This meeting of the House Energy Committee will now come to order.
The time is 1 10 p.m. on Thursday, January 2nd.
Members, President.
Present.
Representative Edgman, Representative Costello,
Representative Johnson, representative Ruffridge,
co-chair, Rep. Holland, and myself, co chair, Mears.
full house and therefore harm to do business.
I'd like to remind members,
please silence your cell phones,
but please, if you may also use them for communication
during the meeting, but, please be subtle about it.
As a reminder, to staff and members of the audience,
please do not approach the table.
If you need to pass a note to committee members
please get the attention of my committee aid,
Griffin Flush.
new to the Energy Committee, welcome Griffin.
And he will take care of it.
Importantly, I'd like to thank Cheryl Cole returning to us
this year as the House Energy committee secretary.
We have Zach Lawhorn in the back, along with Renzo Moises
from the Juneau LIO for Tech and teleconferencing.
Welcome.
I also want to mount welcome. We've got two new members to the Energy Committee this year,
Representative Johnson and Representative Ruffridge. Welcome. And I do want
to acknowledge that we've a lot of leadership at the table here. I think that speaks to
the importance of this issue for Alaska.
I appreciate all of your interest in being here and working on these issues together.
I'd like to give co-chair Holland the opportunity for some opening comments before we get on
to our short agenda today.
Great, thank you, Co-Chair Mears.
And it's a pleasure to be back here again.
It seems like it has been a while,
but then it seems it is only been
a moment since we were here last.
So thank for being here and those of you
that are joining us.
A couple of things I wanted to just frame
that Co Chair Mares and I had discussed
about this committee and the work ahead of us,
this session, in terms of some broad areas
of focus and interest.
And they really build on where we
were last session.
the Cook Inlet gas supply conundrum in terms of the questions people have had about do
we have enough? Where is it going to come from? What will it cost? And that issue will
continue to be an important one I think that we should be learning about and doing what
we can to support the various efforts that are underway to able to assure Alaskans that
We're also going to continue to be looking at various new policies that are focused in
on diversifying our energy supply, but we'll be doing that looking
at a broader array of options in what that means in terms of not just renewable energy,
but other sources of energy that would help our utilities and help
stable energy supplies. So we'll be working on that diversification and the
economic growth opportunities that that represents as well as the economic
growth that it will support if we have plentiful affordable energy available.
And of course, we'll also be continuing, as we did last time, focusing in on the important
challenges of rural Alaska and their access to affordable, reliable energy and recognize
that there's also an interesting interplay that the work that we do to ensure affordable
energy in the rail belt is directly a benefit and important to rural communities at the same
helping them meet their needs, we have to work together.
And as we saw last session,
I thought it was fascinating to explore
that many of the challenges that our rural communities
have faced for decades,
in terms of worry about energy supply affordability,
are actually now the same challenges and questions
we're now looking at in the case of Click Inlet.
So we've actually come closer to being
looking at a situation that's a little more balanced in terms of understanding that where
The rail belt energy goes so does the rural and what we can learn from rural utilities
and how they've addressed their challenges
and they have diversified,
are in fact sources of inspiration,
knowledge, technology, and expertise
that we can bring into many of the work
that do in our urban area.
And I think the presentations we had last session
will be building off of that
and hoping to find new areas of common challenges
and ways to work together.
And then lastly, the opportunity for energy investments.
you know saw a significant shift during the last session and over the summer and there's exciting
right on our doorstep now, whether it's the gas pipeline,
whether its the emerging geologic hydrogen discussions,
the critical minerals that are being developed,
as well as the progress being made on new projects
that we've seen with Pika and Willow.
And of course, we got some interesting activities going on
with the geothermal and other new sources of energy
that were not seen.
fully developed in Alaska before but now we're on the cusp of seeing those being realized so
it's an exciting point for us to build on what we did in the first session and to move that
further in this second session. We have a series of bills that we'll be picking up that
the last session that will be looking at supporting each of those from the
diversified energy to net metering to rural energy fund issues the LNG imports
and I'm looking forward to all of these issues and again just want to put this
back into context of how we were able to take a lot of the work from
the first session and create the context for what I think has been some really
valuable discussions over the interim and looking
And today's discussion will be, I hope, a framing of some of the broad opportunities that are here and developing in our state now and represent I think what our future generations can be looking forward to so appreciate a couple moments of time on that and look forward
to working with all of you and co-chair during this next session.
Good segue into our energy discussion this this year with the house joint
resolution 27 we got a heavy week next week I'll talk about a little bit more
as we conclude but for now this is the only item we have on our agenda today
HJR 27 supporting state energy developed by Representative Holland
followed by invited testimony for the resolution
Coach Erhan, please head up to the table
along with your staff and introduce yourselves
for the record and begin your presentation.
Thank you. And for the record, Representative Kai Holland from House District 9 and the sponsor
of House Joint Resolution 27 and with me is staff.
Thank You, Chair Mears. For the Record, I'm Timothy Truer, House Energy Committee Aid for
Representative Holland. So to begin with the sponsored statement,
frame, though, in beginning the discussion on this resolution that was introduced at the end of the last session.
And this is actually the first hearing on the resolution.
So this essentially is the introduction of a bill that is introduced previously.
But this revolution is
Built off of the work that we did in the first session. It's built off
Of the emerging opportunities that were shared to us from a number of different companies that came and
Shared with us the working that they're doing to develop new businesses to
develop
New energy sources and develop
New technologies to meet our future energy needs and potentially even developing our Future
export opportunities particularly in hydrogen and ammonia and
referencing again the
Constitution and our role here of developing
our natural resources for the maximum benefit of the people.
And when I look at this, I think of those natural
resources as not only our traditional fossil fuel
resources and mining, but now these emerging
understandings of critical minerals and rare earth
minerals that are on there,
but also the natural resource is found in our immense
wealth of renewable energy and tidal power,
offshore, and onshore, which represent new sources of recognizing these natural resources that we have to develop in addition to what we traditionally pulled out of the ground and managed that.
these extraordinary assets really are global in scope in terms of the size of
the markets that they could be developing for Alaska in
terms with a number of jobs that could create for
Alaska and new ventures in the future and so this
resolution is really trying to pull together what we
learned from the first session.
what we gained from the presentations that we saw and the work going on in Alaska,
and was a way to begin framing how do we help bring together
many of these different
issues and opportunities, and bring clarity and focus to a comprehensive energy strategy
and an economic strategy that looks at the jobs, the value-added activities that could be built
upon these emerging areas. So we're going to run through a little bit of the structure of
the resolution, some of key points in there. And looking forward, we have three invited guests
to provide you some more specific, tangible insight to the work that they're doing that would
complement and be examples of what this resolution is helping us to become more engaged in.
And I hope out of this Resolution will come not only clarity on some of the amazing opportunities
in front of us, but I am hoping that the discussions, the hearings that we'll have in the future
on this Resolution will help bring forth some understanding of some policy areas we need
to develop that may spin off into supplemental bills or other activities that will
create the policy framing and the appropriations support for the work that is emerging in our state.
So, at this point, I turn it over to Mr. Truer, and we'll run through a little more information on the resolution.
Thank you again, Chairman Mears.
The fundamental premise of how strength resolution 27 is that we are at an inflection point in the history of Alaska's energy economy.
And yes, we face significant challenges as one indicator of those challenges,
we've faced 11 consecutive years of net out migration from the state as of 2023.
But as this committee heard through our last session,
we still have enormous untapped potential across both legacy sectors
and in emerging growth areas when it comes to energy and critical minerals.
House joint resolution 27 is an attempt to distill many of those lessons from last year's
testimony as we heard. It outlines the context of both those challenges and opportunities and
pushes us to rally around a clear set of goals for a vibrant economic future based on that value
out of support for our existing economic engines paired with smart investments in emerging sectors
but how do we know where to put those targeted investments? The statewide, the Alaska statewide
comprehensive economic development strategy for 2022 through 2027 outlines four key areas.
One, invest in energy infrastructure that lowers costs for residents and businesses,
Two, promote the development and deployment of renewable energy sources such as wind,
hydro, geothermal, tidal, and solar, as well as hydrogen energy storage systems.
Three, align energy investments with industry needs, including critical mineral processing,
data centers, fish processing and other energy intensive sectors.
And four, coordinate energy strategies
with workforce training, transportation networks,
and digital infrastructure to support economic diversification
and resilience.
Next slide.
And similarly, the Alaska Energy Security Task Force
provides guidance in how to achieve the objectives
of energy costs and security, energy security going forward.
HGR 27 is also an attempt to take the next steps needed
to turn these findings into policy.
Next Slide.
One particularly promising emerging industry for Alaska is the production use and export
of hydrogen.
As illustrated in a report from the University of Alaska Fairbanks, the Department of Energy's
Arctic Energy Office and the National Renewable Energy Laboratory, hydrogen is a versatile
or a medium for storing energy.
It can be made cleanly using electricity derived from our abundant renewable energy resources
or even through stimulating certain kinds of geological formations underground,
as you'll soon hear in some of our forthcoming testimony.
Next slide.
HCR27 directs state agencies to coordinate energy and economic planning
to achieve a series of ambitious benchmarks by 2035.
These include 1,200 new scalable ventures and associated jobs and energy and emerging sectors
generating economic activity with the goals of retaining the next generation of state
residents and attracting to the state the 30,000 working age people that we have lost over the past
decade and a half.
It also includes lowering the cost of energy for households and industries to below national
averages and building the grid and industrial base to support the state's role as an exporter
of clean energy and value-added critical mineral products.
Next slide.
To conclude, HDR27 is a commitment to a comprehensive energy in economic strategy that includes
exploration, development, and production of fossil fuels, renewables, critical minerals,
It urges the federal government to provide project and financial support and
permitting coordination for the development of the state's natural gas resources.
It calls for investing in the goals of
the SEDS to strengthen the existing economic engines of
the State while also building new sectors and
supporting alignment between federal executive orders and the statewide Seds.
encourages energy investment, providing direct benefits to underserved regions,
including affordable local power and heat, building regional energy plans
that support resilience through local and clean energy sources.
It asks the state agencies to aggressively pursue opportunities
to develop and process critical and rare earth elements using the State's clean
energy to produce the world's lowest carbon strategic minerals.
direct state agencies to coordinate energy and economic planning to create those 1,200
new scalable ventures and associated jobs in energy in emerging sectors that generate
economic activity with the goals of retaining the next generation of state residents.
And it champions a unified voice in supporting the state's full development potential, both
domestically and internationally, to ensure that all public and private sector efforts
We are deeply fortunate to have three invited speakers that will provide further context and real-world examples of what HDR 27 seeks to amplify in Alaska
H.R. 27 highlights the abundant renewable energy potential in Alaska, including geothermal,
as I mentioned.
Paul Craig is here and will share his work leading geolaska, who are developing geothermal
resources on Mount Augustine and Cook Inlet.
Next, we will have, calling in Paul Foos, whose long led the charge in developing Alaska's
emerging energy opportunities and brings a rich perspective on the past, present, and
future of Alaska�s economy.
for future economic opportunity in Alaska.
And we are very fortunate to have Dr. Lorna Ortiz,
founder of GeoKilm, calling in and who's going to share
her, the work her company has done
in taking less than 200 oil and gas industry
to produce hydrogen underground.
And they are looking here in Alaskia.
Thank you for your time, Chair Mears.
I appreciate the opportunity to introduce this resolution
and invite any questions from the committee.
Thank You.
Any questions now?
Are we going?
Formulate our thoughts and get them later. It looks like we're gonna ask questions later
Oh
Representative Edgman
Yeah, thank you for the presentation. I'd like the comprehensive nature of
Resolution
There's a lot of where as is in it, which is great a
lot, of further resolves and I guess fiber to
if you read this a little closer, I could answer my question,
but I think I'll take advantage of being at the table
and ask who would be the primary audience of this?
Is this, it's been said over the years
a joint resolution can be just a memo to ourselves
sort of thing, but,
I noticed obviously this has a wider audience
because it goes to a lot of people with federal side.
Is it a message?
Is is a coordinated
comprehensive vision type of a message from the legislature to the federal government, is that what this does?
Great.
Thank you for the question, through the co-chair mirrors, Representative Edgman.
If I had to pick a place where this message is aimed, I might have thought that if we had a commissioner in a department of energy,
to that, which is to say right now this message, I hope, is one that while it is intended to be conveyed to the president because it does recognize the executive orders of the federal government and their critical role in supporting some of
the projects, so the message needs to
be
to our federal agencies that are providing coordination but it also needs to be a message
that goes to some of our key commissioners and their role in supporting and guiding some
of the investment tools that we have in terms of providing investments like Al Yaskam for example
that has been a strategic opportunity to begin doing value-added processing on the
North Slope. I think it's also a message to the university to look at their programs and what
they're doing to develop new technologies and to accelerate technology transfer and commercialization
of the work that they are doing. For example, in their research findings in the geologic hydrogen
coordination at the federal level.
There's a message of coordination
at state administrative level,
and there's message here to some of our state enterprises
and organizations like Aida, like our university.
It is intended to fundamentally address the fact
that we are highly fragmented right now in these issues,
and that's one of the aspects of this that
both creates this broad scope, but also I hope brings in some discussion down the road of
how could we provide more clarity and more unity in the priorities and the investments
would suggest not gone as far and fast as they might have because we don't have
any one person to send this message to. And so it is diffused. So I'm trying to
bring some awareness to that but those would be some folks that I hope this
message resonates with and that we might seek ways to align our activities.
you know, Alaska, having a energy policy and on codified section of whatever part of statute is.
I can't remember. It's been there for during your 20 years because we worked on it in the room next door back in 2010.
But would that be part, the goal of something of this, and I also, you
know we sit here and
face the budget realities of course that are in front of us and knowing that the
renewable energy grant fund right now is zero-funded right which is a travesty
that shouldn't be the case but it is is that sort of part of the purpose of
this too like in terms of action items thank you for the question through the
On the books, as you noted, it's uncodified.
It has also not been updated.
It had certain threshold targets that were aspirational
when that was done, I think, 10-ish years ago.
A little vague on that, but thank you.
Yeah, so I guess it was 10 years.
So that does need to be updated,
and we are currently anticipating looking at updating that
as a part of the work we'll be doing
on a diversified portfolio standard bill.
So at the moment, this resolution is intended to give us
kind of a balcony view, a broad set of initiatives
at a federal level and to state level
and the opportunities that we've seen to a university
to get us scope and perspective.
But to the point you're making, I'm hoping that
we will recognize that there are some policy pieces
that this may help us provide some clarity on to move.
forward with and be able to update some of those policies where necessary and for example
with hydrogen to recognize that we need to actually create some new policy frameworks.
If you go back just a few years ago you'll recall that, we recognize, that didn't have
the policy framework to be to support the carbon sequestration and so there was a move
Create the policy framework that is now in the process
being promulgated to be able to manage
and develop the CCUS.
The same situation is becoming apparent over this interim
that we have the same gap in how will we support
the emerging interest and opportunity
in geologic hydrogen capture and hydrogen stimulation
and storage.
So this has been a way for us to capture some of those areas
that do need work and in some cases to be able
to see the connection over to either updating policy
like the energy policy or creating new policy
where this helps us clarify gaps.
If I could.
Follow-up.
Just close by saying that in my experience members introduce
thereafter, once approved, you know, like hand carried back the delegation or
handed to the Delegation when they come into Juneau. And one area of focus that's
a component of all this is renewable energy, which the current federal
administration has less of an emphasis on which my view is short-changing our
As we get into the debate of the nuts and bolts of their resolution,
I might have some suggestions along those lines.
Thank you for the comment.
Thank You. I appreciate that last statement as well.
We are definitely in a situation where if we can generate our power
locally instead of importing fuel, we're further ahead and all over the state.
So thank you, Co-Chair Holland, Mr. Chor.
We are ready for our first invited testimony.
We will hear from Paul Craig, CEO of Geo-Alaska LLC.
Mr. Craig please come to the table,
introduce yourself for the record
and proceed with your testimony
Do you have the slides or the packets or that have a geo?
Oh, OK.
Do your last guy, unless you wanted it up to him.
There was a slide presentation that would be helpful.
Doing it in at ease.
Sure.
Yeah.
Briefities.
Now we are back on the record. So welcome, please introduce yourself and provide your testimony
Good afternoon. Paul Craig. I'm a 46 year resident of Alaska came here for nine months, and I am still here I
am CEO of a company that I started in
2020 named Geo Alaska
I've been involved in the energy business in Alaska since 1993.
I am the majority owner of Amorok Resources, which has a Nikolai Creek unit on the West
Side of the Inlet.
I have some other assets on The North Slope and the oil and gas arena.
I'm about energy.
And I'll be about the future of energy and geolaska represents
a geothermal company, majority owned by Alaskans.
I don't have my slide show up to guide me,
but I'm going to just use,
I'll use your time efficiently
and just give you a very quick overview
of what we're doing and what our intention is.
Before I do that, I would first of all like to thank you,
co-chair Holland for inviting me to testify.
And I would like to speak in favor of House Joint Resolution 27.
I think it's a good idea to put forth this statement about Alaska's policy.
I'd also like thank DNR for all the support they have provided over
the past five years since we started with regard to developing a geothermal company,
including Commissioner Crowther.
director, Nottingham, and most importantly, the front line guy, Jonathan Schick, who is
doing the hard work to get things moving for geothermal in DNR.
And I'd also like to give special mention to somebody recently employed by Division
of Geological and Geophysical Surveys in Fairbanks.
One of the world's leading volcanologist. He's been studying Augustian Island for 40 years
He is a champion of geothermal for the state of Alaska
I'd also like to thank Governor Dunleavy for his efforts with the sustainable energy conference and all he's done on behalf of this agenda
so
Geolaska started with a permit on spur
Then we got a permit on Augustian Island.
We have expanded the permit
on Augustine Island to cover more acreage.
We've rolled all of those permits
under state of Alaska laws into 10 year geothermal leases
which now gives us enough runway
to attempt to get this company off the ground.
And another thing that happened,
slices and slashes to the wind and solar agenda with the one big beautiful bill went into effect on July 4th of 2025.
One good thing that was included in that bill was a 30% tax credit for geothermal, for baseload geothermal power.
consideration that it's never had historically and is ready to launch as an
industry. We ran the economics on a business model for
GeoAlaska on Augustine Island without tax credits. It's a 34% internal rate of
return based upon providing power to the beluga power station.
purchase power if we can deliver it from Augusti and
Island to the tune of 200 megawatts.
It's been in the media and we hope to be able to do that.
We hope, to, be, able,
Nothing ever goes like grease lightning.
So the reality is it'll probably be 2030,
2031, by the time we actually are able to deliver power.
In the meantime, there are on island uses of this power,
AI, they call them AI factories now, fiber optic connection,
much less expensive than a high voltage direct current connection.
There are sustainable aviation fuel, we're in communication with a company that's very
interested in partnering with us on the island for sustainable aviation fuel and
Most importantly, with regard to Augustine,
there is a magma chamber at 6,500 feet below surface.
This has been known by the USGS for years.
We visualized it with our geophysical data,
magnetotoleric data.
We are.
talking with some parties who are very interested in
taking, 10x in geothermal, basically doing the space X to
rocketry in the geothermal arena, figuring out
how to extract enthalpy
from near magma.
And if they can figure that out, instead of five megawatt wells,
we could be looking at 50 to 100 megawatts wells.
It's mind boggling what's possible.
This is research and development.
It is not done.
Alaska could on the cutting edge of doing this.
But most importantly, we're going to pursue the meat
and potatoes project, get we believe 200 megiwatt of power
generated there on Augustine Island and move forward
advance Alaska's energy delivery systems.
I'm not anti-oil.
I don't look at hydrogen as a competitor.
I look all at the above.
And, as I say, President Eisenhower could have been called a fool for developing the
interstate highway system.
He wasn't a Fool.
You look what that did.
Transmission systems we need the resources. We need all of the above and I hope to be part of making that happen
So I'm happy to entertain questions and happy let you move on to your next presenter as well
Thank you, mr. Craig any questions
Representative cop, thank you for that presentation
So wish you all the best on
Getting geothermal going in August and i kind of
Spent 25 years of my life on the lower cook and let a cross from it looking at it and and you know
Where that this has been looked at a long time there is what's your sense of?
What the state would need to do to be able to transmit
from that location to and
You know an energy center where where it could be utilized because obviously they were beaten need be a
It's a pretty significant infrastructure commitment to get it from Augustine.
Yep.
Happy to answer that.
It was a great question.
Today, the grid will only accept about, well, it won't accept anywhere near 200 megawatts
of power if it comes over to anchor point, Homer area, but anchor port would be the landing
place.
because of a bottleneck going up the keynote peninsula.
If today's world, if the power were taken
to the blue go power station,
it can be wheeled around from there.
Our business is producing the Power.
And we have modeled an HVDC high-voltage direct current
submarine cable from the island to Buluga Power Station
and built the economic model with the rates of return.
I talked about on that, on us building that.
But I think there's a lot to be said for the state of Alaska
owning or some entity within the State, owning the highways,
so to speak.
private ownership of that. It's really a matter of what makes most sense commercially and
and for the future of the energy needs of Alaskans. I also wanted, I forgot because I don't have the
And I am surrounded with people much smarter than myself.
Anthony Pannino is a local Alaskan, used to work with Exxon.
He's on the board with Joe Alaska, he's just outstanding.
We're partnered with Ignis Energy based out of Houston.
They're a minority owner, they bring a.
Raft of very competent professionals to the table as well. And a lot of the technology comes from the oil and gas industry
the owner of Ignis is the
geologue, which has been active on the North Slope in Alaska for decades.
So I'm surrounded by very bright, competent people and the one thing that the state could
also do, and Ada had me present yesterday about this, my hat off to Randy Raurava for
his and The Board for their willingness to consider this.
Launched would be very helpful. I can bootstrap things so far and then it you know
We need we need to be collaborative in terms of getting this future built
I think I just want to follow it briefly on that mr. Craig
Could you quickly recap, electrons is not the only thing that we can export as far as our energy.
You mentioned a couple of things in your presentation.
What else are we, can we export besides electrons?
Happy to discuss that.
So electrons would be what we'd export via HVDC cabling.
Photons would what would export by way of fiber optic cables,
from a data center, AI factory, can also export chemicals.
Green ammonia, sustainable aviation fuel.
I'll ask, Anchorage has the fourth largest cargo airport.
And these companies have sustainability goals
and we can participate in helping them meet those
which might cause more landings than Anchorage.
could also export. I mean this sounds crazy, but they're doing it in Finland
today. It's energy intensive, growing protein from bacteria.
It has now saw research from the 60s and 70s for interplanetary travel.
And it's carbon negative.
It takes carbon dioxide out of the atmosphere
and grows it into protein that contains all 9 amino acids
that humans need.
It's in the European food chain.
Look up solely in S-O-L-E-I-N, if you want to know more about it.
But there's a raft of value added manufacturing opportunities
that would create economic activity for this state.
Thank you. Representative Reffrich.
Yeah, thank you, co-chair Mears.
Thank You, Mr. Craig, for being here.
I mean, Augustine is sort of in my neck of the woods,
so I've paid attention to that for quite some time,
and I just had a couple of questions on sort
of economics of this because your numbers are different
than what I have heard in the past.
I would assume that you have a large investment plan in order to generate energy by 2029.
Do you an idea of what the cost per kilowatt hour would be for geothermal energy that's
created from Augustine?
Well, yes, a very good idea what it would cost.
So, let me give you a couple of numbers that help get there.
There's just to get launched, we're looking at approximately $12 million Series 8 Caprais.
The whole project to where we are delivering 200 plus megawatts of power is a $850 million
CapEx project.
then there's the issue of what does it cost to produce a kilowatt of power?
And I think that's what you're asking.
And we believe that that could be done for three cents a kill a lot.
If the cutting edge technology works, that can drop below a cent per kiloatt.
Now that doesn't mean we can sell it for that, because you've got to capture the CAPX, et cetera.
sustainable power source there's a metric called levelized cost of energy and
if you add in batteries for wind and solar and you compare geothermal with
nuclear and everything else geothermal is by far the the most efficient way to
produce renewable sustainable energy. A couple follow-ups if I may. Yeah,
Because you had said that you projected a 34 percent rate of return, I guess
Thank you for answering the question on the generation cost. What do you think the sales cost would be and and I I
Guess from for my sake. I'm trying to compare
another
South
Cook and let project for energy, which was Bradley Lake
Which I think it costs, you know 350 million or some odd dollars to to build that
And it comes on to the grid at $0.04, I believe per kilowatt hour.
In order to get that 34% rate of return, what do you think you'd have to sell it at?
I can't answer that question for commercial reasons, but I also can answer
that because I don't know whether who's going to build that transmission system.
You know, if we're selling at Beluga Power Plant, it's a different price than if
we are selling its short side.
And what I can say is that we will be competitive with gas-fired power, whether the gas comes
from Cook Inlet or is imported either way or comes from the North Slope.
We are still competitively priced.
Thank you.
And final question, Madam Chair.
Mr. Craig, but is this a depleteable source or is
this ongoing?
You know, that's an excellent question.
Unlike oil and gas, which is a
depletable resources, X number of molecules in the ground,
all of which never get produced,
but some of what you do.
But there's a decline curve associated with production of oil
and gases.
With geothermal, once you get it fine-tuned,
it's in perpetuity.
Theoretically, it's finite, because the Earth is finite.
But for practical purposes, for energy production,
it is sustainable, baseload.
Though Italy has the first geothermal power production
plant, 1904, its still producing at similar rates
as it was originally.
And Augustine has a large enough magma chamber under it.
It's not going to be an issue in terms of longevity. I imagine if the earth core is cooling. We've got bigger problems to worry about exactly
Representative reference you have a final follow-up. It is not really a follow up
It says secondary question about magma in general.
I mean Augustine isn't exactly a stable volcano. What do you do when it inevitably erupts?
Through the chairs the co chairs I would
tell you that this is a very good question is what I get frequently. Magma has been drilled
in Iceland. What happens is because you're cooling the drill bit with cold water, that's what you
do when you are drilling geothermal. You create obsidian on your drill bed.
You have to put more torque on it and break the glass and bring it up. We drilled magma.
But you don't set off a volcano by doing this.
If anything, you could theoretically say you're reducing volcanic risk
by reducing the temperature of the magma chamber.
We're not going to do that either.
Augustine Island erupts on average once every 30 years.
The shortest period of repos is about seven years,
the longest has been 70 years in the last 200 years
you know, bunker-ized facilities.
It's not lava flows, it's pyroclastics,
and the cannon shoots a little bit
toward the north side of the island.
We'll select surface sites.
We have Alaska Volcano Observatory monitors this island
extraordinarily heavily,
and we will make sure there are no human beings
on the planet, on The Island, if there's...
if it's gone yellow or red in terms of the rating of risk and will design surface facilities so
at least they either can be shut down or they can run remotely. We have to figure that out with
the engineering but we're aware it will erupt. I mean it is not a question of if
How long do those chips last, not very long?
I mean, they're outdated within a few years.
So, and Lloyd's of London, you know, this is,
you can underwrite these things.
We will have policies in place in that regard,
but the safety for humans is our most important consideration.
Thank you.
Any more, Representative Rushridge?
We got some time.
Representative Co-Chair Holland.
I think you know in wrapping up for now I'm curious if we kind of go back to the balcony on this one
What do you see in terms of geothermal opportunity in Alaska?
You've dealt deeply it sounds like in the Mount Spur
Opportunity that we've heard about for a decade or two
Now Augustine seems like his advanced
quite a bit further than Mount Spur, but is this a resource that has opportunities in many other
places? Is this unique to Cook Inlet? And if we develop this, this is exciting and beneficial,
but it's a localized one or is it a broader opportunity? We should understand and do we have
the framework in place to support broader development of this resource? It's much broader.
And Paul Fuse will be testifying shortly.
He's working on another such project.
And you could say, are we competitors?
No, we're, you know, there's a lot of room for growth
in this industry and for different reasons
in different markets.
There are 50 volcanoes, at least 50, going out the illusion chain, not all of which will
be developed for geothermal, but more than one or two, makushin, where there's been some
effort to develop geothermal. There's geotherapy, there may be a lot of geathermal up near gnome
There may be a lot of geothermal in Southeast.
There's a lotta hot springs that,
and you don't have to have a magma chamber
to has geothermal potential.
So it's massive potential throughout the state.
And it is technology that we could be leaders
of this technology, and 3D seismic came from Prudel Bay.
That's that it was because of the equity battle between the two primary owners 3d seismic was developed
We can be the leaders of development of cutting-edge
geothermal technology right here in the state and
It can have an impact nationwide and worldwide
I don't want to sound grandiose when saying these things, but you know the future is unknown
But it's inventable and we can work together to invent it
Thank you, Mr. Craig. And I also appreciate that you noted some of our lower temperature
heat resources as well. I'm sure that I am not the only one that appreciates our hot spring
resources, as Well, for recreational activities. But there's a wide variety of what we can
benefit from for some our unique circumstances here in Alaska. Thank
invited testimony former mayor of Onalaska and Dutch Harbor former commissioner of commerce
and economic development and former chairman of the board for ADA. Mr. Fuse welcome to house
energy please introduce yourself for the record and proceed with your testimony.
Yes thank you Paul Fus. Can you hear me okay?
I'll share to the committee members of the Committee thanks for this opportunity and I hope you don't mind me kind of relabeling this bill myself which I'm calling blueprint for Alaska's future.
In a long time since we've taken a comprehensive look at, you know, how our economy works and you're going to take to keep it going in the future so I thought I could provide some, some context here for our
this bill might affect our future in that regard.
If you could give me the next slide, please.
So when I was commissioner, we did an input output model of Alaska's economy,
and this is based on personal income coming into the state.
And you'll see that it's pretty much dominated by oil income,
you know, fisheries mining tourism. And then at that time, because of Ted Stevens,
And then the surprising one was of everyone who's retired up here
and the money that's coming back to them,
they're 20% of our autonomy, our retirees,
and they never get any better.
So somebody needed to thank them somewhere along the line too.
Entrepreneur, that just means like FedEx and UPS,
the re-handling of cargo.
So the other thing that we would look at
is the state's gross domestic product.
And there's one other graphic that I didn't get to put into this presentation, but I'll send to you.
And of Alaska's gross domestic product, last year was about 54 billion dollars.
But of that 40 billion of it was oiling gas.
So it's important for this energy committee to focus on this.
And I like to say that the energy has been the central organizing principle.
of the human race ever since we learned to use fire.
And it still is today, we can't do anything without it.
And of course, it's such a big part of our economy,
we really need to pay attention to it,
I did want to respond to representative Edgman
who this should be addressed to,
and certainly it is policy makers and things like that.
One of most important people is the people of Alaska.
people of Alaska need to understand this of how our economies are structured and you know what
plays the bills here and uh you what our future is going to look like and especially our children
who are getting oftentimes a really completely different picture of what they're hearing in our
school system. So uh, you now with that I would just say about this graphic about 20 years later
He said he found basically the same thing except for a little bit of reduction in federal.
And then I talked to Dan Robinson, who's the chief economist at the Department of Labor.
And he says he doesn't really see any significant change in this either.
So I think he can pretty much use it as a model.
So, and I just want to mention one more thing.
And that is at that time when we first did that.
We didn't really record or have the data on what the native
corporations were doing. And they are making a significant
contribution to our economy in hundreds of millions a
dollar a year that brought back. Almost every other company that
comes here takes the money and leaves the state with our
native corporation who ought to make the
money somewhere else and they bring it back to Alaska.
So I think they also need to be recognized as a
The next slide, please.
And of course, there's money that's coming in.
This is what drives our service economy.
This was what Alaskans have the money to go and spend on our
hospitality, industry, health, education.
We wouldn't have money
to actually spend
on these industries if we didn't
have our productive, our resource
So, you know, we often focus on some of these other areas and look at what are the employment
numbers and I'm sure it's a lot of job. But who's paying for the job? It's that new money that's
coming into the state. So our next slide, and then I am getting down here into what we call
leakage. Once money comes into this economy, how long does it stay here? And where does
What we have is not having Alaskans qualify it or not or wanting to work in our industries.
We've got 49% outside labor on the north slope.
We got 42% out side labor in the mining industry.
And this is because we do not have to qualify people to do it for the people that are willing to actually go work
in those industries so we can't blame those industry but we should be doing something about.
workforce development that I'll address this a little bit later. And in the fishing industry
and in tourism, because those are seasonal industry, it's also understandable that a lot
of this is outside labor. It's hard to get an Alaska to take a job for just two or three months
when they know that they have to make money for their family for the whole rest of the year.
I would say for The Village, there's a lotta there leakage is the payment for energy for fuel. So
And we've done a lot for renewable energy out there, and although when you look at it,
it really doesn't lower the cost of energy, but when it's done, it cuts more of the money
in the community, in terms of renewable development and the people there. So,
now the other thing that it all comes down to is what is the multiplier effect. When the
And our highest multiplier effects are in the oil and gas and mining industry up to three,
and our lowest would be, you know, somewhere around the tourism industry about maybe one,
one and a half times that money turns around just because of the extensive boring ownership of
the companies involved and kind of its seasonality. So if you go to the next slide, so how does this
for our revenue, your operation,
your budget.
And when you look at this, you know,
the revenues of oil and gas about two and a half billion,
you the rest of it coming from really the permanent fund
dividend that we're using for a state budget,
and of course, that's all oil money.
And, while we do give a lot of credit to our
brilliant investors at the Permanent Fund,
we have to remember that still,
those in additionally to the permanent fund every year, and that amounts to over 600 million
dollars a year goes into the corpus of the Permanent Fund from annual oil revenue,
in which I was disappointed to hear one of those members of another body of
the legislature say they didn't see the connection between oil and gas development and health, but
When you look at your budget, how much of that oil money went to pay for a matching
money for Medicaid?
It was $630 million, $634 million last year that went for paying our matching money
for Medicare.
So, again, this, you know, production of our resources is critical to our state.
Now when you looked at, uh, some of the, for the health industry, it's a growth industry
new money into the state. I mean, you know, very few people are coming to Alaska,
for health services. What it's done, it really reduced the amount of leakage that
America, America-Alaskan used to have to go out of state to get health, health benefit,
or, I think, in health service. The same for retail, and we've seen because of internet sales,
you now have actually reduced that. And so I, think maybe you're looking at a bill here that
some of that. So I think, you know, Governor Dunleavy, when you said, look, I have years
to make this transition until we get some new resource development online. And I
think that's a pretty good timeframe to look at this. If you have a reasonable dividend,
then, some control over the budget, we can soldier on through these years.
But the next thing I'm going to speak about is what's going
to happen in the future. That's very bright for some
happened. In terms of, you know, fisheries, we get about $160 million a year in revenue.
We spend about 200 million in a fishing game mannequin. Mining about 130 million dollars
a week. And I do think for tourism that perhaps a seasonal sales tax the governor is talking
So the next slide, you know, within this contact, it's really looking right.
I mean, and it is substantial.
What's happened here, both the executive order of President Trump in terms of the oil
and gas development in Alaska.
And recently, one of your previous legislative members, due care, Senate President due cares
was here.
And I got to spend some time with her.
I really think you ought to invite her to come and testify in front of that.
committee she's then I she is the administrative director of Trump's executive order for Alaska
and she has making sure that these agencies that have a connection to this are actually living up to
that to that executive border. We also have the big beautiful bill that was referenced
and the importance there is that some of the lease provisions in there just can't be overturned by
during the previous administration, and also some some really good clarity on timelines for
process, environmental impact statements and things like that. That's going to help also
some recent Supreme Court cases. Mr. Chair, I've run this section seven
county's infrastructure case. It said you can't stack on every other potential impact or they
Oil development on oil and gas, including climate change.
Because if that was true, then every single oil
and the gas development, you'd shut it down
because it could impact it.
So when there were measures, these people said
we should shut down oil
and in the arctic, they said, well,
what's the alternative for the United States?
Well, of course the alternatives is the Alberta Tarsen,
and they're producing about four kinds
as much as we are right now.
And they were asked, well, if you could make up the difference for that, what could you
do?
I said, yeah, we would gladly do that if we shut down the Arctic, and they
were ask, Well, how long did you do
that for?
We said well we've looked at our reserves, so we could do it for the next 149 years.
That's a dirty soil in the world.
So the other option is of course Venezuela, I just have to say that everything that's
is not good news for Alaska. I'll just leave it at that. So if you could, the other thing is
in renewable energy development. And in terms of geothermal, we are working on a geothermal project
out in the Aleutian, and of course it's a stranded energy, which is, you know, usually that's
a problem, but for there we want to make the alternative fuel methanol ammonia that we can use
that are on the Great Circle route and also on
the Northern Sea route. And the kind of answer
representative Rockwood's question, what we've determined for
these hydrogen-based fields and everything, we need to produce that
geothermal energy at about six cents a kilowatt hour to
make the subsequent production
I went to the COP29 in Azerbaijan and gave some statements there on behalf of some of
the Arctic.
I'm a member of the Northern Forum, which I'll ask you a number of.
And the question there is, is renewable energy a threat to oil and gas production?
And, the answer is no, it's not.
So, if you look at that, even with the highly ambitious implementation of renewable
you'll see because the world energy demand, oil and gas went up at a similar rate.
And in the last year that agency, International Energy Administration said that oil demand went
up by about 960 million barrels a day. And so it's really not a threat.
And the all above strategy that's in this resolution is very
legitimate. And it's not a threat to our oil and gas production in Alaska. But if you could go to
the next slide, you know, how does this impact international trade? And of course, a big one
is a gas line. When we take a look at this, and I've been working on this project over 30 years
Well, what's happening in the world and world energy demand? There is a demand for our project,
but the Gas Line Development Corporation has said to make it economic, we need about 20 million
tons a year. And to the other countries of Asia that have indicated some commitment to
the project that amounts about 10 million tons per year, but we really need to sign on for this
And China is Alaska's number one trade partner, $1.6 billion a year, and I talk with their
consulate and their people quite a bit because I'm involved in the
agriculture industry and there are number-one sales for that. And they said, boy, it's one of the
biggest things that America actually has to address this trade imbalance.
So, you know, it's been reassuring that President Trump has said he wants to make this part
of his trade negotiations.
If we get that kind of a commitment from China, then the project can probably go forward.
They're the biggest LNG importer in the world, nine billion cubic feet a day.
So hopefully when we do our trade missions to Asia and the gas line, we'll also include
Also, the Northern Sea Route is a potential benefit to us, and we're also working on a
container transshipment hub in ADAC that can help services and it would also help our
fisheries products and other products from Alaska get directly to the European market.
Now there's also a downside to this and what it is is because of European sanctions on
Russian oil they're sending all that oil out now through the northern sea route to China and
India and Japan. Well last year we had about a hundred and third, 128 million tons of crude oil
right through the Bering Strait and that amounts to about 930 million barrels a year and if we
ever had an oil spill there it would be absolutely catastrophic. It is the number one threat to
food security for our western and Arctic residents and we need to make sure that we have the highest
level of prevention services, which we provide through the Marine Exchange of Alaska,
through vessel tracking, monitoring, emergency response.
We're also proposing that any icebreaker in the world that's available
should be able to respond regardless of the Jones Act,
even if it's a foreign flag vessel.
And we're calling this Uber for icebreakers.
So, if you go to the next slide, and this is, I think, one of the most important if
you look at a policy that could be developed, you know, under this resolution, could
be workforce development.
And you, know I already decided to do some figures of how many outside workers that we
have.
And I talked to Dan Robinson at the Department of Labor, the chief economist there, he said
the number one thing we could do for economic development in Alaska is to have our own people
So, you know, this comes down to our education system.
Not every kid's going to call it.
We should encourage them, but 60% don't.
What are they going do?
So this come back to the vocational technical program.
We used to have a great program through our...
community colleges which was swept into the university.
University really needs to look at this and it's one of the things that we can do
and most importantly we need a curriculum for our students that shows how our
economy works and what they're placing it can be.
They're being taught by some of our teachers in the system there that mining
is dirty. You don't want to do that. We're raping
Mother Earth. Oil and gas we're destroying the planet.
So mining materials, okay, there's six times as much metal in an electric car than there
is an internal combustion engine.
So I've also been working on a sustainable development curriculum for our students, and
I'd like to provide a little bit more information of that to the committee later, but I really
commend you for taking this up, then I think you ought to elevate this into some kind of
communicate directly, not just to the outside world, but to our own people and especially
to students, what our economy currently operating and what are future brings.
I'll leave it at that.
I hope some of this data has been useful to you and that you can use it in developing
and promoting this resolution.
Over.
Mr. Fuse, thank you for joining us today and providing that larger perspective.
Are there any comments or questions from the committee at this time?
Thank you so much.
We appreciate you joining us here today.
Finally, we will hear from Lorna Ortiz, founder
and chief commercial officer of Geo-Kiln Energy Innovation.
Dr. Ortiz please introduce yourself for the record
and proceed with your testimony.
Hello, hi, for that record.
My name is Dr Lorne Ortiz.
I am coding all the way from Houston.
And after these two amazing speakers,
I just want to say I'm...
incredibly excited to hear all the information they had to share. Like me, they are also in favor
of this amazing resolution and that's why I'm here because I am willing to speak in favour
as a different thing.
I am my person from Alaska and I don't intend to be the most
knowledgeable person of Alaska right now,
especially after these two amazing falls presentations.
But I'm.
I am originally from the island of Puerto Rico, which like Alaska was a territory, still a
territory of the United States. We get our diesel and our gas and oil and everything
shipped to our island in every single month. Expenses keep rising and people are less, you know,
It's even every time it's more difficult to maintain our electricity infrastructure,
the maintenance, but also pay for that access to energy.
It is something I grew up with.
I know for a fact and I
know firsthand what is it to have a hurricane and not having electricity for more than nine months.
This is the kind of difficulty I grow up
with I have appeared in chemical engineering from the University of South Carolina,
20 years for Shell. Shell oil and gas. I had an amazing career and I loved it.
I worked a lot between the scientists and the commercial and my job for many
many years was to look for...
amazing breakthroughs that were invented in Shell or not in
Shell and commercialized those, monetized
those and make it available to the consumer, to make
it products out of them. After 20 years, I decided that
after the shift from Shell's strategy to look less at new
technology and sell more of their assets. I
decided to
leave the company early last year and invest my 20 year retirement into geo
kill. And so far I have been working as a co-founder as well as the CCO
commercial officer in geo kill I hope that you have the presentations
lights I am guessing that would share with you. If not please let me know and
I will give you more details but if you're looking at the slides I
quickly go through them and I will leave more time for questions when you're talking.
Okay, awesome. All right, let me go back here and put this up.
All Right, my geo-kill, we're actually,
we believe we are the next energy revolution. We make hydrogen directly from rock and what we use is
And I will explain what the difference is between what we do and what natural or white
hydrogen inside the geologic hydrogen space is.
Our since low cost, when I say low costs, we're talking about $1.5 a kilogram at the
unconventional. You drill more, you produce more. And that's what actually made sense to me when I
first came across the technology. The manufactured subsurface hydrogen, which is the product for
others exploration efforts for geologic hydrogen. This one is totally controllable. It's low cost
and we can scale it up to finally have a commercial viable solution for hydrogen production.
If you take to the second slide, we're not going to do this without having the right market in front
There's a 1.5 trillion market for hydrogen in the next few years.
a lot of the methods. The methods that today produce hydrogen, including the green hydrogen
using electrolysis, are very costly and they're very chirony-tensity, blue hydrogen green
hydrogen and gray hydrogen which is what typically used today from natural gas. Geologic hydrogen
has a huge promise but it's really hard to find and that's what geo-kill brings. We
with reliability and at scale.
Can you please go to the next slide?
And this is where it gets really exciting.
I know, I say exciting, but what you can do
with engineered, underground, under subsurface hydrant
and versus natural hydrated.
And I wanted to show you the difference
because like
my phone talking before me.
We're not against any or the other.
I want hydrogen to be successful.
I wants geologic hydrogen
to make it to the surface in
the right quantities at the
right cost, right?
And for that, there's a lot that
exploders need to do to unlock
that natural hydrogen.
And this company is like
Joe Keelner doing the stimulation
of this as a factory on the ground.
that the name natural or white, both are referring to the same thing.
Essentially, you are doing exploration of deep earth source work that contains iron, but also other minerals as well, finding the right source,
pool, a kind of pool or a sort of hydrogen that you can find either by migration or drill directly
into it, that will bring hydrogen to 50 cents a kilogram to the wellhead, which is incredible.
We want that to happen. But just like diamonds that...
Carbon is everywhere, but finding that perfect diamond in the
road is very difficult. Trust me, hydrogen is
everywhere. We can snip it, we can see it.
We could see sweeps everywhere but
finding the perfect pool of hydrogen that we
can extract.
That is really hard. What we want to do is, while that is going on,
what can we do to accelerate that production in commercial rates that will be low
cost and scalable? And what we
do as we go higher or shallower, where the rock is colder and apply temperature.
That's what
we
do. We apply very control temperature to heat the
that will accelerate the natural reaction
that occurs in our Earth called serpentinization,
which in the presence of iron and a little bit of water
and the right temperature, the iron two plus converts
into iron three and releases.
hydrogen. That's how the
separate digital reaction
produces hydrogen now. You
need a billion years and a
lot of patients to get into
finding that hydrogen and
what we're trying to do is
to accelerate that by a
million times faster with
our technology.
Also, you will hear stimulated hydrogen can be named engineered or manufactured.
I wanted to give you all this because, like I said, I may not be the only person that
comes to you and talk to about unlocking that hydrogen underneath your feet.
I want to make sure that you knew that all of us are speaking to the same thing and the
only difference is either you make it or you find it.
like I said we come from oil and gas years of adding shell and I will show a
little bit my my team after this and we have used the same proven oil
and gases process we used for shell years ago shell spent half a billion
dollars half of billion dollars creating the most economic and most
for a bitumen process and heavy oils.
After many years,
that Shell actually decided not to pursue more
on the unconventional business.
This technology for subsurface heating wells
was a spinoff and now they are companies
that actually offer long heaters like this
for sub-surface impact in Alaska.
are being used as for oil and gas applications.
Our chemistry evaluated, like I said,
this is in public literature, this
is serpentineization.
We are only using the fact that serpentinization is
accelerated by temperature.
That was the switch to click.
And we put together one-in-one, and we knew that temperature could actually accelerate this reaction.
That's how we created a process.
However, one of the things that is really important to know is that
we, when we worked at Shell, we made so much hydrogen
when were not supposed to make hydrogen subsurface.
When hydrogen was a problem in the ice of Shell and
we spent our days trying to mitigate the production of hydrogen.
we had subsurface thermal acceleration.
And that was something that, yeah, was a headache,
but it was part of what we were trying to do.
And I think that at the end of the day,
we kind of like switch it around and say,
wait a minute, if we're making hydrogen,
how about we make hydrogen as a purpose?
Like...
for good, right? And that's what Geokyeon got started.
We can use intermittent power. Our heaters are electrical heatters
that go into the formation through wells. We, in the picture, you will see
a vertical, I'm sorry, a horizontal well. It depends on the formations.
We do this, we intend to do these with verticals, with
horizontal. Everything is engineered to give you that $1.5
a kilogram of the wellhead. Depends on
water because we look for
formations that have in C2
water, that's tokyometry with
water and the percentage of
iron present in the formation.
It's low enough to help us and
to give us enough for the
reaction to carry out without
the injection of water.
If we ever have to inject
water for specific formations,
we know how to do that.
We have done it on the field.
Our simulations and our work,
that we can accelerate this reaction a million times faster is an energy
positive process compared to any other hydrogen producing process which are
energy negative doesn't make sense to use hydrogen as a fuel when you need so
much energy to make hydrogen and burn it to
make electricity in our case our process is energy positive for every kilowatt
16, 18, depending on the formation you're working on
the process and the capacity you are operating,
you can use this as a fuel and
the exothermicity of the reaction allows to use
the same heat to continue to propagate the
reaction without having to continues to
use electricity to power the electrical heaters.
So all that I can answer questions after I've done here.
This is the team, and this is our biggest asset.
We have over 120 years in expertise in energy leadership,
and here is a team that actually invented this process.
For subsurface heating for Shell,
my CEO was in the patent of that initial work.
And that's the full second my COO was the person who
literally did all the operations for shell years ago,
putting this on the ground and making it.
the development of the assets and Robert O'Roskey is the expert subsurface simulation guru as we
call it that tells us exactly what the placement how we can design everything subsorface to get
that production at the price that we needed.
at the market where we are sitting. Natalia Ranches, our CFO, also from Shell, from a big
project finance. And Katie, actually, it's our new addition to the team. She came from
Exxon and she also came to Department of Energy from the hydrogen hubs program. So very knowledgeable
on that hydrogen big projects in the United States and also overseas with Exxon.
I said I brag about this because to be honest,
you know, making a team like this in social short time for a typical start up.
You don't see this kind of teams together.
And I'm very, very happy to say that, you
know that's the team that we have.
The way we're doing this is we do risking.
the step-by-step.
And like I mentioned before, you make more,
you drill more.
And it is something that our fellows and foriling gas
they're very familiar.
And a lot of people in Alaska are going to details in a second.
The phase one is to validate the geology,
whether the heat propagation in the rock
is the geological suitable for the thermal production.
And that's something we do in an existing well.
We're doing this.
I have to say, we worked really hard with Launch Alaska
program.
They were amazing, amazing.
But due to the limitations and federal funding,
the program stopped.
And we had to pivot ourselves last year
and started looking for a different place
where we could do our phase one.
And finally,
we were able to close a contract with one of the major
hydrogen exploration in cancers.
Their name is Heiterra.
year in May, the first week of May. And the funding was provided by Bill Gates and Breakthrough
Energy Fellow. So, Phase 2 will be to validate the productivity and this reality productive.
On scale level, we're targeting around 1.5 tons a day. It's this flare, but actually,
agreements from Shell, mobility in California, and others to bring that hydrogen, even if
it's one turn a day, they are interested.
to get it and use it in their facilities and grow with us as we produce more, even though
it's not in California, it is in Kansas. They're looking at trucking and bringing it all the way
to California. So we're working on these agreements and I'll be able to provide more information in
two weeks as I finalize those things. And then we monetize the production. Can these be reliably
as our typical train for production at $1.5 the kilogram and the projects it's now being
looked at bank for product financing and apparently it looks like we may start in
Kansas but we also have opportunities in the middle east north of Emirates as well as Minnesota
and Canada and now Michigan is opening the doors for geologic hydrogen in a big way.
I will skip the map. I want you to look that we're not just a Houston
Deep Tech company sitting in Houston for Houston. We are in
Houston because oil and gas brought us there.
We're from everywhere in the world and we have connections,
partners, especially our biggest and latest partnership
is Chiyoda, which is a Japanese company.
for sure after that announcement got really excited and we are now looking at
investors, partners and supporters from Japan for the development of all the surface.
surface kit that will be needed for a commercial plant for geologic hydrogen for
a geokule. The next slide is all about Alaska. So,
geocune and Alaska is something that I believe there's a huge opportunity to
build for the Arctic. Like I said, we had the great opportunity
to be considered by launch Alaska and get, you know, all the way to the end.
I think the opportunity is huge because you
underground resources that any of the states and the low 48 and that's
something that also like I said at the beginning we from Puerto Rico it's
something the hurts that we don't have that kind of resources than you guys
have so the opportunity is massive for you to develop your own access to
energy right there and we think we can bring that
with our manufacturers of surface hydrogen.
The geology is there and you will see in the slides,
there's some names, these are names provided
by the University of Alaska, Fairbanks, Mark Myers
and others from the Natural Research Department
have been working with us,
helping us to look at the best places.
But maps are needed and that's something that I put at the end and something
that the state could help. The infrastructure is there. You have extensive
well networks, the capability that people's skills are also there because
there are a lot of oil and gas skills that are replicable to our business as
well. And I think the best thing is we can do this for Alaska, in Alaska with
that can pivot from typical oiling gas to oil and gas and hydrogen production.
And I don't compete with geothermal.
We love geothermal.
We'll have any kind of geologic subsurface energy potential, because that's what it's
all about.
Can we actually unlock that subsorface and energy, and I heard a lot of you talking
about critical minerals and materials.
critical mineral access or recovery and hydrogen production as well.
We're working with PNNL to look at opportunities where we can
explode that in the critical, mineral space,
given the difficulties for hydrogen products to be funded by the Department of Energy.
We are looking at.
co-working with the mining talon metals for example in Minnesota is one of our
partners that we're working with them. I look at you and I really I
really think that what you're doing today here it's incredible way ahead of
many many other states.
I know things that I would love to propose in there here at least three
that i think will accelerate the potential for
people like us and companies like Gioquil to bring this access to Alaska.
And one of the things is, you know, to make hydrogen projects,
geologic hydrogen products under existing oil and gas regulatory frameworks, for example,
don't treat this as something completely different, it will make it super difficult
to go through permitting, do things that today oil gas can do easily.
And there's information there for you to read. The royalties,
this with mining, can we actually participate more on the Alaska mining license tax rather
than the typical oil and gas royalties, for example, that would be something that will
be super interesting and participation of the state, like for
example we need help with maps.
They're not giving us efficient information to validate.
to assess the specific places where we can look at existing wells that match our geology for
hydrogen production and areas that we will have to start from scratch, right, and start drilling
and looking for the source rock that I explained to you. If we could have some kind of state-funded,
yes, funding is a big deal, especially Jill Keown-Hassen has not received one cent from the government,
board right when the administration was changing their gears into not hydrogen projects. However,
one thing that I have to say is because of the speed at which we are operating, we
early producers of hydrogen in our phase three by 2027, taking advantage of the tax
credits of three dollars per kilogram of produced hydrogen. And that is on top of our
financial models and our financials. We did not account for that kind of money
does not need subsidies.
If we have them, it will be great.
Okay, so that's something that, you know,
I thought I should mention.
Our potential is huge and I have to say
for four projects only that we are having in our pipeline,
we're looking at three billion.
plus dollars MPV by 2030 and this is something that is really incredible for such a new
industry. Our projects stand alone have an IRR of 50 percent with no incentive,
with incentives if we can start something in the ground
by the before the end of 2027.
So that's, I know I'm very passionate.
I think it's a match between Alaska and Tokyo.
And I want to come back.
I wanted to work there.
I wanna make sure that we could see actually this
possible for the people in Alaska,
like we're gonna be seeing it for cancers,
for their Middle East, for Minnesota,
for Texas.
I mean, especially California as well.
So with that, I open the floor for any questions
and I apologize for the time.
I think I got carried away.
But anyways, yes.
Anything you want to ask,
I'm here to answer.
Thank you.
Thank You, Dr. Ortiz.
We did.
This is the only thing on our agenda today, so we did have a little extra time.
I was thinking that this is a pretty technical discussion and in the weeds,
but I think since I've got jokes, it's deep in The Rocks instead of the weeds.
So are there any questions or comments from the committee at this time?
I can't imagine a better evangelist for hydrogen.
Thank you. I'm here to help in whatever. Hi, I am.
Definitely.
Thank you.
Co-chair Holland.
Great, thank you for the presentation, the energy and the opportunity that you're helping
us understand.
I'm just curious as we wrap this up, you've talked a tremendous amount about the potential
of affordable hydrogen.
What's your view of what we do with it?
We haven't talked much about market, but you have been looking at Alaska, and you see
this immense opportunity for producing competitive hydrogen Alaska.
In Alaska per se, I mean, there's a few things we could use it for, but what you're talking about is at a scale that's much beyond what we might use locally.
What are your use cases for hydrogen that would be produced in Alaska and what should we be seeing in terms of our opportunity that
would come from having been able to develop this new resource?
So one of the things that we have as a benefit is we can
co-locate our production to whatever is needed and that's
something that because of you are sitting on the over such an
amazing resource that is spread.
all over in the country, you have choices to actually wear. You will be producing. So
it depends if you're going into chemicals, for example, into ammonia production, right? So you
will have the production of hydrogen. I don't make the case about the clean hydrogen anymore,
because it may be great for some people. And that's what some
people really love. It is clean-hydrogen, in zero carbon, low carbon hydrogen, if that is
replacing gray hydrogen that is used today to make ammonia, for example, and other chemicals
that would be a huge use. But one of the things that I think is most important for Alaska,
it's also used in the port,
for instance, as well as for power generation. Even though for other states, power
given that the hydrogen that we produce is energy positive,
it's something that you could actually use
to produce electricity.
As well as the heat that
we produced on the ground,
it something after the depleted.
It's something that stays as a heat battery that can be used for other users in Alaska
as well.
And I can give you a more detailed list specifically of users because I'm working with the hydrogen
working group in Alaskan and others.
They are amazing experience with where they will use this and their off takers are very
willing and interested to have a production of hydrogen in alaskas.
I can give you a much more detailed list of uses specifically for Alaska.
Thank you, Dr. Ortiz. Yeah, future fuels and future, you know, energy sources and uses in Alaska is something that we're definitely keeping an eye on here.
Do you have a follow-up for Dr Ortiz or?
Okay.
Seeing no other questions from the committee, thank you.
Dr, Ortiz, and we will have some wrap-ups comments from Co-Chair Holland.
Great. Thank you. And thank you, thank
you to all the presenters. I just wanted to touch
on two brief points as we wrap up today. In addition to just
being thankful for the presenters and for
the committee to take the time to introduce the bill today.
But I want to just note that since this resolution was introduced in May,
the version you have,
a couple key things have surfaced over the interim that we'd like to develop in this.
One is what we were just learning about,
which is we've learned a lot more in the last six or eight months about hydrogen.
It's opportunity, but also some of the gaps that
regulatory framework to be able to enable the development of hydrogen, whether it's
naturally occurring or stimulated as we were just learning about and the storage of that.
So we are going to looking at some additions to the resolution to bring some clarity to
that emerging need and opportunity.
The second is there's been a lot of discussion about how we manage a very fragmented set of
energy policies and programs in this state and been investigating the question of is
a way to bring together some of the policies around energy in this state and
if you will, defragment it a bit. And whether that's a department or division
that would bring that together, we want to ring that into this discussion with
this resolution. So you have the resolution as it existed in May when we
kind of wrapped up what we learned from the first session. We're going to
bring in a couple changes related to hydrogen management and energy policy
I think update it from what's happened in the last eight months and look forward to those future
discussions. Again, thank you for the time that we've had today. Thank you, Coach Erhan. And with
that, we will set the resolution aside for further consideration at a later date. The House Energy
Committee will meet next Tuesday, January 27, where we'll hear from developers for two natural gas
With no further business before the committee, this meeting is adjourned at 2.50 p.m.