GeoAlaska’s proposed geothermal energy exploration project on Mount Augustine in lower Cook Inlet has been selected by the U.S. Department of Energy to receive up to $8 million in federal grant funding. The Anchorage-based company aims to determine if the active volcano can serve as a long-term, renewable power source for the region.
Federal Funding and Project Scope on Augustine Island
The U.S. Department of Energy announced that GeoAlaska is among 21 recipients nationwide selected for a share of more than $99 million in potential funding. The program supports geothermal field testing and exploratory drilling. Mount Augustine is the sole Alaska-based project selected in this round, joining 16 projects across 10 states targeted for exploratory drilling.
The grant money is not yet guaranteed. The Department of Energy must first verify that GeoAlaska holds the proper leasing for the site, and the final grant amount has not been finalized. Paul Craig, CEO of GeoAlaska, noted that securing financing for exploratory drilling is notoriously difficult. “People just don’t want to put their money at risk for exploratory drilling,” Craig said regarding the challenges in both the oil and geothermal sectors.
Established in 2020, GeoAlaska first obtained a permit from the Alaska Department of Natural Resources in 2021 to explore a geothermal system on Mount Spurr, an active volcano located 80 miles west of Anchorage. The company secured a geothermal prospecting permit for Mount Augustine in 2022 and partnered with Texas-based Ignis Energy LLC the following year to advance development on both mountains.
Volcanic Geology and Exploration Plans
Mount Augustine sits on Augustine Island across Cook Inlet from Homer, roughly 175 miles southwest of Anchorage. The rocky, barren island consists largely of volcanic deposits, presenting few environmental obstacles like wetlands that typically complicate energy development.
GeoAlaska research and historical data from the U.S. Geological Survey indicate a magma storage zone beneath Augustine Island starting at approximately 2 kilometers below the surface. “The biggest risk in any geothermal project is heat. Is there heat in the ground?” Craig said. “Heat is not a risk at Augustine. We will encounter heat. The question is at what depth.”
With federal backing, the company plans to drill a coring well to collect rock and fluid samples, temperature readings, and geophysical data. The Energy Department mandates that information gathered from Augustine Island and other grant-funded sites nationwide be made publicly available to assist researchers and industry members with future geothermal exploration.
The project involves drilling wells at two depths. Test results will determine the appropriate technology to access the energy. If drilling intersects fractured rock containing very hot water, the fluid can be brought to the surface to generate steam and drive turbines. If the drilling encounters solid rock, the company can pump fluid down to absorb underground heat and carry it back to the surface.
Potential power distribution options include connecting Augustine Island to Alaska’s power grid via a high-voltage direct-current cable running to the mainland. Another possibility involves using the geothermal energy to produce aviation fuel by recycling carbon dioxide and combining it with hydrogen. “It’s this massive magma storage zone, and if we can figure out how to extract heat from the zones above that area, and produce power from it, there’s no decline curve. It’s in perpetuity,” Craig said.