In March, council set aside $42,000 for a study of alternative energy resources in Unalaska. Mike Hubbard, a consultant with the Financial Engineering Company of Maine, presented that report to city council at their meeting Tuesday night.
Hubbard examined the feasibility of wind, solar, tidal, and geothermal energy, along with liquid natural gas. His conclusion? None of them are ideal for Unalaska.
Solar and tidal energy likely wouldn’t work given the city’s location, he argued. And Unalaska has high winds, but the capital costs of a wind farm are just too high for the city.
Ultimately, Hubbard said Unalaska would have the most success with a combination of liquid natural gas and geothermal power from Makushin volcano. For more than 30 years, Makushin’s been discussed as a potential energy source. But Hubbard wasn’t optimistic.
“If you tried to pick a worse site – I’m sure you could – but not much worse of a site,” he said.
There are no energy wells on Makushin right now – just an old research well. Hubbard said the part of the volcano with known geothermal potential is privately owned and tough to get to.
Hubbard said private companies have expressed interest in Makushin before – notably, Iceland America Energy in 2006. But without financial support from the state, those deals fell through.
Now, some grants are available for geothermal projects. But Hubbard estimates that developing Makushin will cost more than $200 million. And without substantial government support, the Makushin won’t go anywhere.
“There’s a huge amount of risk, just to know if there’s a well,” Hubbard said. “So it’s not something the city can really take on.”
Liquid natural gas isn’t much better, Hubbard said. Even though the cost of the gas is low right now, importing and processing it is expensive. Unalaska could partner with other towns in the region to help reduce the import fees down the road.
At the meeting, council also voted on a budget amendment that included grants for public safety, public works, and $202,000 for the Museum of the Aleutians.
All six councilors said they appreciated the resolution that city manager Chris Hladick introduced with the budget packagewas up for consideration along with the amendment. It would allow the city to front the museum money, and pay itself back over time with bed tax revenue, which is specifically set aside to promote tourism in Unalaska.
At current rates, it will take about 8 years to pay off the grant.That specified that the bed tax fund would cover the museum grant — not the general fund.
Councilor Zac Schasteen said he’s opposed the grant from the start because he thought the city couldn’t afford it. But he said the bed tax plan changed his mind.
“It shifts the burden from money that could be going to something else — money that could be going to sidewalks, or money that could be going to offset the rising costs of utilities,” Schasteen said. ” It shifts that burden to a completely different fund that’s not accessible to offset the costs.”
But councilor Roger Rowland disagreed. He said the city has to should start cutting back on expenses wherever possible, given the high capital costs Unalaska faces in the next few years.
“This amount of money doesn’t make a pipsqueak of difference in those big projects,” Rowland said. “This is just the first decision of many. And they’re all going to be difficult, they’re all going to be controversial. And they’re all going to be, somebody gets the money, somebody doesn’t. So that’s my reasoning. It is not about the museum.”
Both Schasteen and Rowland said they’ve still been hearing from community members who don’t want the city to fund the museum grant. But councilor Dennis Robinson said the only feedback he’s gotten from Unalaskans has been positive. And he pointed out that all of the public comments about the museum at recent council meetings have been in support of the grant.
Council voted 5-1 to pass the budget amendment on to a public hearing and second reading, at their Dec. 11 meeting. Rowland was the dissenting vote.