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Alaska Geothermal Power Can Fuel U.S. Indo-Pacific Strategy

Opportunities on the Pacific Rim can kick-start a critical sector.

By Gabriel B. Collins, a fellow at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy and a senior visiting research fellow at the Oxford Institute for Energy Studies.

A frozen landscape surrounds the waters of Prince William Sound in Valdez, Alaska.

A frozen landscape surrounds the waters of Prince William Sound in Valdez, Alaska, on April 1, 2004. David McNew/Getty Images

Strategic energy technologies often start small but can scale quickly with judicious front-end policy support if they possess competitive thermodynamic and technological advantages. Since World War II, the U.S. Defense Department and other agencies have played key roles in helping nuclear power, grid-size batteries, and other new energy concepts achieve commercial scale. Geothermal energy development now presents the next such development opportunity. As the U.S. Energy Information Administration explains, “[t]he slow decay of radioactive particles in the Earth’s core” creates hot rock and subsurface water that can be tapped for direct heat and to create steam energy that spins turbines and generates electricity.

The Pacific Rim is one of the world’s most promising prospective places for expanding geothermal power development, with advantages for both local energy security, emissions reduction, and U.S. geoeconomic position. Alaska can anchor this new geoeconomic energy vector. America’s largest and westernmost state features strategically located ports, cities, and current (and likely future) military facilities that often sit atop or near areas of high geothermal potential.

Strategic energy technologies often start small but can scale quickly with judicious front-end policy support if they possess competitive thermodynamic and technological advantages. Since World War II, the U.S. Defense Department and other agencies have played key roles in helping nuclear power, grid-size batteries, and other new energy concepts achieve commercial scale. Geothermal energy development now presents the next such development opportunity. As the U.S. Energy Information Administration explains, “[t]he slow decay of radioactive particles in the Earth’s core” creates hot rock and subsurface water that can be tapped for direct heat and to create steam energy that spins turbines and generates electricity.

The Pacific Rim is one of the world’s most promising prospective places for expanding geothermal power development, with advantages for both local energy security, emissions reduction, and U.S. geoeconomic position. Alaska can anchor this new geoeconomic energy vector. America’s largest and westernmost state features strategically located ports, cities, and current (and likely future) military facilities that often sit atop or near areas of high geothermal potential.

To realize this potential requires financing “first of a kind” demonstration projects that, if successful, can de-risk the resource and catalyze broader regional scale-up. Achieving eventual multi-gigawatt scale would both enhance U.S. strategic resilience and, critically, the strategic resilience of allies such as Taiwan who face coercion, especially over energy, by China. Key government agencies’ substantial facility footprints, need for resilience, and ability to underwrite power purchase agreements can make them transformative early adopters.

There appears to be the political will to get this done, with Ravi Chaudhary, the U.S. Air Force assistant secretary for energy, installations, and the environment, saying in September 2023, “Geothermal sources strengthen our energy grids and give us the ability to isolate threats before they impact our operations. This type of capability will translate into victory in a high-end fight.”

Alaska’s geographic importance coincides with emerging U.S. technical excellence. Geothermal power, like high tech and aerospace, is a sector of American competitive advantage that can be leveraged as part of a broader energy abundance agenda in a region that is leading global energy transitions. In the geothermal space, firms such as Eavor, Fervo Energy, GreenFire Energy, Sage Geosystems, Teverra, and Zanskar Geothermal and Minerals are developing cutting edge approaches that leverage the massive subsurface expertise and experience U.S. companies have built through drilling and fracking tens of thousands of shale oil and gas wells over the past 20 years.

The new generation of enhanced geothermal wells use cutting-edge oil and gas techniques including horizontal drilling, hydraulic fracturing, and distributed fiber optic sensing to monitor reservoir conditions. They also dramatically expand the number of locations suitable for geothermal power development and, because well pairs can be added modularly, help manage project developers’ financial risk.

U.S. firms enjoy unique competitive advantages here, ones that if harnessed through smart policy can help advance energy security interests on our own soil in Alaska and the Aleutians, as well as in Japan, Indonesia, the Philippines, and Taiwan.

Geothermal energy offers the 24/7/365 baseload electricity supplies that countries need for building out and operating competitive industrial bases. Because it can continually run regardless of weather or sunlight, every megawatt of geothermal power that comes online can displace coal, gas, or oil-based dispatchable generation. Climate benefits follow. Furthermore, unlike hydropower and many other thermal power plant types, geothermal is substantially decoupled from drought risk. It is also potentially capable of load-following to fill gaps in wind and solar generation, a capability that Sage Geosystems has recently demonstrated at megawatt-scale.

Geothermal generation’s engagement of physical heat also opens possibilities for supporting food cultivation in greenhouses and distillation of seawater. Where warranted by remoteness (Aleutian Islands) or by strategic circumstances (Taiwan), geothermal power can also potentially support green hydrogen production and liquid fuel synthesis.

Geothermal power also brings security benefits. Policymakers are recognizing in the wake of Russia’s invasion of Ukraine that during industrial warfare, energy assets can and will be targeted. Fossil fuel generation facilities on islands are the most vulnerable because an adversary can trigger blackouts through interdicting seaborne fuel imports and does not even need to strike on land to create potentially strategic effects. This is true for vital U.S. territories, including the Aleutian islands of Unalaska and Adak; Shemya Island; Guam; and Hawaii.

For Taiwan, which faces the real risk of a blockade by China, each gigawatt of geothermal power brought online could, potentially displace about 1.25 million tons per year of liquified natural gas imports, or roughly 6 percent of the island’s total import volume in 2023. That estimate assumes that the geothermal facilities run at a 90 percent utilization rate and that the LNG would have been used to generate electricity in modern combined cycle power plants with a 50 percent thermal efficiency.

Geothermal projects could be sized to power all, or at least a major part, of some of these key islands’ electricity needs in way that helps resist potential blockades. Geothermal also has the advantage of being less politically controversial than nuclear power and, unlike contemporary nuclear generators, can be deployed in increments more modularly sized to the local market.

Accelerated geothermal energy developments in the Indo-Pacific, perhaps backed by the U.S. International Development Finance Corp. or Office of Strategic Capital as part of a low-carbon energy abundance package, would also offer a template for U.S. firms to play leading roles in Latin America and East Africa, two other priority regions that are—pun fully intended—geothermal power hotspots. The potential global addressable market in key regions of interest encompasses tens of gigawatts of generation capacity at the outset—a major commercial and strategic opportunity. If the first advanced geothermal projects pan out commercially, the market space would likely expand substantially.

Present energy security concerns, geopolitical conditions, and the apparent readiness of new geothermal approaches suggest the timing is propitious for a test case that puts U.S. policy muscle behind emerging domestic geothermal technological excellence. Alaska and the Aleutian Islands, in particular, offer an excellent starting point.

All modern energy systems need baseload power—resources that deliver when it is dark, subzero, stormy, etc. In the highly volcanic Aleutians’ case, this would ideally be geothermal power. The idea of geothermal in the Aleutians is not new; in the 1970s, the Navy studied using geothermal power to replace about half of Adak’s requirements which, at the time, totaled nearly 9 million gallons of imported JP-5 jet fuel per year The geological potential is real, with temperature gradients of 80 degrees Celsius per kilometer of depth on the north end of Adak Island that exceed those found in Utah where Fervo is now developing a utility-scale enhanced geothermal project with a 400 MW capacity.

The backdrop features both strategic and commercial drivers. Enter Dutch Harbor, the main settlement on Unalaska and the United States’ largest fisheries port by volume. Unalaska offers a combination of major volcanism and corresponding geothermal power potential, strategic position, and local desire to find energy sources better than expensive and polluting diesel power generation. Unalaska’s annual diesel fuel needs for power generation can run as high as 3.6 million gallons per year, which at a diesel cost of $4 a gallon means more than $14 million annually. In addition to high costs, diesel generators release substantial air emissions and bring with them the risk of fuel spills, which threaten sensitive local ecosystems and are challenging to remediate in the harsh Aleutian environment.

The area has long been recognized as a potential geothermal hotspot, with the Ounalashka Corp. saying that 11 previous development attempts having failed for various reasons to bring a project to fruition. In the latest incarnation, Ounalashka Corp. has partnered with Chena Power to try to commercially develop a 30 MW geothermal power project utilizing subsurface hydrothermal resources associated with the Makushin Volcano on Unalaska Island. Adding next-generation projects on Unalaska and its neighbor Akutan could allow the area to potentially become a major geothermal hub, creating sufficient energy abundance to go beyond just displacing local diesel generation.

The commercial case includes avoidance of steep fuel costs, cost-effective and ecologically-friendlier support for additional seafood processing plant expansions, desalination of seawater, local cultivation of fresh vegetables in greenhouses, and potentially, even producing liquid fuels based on green hydrogen. Current geothermal power development attempts on Unalaska now have a higher probability for success because the stakes in local energy security in the Aleutians, and more broadly for the United States and its allies and partners around the Pacific Rim, are higher than they have been for decades.

The Aleutian Arc offers incredibly strategic real estate—with at least three militarily relevant operational airfields on Unalaska, Adak, and Shemya that are within seven flight hours of all key flashpoints in East Asia. Nome, which sits north of the islands, is now in the early stages of a $600 million upgrade to create a deepwater port capable of handling any U.S. Navy vessel other than aircraft carriers. And to the south, the U.S. Coast Guard recently announced that it will homeport its new Arctic icebreaker in Juneau, a vessel that will steam near or between various Aleutian Islands each time it heads into the high north. Russia and China have in their own way highlighted the Aleutians’ importance with periodic joint warship cruises and recently, a flight into the region by Chinese and Russian bomber aircraft.

There is also potential for re-opening the Navy base on Adak that was closed in 1997 and for expanding facilities in Shemya, which already hosts key early warning radars. Other islands in the chain—including Attu and Kiska (which Japan seized in 1942), Amchitka, Atka, and Tanaga—hosted facilities in World War II; in Attu’s case, as recently as 2010, when Casco Cove Coast Guard Station closed. These footprints could be re-provisioned. The islands also offer a barrier to keep Chinese submarines from accessing the Bering Sea (just like the NATO focus on the Greenland-Iceland-U.K. Gap in the Cold War), and in the future, could offer bases for long range land-based strike systems. All these concepts require abundant energy to achieve the resilience needed to weather the unfolding United States-China cold war and, if necessary, actual kinetic conflict.

Aleutian geothermal resources, through both the legacy project at Makushin Volcano and future projects using next generation approaches, would turn the Dutch Harbor area into an Aleutian energy hub. If it succeeds, similar approaches can likely be used further west at Adak and Shemya. Successful Aleutian geothermal projects can also provide templates usable around the Indo-Pacific (especially in Taiwan, Japan, and Indonesia) and potentially in other regions of interest with rich geothermal resources, such as Central America and East Africa.

The intense competition unfolding in the region means time is of the essence. A U.S. Energy Department analysis notes that to achieve commercial scale in the next generation geothermal space, early-stage developments will likely require “unique developer classes with strategic motivations” who “will likely fund projects entirely with equity.”

The Energy Department estimates that at present, a 30 MW next-generation geothermal project of the type needed in an Aleutian context likely costs about $450 million to complete all surface and subsurface work. Such a project could be built with a combination of a grant and a low-interest federal loan, on the condition that development emphasizes next generation geothermal technologies of U.S. origin. Abundant geothermal energy could revolutionize Aleutian energy supplies and set the stage for a broader geoeconomic push to scale new geothermal opportunities in Taiwan, Indonesia, the Philippines, and elsewhere across the Indo-Pacific to the benefit of partner and U.S. interests alike.

This article exclusively consists of the author’s personal views and does not reflect the assessments or positions of any entity he is associated with.

Gabriel B. Collins is a fellow at the Center for Energy Studies at Rice University’s Baker Institute for Public Policy and a senior visiting research fellow at the Oxford Institute for Energy Studies.

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