1. HOME
  2.  | 
  3. Industry
  4.  | 
  5. Energy
  6.  | Support Industry Innovations: Methanol, Drone Delivery, Energy Diversification

Support Industry Innovations: Methanol, Drone Delivery, Energy Diversification

by | Mar 27, 2024 | Energy, Featured, News, Oil & Gas

Renewable Independent Power Producers and CleanCapital held a ribbon cutting for its 8.5 megawatt Houston Solar Farm project last year.

CleanCapital

“Alaska has a lot of things going for it: we have a harsher climate, bigger issues to overcome. We have the right attitude to try and solve problems because we’re used to doing hard things here,” says JR Wilcox, owner of Alyeschem, a company building a distributed chemical manufacturing company on the North Slope.

Wilcox, along with Jenn Miller, CEO of Houston solar farm operator Renewable IPP, and Hunter Van Wyhe, operations engineer for Furie Operating Alaska and head of its drone aircraft project, spoke as part of a panel on Alaska Innovations at the Alaska Support Industry Alliance’s 2024 Meet Alaska conference at the Hotel Captain Cook March 22. Panel members discussed unique-to-Alaska innovations that are helping solve problems in the oil, gas, and electrical industries.

Arctic Chemicals

Wilcox’s company, Alyeschem, is working on a project that will use North Slope natural gas, carbon dioxide, and water to create two products, methanol and hydrogen, in what will be the first petrochemical facility in the US Arctic.

The hydrogen will be used to treat locally produced high-sulfur diesel fuel to make ultra-low-sulfur diesel, which Slope producers are federally required to use in moving equipment to reduce emissions. Methanol, currently imported thousands of miles to Alaska and then trucked hundreds more to reach the Slope, is widely used to prevent hydrate buildup in gas compression plants and to prevent temporarily shut-in wells and pipelines from freezing. Producing methanol and hydrogen on site will reduce the need for North Slope producers to import the two largest commodities hauled up the Dalton Highway. The benefits, Wilcox says, are numerous.

“It’s part economics and part operational reliability,” he says.

Current Issue

Alaska Business July 2024 Cover

July 2024

He further illustrates in his presentation, “The North Slope is a world-class energy basin and can continue to be for generations to come. Its future hinges on lowering operating costs, increasing the resource base, monetizing gas, and adapting to the clean fuel transition. Value-added chemistry is the key to all of these challenges.”

Wilcox has been working on the chemical plant project for about ten years. It has traction; a plant location and pipeline right-of-way are acquired; gas supply contracts are executed; sales contracts are in final form and major permits acquired. McKinley Alaska Private Investment and BP Energy Partners, through BP Natural Gas Opportunity Partners II LP, have signed on as major equity partners, he says.

Alaska Industrial Development and Export Authority (AIDEA) announced in December its approval of a cost reimbursement agreement “to undertake feasibility activities” of Alyeschem.

“Alyeschem already has site control, a gas supply contract, equity investors, major permits, and front-end engineering and design completed. Partnering with AIDEA for potential investment is one more step closer to making this a reality for Alaskans,” Wilcox said when AIDEA announced its investment.

Engineering on the project is now at the 30-percent completion phase; a final investment decision is pending. Once that decision is made, Wilcox says construction can happen in 2025 with a commissioning late that year.

Unmanned Deliveries

HEX Cook Inlet is the parent company of Furie Operating Alaska. Furie currently produces gas from the Kitchen Lights Unit in Cook Inlet. A byproduct of gas production is water, which needs to be tested on a weekly basis to meet state Department of Environmental Conservation permit stipulations.

Samples are sent to shore in one-gallon containers, but sometimes getting them there can be problematic—when no helicopters are flying or no ships scheduled to be at the platform 15 miles offshore, for example. Furie leaders suggested sending the samples via drone.

“The approval process for these drone operations is not easy,” Van Wyhe told the Meet Alaska audience. “There’s a reason you’re not currently getting packages delivered by drones right now.”

The permitting process is daunting, but Furie leaders decided to forge ahead. They have worked since 2021 with the UAF Alaska Center for Unmanned Aircraft Systems Integration (ACUASI) to develop a program that would allow the company to conduct flights to and from its offshore platform. Furie and ACUASI developed the program over 2022 and in 2023 secured a Beyond Visual Line of Sight waiver, the first such waiver in the United States approved for flights to and from an offshore platform. It’s also the second Beyond Visual Line of Sight waiver granted in the state of Alaska with no limitations to flights under 400 feet, Van Wyhe says.

Van Wyhe and Mark Slaughter, chief commercial officer for Furie, say the first flight is scheduled for June.

Due to magnetic interference from the platform, a second pilot has to control the drone once it approaches, so hand-off procedures have to be perfected. Van Wyhe estimates it takes between 20 to 30 minutes to fly the 15 miles to the platform.

The partnership with ACUASI is vital; the center is helping Furie get the project set up and proven, and it will assist with training Furie’s drone operators, helping Furie select the best drone for the company’s needs. At the end of the process, ACUASI will pass the reins to Furie.

“We feel this is an innovative solution to challenges we’re currently facing and a good opportunity to utilize emerging technology in the oil and gas industry,” Van Wyhe told the Meet Alaska audience.

Innovation via Diversification

The discussion about innovations wasn’t limited to oil and gas; Meet Alaska’s conference was in part about Alaska’s energy future, and according to Miller, Alaska’s energy future is squarely in diversification—particularly reducing the state’s reliance on dwindling Cook Inlet natural gas.

Miller and three business partners, all with an oil and gas background, started Renewable Independent Power Producers (Renewable IPP) in 2017 with an eye toward energy diversification. The group started by building a 140-kW solar array in 2018, a project that they self-funded, designed, and built. That pilot project came in 5 percent under budget, and the performance matched the group’s estimates.

From that promising start, the group moved on to a 1.2-MW expansion in Willow financed through a loan, their own investment, and contribution from an angel investor. That was the first utility-scale project Renewable IPP undertook. Approved by the Regulatory Commission of Alaska and with a power purchase agreement from Matanuska Electric Association, the project paved the way for an even larger project: the 8.5-MW Houston Solar Farm.

The Houston project was financed in part by CleanCapital, an asset management firm that specializes in development and financing of utility-scale solar and battery energy storage projects. Through the project, Miller says, CleanCapital became a minority partner with Renewable IPP. Alaska Energy Authority also supported that project, she says, via a $5 million low-interest loan.

Miller notes that solar power in Alaska wasn’t economic a decade ago, but the cost of solar has dropped significantly since then. Renewable IPP has proved its ability to take a project from concept to operation on a lean budget, which is key to making solar work. Sticking with projects from development through operation helps when talking with power companies about future projects, she says.

“When we go to meet with utilities, it builds a lot of trust. It’s not just, ‘Hey, we’re going to sell you this project and we hope it works out,’” she notes. “On a national or a global scale, these projects are very, very small, but it’s set us up to really scale.”

Miller notes that Renewable IPP is working on a larger project on the Kenai Peninsula.

What’s innovative about building solar arrays? Well, Miller says, the fact that it’s being done in Alaska, to start: a cold environment known for having limited daylight.

“With solar in Alaska, we often get a gut reaction of ‘What? How does that work?’” Miller notes. “The reaction has been, every single time, ‘If it works in Alaska, doesn’t it work everywhere?’ We’re proving up the resource, showing that it can work in harsh climates.”

Alaska Business Magazine July 2024 cover
In This Issue
Best of Alaska Business 2024
July 2024
Welcome to the 2024 Best of Alaska Business special section! For the ninth time we invited our readers to tell us which Alaska businesses they love the most, this year in forty-four categories. Throughout the month of March, you told us who should be featured in these pages, and we're thrilled to be able to publish the results.
Share This