Geothermal data video interview posted online

 My Tuesday interview about the National Geothermal Data System with Jane Poynter on Arizona Illustrated is posted online at the Arizona Public Media website.

 

Gold mining securities fraud draws $5 million in restitution and penalties

The Arizona Corporation Commission says they have "ordered former Scottsdale resident John M. McNeil, California resident [and former Edmonton Oilers owner] Peter Pocklington and their affiliated companies to pay $5,149,316 in restitution and a $100,000 administrative penalty for committing securities fraud in connection with a gold mining venture" near Quartzite, Arizona.   The ACC announcement went on to say:

The Commission found that, while not registered as securities salesmen or dealers in Arizona, respondents McNeil, Pocklington and their affiliated companies— Crystal Pistol Resources, LLC, Crystal Pistol Management, LLC, and Liberty Bell Resources I,LLC — told at least 120 investors that they had obtained mineral rights to a placer mine outside of Quartzite, Arizona, and would begin mining and processing gold on the site within a short period of time. The Commission found that the respondents obtained at least some investors by making unsolicited telephone calls to them and that some investors were taken to the mine site, which was located on U.S. Bureau of Land Management land. Additionally, the Commission found that Crystal Pistol prepared newsletters in which it claimed to be offering one of the most lucrative dividend plans in the mining business and that hedge funds and banks were interested in the project. The Commission found, however, that the estimates of gold resources on the respondents’ website were not supportable with the methods currently available in the industry. In settling this matter, the respondents neither admitted nor denied the Commission’s findings, but agreed to the entry of the consent order.

CBC News in Canada reports that Pocklington issued a news release saying that his "company has worked diligently and honestly with its investors and any errors were the result of inexperience and naivete, not malice or avarice, and were quickly rectified."

Coal, water, power, intersect on Navajo Reservation

The situation of the Navajo Generating Station [right, credit NGDS], a coal-fired power plant in Page, Arizona is complex.    It is a major economic engine for the Navajo Nation, a major supplier of power for the Central Arizona Project, a target of the EPA for air quality, and the focus of debate on all those topics.   Alan Dulaney,  Water Policy Administrator for the City of Peoria, wrote a column in this month's issue of the Arizona Hydrological Society newsletter that brings some of these complex interactions into focus.  It is reprinted below with approval of Alan and AHS:

Navajo Generating Station hangs by a thread. So stated David Modeer, General Manager of the Central Arizona Water Conservation District (CAWCD), on May 1 in Glendale. And the fate of a major portion of the reasonably priced, replenishable water supply for central Arizona hangs with it.

The Central Arizona Project has been a goal for Arizona since 1912. Arizona takes 1.5 million acre-feet each year off the Colorado River and moves it through Maricopa, Pinal, and Pima Counties. But a tremendous amount of power is needed to move that water uphill to Tucson. Navajo Generating Station (NGS) provides that power, and keeps CAP water rates reasonable. Without reasonable rates, farmers have made it clear that they will pump mostly groundwater again, and municipal users would soon follow. All the progress that has been made since the 1980 Groundwater Management Act in moving the three most populous counties to sustainable water supplies could be undone. And it all comes to a head with NGS, which is facing a myriad of challenges to its continued existence.

NGS sits on Navajo Nation land. On Monday night, April 29, the Navajo Tribal Council discussed the proposed lease extension which would allow NGS to operate beyond 2019. They came up with a new lease (10 amendments), voted 20-1 to accept their version, and President Ben Shelly signed it. But Salt River Project, which operates NGS, has said it will not accept the changes. NGS takes 34,000 acre-feet each year of Upper Basin Colorado River water from the Navajo Nation allotment for cooling, leaving only 17,000 acre-feet for the Navajo Nation. The Navajos want all their water back. They also want more control over the plant, and want the US Bureau of Reclamation to sign the lease. SRP and the other partners believe promises of more money and jobs will prevail. SRP must continue negotiating with the Navajos - but a new lease is by no means certain. In my opinion, non-Reservation folks do not truly grasp what the Navajos want, which is control over their own natural resources and cultural traditions. This is not a situation that can be resolved with more money; both sides are operating under different assumptions. I am not hopeful that a new lease will be possible as long as the two sides talk past one another.

Just a couple of weeks ago, Nevada Power suddenly announced that they would seek legislative permission to withdraw as a partner in NGS. We already knew that Los Angeles Power and Water was withdrawing, but the Nevada announcement came out of the blue. I suspect that continuing uncertainty with the lease - and beyond that, new coal contracts, EPA visibility rule requirements costing up to $1.1 billion in retrofits, and other challenges still unresolved - caused Nevada to decide that withdrawing would be the best option. Who will be next to bolt?

Arizona has done more water planning than any other state in the Union. The CAP canal is proof of that. Because of our water resources expertise, we sometimes think that our structure of water rights and engineering is unshakeable. It has brought us years of sustainable water at reasonable prices. Yet as David Modeer noted, uncertainty rules CAP from here on out. Only one thing is certain: the era of cheap water is over.

Alan Dulaney,

City of Peoria

Magnitude 2.3 earthquake east of Mesquite

The USGS reports a magnitude 2.3 earthquake 19 miles east of Mesquite, just before 2 A.M. local time on Sunday morning.  [Right, orange star marks epicenter. Red line is surface trace of Hurricane fault zone.  Credit, USGS]

Geothermal power from mine waste heat

Electricity is being produced from low-temperature waste geothermal heat at a gold mine in Nevada, offering the potential for broader application of the technology at mines and oil and gas operations in many areas of the country.

ElectraTherm, a company that specializes in small-scale, distributed power produced from waste heat,  commissioned their second geothermal project utilizing low  temperature (170- 240°F/77-16°C) geothermal brine to generate electricity at the Florida Canyon Mine operated by Jipangu International. [Right, Electratherm's power module.  From the DOE Peer Review presentation - http://www4.eere.energy.gov/geothermal/sites/default/files/documents/gtp_pr2012_smallscaleelectrical.pdf ]

The project is supported by a grant from the US DOE Geothermal Technologies Office and will be generating electricity this year for less than 6¢ a kilowatt/hr, with ElectraTherm's new plug-and-play technology. DOE said "Building on this first-of-its-kind success, this emission-free electricity is the first in the nation to be generated from cost-free geothermal brine at a mine operation, and the technology has the potential for extremely broad application in many parts of the country, including oil and gas operations."

Treehugger.com notes that waste heat offers more power potential than all renewable resources combined.








Geothermal Technologies Office: Low-Temperature Geothermal Resources

New Arizona publications from USGS

Here are a few recent publications on Arizona from the US Geological Survey with links to the downloadable files:

Hydrogeologic framework and estimates of groundwater storage for the Hualapai Valley, Detrital Valley, and Sacramento Valley basins, Mohave County, Arizona,2013, Truini, Margot; Beard, L. Sue; Kennedy, Jeffrey; Anning, Dave W., USGS Scientific Investigations Report: 2012-5275, http://pubs.er.usgs.gov/publication/sir20125275

 Bedrock and surficial geologic map of the Satan Butte and Greasewood 7.5’ quadrangles, Navajo and Apache Counties, northern Arizona, 2013, Amoroso, Lee; Priest, Susan S.; Hiza-Redsteer, Margaret, USGS Open-File Report: 2013-1007, http://pubs.er.usgs.gov/publication/ofr20131007

 

Geologic map of the Topock 7.5’ quadrangle, Arizona and California, 2013, Howard, Keith A.; John, Barbara E.; Nielson, Jane E.; Miller, Julia M. G.; Wooden, Joseph L., USGS Scientific Investigations Map: 3236,  http://pubs.er.usgs.gov/publication/sim3236

 

Possible meteorite from Mercury donated to ASU

A piece of what may be the first meteorite from Mercury found on Earth has been donated to the ASU Center for Meteorite Studies in Tempe.

ASU's School of Earth & Space Exploration reports that

meteorite enthusiast Fredric Stephan donated two pieces of specimen NWA 732, a green meteorite recovered in Morocco, totaling 10 grams. CMS now holds 10 grams of the 345 grams found. [Right,  Melissa Morris (assistant director of ASU’s Center for Meteorite Studies), meteorite collector Fredric Stephan, and Laurence Garvie (collection manager of ASU’s Center for Meteorite Studies) hold samples of the center’s newest acquisition: A meteorite that has been suggested to hail from planet Mercury. Photo by Andy DeLisle.  Credit, ASU]

[Taken from the ASU announcement]

Copper: mining, art, and global competition for resources at ASU Art Museum

Copper is the theme of a unique program at the ASU Art Museum on May 7 for a lunchtime conversation "at the intersection of geology, sustainability, and art—in the midst of the exhibition, Cu29: Mining for You."
Former Colorado State Geologist Vince Matthews will give a presentation on the global competition for mineral resources. "Ongoing demands for mineral resources in the U.S., coupled with exploding economies in India and China, are straining energy and mineral resources in unprecedented and unnerving ways."

"After the presentation, Phoenix artist Matthew Moore and ASU geologist Steve Semken will join Matthews in a free-wheeling discussion. Moore will showcase the Cu29 exhibition, a collaboration with London artist Clare Patey, ASU faculty, and students. The exhibition centers on the endangered elements in the periodic table, specifically copper, a mineral at the core of Arizona’s history, economy, environment, and cultural life."

Co-sponsored by the ASU Art Museum. Limited free parking available at the Ceramics Research Center on the northeast corner of Mill Avenue and 10th Street.
Tuesday, May 7, 2013
12:00 - 1:30 p.m.
ASU Art Museum
Mill Avenue and 10th Street
Arizona State University, Tempe campus
(lunch will be provided)

[taken in part from the museum announcement]

Two CO2 wells permitted in St. Johns field

Kinder Morgan received permits from the Arizona Oil & Gas Conservation Commission, for two new carbon dioxide wells in the St John's field in eastern Arizona.

The  10-26-30 State (permit #1146) and 9-25-30 (permit #1147) wells are both in Apache County.

Kinder Morgan intends to produce CO2 for shipment by pipeline to New Mexico and West Texas for use in enhanced oil recovery operations.    When the EOR process is complete, most of the CO2 should be sequestered in the oil producing geologic horizons.

Pinto Valley copper mine sold for much more than expected

BHP Billiton sold its Pinto Valley copper mine and associated rail line for $650 million, which is a lot more money than analysts expected.   According to Reuters news service, "Deutsche Bank had estimated the mine could sell for around $274 million, while UBS estimated it was worth $500 million."

Financing geothermal energy development

A panel of bankers and investors is at the Governors Geothermal Workshop in Phoenix today explaining what the geothermal industry needs to do to finance development of this renewable resource.   Lending from financial institutions was represented as much cheaper than selling equity.

Rich Endicott, President of The Biltmore Bank in Scottsdale, told the audience that traditional bank lending (underwriting) expects the primary source of repayment to be from savings generated by the geothermal system.  But lenders also are looking for secondary and tertiary sources to ensure repayment - this may come from equity investors, government guarantees, or the system host for example.

In addition to cash flow, lenders also are looking for secure collateral and evaluation of the character of the borrowers and the project.   Collateral includes purchase agreements for the energy, long term leases, government performance guarantees and incentives, credit insurance, or assets.


Rick Tallman with Renova Capital said his company is investing millions in electricity production from geothermal but the high cost of drilling deep wells and potential for problems makes this a much higher risk endeavor.   He said many of the current hydrothermal projects around the country except for the Geysers field in California are in this situation.   He said that ground source heat pumps are one of the safest, lowest risk energy investments you can make; the technology is well established, drilling is very shallow, and the unknowns are fewer.

Rick urged creation of a state  revolving loan fund as a way to stimulate geothermal energy development.  He noted that most water systems in the US have been funded this way over the past decade.   The rapid payback and low risk makes it an effective tool and actually is a money maker for the state.

Arizona touted as low cost producer to break Canadian lock on potash market

There's an interesting column by one of the Motley Fool team, making the case that the rising costs for developing new potash mines in Saskatchewan are making Arizona look like a good deal.

Canada produces over 40% of the world's potash which is used mostly as fertilizer and the US imports more than 85% of the potash needed in the nation.    But estimated costs for junior miners in Saskatchewan to start a new mine have ballooned to be twice the cost per tonne of production of a new mine in Arizona according to Peter Epstein.  He urges investors to look at Apache Junction-based Passport Potash  which is trying to develop a 2 million tonne per year underground potash mine in the Holbrook area.  [Right, thickness map of potash in Holbrook basin.  From AZGS report]

[Thanks to Thomas Poscharsky for bringing the column to my attention]

Helium legislation could promote production in Arizona

The US House passed the Responsible Helium Administration and Stewardship Act (H.R. 527) by a vote of 394-1 last week.   An analysis by AAAS says the bill authorizes the Secretary of Interior to restore for sale "crude helium for federal, medical, scientific, and commercial use"  pricing helium from the national reserve at market prices.   This will encourage the private sector to develop helium resources to replace the dwindling federal reserves.  Arizona has historically had some of the richest helium deposits in the country and Kinder Morgan is developing the St. John's carbon dioxide field which will also produce helium [Right. Credit, Enhanced Oil Resources]

AAAS reports that the Senate Energy and Natural Resources Committee introduced a discussion draft of a companion bill.