Every time a major energy project comes up in Alaska, we hear the same predictions. Air quality will decline. Rivers will be damaged. Salmon and wildlife will disappear. The trees will wither. The wells will run dry. We heard it in pipelines, mines, roads and power plants.
Some projects are worthy of scrutiny, and others are not. Some deserve a good look because they can bring real benefits if they are built responsibly. Alaska still needs power for homes, businesses and industry. Matanuska-Susitna County is at the forefront of modern energy and new industries that require reliable electricity.
The West Susitna area is not an untouched wilderness. It has long been identified for resource development. There is a coal lease there, and the land has been set aside for industrial use. If we want reliable energy and economic growth, we won’t be surprised when proposals like the Terra Energy Center’s coal plant and biomass with a carbon cap emerge. This is not a return to the old coal plants. It is an attempt to use local resources with modern technology to produce reliable electricity.
No industrial project is without impact. The question is whether those impacts can be controlled and whether the benefits are felt in the areas selected for development. In the upper Susitna Valley, which has large coal reserves and geology suitable for carbon storage, a recent study from the University of Alaska Fairbanks outlines a possible way forward. It explored what a 75 or 300 megawatt biomass and coal plant with a carbon cap might look like and found electricity from a plant like this could compete with new natural gas production, especially as Cook Inlet gas supplies dwindle and LNG imports increase.
The investment is estimated to be between $1 billion and $3.6 billion. Although development should not depend on them, federal 45Q tax credits for carbon storage can reduce part of the long-term costs while they are available. Fuel prices are also more stable. Local coal and biomass are estimated to be about $4 per million BTU, while natural gas in Southcentral ranges from $7 to $30. With capture rates between 90% to 95%, emissions can fall below those of existing gas plants. This type of generation can store residual Cook Inlet gas for home heating while providing reliable baseload power.
A facility in the Susitna area could also support new industry in Port MacKenzie. Large data centers require constant power, often hundreds of megawatts around the clock. Alaska’s cold climate is an opportunity for cooling, but these devices rely on sustainable energy. One simple idea. Part of the plant’s production can be done directly at the facilities through long-term power contracts or a dedicated transmission line. Those industrial customers would pay for the buildings they needed, and their demand would not fall on residential ratepayers. Any excess power can be sold to utilities through power purchase agreements. Developers believe that this approach can support several institutions and billions of dollars in private investment.
Alaska often says it wants jobs, a strong tax base with no income tax, healthy profits and an economy independent of oil and the Permanent Fund. But when opportunities arise, sometimes we close the door before the conversation even begins. Meanwhile, budgets are tight and infrastructure lags behind. If Mat-Su Borough wants to lead the economy, Port MacKenzie is a logical place to start. The port was built for industrial operations. Data centers don’t hire thousands long-term, but the construction requires a lot of workers and the equipment generates a lot of property tax money. Other sites have shown what this can mean. Quincy, Washington, has turned its data center investment into major local tax revenue. Northern Virginia has seen billions in economic and related jobs. A similar approach here, combined with the local energy source, could boost the Mat-Su economy for decades.
However, a few misconceptions are worth clearing up.
Clean coal is often thought of as a marketing buzzword, but modern carbon capture techniques can remove a large portion of carbon dioxide before it reaches the atmosphere. A UAF study shows that greenhouse gas emissions can be lower than electricity from LNG. Pollutants such as sulfur and nitrogen are controlled with modern equipment, and captured carbon dioxide can be stored in deep geological formations such as the Cook Inlet gas reservoirs.
Another concern is that the project will overwhelm the Railbelt network. It actually increases the generation capacity and helps protect Cook Inlet’s natural gas supply for home heating. If data centers purchase energy through separate agreements, their demand does not change the cost to residential customers.
There are also concerns about water use. New data centers rely heavily on air conditioning and water management, which is another reason Alaska is attractive to developers. Water consumption is assessed at the time of approval.
Natural gas will not always be the cheapest option. Southcentral Alaska faces a potential supply gap between 2027 and 2030. We must be different. As production decreases, prices will rise. Coal and biomass provide a sustainable domestic fuel supply, and with government incentives for carbon storage UAF’s analysis shows carbon-intensive coal can compete with new gas plants on cost and emissions.
None of this implies automatic consent. It means proper analysis, clear rules and evidence-based decisions. The UAF test gives Mat-Su a place to start considering clean carbon-rich coal as one option to power data centers and power our economy. If we reject every proposal before the facts are reviewed, we will lose opportunities that could support our community for decades. Mat-Su Borough has an opportunity to lead, and deserves a serious look. We must stop saying “No, because” and start saying “Yes, but.”
Rep. Kevin McCabe of Big Lake is Alaska’s state representative for House District 30, which covers Point MacKenzie, Big Lake and follows the Parks Highway north to Anderson.
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