Alaska and Hydropower
Robert Menard
Certified Purchasing Professional,
Certified Professional Purchasing Consultant, Certified Green Purchasing Professional, Certified Professional Purchasing Manager
When you think of Alaska, what energy source comes to mind? Oil! This is not a trick question.
Although I have been fortunate to have visited this wonderful state several times while doing public seminars in the 1990s, it was not until 2012 on an extended vacation that I had the opportunity to see a modern Wonder of the World that I had studied in engineering school, the Trans-Alaska Pipeline. This 800 mile miracle heads south from Prudhoe Bay to Valdez and salvaged lives and the economy in the mid 1970s during the vicious OPEC oil embargo.
So it was with curiosity and fascination that I learned of news of the pending $5.6-B Susitna-Watana hydropower project in Alaska. Doubtless, the crash of oil prices forced a reexamination of alternatives. Since completion of the pipeline, petroleum revenues had averaged over 85% of Alaskan state revenues, according to the Alaska Oil and Gas Association (AOGA).
An Executive Order issued by Governor Bill Walker (D) limited state government spending in response to the steep drop off in petroleum prices, which in turn, brought far less revenue to the state of Alaska. The resumption of planning for this megaproject, principally a huge dam and power generating turbines, does not mean that construction is certain. Rather, the Governor’s press secretary referred to “…leave it (Susitna-Watana dam) at a point until the state’s financial position changes.”
So what does this mean for the Alaskan economy?
Leaving aside the gargantuan engineering feats and monstrous construction challenges involved, which are intriguing to those of us who are still awestruck by the Trans-Alaska Pipeline built 40 years ago, the decision marks a watershed. After almost a half century of oil dependence, the state has concluded that hedging its energy bets is the wave of the future.
Revisiting hydropower is a natural and logical consequence of free markets. With petroleum prices in a continued trough, Alaska must find alternative ways fund its treasury. Alaska my indeed decide that hydropower is the way to meet the electricity needs for 80% of the state’s population that lives in the Railbelt, a geographic corridor running from Fairbanks south though Anchorage, with more than half of the state’s residents, and on to Homer.
What about the sustainability dimensions of the decision?
Although Alaska produces huge quantities oil, it consumes only a fraction of that harvest so sustainability concerns in Alaska are not substantially impacted by a shift toward renewable fuels. Nevertheless, if Alaska can replace its fossil fuel consumption with hydro power, its sustainability profile with respect to hydrocarbon power will be improved. The 459 MW generated by the three planned turbines (with a fourth turbine that could be added in the future) would be enough to power more than 80,000 homes. That cannot be a bad thing.