Analysis Shows Proposed Susitna Project Not Worth It

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An analysis of the merits of the proposed $4.5 billion hydropower project on the Susitna River in Alaska suggests  the project is not an effective solution to Alaska’s impending energy problem.

The report suggests that Cook Inlet Basin gas resource is a far better alternative than the Susitna River project that  would require construction of a 700-foot high Watana dam.  The report states “ …[a] better alternative to providing long-term, affordable, stably priced energy is for the state to finance, explore and produce the Cook Inlet Basin gas resource it already owns. For considerably less investment than Susitna, the state can meet the current Railbelt demand for electric power and space heating for the next 100 years with stable prices- one-third the price of a Susitna kilowatt hour in fact- and with less environmental impact than a Susitna power dam.”

Some of the key points made in the report are:

  • There is greater certainty of energy supply from the proposed Watana hydropower dam project than from the other options
  • The proposed Watana hydropower dam project will take considerably longer to license and permit than other options.
  • Local environmental impacts from LNG will be minimal; impacts from developing new Cook Inlet gas fields will range from minimal to moderate; impacts from the proposed Watana hydropower project will be significant
  • Capital investment to accommodate LNG imports to Cook Inlet is an order of magnitude less than that of the Watana hydropower dam. Investment in LNG facilities could be privately financed. State of Alaska financing to find and develop its Cook Inlet gas resource could be at little as 25% of the required investment in Watana
  • State financing, production, and ownership of Cook Inlet gas fields congruent with state financing, construction, and ownership of Watana hydropower facility, will provide energy at the busbar at one third the price/kwh from the hydropower project.
  • The economic-impact of Watana hydropower dam, while providing 2,600 gigawatt hours annually at a stable price, declines as demand for energy in the Railbelt increases during the 50- to 100- year time frame.

The controversial project would have significant environmental impacts on the river and the watershed.  The project would impair 184 miles of river flow from the dam site to Cook Inlet and cause significant harm to the fish and wildlife in and around the river.  The reservoir resulting from the dam would flood 20,000 acres of land and 39 miles of the Susitna River channel.

The report concludes “ In general, of all the renewable-electric, power-supply systems, hydropower has the largest the environmental footprint not only spatially, but also ecologically because aquatic ecosystems are the areas of greatest biodiversity and productivity in most terrestrial regions.”

Read the report here (updated in Dec 2012). 

The Alaska House Energy Committee recently passed HB 103, a bill that authorizes the Alaska Energy Authority (AEA) to move forward with the Susitna River dam. Governor Sean Parnell is  a strong supporter of the project.  The The Alaska Conservation Alliance, which represents many of Alaska’s environmental organizations, is considering the project and is so far not opposed.