HomeMy WebLinkAboutGrant Cover LetterALASKA GREEN ENERGY
Mr. Butch White, Grant Manager
Renewable Energy Grant Program
Alaska Energy Authority
813 West Northern Lights Blvd.
Anchorage, Alaska 99503
Re: AGE's Rural Arctic Ready Energy Solutions Grant Application
Dear Mr. White:
Alaska Green Energy, LLC (AGE) in collaboration with UAA's School of Engineering is pleased to
submit the attached Renewable Energy Grant Application titled Rural Arctic Ready Energy Solutions.
Our proposal demonstrates a Prototype Arctic Ready Combined Heat and Power System using Coal Bed
Methane (CBM) gas that will greatly reduce energy costs in rural Alaskan communities that have
potential CBM resources. If viable quantities of CBM are found in these communities, then they will
have a sustainable energy source available 24/7 365 days a year. This program has the promise to
solve the energy crises facing the 38 rural communities identified by the State of Alaska as having
potential CBM resources. The significance of this fact can not be overstated.
The project will proceed in three parallel components. Component 1 will complete our principal sub-
contractor Fowler Oil and Gas's (FOG) Kircher CBM Well located at the intersection of Trunk and Bogard
Roads near Palmer Alaska. FOG's directional and horizontal drilling proposal and in -ground dewatering
resolves the most difficult social, environmental and operational issues that face rural Alaskan CBM well
development. Component 2 will demonstrate the Prototype Arctic Ready CHP at the nearby Colony
Schools Complex. Our Prototype Unit will be installed using FOG CBM gas to provide heat and power to
Colony Middle and High School at a significantly lower rate and greater efficiency. Component 3 will
conduct a detailed assessment of 7 of the 38 rural communities that State and federal agencies have
identified with CBM resources to determine if viable quantities of CBM exist to replace diesel as their
primary fuel source. A final report will be prepared for each community that will determine the project's
economic feasibility, identify the quality and quantity of the CBM resource and implementation options.
The final report will include well costs, the cost to retrofit existing equipment and the cost to integrate into
their distribution system.
Our premise is to test these technologies on the road system in the controlled and cost effective
environment of Palmer Alaska. Once these technologies are proven, we will take them off the road to
rural Alaska communities and start solving their energy crisis.
A unique feature of our Component 1 proposal is that FOG will repay the State its investment to
complete the Kircher Well when commercially viable quantities of CBM gas are produced. The payback
is proposed to take place over a 20 year term at a favorable interest rate. Commercial and private
funding has been difficult for Fowler Oil and Gas Co. to obtain due to the non -collateral based nature of
his project. It is our belief FOG's advanced drilling technology is the linchpin developing CBM resources
in rural Alaska. It cannot happen without FOG's project. FOG is committed to proving his technology
and applying it in rural Alaska. We also realize that FOG may benefit in addition to the scope of our
proposal. Therefore, we feel it is proper to reimburse the State of Alaska for Component 1 of our
proposal. This is a win -win situation for the State, rural Alaska communities in need of reasonable priced
energy, and FOG. One must also consider the positive impact to the citizens of Alaska as the
introduction of CBM as an energy alternative to diesel fuel.
Clean, Efflclent Power... Now
AGE's team is a group of passionate, long time Alaskans who have come together to foster the
development of alternative and renewable energy systems in Alaska with a focus on resolving rural
Alaska's high cost of energy. AGE is certified by FERC to operate CHP systems. FOG is Alaskan
owned, and its technology is cutting edge. FOG's technology has direct application to rural Alaska's
sensitive environment. UAA will provide engineering, environmental and socio-economic support and
provide education opportunities to students and interns. Other consultants include Van Boerum and
Frank Associates, Kansas Geological Surveys, Scientific Drilling and Baker Hughes/Centrilift all are
recognized experts in their fields. Together we can move this project forward quickly with construction,
drilling, coring and testing activities commencing in the spring of 2009.
We look forward to working with AEA on this project. Please contact me at 907-746-1815 should you
have any questions or require additional information.
Sincerely,
Robert Gross
Vice President Operations
Alaska Green Energy, LLC
Clean, Efficient Pourer... Now