Feds select Anchorage company to drill geothermal test well on Augustine volcano

The U.S. Department of Energy has selected GeoAlaska LLC of Anchorage for possible federal funding to drill a geothermal test well on Augustine, the volcanic island in lower Cook Inlet. The amount hasn't been made public.

DOE announced the selection Monday, Sept. 21, as one of 21 geothermal projects nationwide sharing more than $99 million: five field tests of enhanced geothermal systems and 16 exploration-drilling projects. Augustine is the only Alaska project on the list. A selection isn't a final award. DOE can end negotiations for any reason, and further funding depends on Congress and on the project meeting milestones.

The plan is to drill, core, log and test a confirmation well on the volcano's southern flank. GeoAlaska plans a shallower well aimed at temperatures above 150 degrees Celsius, about 300 degrees Fahrenheit, and a deeper one above 350 degrees Celsius, about 660 degrees Fahrenheit. The data are set to be made public through DOE's Geothermal Data Repository.

A 2024 paper by GeoAlaska, Ignis Energy and Texas A&M researchers estimated the resource at about 70 megawatts, within a range of 49 to 93, at a capital cost near $234 million. The authors cautioned that "these numbers will change as GeoAlaska collects additional quantitative data." The paper said an exploration well was planned for 2024 and 2025; state and federal records don't show whether one was drilled.

The state gave GeoAlaska a geothermal prospecting permit in 2022 and a second, two-year permit in January 2024 covering about 7,205 acres, at $3 an acre a year. No one else applied, and Division Director Derek Nottingham found the benefits "outweigh the potential negative effects." The permit can become a lease if the company makes a commercial discovery and submits a development plan. State records don't show whether it has been renewed or converted.

Augustine has drawn interest before. A 2013 state lease sale drew one bid, but no exploration followed and the lease was given up in 2014. The state opened bidding on about 55,771 acres on the island's northern half in April 2025, but records don't show whether that sale drew bids. In June, Gov. Mike Dunleavy and POSCO International executive Lee Kye-in signed a nonbinding, two-year agreement naming Augustine geothermal development among the projects they plan to explore.

Today, Augustine is mainly used for volcano monitoring. It last erupted in 2006 and is at a normal alert level. The state's permit decision names Seldovia subsistence fishers for consultation, since a future power cable could temporarily displace fishing in the area.