pioneer spokesman Casey Sullivan said Aug. 30.

The three production wells were fractured following a successful test fracturing in late 2012 in a production test of an exploration well near Oooguruk.

The production figures were presented by Pioneer to financial analysts Aug. 1, Sullivan said.

All three wells are producing from the Nuiqsut formation, one of two formations that are tapped at Oooguruk.

Prior to fracturing, the Oooguruk wells produced in the range of 500 barrels per day to 800 barrels per day. Following the fracturing, two of the wells fractured in the early spring increased output to an average of 1,500 b/d and a third well fractured in late spring increased output to 3,000 b/d and sustained the rate for 40 days, according to information presented to analysts. The well is currently shut-in for maintenance.

A 2012 test of large-scale fracturing on a test well drilled into the Torok formation, which Pioneer hopes to produce from in its planned Nuna development.

The well flowed at 2,800 b/d, according to data given the analysts. Nuna is a potential new project near Ooguruk that is onshore, in the Colville River delta northeast of ConocoPhillips’ producing Alpine field.

Ooogouruk is owned 70 percent by Pioneer and is field operator, with 30 percent owned by Italian major Eni. The field produced 4,000 barrels per day net to Pioneer in the second quarter of 2013, according to the information presented to analysts.

Nuiqsut formation wells have had mixed results at Oooguruk, while production from the Kuparuk and Torok formations, being produced, has met expectations, a Pioneer official told a meeting of the Alaska Geological Society last April. The Ooogurk field is offshore, in shallow water, just north of the shore and Nuna’s location. Pioneer will make a decision on whether to develop Nuna later this fall, Sullivan said.

Smaller-scale fracturing has been done for years in North Slope fields but Pioneer’s tests were the first large-scale, multi-stage fracturing jobs. The company adapted the technique from similar procedures used by Pioneer in drilling of wells in the Eagleford shale and similar formations in Texas.

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Wednesday, September 4, 2013

I'm going to make this place (Alaska) your "home"

Deborah Brollini
Alaska's Energy Diva

One thing I have most enjoyed about my Thoughtful Thursday outreach has been spending time with Alaska’s youth, and young people. Their energy, and optimism is infectious. We could learn a lot from them if we would just get beyond our own baggage and opinions.

Our children continue to charge on in life with cheerful and generous hearts despite the painful world we have left them. This generation has witnessed evil to its highest degree and they have chosen to be joyful, dream, and be optimistic about their futures.

My daughter’s best friend’s father passed away last year, and she does not have a chip on her shoulder. She is a child, a senior in high school, and she continues to work everyday to contribute to her family, DREAM of college and “getting the heck out of here.” She has not allowed the loss of her father stop her from pursing her dreams. I’m not sure this young woman knows that I will move heaven and earth to make her dreams come true. This kid has a grownup in her corner.

It is a sad that we the grownups of the world sit around shaming each other because we want to be right rather than reaching out to find common ground and find solutions. We owe it to our youth to put our big boy shorts and big girl panties on and start acting like the grownups that we are.

I attended the Phillip Phillips concert on Monday surrounded by youth and American Idol fans. I am always amazed how music can bring people and generations together. My daughter bought me tickets to the concert for Mother’s Day. She knew I loved this kid because he is talented, grounded, and committed to excellence. My daughter may never know why I listened to “Home” thousands of times… over, and over, and over again. I listened to keep me focused and to keep Alaska her “home."

I hope our young people keep ignoring us, and keep on dreaming BIG! ________________________

Thoughtful Thursdays Alaska

Organizing for Alaska