Part 2: Gold Mine Pipeline
As the debate over the Pebble Mine continues, another mining project is quietly moving forward. The Donlin Gold Mine project is one of the largest-known untapped gold deposits in the world. When it is up and running, the mine will produce 33.6 million ounces of the precious metal.
The way it plans to power the massive operation could blaze a trail for affordable energy in rural Alaska.
The Donlin Gold Mine is miles from anywhere and hundreds of miles from any power supply. Right now, the mine and the villages in the area rely on diesel fuel for power, but a plan to build a natural gas pipeline from southcentral to the project could change that.
The mine site is nestled amongst tundra-covered hills and valleys along the Kuskokwim River. When it is up and running it will be the largest mining operation for hundreds of miles.
Right now, Donlin's camp is a series of neat rows of tents, heavy equipment and supplies.
Almost all of the operation's workers are residents of the region, and if you ask Donlin officials they say they are a large part of the community.
“We look to try to figure out the strengths of the local culture and one of them was family and just having a nice home environment,” said Donlin operations manager William Beber. “We really strive to maintain a nice atmosphere here, because we work together but we also live together.”
Donlin plans to be up and running in the next seven years. They estimate processing 60,000 metric tons of ore a day will produce one million ounces of gold a year.
But the location of the gold deposits provided some hurdles, mainly, how to power a project with no affordable energy in the region. Donlin hopes to overcome that challenge with a pipeline.
“It is going to be a significant project with huge energy requirements,” said Graham Smith, spokesperson for the state pipeline coordinator's office. “A gas pipeline for them is much more feasible than barging diesel up the Kuskokwim."
Donlin is planning to build a 312-mile natural gas pipeline pipe from southcentral to the mine site. Mine officials say the 12-inch diameter line would provide enough gas to power their operation and even supply gas to surrounding villages.
“In theory, they could possibly have a gas supply before the in-state line or the larger lines goes through,” said Smith.The planned pipeline would travel through mountain valleys, under rivers and over fault lines; it’s a massive two-year mapping process that has had hurdles of its own.
“The location. It’s in the Alaska Range and there's a lot of snowfall there and bad weather,” explained Donlin shop foreman Evan Polty Jr. “It’s always foggy and it was a challenge with the terrain there.”
With the route all mapped out, Donlin said it plans to go into permitting by March 2012. But with no developed Alaska gas supply yet, Donlin is planning to import liquefied natural gas to southcentral—a reality that frustrates one of the main supporters of an all-Alaska gas line.
“I don’t know that they are the groundbreaker. They're just a sign of some have said look, we need some energy for our projects,” said Bill Walker, general counsel of the Alaska Gasline Port Authority General. “Would they rather get that LNG from here in Alaska? Absolutely. No question about it.”
Walker said Alaska as a whole needs to follow Donlin’s lead and build a natural gas pipeline.
“I don’t know that there is anything special about what they are doing,” he said. “They are doing what we should be doing as a state, quite honestly. If they can do it, why can’t we do it?”
Donlin's pipeline is just one of many quietly moving forward in Alaska while the larger gaslines appear stalled.
Walker claims the state-backed TransCanada project is dead in the water because the natural gas market has fallen in the Lower 48. He said Alaska gas should go to supply Asian markets and local ones like Donlin.
“What are we doing? We are paying the highest cost of energy in the nation when we are the most energy-rich state in the nation,” he says. “We kind of wait and rely on somebody else to do something, and that's why we are where we are.”
Donlin’s gas could be flowing in three to four years. According to the state Joint Pipeline Office, another game changer for Alaska's gas is the use of a plastic composite pipe instead of steel. The plastic makes building a pipeline a lot cheaper.
Anchor Point Energy has already used the plastic for an 8-mile gasline on the Kenai Peninsula.
Polar LNG has submitted an application to build a gasline on the North Slope to transport the gas to a road; the LNG would then be trucked to Fairbanks. The state is currently reviewing the application.