Somebody wants power

Doing a Google search on "GVEA" netted me this interesting little blog article on NovaGold Resources and Barrick Gold, and a mine on Donlin Creek. These two companies have been working together, and are now embroiled in a hostile takeover struggle. Donlin Creek has one of the largest gold deposits on the continent.

Through its Placer Dome takeover, ABX [Barrick Gold] became a 30% partner and the operator. Barrick has “earn-in” rights to another 40% by meeting certain criteria. Barrick is required to expend $32MM, complete a Bankable Feasibility Study and make a positive decision to construct a mine by November 2007. Barrick has already spent the $32MM drilling the property. Novagold contends that Barrick will not be able to meet its other obligations by the deadline.

The mine that the partners are attempting to build will require 140 megawatts of power, and the nearest utility is GVEA--350 miles away. NovaGold is talking about using wind power, diesel generators, and a giant line to GVEA's grid so they can operate the mine at the capacity they are hoping to get. The article is seriously doubtful that all this is possible:

The current plan calls for a 350 mile 230kV power line to be constructed through the Alaskan wilderness, at a current cost of over $400MM. The power line would take at least 7 years to construct, the first 4 years in permitting alone....The problem is GVEA does not have the extra 140MW of capacity...

While it certainly seems, per this article, that GVEA would be unlikely to have the capacity to handle a monster project like this, it does indicate that there are big companies out there with a serious interest in GVEA's power generation equipment and capacity. Here's the information on Donlin Creek from the Northern Environmental Center. Definitely worth a read: the intertie would connect in near Nenana.

So perhaps this G&T thing isn't only about saving the membership money, but about directing power to those with the financial backing to buy it, or build more power generators, or to simply buy our generators from the G&T. After all, the G&T board of directors would be obligated to consider any transaction that might make financial sense.