GEOTHERMAL DEVELOPMENT PLAN: NORTHERN ARIZONA

Prepared by

The Arizona Geothermal Commercialization Team Don H. White, Ph.D., Principal Investigator Larry A. Goldstone, Project Manager

Arizona Geological Survey Open-File Report 80-10

1980

Arizona Geological Survey 416 W. Congress, Suite #100, Tucson, Arizona 85701

State Contractor: Arizona Solar Energy Commission, James F. Warnock, Jr., Director Frank Mancini, Ph.D., Associate Director 1700 West Washington, Phoenix, Arizona 85007

Work perfonned under Contract No. DE-FC03-80RA5oo76 Modification No. A-001 Evaluation of Geothennal Energy in Arizona U.S. Department of Energy San Francisco Office Region IX

Subcontract 114-80 with Department of Chemical Engineering University of Arizona Tucson, Arizona 35721

This report is preliminary and has not been edited or reviewed for conformity with Arizona Geological Survey standards

ACKNOWLEDGEMENTS

The Arizona Geothermal Commercialization Team has been comprised of many individuals over the past several years. Recognition is extended to the following professors who have contributed to the

Team's efforts: John Kessler, Ph.D.; Mike Pasqualetti, Ph.D.; and

David Wolf, Ph.D.

Group leaders were Mohamad Chehab, Larry Goldstone, Lani Malysa and Bill Weibel.

Other contributors include Cherif Ballamane, Ronda Bitterli,

Wei-hsin (Alex) Chung, Elizabeth Foster, Jeff Hagen, Akram Hasan,

Greta Jensen, Gary Kyle, Timeral Rowe, Edward Seames an4 John Westover.

The following people were special task contributors: Don Astrom,

Greta Jensen, Iftikhar Khan, Doug Linkhart, Lani Malysa, Mobin Qaheri,

Xavier Suarez, Charles Tabet and Steve Unguran.

In addition, W. Richard Hahman, Sr., Claudia Stone and Jim Witcher of the Arizona Bureau of Geology and Mineral Technology-Geothermal Group deserve recognition for their contributions and assistance.

Special thanks are extended to Bette Holt for drafting some of the figures and to Peggy Jackson and Lee DeYonghe for their assistance in typing the final manuscript. '. TABLE OF CONTENTS

LIST OF FIGURES ii

UST OF TABLES iv

INTRODUCTION 1

AREA DEVELOPMENT PLANS 2

GEOTHERMAL RESOURCES 2 ECONOMY

Population 4 Growth 4 Industry and Employment 6 Income 6 Other Economic Indicators 10

LAND OWNERSHIP 11

ENERGY USE -;- 18

HATER 22

DISTRICT HEATING 30

Alpine 30 Springerville 34

MATCHING GEOTHERMAL RESOURCES TO POTENTIAL USERS 37

Ready-Mix Concrete Industry 44 Sawmills Industry 44

APPENDIX A 46

BIBLIOGRAPHY 48

i LIST OF FIGURES

Figure

1 Area Development Plans for Arizona 3

2 Population Projections for the Northern Arizona Counties to 2020 5

3 Major Employment Sector Projections for the Northern Counties 7

4 Other Employment Sector Projections for the Northern Counties 8

5 Projections of Personal Per Capita Income for the Northern Counties (1972 Dollars) 9

6 General Land Ownership Map for Apache County 12

7 General Land Ownership Map for Coconino County 13

8 General Land Ownership Map for Gila County 14

9 General Land Ownership Hap for Mohave County 15

10 General Land Ownership Map for Navajo County 16

11 General Land Ownership Map for Yavapai County 17

12 Estimated Natural Gas Sales by Month in 1979 for Prescott (Yavapai County) 19

13 Estimated Natural Gas Sales by Month in 1979 for Kingman (Mohave County) 20

14 Estimated Natural Gas Sales by Month in 1979 for Flagstaff (Coconino County) 21

15 Projected Alternatives for Water Use in Gila County 23

16 Projected Alternatives for Water Use in ~avajo County 24

17 Projected Alternatives for Water Use in Apache County 25

18 Projected Alternatives for Water Use In Yavapai County 26

19 Projected Alternatives for Water Use in Coconino County 27

20 Projected Alternatives for Water Use in Mohave County 28

21 Projected Geothermal Heat On Line Under Private Development 38

ii LIST OF FIGURES continued

Figure

22 Projected Geothermal Heat On Line Under City Development 39

23 Projected Geothermal Heat on Line Under Private Development for the Residential, Commercial and Industrial Sectors 40

24 Projected Goetherma1 Heat On Line Under City Development for the Residential, Commercial and Industrial Sectors 41

iii INTRODUCTION

Alternative sources of energy will have to be developed as the avail­

ability of traditional energy resources continues to diminish. Arizona

is supplied with geothermal reserves which could potentially supplement

the existing energy supplies. Consequently, planning efforts have con­

centrated on estimating the potential of geothermal energy utilization

in Arizona and in providing information necessary for its prospective

commercialization.

Geothermal commercialization plans were prepared for seven distinct

intrastate subdivisions. The geothermal resource prospect and the poten­

tial geothermal uses for each area are discussed in separate Area Develop­ ment Plans (ADPs). The major objective of the ADP is to provide information

for the prospective development and commercialization of geothermal energy

in the specified area. Attempts are made to match the available geothermal

resources to potential residential, commercial, industrial and agricul­

tural users.

Much of the northern counties (Apache, Coconino, Gila, Mohave, Navajo

and Yavapai) is located in the Colorado Plateau province, a region of low geothermal potential. Two areas that do show some potential are the

Flagstaff - San Francisco Peaks area and the Springerville area. Flagstaff is rapidly becoming the manufacturing center of Arizona and will have many opportunities to use geothermal energy to satisfy part of its increasing need for energy. Using a computer simulation model, projections of geo­ thermal energy on line as a function of time are made for both private and city-owned utility development of a resource.

-1- AREA DEVELOPMENT PLANS

Arizona has been divided into seven distinct single or multicounty

subdivisions for which Area Development Plans (ADPs) for geothermal com- mercialization have been developed. A map of Arizona presented in Figure 1. shows these areas which are numbered in order of planning priority.

This ADP is concerned with the northern counties. Both metric and

English units are provided in the text. However t only metric units appear in the tables and figures. For convenience, some common conversion factors are listed in Table 1. In this report, one million Btu = MBtu.

TABLE 1: SOME COMMON CONVERSION FACTORS

Length and Volume Conversions: To Convert: Multiply By: To Obtain: meters 3.281 feet kilometers 0.6214 miles cubic kilometers 0.2399 cubic miles liters 0.2642 gallons Temperature Conversions: OF = (1.8 x °C) + 32

GEOTHERMAL RESOURCES

Much of the northern counties is located in the Colorado Plateau pro- -. vince, a region characterized by low heat flow and little geothermal po- tential. The Flagstaff - San Francisco Peaks and the Springerville areas, however, do exhibit some geothermal potential. Geologically young vol- canism has occurred in the San Francisco Peaks area, and U.S. Geological

Survey studies in the San Francisco Peaks volcanic field suggest that there may be significant residual volcanic heat at depth.

-2- . Priorities

. I) Maricopa II) Pima III) Graham/Greenlee . IV) Pinal 9 V) Yuma VI) Cochise/Santa Cruz VII) Northern Counties 1 (1,3,4,8,9,13)

County Names

1. Apache 2. Cochise 3. Coconino 4. Gila 5e Graham 6. Greenlee 2 7. Maricopa 8. Mohave 9.~ Navajo 10. Pima 11. Pinal 12. Santa Cruz 13. Yavapai 14. Yuma

",

Figure 1: Area Development Plans for Arizona.

-3- Abnormally high heat flow occurs in the Springerville area, an area located in northeastern Arizona (Apache County) where both geologically young and extinct volcanoes are observed. There is one hot spring in o Apache County that discharges water having a temperature of 21.7 C (71.1oF)!

Sixty wells located in the county ranging from 200 m (660 ft) to 400 m

(1310 ft) in depth produce water ranging in temperature from 20°C (6SoF) to 27°C (81°F).

Further studies are being conducted by the Arizona Bureau of Geology and Mineral Technology to identify additional geothermal resources. Re­ sults of these studies will be available next year.

ECONOMY

Population

The 1980 population of the northern Arizona counties was 355,657 people. The combined land area of the counties is 65,709 square miles which results in a population density of 5.4 persons per square mile.

The ethnic breakdown of the population is 55 percent white, 28 percent

Indian, 11 percent Hispanic and 1 percent black.

Growth

Since 1970 the northern counties have experienced an annual popula­ tion growth rate of 5.8 percent. Table 2 shows .. the annual population growth for each of the counties from 1970 to 1978.

Population projections for the combined counties indicated in

Figure 2 show steady growth for the next forty years.

The largest city in northern Arizona is Flagstaff. This city is rapidly becoming the manufacturing center of northern Arizona due to its access to two main interstates.

-4- Population (in th~usands)

8,000

7,000

6,000 I VI 1

5,000

4,000

3,000

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Figure 2; Population Projections for the Northern Arizona Counties to 2020. Source; Technical Advisory Conunittee (DES) TABLE 2: ANNUAL POPULATION GROWTH RATES FOR THE NORTHERN COUNTIES, 1970 - 1978

County Annual Growth Rate

Mohave 9.8%

Yavapai 7 0 7% Apache 6.5% Coconino 4.1% Navajo 4.0% Gila 2.5%

Industry and EmplOyment

Figures 3 and 4 show current and projected employment levels for the various sectors in the northern counties. Presently, the largest employment sectors are the trade and service sectors. By the year 2000, the trade and service sectors are projected to increase 77 percent and 79 percent, res- pectively; manufacturing is projected to increase 67 percent and the mining and utility sectors are both expected to grow 71 percent. Employment in agriculture is expected to decrease 17 percent.

The Department of Economic Security estimates that total employment in the northern counties will rise 1.8 percent annually to the year 2000.

Income

In addition, several other economic indicators show positive growth in northern Arizona. Figure 5 presents projections of personal per capita income for the northern counties to 2000. Annual growth rates are shown in Table 3.

These income figures represent a slower rate of growth than is common in the more populous Maricopa and Pima counties. Also the types of employ- ment found in these two counties tend to have a lower wage scale than the more industrialized counties.

-6- 30,000 I- ..-

....-

25,000 ~

o:l aJ aJ >, 20,000 ,...,a ~ ...... e-c::: ~ - to-< a - ....- l-4 II 15,000 ..- § !- z . - ....- 10,000 ~ ,...... -

5.000 ~

1978 2000 1978 2000 1978 2000 1978 2000 1978 2000 Constr. Manuf. Trade Service Local

Figure 3: Major Employment Sector Projections for the Northern Counties o Source: Department of Economic Security

-7- 15,000 "'" -

10,000 -

:- r--

'.... o "- i-o .-- ~ ~ :: S Z

5,000 ... -

~

..- - -- -

1978 2000 1978 2000 1978 2000 1978 2000 1978 2000 Agri. Mining Utilities FIEE Civilian

Figure 4: Other Employment Sector Projections for the Northern Counties. Source: Department of Economic Security

-8- $7,000

Yavapai Gila $6,000 Coconino ~1ohave

~e $5,000 0 .c.J ,....r::: Apache ~ ...... j.I c.. Navajo ~ u $4,000 ;.. <:) 0...... :e r::: 0 'Jl ;.. ~ 0.. $3,000

$2,000

$1,000

1978 1980 1985 1990 1995 2000

----.._----_._------..------Figure 5: Projections of Personal Per Capita Income for the Northern Counties (1972 Dollars) Source: Department of Economic Security

-9- TABLE 3:" PROJECTIONS OF PERSONAL PER CAPITA INCOME GROWTH TO 2000

% Annual Personal % Annual Per Capita County Income Growth Income Growth Apache 3.6 1.6 Coconino 5.5 2.1 Gila 4.4 2.7 Mohave 4.6 2.2 Navajo 4.2 1.6 Yavapai 4.5 2.4

Other Economic Indicators

Between 1968 and 1978 the value of retail sales steadily increased

in both counties. Table 4 indicates the percentage increase in retail

sales and bank deposits over the ten-year period.

TABLE 4: RETAIL SALES IN THE NORTHERN COUNTIES

% Increase in % Increase in Retail Sales Bank Deposits County 1968 - 1978 1968 - 1978 Apache 242.1 231.5 Coconino 231.4 239.3 Gila 195.7 152.1 Mohave 363.4 413.0 Navajo 360.1 270.9 Yavapai 300.2 212.2

The sparse population of the northern counties and the lack of an in- dustria1 base have resulted in few potential developers of geothermal energy.

However, increases in the major economic indicators suggest that the his-

torica11y slow growth of the northern counties is changing. With population

-10- growth and the encouragement of light industry, the opportunities to use geothermal energy will also increase.

LAi'ID OWNERSHIl'- .. -- ._- .. Figures 6, 7, 8, 9, 10 and 11 show general land ownerships maps for

Apache, Coconino, Gila, Mohave, Navajo and Yavapai counties. Table 5 gives acreage breakdowns for each ownership class.

TABLE 5: BREAKDOWN OF LAND OWNERSHIP

Apache Total Coconino Total % Acres % Acres Federal 11 786,610 40 4,754,800 State 10 715,100 9 1,069,830 Indian 62 4,443,620 37 4,398,190 Private 17 1,215,670 14 1,664,180

Total 100 7,151,000 100 11,887,000

Gila Total Mohave Total % Acres % Acres Federal 58 1,763,200 69 5,855,340 State 1 30,400 6 509,160 Indian 38 1,155,200 7 594,020 Private 3 91,200 18 1,527,480

Total 100 . 3,040,000 100 8,486,000

Navajo Total Yavapai Total % Acres % Acres Federal 10 634,300 50 2,589,500 State 5 317,150 27 1,398,330 Indian 66 4,186,380 0 Private 19 1,205,170 23 1,191,170

Total 100 6,343,000 100 5,179,000

-11- o

l. E G E N 0

o ~RIVAre:

a STATE

~ INOIAN

FEDERAL

Miles

o ___10 .,;2~0_ 30

Figure 6: General LArizona Water'Commissiop for Apach(e ...County_ Source: and Ownership Ma n 1977)

-12- .. .. - . :0

......

L E G E N o

o PRIVATE

o STATE

~ INDIAN FEDERAL 1 .J.. 9'J"~14'- • <10')'. MillS / . 7'/. o 10 20 I ! I

Figure 7: General Land Ownership Map for Coconino County. Source: Arizona Water Commission (1977)

-13- Gli"",,-..J

Mile:!

0'-,__...10 2;;.,;0__~30

E G e: N 0 n PRIVATE STAn: ~ INOIAN FEOERAI. L-.J D

Figure 8: General Land Ownership Map for Gila County. Source: Arizona Water Commission (1977)

-14- , . I ' II • • I...... ,...... ' '0~/'Y '/ /j I • ...... v / '/ • ...... J. .I:J- • • · ...... • ". • •• J' :1...... • I .' I .. :J , ." • , ·.. ~ • .. • ~ • .. • I l- ... • • •• .I , ~':7 • I • •• w'"'i, • · . • ~ .. - •• • ... - • • • ...... - " • • '" I • •- -•• • • • I - -

, • .' • • ,. • , , , • ' . rI' A' • • A ·. :. , • • I I ~ ~ '- ...... • ,0 ·..-:-; ..."1,.::• " I .. _ . .' ' ...... ,• ;a •••• :.. • •• ;1 •••••••••2 ~. , ...•. •,'.''!I':_!!.'It-:.:.•.:.:.:.:.:.;.'.:,.:-:-.:..1, .-:.:.;.;-;.. :: . . ' • • 1 • • • • .. • I I • ,1,-. ';•• /i~·~:·:W·l·/~"a 1- 1:- ·.. ..':-:-:.:-:-:-:-: :.:.:.:.... ~ . . ,...•... ' . - \ ,.. · ' \.'...... ·. ., < .:.:.:. "':~"'I:':':':':l ... /-,.. .. :.:.:....: .;;...... •. , . . :.. .:.: -., . . . '~r : •. ~. .- Y· '.:_.1 I .. ,.), ., .. '. .:- . .. t·.~ ·.·.·.·1· ••1' • •... • ..a II • - • • •• • , . • Mill' •• 1I o 10, 20 30 • • •• 1 ,

I. E G E II 0

DpR,VAn: STATE ~IIlOIAN FEOERAI. o ~__".©69~.

Figure 9: General Land Ownership Map for Mohave County. Source: Arizona Water Commission (1977)

-15- rT: l...... _..J\

LEG E N 0

o PRIVATE

== STATe:

~ INOIAN

rj - ...... ; F"EOERAL

Mil••

o 10 ro 30

Figure 10: General Land Ownership Map for Navajo County. Source: Arizona Water Commission (1977)

-16- ...... _..

Miles

o 10 , I

L E G E N"' 0

DPRIVATE EI STATE ~INOIAN FEDERAL

Figure 11: General Land Ownership Map for Yavapai County~ Source: Arizona Water Commission (1977)

-17- ENERGY USE

The largest electric utility company serving northern Arizona is

Arizona Public Service Company. Other electric utility companies in-

~l.ud~ Nav~.p~'<=:tl..e.~lectric C_~operative~hicl1_.seJ:"Ves both Navajo a~d ~pache.

counties and Mohave Electric Cooperative t Inc. t which serves Mohave County. Southern Union Gas provides natural gas to Prescott, Kingman and

Flagstaff. Natural gas sales for the residential t commercial t public

authority and industrial user classes are presented in Figures 12, 13

and 14 for Prescott t Kingman and Flagstaff t respectively. Residential

users are clearly the largest consumers of natural gas in the winter months due to the use of natural gas for heating. Demand for natural

gas drops off rapidly in the summer months and is at its lowest in August.

With one exception, this general pattern of high demand~or natural gas in

the w~nter months and decreasing demand in the summer months is consistent

for the other user classes as well. Unlike the other user classes, the

industrial class of Kingman, consisting primarily of the copper mine north- west of the town, uses more matural gas during the summer in generating

electricity.

For comparative purposes, Table 6 shows the average natural gas con-

sumption per facility for the residential, commercial and industrial user classes of three towns in the northern counties and of the southern counties as a whole. The figures show that the northern counties consume signi-

ficantly more natural gas than do the southern counties. The disparity

can be attributed to the severity of the winters in the northern counties t

causing more natural gas to be consumed by the northern counties for heating purposes.

-18- Sales in t-1CF (in thousands)

200

46S -: 160 de./jt. .J. il./

120

I t-' \0 I 80 Commercial

40 Public Authority

Industrial

I I _ 1__ J • • . ------~ - ._- - Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

Figure 12: Estimated Natural Gas Sales by Honth in 1979 for Prescott (Yavapai County). Source: Southern linIon Gas Company Sales in ~1CF (in thousands) 100

ltl-s'~' 80 C/~ 'I)l' . .j~./

60 I Iv o I

40 Commercial:

20 Public A~ity

Jan Feb Mar Apr May JlUle July Aug Sept Oct Nov Dec

Figure 13: Estimated Natural Gas Sales by Month in 1979 ,for Kingman (Mohave County). Sl.lurce:. Southern Union Gas Company Sales in MCF (in thousands)

200

Res· -lc/elj t-iil./ 160

120 Commerieal

I N ...... I

80

40

.Jon Feb Har Anr May .Tune JulY Aug Sept Oct Nov nee

Figure 14: Estimated Natural Gas Sales by Month in 1979 for Flagstaff (Coconino County). Source; Southern Union Gas'Company TABLE 6: COMPARISON OF AVERAGE CONSUMPTION OF NATURAL GAS PER FACILITY BY USER CLASS, 1979

Northern Counties

Residential Connnercial Industrial Flagstaff 134.0 MCF 758.26 42416.7 Kingman 89.0 MCF 407.45 87557.25 Prescott 106.34 MCF 442.25 17555.0

Southern Counties Residential Connnerci.al Industrial Southern Counties 62.9 MCF 467.7 13786~8

Source: Southern Union Gas Corporation Southwest Gas Corporation

\ WATER Figures 15 through 20 present alternative futures for water use for

the northern counties. The three alternatives take into account a variety of factors such as population growth, industrial development and consumer lifestyles that will have an effect on the future level of water use. In general, urban water depletions are expected to be even greater than what would be expected due to the projected population increases alone. In

Apache, Coconino and Navajo counties, the current per capita rate of use is much lower than the remainder of the state. <.These rates are expected to show small increases.

Because of the scattered nature of most urban water use in northern

Arizona, the reuse of water is limited. Therefore, depletions for urban use represent a larger portion of withdrawals for the northern counties than for other parts of Arizona.

-22- PROJECTED ALTERNATIVE WATER DEPLETIONS AND DEPENDABLE SUPPLY

90

I- W l.U U.. u.Ia: 60 <.) < u. 0 In 0 ~O Z < In :::l 0 J: I- 0 1970 1geo 1990 2000 2010 2020 YEAR

ALTERNATIVE FUTURES SUMMARY

ITEM ALTERNATIVE FUTURES

(Quantlt'" In Thousands) I It 1\1 1970 1990 2020 t990 2020 1990 2020 POPULATION • 29.3 53.9 65.2 40.5 56.4 40.5 56.4 HARVESTED ACRES 1.0 1.2 1.3 1.0 1.0 0.8 0 URBAN DEPLETIONS AFIYR 2.9 J.8 4.9 2.9 4.2 2.9 42 STEAM ELECTRIC DEPLETIONS AFIYR 0 0 0 0 0 0 0 MINERAl. DEPLETIONS AFIYR 14.0 330 82.0 29.0 60.0 29.0 60.0 AGRICUl.TURAl. OE?L. AF/YR 2.0 2.3 2.6 2.0 2.0 1.6 0 TOTAl. WATER OE?L. AF/YR 19 39 89 34 66 J.'3 64 DEPENDABl.E WATER AFIYR t9 34 37 , 34 37 34 37 SURPl.US SUPPLY (Del.) 0 (5\ (52\ 0 (29\ 1 (27)

Figure 15: Projected Alternatives for Water Use in Gila County. Source: Arizona Water Commission (1977)

-23- PROJECTED ALTERNATIVE WATER DEPLETIONS

I~O .------.,

~ 1&.1 1&.1u.. I 1&.1a: 100 U ~ u.. o _---"":"-=~=:A:I.::T:.~I~;;;:;~ AI..T...!. __--: - en _ .___ ----:----.-----.------.~AL.T. ttI o ~O -::-~_. Z l.-_gIII""" ~ en o:> : ~ Ol- ....L- ---l~----~_:_--~~_:_---""':"":' 1970 1980 1990 2000 2010 2020 YEAR

NOTe. Oeoend.Jot. IUQpty C:VI 01 drt'eIOPe'i2 10 sallsfv deC:)ltlIOns In all Ilm.frames

ALTERNATIVE FUTURES SUMMARY

ITEM ALTERNATiVe FUTURes

(OulInUlies In Thoullndal I II III 1970 1990 2020 1990 2020 I 1990 2020 POPULATION 41.'6 812 1240 72.1 106.0 72.1 106.0 HARVESTEO ACRES 13.0 145 15.0 13.0 13.0 13.0 13.0 URBAN DEPLETIONS AF/YR 15.3 16.1 19.9 15.4 18.5 15.4 18.5 STEAM ELECTRIC DEPLETIONS AF/YR 3.1 13.5 36.1 11.7 22.9 11.1 22.9 MINERAL DEPLETIONS AF/YR 0 40 6.0 40 6.0 40 6.0 AGRICULTURAL DEPL. AF,VR 26.0 28.9 30.0 26.0 26.0 26.0 26.0 TOTAL WA TER OEPL. AFiVR 44 62 92 51 73 51 73 OEPENOABLE WATER AF/YR' 44 62 92 57 73 57 73 SURPLUS SUPPLY (Oel.)' 0 0 0 0 0 0 0

.The 0''1''00101. dee.ndloa. supoty ••ceecs d,p'.honl. t".,.tore. SUQQly and a~04!'ndl04.supply I'. Issuml!d 10 b. In O,Jlane. ·0,,1'(''''CI'. mlV '.'It In IQcalI.U!d ;1'''.1.

Figure 16: Projected Alternat~ves for Water Use in Navajo County. Source: Arizona Water Comm~ssion (1977)

-24- PROJECTED ALTERNATIVE WATER DEPLETIONS

I~O

AL.T. t AL.T. It ---- 100 AL.t m --_..

50

·0 I..- ...I- ....J. .l- -J 1970 1980 1990 2000 2010 2020 YEAR

NOT! o.penOaCle sUPPly can De d.",eIOQe

ALTERNAT1VE FUTURES SUMMARY-

ITEM ALTERNATlVE FUTURES

(0"""11"" In Thou.and') I II III "70 1990 2020 1990 2020 1990 2020 POPULATION 32.3 15.7 134.0 75.4 141.0 75.4 141.0 HARVESTED ACRES . a.5 9.4 9.8 a.5 a.5 8.5 8.5 URBAN DEPLETIONS AFfYR 2.3 5.3 to.l 5.3 10.6 5.3 10.6 STEAM ELECTRIC DEPLETIONS AFfYR 0 14.7 37.3 12.8 24.0 12.8 240 MINERAL DEPLETIONS AFfYR 1.0 2.0 3.0 2.0 3.0 2.0 3.0 AGRICULTURAL DEFL AFfYR 14.0 15.5 16.2 140 14.0 14.0 14.0 TOTAL WATER DEPL AFfYR 17 37 67 34 52 34 52 DEFENDABLE WATER AF/YR' 17 37 67 34 52 34 52 SURPLUS SUPPLY (Deq' 0 0 0 0 0 0 0

'11\. "..MOPIDIe CSeP4tf\dlDle ,upC'ty ••cHdI d-olactOnt. lhef"or•.•UPQly and deCMftGaote ....opfv.,. u.um4td to De In tuuance. :OeilCleftcan may ••llt In 1000hzed &leu.

Figure 17: Proj ected Alternatives for Water Use in Apache County. Source: Arizona Water Commission (1977)

-25- PROJECTED ALTERNATIVE WATER DEPLETIONS AND DEPENDABLE SUPPLY 120,...------,

~ lIJ lIJ \I"• lIJa:: so u cl II. 0 III 0 40 Z ~ III :;) O' 1: ~

OL- .l- .l- .J..- ~___:_---~ 1970 1980 1990 2000 2010 2020 YEAR

ALTERNATIVE FUTURES SUMMARY

ITEM ALTERNATlVE FUTURES

(Qu.nUll" In TIIouunda, I II III 1970 1990 2020 1990 2020 1990 2020 POPUL.ATION . 36.8 108.0 191.0 610 92.8 67.0 92.15 HARVESTED ACl'lES 8.0 6.7 6.9 6.0 6.0 6.0 6.0 URBAN DEPLETIONS AFIYR 4.9 8.8 15.8 5.4 7.6 5.4 7.6 STEAM ELECTl'lIC OEPLETIONS AFIYR 0 0 22.7 0 95 0 9.5 MINERAL OEPLETIONS AFIYR 5.0 20.0 48.0 170 38.0 17.0 38.0 AGRICULTURAL OEPL. AF/YR 240 24.2 22.8 21.8 19.8 22.0 20.0 TOTAL WATER OEPL. AFIYR 34 53 109 44 75 44 75 OEPENDABLE WATER AF/YR' 22 46 58 41 41 41 41 SURPLUS SUPPLY (Oel.) (12) (9\ (51\ -. (3\ (28) (3) (28)

'In eM."" ar ••• ..,P\.,llddIUonai ..,a.etmly ~dl"fe+OC)e'd:I'" deoettd••suootv ....set ltqU&t to d~'hO". Trans'., 'rom .'1.1 wnetl a SuOply Could be ~"O(Mdto defiCient " ••, 'I nol t_"ltUI lMCauSI o' geoqrlO"IC: cGncutlon. 1".,ltOf•. l1.tlCIet1Clft ire un.'4OtdIOle.

Figure 18: Projected Alternatives for Water Use in Yavapai County. Source: Arizona Water Commission (1977)

-26- PROJECTED ALTERNATIVE WATER DEPLETIONS

150

I- LIJ ALT. I LIJ ~. ALi: It ---- LIJ a: 100 AL.T. m _.-.- u ~ u. 0 (f) 0 50 Z ~ (f) ~ 0 J: I- OL.-- --I -.L --... -J

1970 1980 1990 2000 2010 2020 YEAR

NOTE. Olt1)enClable IUQPly can 01 d'V~OPed 10 'lUSty deplellon~ ,n all IIme'tames

ALTERNATIVE FUTURES SUMMARY

ITEM AI.TERNATIVE FUTURES

(QII..,UI," In ThouI.nclll I II III 1970 1990 2020 1990 2020 1990 2020 POPUL.ATION 48.3 77.7 100.0 103.0 160.0 103.0 160.0 HARVESTEO ACRES . 4.5 5.0 5.2 4.5 4.5 4.5 4.5 URBAN CEPLETIONS AFfYR 5.3 6.4 8.7 8.4 13.9 8.4 13.9 STEAM ELECTRIC OEPLETIONS AF/YR 0 31.4 57.6 27.3 42.2 27.3 42.2 MINERAL CEPLETIONS AF/YR 0 1.0 2.0 1.0 2.0 1.0 2.0 AGRICULTURAL CEPL. AFrtR 9.0 9.9 10.4 9.0 9.0 9.0 9.0 TOTAL WATER OEPL. AF/YR '4 49 79 46 67 46 67 OEPENDABLE WATER AF/YR' '4 49 79 46 67 46 67 SURPLUS SUPPLY iCef.)' 0 a 0 0 a 0 a

'Tnt d:.-w~OOlbl'Cle~nd.DI'suaotv 'sCft'dl d:.~.tlons. t"ef,'or•. SUl)O'ly and dependabil tuooty It. assumed to bl In e.lane•. :OehCl.nCtn may ,s.'l In loc:alll~ .,tu.

Figure 19: Projected Alternatives for Water Use in Coconino County. Source: Arizona Water Commission (1977)

-27- PROJECTED ALTERNATIVE WATER DEPLETIONS

300

I- lI.I lI.I LI. I lI.I a:: 200 tt.\.r. u q u.. m 0

ALTERNATIVE FUTURES SUMMARY

ITEM .... LTERNATIVE FUTURES (OUMUU.. In ThOUlllndlll I II III 1910 1990 2020 1990 2020 1990 2020 POPULATION 25.9 52.6 94.3 55.6 82.4 55.6 82.4 HARVeSTEO AC~ES , 8.0 24.9 31.1 24.5 30.3 U.8 28.9 URBAN OEPlETIONS AFfYR 6.1 9.0 .15.1 9.5 13.9 9.5 13.9 STEAM ELECTRIC OEPl.eTIONS AFIYR 0 0 26.2 0 10.9 0 10.9 MINERAL OEPl.eTIONS AFIYR 4.0 9.0 28.0 9.0 18.0 9.0 18.0 AGRICULTURAL OEPl. AFfYR 23.0 91.0 112.0 94.7 109 92.0. 104.0 TOTAL WATER OEPL AFfYR' 71 152 219 150 189 148 184 OEPENOABLE WATER AFIYR' 61 138 t81 139 169 139 t69 SURPlUS SUPPlY (Cel.) (4) (t4) (32) (11) (20) (9) (1S)

'IncluClell 37.:lOO "FfYA rOf "'" ...., ..I

Figure 20: Projected Alternatives for Water Use in Mohave County. Source: Arizona Water Commission (1977)

-28- For Gila, Navajo, Apache and Yavapai counties, little change is ex-

pected in water use for irrigated agricultural production. Under Alternatives II I II and III, water use in Coconino County in the year 2020 is projected to I I £ be over double the current levels. In Mohave County, all three alternatives I I show water use for irrigated agricultural production at least tripling by f 1990 and continuing to increase to the year 2020. I Large increases are forecast in the amount of water used to cool I steam electric power plants. Water use has increased significantly due I to the construction of new and the expansion of existing power plants.

Additional coal-fired plants and plant expansion are anticipated so that by 2020, water use will range from 68,000 to 154,000 acre-feet per year.

As much as 23,000 acre-feet of this may occur in Yavapai County if the high projection of electrical power generation in Arizona is realized.

Both Yavapai and Mohave counties anticipate major expansions of the existing copper mines. Although water used for this purpose will increase with the projected increase in mineral production, it will continue to be less than 10 percent of the statewide levels.

Several surface water hydrologic areas supply water to northern Arizona.

The Colorado River Drainage Basin supplies water to most of the developed areas in Apache, Coconino and Navajo counties. The Verde River Basin supplies water to urban development in Yavapai County. The Colorado

River supplies Mohave County with water. Future dependable supplies along the Colorado River are projected to equal depletions. However, off-river uses of water will result in deficiencies for Mohave County under all three alternatives.

-29- DISTRICT HEATING

Both. Springerville and Alpine, located in the White Mountains of

east-central Arizona, experience severe winters. Evidence for geothermal

potential in the area suggests that geothermal district heating systems

for the two towns may be feasible.

Alpine

The community of Alpine is a small town located in the White Mountains

of east-central Arizona approximately 25 miles soutn of Springerville, Arizona.

The community has a population of 500 people and has nistorica11y experienced

very slow growth. Future growth is expected to he only one percent per year

during the next 20 years. Because the community is isolated, utility ser-

vices are not available. Most people heat their homes with purchased diesel

oil or propane. In addition, the mountain location results in severe winters

of much longer duration than is the case in southern Arizona. For comparison,

heating degree days for Alpine are 7500 versus 1500 in Phoenix. These cir-

cumstances make Alpine a possible candidate for a geothermal heating system. Preliminary studies on the. potential existence of geothermal energy resources in the. Alpine and Springerville area have be.en completed b.y the

Arizona Bureau of Geology and Mineral Technology, Geothermal Group. Although.

the. conclusions of the study are far from definitive., se.veral comments are worth noting. First, the study concludes that -Ita relatively shallow heat source of unknown character and dimension exists, probably beneath the. area between Springerville. and Alpine. Second, groundwater supplying the. eastern half of the area is positively affected by this heat source."

In addition to these conclusions, a shallow bore hole has been drilled

o 0 just north of Alpine. The hole. had a temperature of 33 C (9~ F) at a

-30- depth of 357 m (1170 ft). The estimated temperature gradient was 75 oC/km

(5 0 F/100 ft). The economic analysis which follows assumes the existence

of a geothermal resource with the above characteristics.

The following analysis concerns the economic factors necessary to de- velop a geothermal heating district in Alpine. Two cases are considered.

The first case assumes that the City of Alpine establishes a local public service company responsible for the development, distribution and manage­ ment of the heating district. The intent of the utility would be to pro- vide hot water for domestic and commercial space heating and hot water needs while earning a modest profit. The second case assumes that a private (investor-owned) utility would be responsible for development, distribution and management of the district heating system. The intent of the utility would be to earn a profit on its operations. Both options are considered feasible methods for geothermal development.

The geothermal heating district for Alpine would consist of 167 resi- dential houses as well as commercial buildings. It is assumed that com­ mercial heat demand is equal to residential heat demand. Estimated resi- dential peak demand for the community is 7,516,000 Btu/hr. The developer would be required to drill wells necessary for the system. It is assumed that 60 0 c (1400 F) geothermal water could be discovered at 914 m (3000 ft) at a distance of one mile from Alpine. It is. further assumed that the flow rate would be 1890 l/min (500 gpm). Lastly, people living in Alpine must purchase fuel oil or propane for use in heating houses and businesses.

It is assumed that the price of purchased energy is $7.00/MBtu. Table 7 presents a summary of assumptions for the two cases considered.

-31- TABLE 7: ASSUMPTIONS FOR ALPINE DISTRICT HEATING SYSTEM

City Private Variable Development Development 0 o 0 o Resource Temperature 60 c (140 F) 60 C (140 F) Depth 914 m (3000 ft) 914 m (3000 ft) Flow Rate 1890 l/min (500 gpm) 1890 l/min (500 gpm) Distance 1609 m (1 mile) 1609 m (1 mile) Bond rate (above inflation) 1% 2% Equity Capital 10% 10% Sales Tax Rate 0% 5% State Tax Rate 0% 15% Federal Tax Rate 0% 46% Geothermal Tax Credit 0% 15% Minimum Tax Rate 0% 15% Property Tax Rate 0% 1% Regular Investment Tax Credit 0% 10% Required Rate of Return 1% 20% (above inflation) Conventional Fuel Price (MBtu) $7.00 $7.00 Real Fuel Price Growth 2% 2% (per year) Project Life (years) 20 20

Using the above-outlined assumptions, a life-cycle cost for geothermal

energy was calculated and compared to the price of propane. The price of

. geothermal energy was found to be $4.55 under private development and $4.33

under city development. In both cases, geothermal energy can be supplied

at a price less than the price of currently available fuel. Net fuel cost

savings over the life of the project total $3,693,000 under city develop-

ment and $2,795,000 under private development. Table 8 presents an

itemized cost summary for the two cases considered.

-32- TABLE 8: COST SUMMARY FOR ALPINE DISTRICT HEATING SYSTEM

Present Value of Capital Costs Category City Development Private Development Research Investment(l) $ 461,291 $ 453,062 Design 179,684 159,915 Wells(2) 325,269 271,468 Transmission 195,967 178,770 Distribution Costs: Residential Retrofit 362,570 330,753 Residential Hookup 125,892 114,845 Commercial Conversion 255,309 232,905 Heat Exchangers 75,963 69,297 Central System 925,280 844,084

Totals $2,907,225 $2,655,099

(l)Research Investment includes the cost of the first well, leases and pumps.

(2)Well cost is the present value of a well drilled 10 years later to pro­ vide for system expansion and necessary leases, pumps and injection wells.

In addition to capital costs there are also operating costs which in-

clude maintenance and electricity costs to run the pumps and fans for the

system. These costs are assumed to be 2.5 percent of the cumulative invest-

ment per year. Operating costs are not a separate line item. Rather they

are reflected in the final price per million Btu.

Of most interest in the above analysis is. the difference in the price

of geothermal energy depending on the type of developer. The advantages of

city development include a lower cost of capital, a lower required rate of

return and exemption from state and federal taxes. However, because a pri-

vate developer can take advantage of geothermal tax credits and regular in- vestment tax credits, the private developer is able to offset some of the advantages of a city developer.

-33- Springerville

Springerville, Arizona, along with the adjacent community of Eagar, is located about 220 miles northeast of Phoenix in the White Mountains of

Apache County. Historically, Springerville has been an agricultural com- munity relying heavily on cattle and sheep grazing. Today, the largest employment sector is the lumber industry followed by the construction in- dustry. Currently, two large coal-fired power plants are under construc- tion in the area. The population of the Springerville area is estimated to be 5,600 people and the annual compound growth rate during the past 10 years was 5.8 percent. Future population projections suggest a growth rate of 4.2 percent per year over the next 20 years. As was the case with Alpine,

Springerville experiences long winters and very mild summers. Heating degree days exceed 6000 for the Springerville area, making it a good can- didate for district heating using geothermal energy.

The economic analysis which follows assumes the existence of a geo- thermal resource. As was the case with the Alpine analysis, only prelim- inary studies on the local geothermal resource potential have been performed.

The reader should refer back to the Alpine section for resource information.

In this analysis, the economics of a geothermal district heating system are compared for two cases. The first case assumes that the district heating system is established for existing residential and commercial buildings.

The second case assumes that a new subdevelopment would be constructed with the intention of using geothermal energy to provide space heating and hot water. In both cases it is assumed that a city utility develops the dis- trict heating system. It is also assumed that current energy users consume electricity for their space heat and hot water needs.

-34- For both cases, the geothermal district heating system would con- sist of 250 residential houses as well as commercial buildings. It is assumed that total commercial demand is equal to 10 percent of residen- tial demand. Estimated total peak demand for the system is calculated to be 10,518,750 Btu/hr. It is assumed that 60 0 C (1400 F) geothermal water could be discovered at 914 m (3000 ft) at a distance of one mile from the site. It is further assumed that the flow rate would be 3780 l/min (1000 gpm).

Table 9 presents a summary of assumptions far the analysis.

TABLE 9: ASSUMPTIONS FOR SPRINGERVILLE DISTRICT HEATING SYSTE..'1

Variable Assumed Value Resource Temperature 60 0 C (1400 F) Depth 914 m (3000 ft) Flow Rate 3780 l/min (1000 gpm) Distance 1690 m (1 mile) Bond Rate (above inflation) 1% Equity Capital 10% Taxes (Federal and State) o Tax Credits o Population 750 Rate of Return (above inflation) 1% Price of Conventional Fuel (per MBtu) $10 Project Life (years) 20

Under the above assumptions, two life-eycle costs for geothermal energy were calculated. If the development of a geothermal district heating system involved retrofitting existing homes and commercialbuildings~ the life-cycle price of geothermal energy was calculated to be $5.53 per million Btu. This price includes the costs for hookup and conversion of each structure to be heated. If a new development were built and designed to use geothermal

-35- heat, the price of geothermal energy would be $3.96 per million Btu. In addition, each home would require $1,250 worth of hookup and heating equipment. In both cases, the geothermal price compares quite favorably with local costs for both electricity and propane. In the retrofit case, total fuel cost savings over 20 years would equal $2,618,000; in the new growth case, total fuel cost savings would equal $3,538,000. Table 10 presents an itemized cost summary for the two cases considered.

TABLE 10: COST SUMMARY FOR SPRINGERVILLE DISTRICT HEATI~G SYSTEM

Present Value of Capital Costs Category Retrofit Case New Growth Case Design $ 238,011 $ 168,810 Wells* 515,983 515,983 Transmission 146,707 146,707 Distribution: Residential Retrofit 466,917 o Residential Hookup 162,124 Commercial Conversion 32,879 ° Heat Exchangers 47,158 47,158° Central System 935,924 935,924

Totals $2,545,701 $1,814,582

*We11 cost includes production wells, injection wells, pumps and lease costs.

In addition to the capital costs are operating costs which are estimated to be 2.5 percent of the total cumulative investment in each year. These costs are reflected in the total price of the energy.

It is obvious from the above analysis that new growth situations are preferable to retrofit situations for establishing geothermal district heating systems. However, in the new growth situation, energy users must pay for the equipment installed in each home. The effect would be to increase the

-36- price of each home or commercial building although the price of the heating

equipment is comparable to prices for current furnace units. A second

point worth noting is that the system analyzed contains significant ex­

cess capacity. Expansion of the heating district to 750 homes would be

possible without incurring additional drilling costs.

MATCHING GEOTHERMAL RESOURCES TO POTENTIAL USERS

In order to define a time frame in which geothermal energy will rea­

lize commercial use, projections were made of the amount of geothermal

energy on line as a function of time. It was with the assistance of the

New Mexico Energy Institute (NMEI) that this time line was produced. For

modeling purposes, it was assumed that geothermal energy comes on line

when its price becomes lower than that of energy alternatives. Pro­

jections of geothermal energy on line for industrial process heat under

private development and city-owned utility development are presented in

Figure 21 and Figure 22, respectively. Projections of geothermal energy

on line for the residential, commercial and industrial sectors under

private development and city-owned utility development are presented

in Figure 23 and Figure 24, respectively.

The figures show that city-owned utility development of a resource occurs sooner than does private development. For example, Figure 21

indicates that under private development geothermal energy for indus­

trial process heat would come on line by 1989 and would rise rapidly

to 2020 as prices of other forms of energy increase. Figure 22 shows that geothermal energy for industrial process heat would come on line even sooner (1983) under city-owned utility development with the amount on line rising rapidly to 2005. The major reasons for a resource being

-37- TOTAL lIEAT HY CALENDAR YEAR T 1.96H3 + c 0 I c C T 1.86H3 ... CC A c c L 1..76£3 ! c c I cc II 1.67E3 ... C £ I c A 1.57£.3 + c T I 1.4753 ... I I c N 1..3"JH3 + I u 1.2153 + c p I I c P P P L 1. 18l£3 + p p P L I p p p I 1.08E3 ... c p p D I p p N 9.80E2 ... c I C U b.82E2 + p T I I w U 1. H4l::.'2 ... C p P 00 I I P 6.8610'2 + C 1 I 1 1 E I p p IIII I I H 5.88/£2 + 1 I 1 1 I p p I Y oj.90£2 ... c p I 1 E I p I A J. ~J1£2 ... U I I I 2.9"£2 ... c C I PP 1.9tlE2 i- I 1 Icc U.80t£1 ... c p P I CC CI I I I I 1 O.OOEO C-C-C-C-C-C-C-C-C-II+I------+------+------i------+------+------RO 85 90 95 00 05 10 15 , CALENUAH YEAH, UASH IS 19HO 1=INF£/u~£n P-]'07'l::Nl"I AL C=lNF. PLUS POT.

STATb:: AHIZONA APl'l.ICAl"ON: I NLJUS'l'/UAIJ Pill VAl' H OHVliI8()PEH

Figure 21.: Projected GeotherDlal Heat On Line Under Private DevelopDlen.t. Source: New Hexico Energy Institute l'OTAL HuAT UY CALEHDAR YEAR T 2.12£3 + C c c 0 I c c c T 2.0U~3 ... c c A I c c L 1.9153 ... c c I c c II 1.~OE3 ... c c E I A 1.10e3 ... c c T I c 1.591£3 + I I c N 1.48e3 ... I c II 1.38e3 ... p p p p I I c p p p p L 1.271£3 ... c pp p L I p p p I 1.11£3 + p p 0 I c p N 1.06E3 ... c p p I tJ 9.::>-1£2 + c p T I U 8. -18£1 + p I p p w I c <0 P '1.42£2 + I 1 I 1 1 I E I p II 6. Jb£2 + c p 1 1 1 I 1 ,I 1 1 I 1 I I' P I I 1 1 I Y 5.30Hl ... I c I c c p I A ..J.2..JE2 ... p p 1 JI H I c 1 .). 1 ~C:2 ... C II I ,. 2. 111:'2 ... J I I 1.U6H2 t C O.3UEO L-c-c-~-~-~-~-~~-~~t~------t-~------+------t------t------t------Hl) gS !)l) !)5 (tu 05 10 15 CALENLJAU YHAll, LJrlSE IS 1980 l;lN~EUREn P;POTENTIAL C=INF. PLUS POT.

S1" A 1'1:: AU I ZON.4. AI'PLI C/~ TI UN: IND USTH I :tl. C 11' Y UTI 1.1 TY

Figure 22: Projected Geothermal lIeat On Line Under City Development. Source: New Mexico Energy Institute TOTAL HEAT BY CAL~NDAR YEAR T 1.n4E4 ..- c o # , c c T 1.ti4~4 .. c A c L 1.7454 1 I c 1/ i.65lf4 .. c E I C A i.55£4 .. c T I 1 • ·i 51:"" .. c I I c p N 1. :)6£4 .. p p I c p p II 1.2bc4 .. c I I p I. i. 1 bl~-t + p L I c p 1 1.071-:4 + p 0 I C p N ti.b&EJ + p I II 8.12E3 + p p I 7' I c ~ U 1.15£3 .. p 0 I I C l' (). 7 81~ J t p c' I II 5.82E3 + c p I C p 1 I I Y 4.85c·3 + 1111111 E I C p 1 I A 3.8SEJ + p 1 R I C II :!.!J1C"J + C I' P I C P 1 1. !Hc"J .. p 1 I c c 1 H.6fJI:.:2 + eel I O.llO,,-O !-C-C-L-C-C-C-C-C-C~+~-~-~-~-l+l-I~:-~-+------+------+------+------HO 35 UO 95 00 05 10 15 CAI.l~NVAU YJ~'AU, LJ.1.SJ~ IS l!lHI) ':;;;.1 NF EJU

S1' ATI;: All I ZONA A"PL Ie ;t'r ION: CO&1l1l N/~ 0 1 NOUS1' U 1 AL AND UI£S I OEN'j' I AI. PRIVATl£ DRVELOPHU

Fipure 23: Projected Geothermal Heat on Line Under Private Developmen~ for the Residential. Commercial and Industrial Sectors. Source: New l~xico Energy Institute TOTAL IJ£AT BY CALENDAIl YcAl~ r 2.2454 ~ C (} Icc l' 2. 12B4 + c A I C L 2.011i4 + c c I c IJ 1.90F.4 + c c E I c A 1. 19I::4 + c T I c 1.68£4 + c p I I c p N 1. ~1c4 + C P P I PP II 1. ·15£4 .. CC P P 1 I P 14 1.34£4 + pp L I c p I 1.23£4 + C p 0 I' P N 1. 12F.4 ~ PP I c H 1.01F.4 + C p Z' I P U s.n4£J + P I ~ I c p ...... P 7. '::;3£3 ~ c I I:: I p II b.71E:3 + P I' CP Y 5.5U1::3 .. C P 1111111 E I f I I 1 I II 1 I A ·1. -11 I:: 3 + P III H ICC P I 1 3.:35L::3 + P I I P I ~.~4E3 ~ eel I Icc IIi 1. 12li3 ~ P ,).OOlW !-C-C-C-~-~-~-~-I-II+I-~-:----.------+------+------~------+------80' 95 C)i) !.I 5 00 1)5 10 &5 CAI.cNLJAll YE All, HASH IS UHW 1=INI'J.::f

Sl ATt::: AldZONA APPl.IC,lTION: COMIIlNELJ INlJUS1'IlIAI4 ,tNU IH::SIVHN1'IAL C 11''1 (JT I LIZ'y

Figure 24: Projected Geothermal Heat On I.ine Under City Development for the Residential, Conunercial and Industrial Sectors. Source: New Mexico Energy Institute developed more quickly by a city-owned utility than by a private investor

are that a city typically has lower capital costs than private industry

and a city utility requires a lower rate of return on invested capital.

For comparative purposes, Table 11 reports energy on line in terms of barrels of oil replaced annually by geothermal energy.

TARLE 11: BARRELS OF OIL REPLACED BY GEOTHERMAL ENERGY Industrial Proces's Heat Market

1985 199.0 2000 2020 Privata Developer o 9357 165,000 350,000 City Utility 9482 87,500 276,79.6 378,571

Similarly,Figures 23 and 24 show that geothermal energy for the resi- dentia1, commercial and industrial sectors -(the residential and commercial sectors are combined) comes on line more quickly under city-owned utility developcent than under privata develop1:lent. Under city development, geothermal energy would come on. line in 1983 while under private deve10p- ment, geothermal energy would not come on line until 1989. Table 12 reports energy on line in terms of barrels of oil replaced annually by geothermal energy.

TARLE 12: BARRELS OF OIL REPLACED BY GEOTHERJ.'1AL ENERGY Residential, Commercial and Industrial Markets

-1985 199.0 2000 2020 Private Developer Q 64,821 253,571 3,464,285 City Utility 66,785 417,857 2,196,429 4,000,000

-42- Further details of the NMEI model for projecting geothermal energy

on line are given in Appendix A.

Facilities serving a large number of people are potential users of

geothermal energy. In northern Arizona these facilities include high

schools, community colleges or universities and airports located in

Holbrook, Winslow, Prescott and Flagstaff. Also, several industries

located in or near the major cities of the northern counties may be able

to use geothermal energy for both their space heating and process heat needs. In Winslow, the Wometco Coca-Cola Bottling Co. of Northern Arizona is a potential user of geothermal energy; Ramsey Logging and Timber Co., located 40 miles south of Winslow, is another potential user. Potential users in Prescott include Aquarium Pump Supply, Quality Plastics of

Prescott, U.S. Electrical Motors and Morris Maler Shirt Manufacturing

Co. In Kingman, industries which might benefit from the use of geo­ thermal energy include General Cable Co. and Tucker Housewares.

Potential users in Flagstaff include E-Z Mills, Jeld-Wen, Incorporated of Arizona, Ponderosa Paper Products, Ralston Purina Company, Southwest

Forest Industries and Spring City Knitting Co. Geothermal applications may also exist for the Snowflake Division of Southwest Forest Industries.

The ready-mix concrete and the sawmill industries of northern

Arizona may be able to use geothermal energy for their process heat needs.

Potential geothermal applications to processess within these industries, identified by a four-digit Standard Industrial Classification (SIC) code, are discussed below. Estimates of annual energy consumption as well as the process temperatures required by these industries were provided by the Solar Energy Research Institute. Information on the specific heat

-43- temperatures needed in each of the operations within these industries was gathered from three principal sources: the Noyes Data Corporation publi- cation entitled "Energy-Saving Techniques for the Food Industry;" Drexel

University's Energy Analysis of 108 Industrial Processes, Phase I of an

Industrial Applications Study, 1979; and a Survey and Analysis of Solar

Energy Process Heating Opportunities in Arizona prepared by the University of Arizona.

Ready-Mix Concrete Industry (SIC 3273)

There are seven large firms within this industry, most of which are located in Mohave County. The principal characteristic of the ready-mix concrete industry is that the concrete is poured wet and is allowed to set at ambient temperature. Therefore, little of the energy consumed by this industry is for process heat. Electricity is used in the crushing and mixing processes while fuel is used for transportation and mixing in transit. However, the industry does require large amounts of hot water for cleaning, mixing and storing. Geothermal energy possibly could be used to heat the water.

Sawmills Industry (SIC 2421)

There are four large mills within this industry located in northern

Arizona, principally in Apache and Coconino counties. The process heat

0 o temperatures required by this industry never e~ceed 82 C (180 F) with most

0 o of the processes requiring a temperature of 25 C (77 F). Therefore, the

0 o assessed geothermal reservoir temperatures of 50 C (122 F) for Coconino

County and 95 oC (2030 F) for Apache County are sufficient for most of the processes within the industry.

Electricity, the dominant energy source in the industry, is used in

-44- almost all of the processes. Some of this electricity could be displaced if geothermal energy were used in the washing of logs, bolts and carts o o (2S C temperature requirement), in operating the drying kiln (2S C temperature requirement) and for space heating.

The results presented in this section suggest that northern Arizona could experience significant geothermal development; however, additional factors may playa significant role to improve the potential for geothermal development. Northern Arizona has good potential for a substantial in- crease in residential and industrial development and is seeking to diver- sify its economy away from its traditional rural base. As additional industries and people are attracted to northern Arizona, greater develop- ment of its geothermal resource potential will become possible. Also, as additional resource assessment work is performed, greater resource potential may be discovered. Finally, northern Arizona could also benefit from geothermal space cooling as well as space heating, further adding to the use of geothermal energy resources.

-45- Appendix A

The New Mexico Energy Institute at New Mexico State University has developed a computer simulation model, BTHERM, to assess the economic feasibility of residential and commercial district space heating, hot water heating and industrial process heating using low temperature geo­ thermal energy. Another model, CASH, was developed to depict the growth of geothermal energy on line over the next 40 years as a function of price of competing energy sources. A major assumption of these models is that geothermal energy must be price-competitive with the lowest-cost conventional energy source in order to assure market capture.

Development of a geothermal resource is characterized by large capital outlays, but a long-term geothermal investment has the potential to provide relatively inexpensive energy at a stable prise. Unlike natural gas and electricity, however, geothermal energy is an unknown energy in­ volving certain risks such as price and reservoir life and the need for back-up systems. An analysis of the costs and economic competitiveness of geothermal energy must take these uncertainties into account. Thus, costs may be overestimated so that the benefits will not be overstated.

BTHERM models the residential, commercial and industrial sectors of a typical city, each sector having unique energy costs and energy system physical parameters as well as different growth rates. The model possesses the ability to model each sector individually and can analyze the application of geothermal energy to new growth only, to conversion ofaxisting structures or to a combination of both. The model also has the capability to model both private and city-owned utility development of the geothermal resource.

-46- Output of the model includes the levelized price per million Btu of

delivered energy, the discounted present value of investment necessary

and the undiscounted values of investments for policy studies. Also t from input of the price and price growth rate of conventional energYt

the model determines the discounted or undiscounted values for federal

and state taxes, tax credits, royalty rates t property taxes and consumer

savings due to conversion from conventional energy to geothermal.

Certain limitations of the model have already been suggested. Costs t for example, may be overestimated due to safeguards built into the model

to take into account the risks associated with geothermal energy. This

overestimation of costs might result in the exclusion of a potential use

of geothermal energy. Another limitation is that the price of natural

gas is taken as the price of competitive (conventional) energy, but not all users have access to natural gas.

The output of the model is not a substitute for detailed engineering design studies but it is useful for determining order-of-magnitude costs and potential benefits of geothermal energy development.

-47- BIBLIOGRAPHY References used in preparing the Area Development Plans

Arizona Agricultural Statistics 1978, 1979: Phoenix, Arizona, Arizona Crop and Livestock Reporting Service, 68 p.

Arizona Community Profiles, 1981: Phoenix, Arizona, Research Program, Arizona Office of Economic Planning and Development.

Arizona Statistical Review, 1979: Phoenix, Arizona, Valley National Bank. of Arizona, 72 p.

Brown, K., 1978, Industrial Process Heat Demand Balance: Golden, Colorado, Solar Energy Research Institute, unpublished draft.

Cllmatograph of u.s. No. 81 Arizona, 1978: Asheville, North Carolina, National Climate Center.

Dunn, D. and Cox, D. C., 1979, Papers in Community Development- No. 2 - Socio- Economic Indicators for Small Towns: Tucson, Arizona, Rural Information Center, 58 p.

Energy Analysis of 108 Industrial Processes, 1979: Philadelphia, Pennsylvania, Drexel University.

Energy-Saving Techniques for the Food Industry, 1977, M.E. Casper, editor: Park Ridge, New Jersey, Noyes Data Corporation, 657 p.

Frank, H.J., 1977, Arizona Energy Inventory: 1977: University of Arizona, Tucson, 100 p.

Gerber, L.A., Worden, M.A., and Dunn, D., 1980, Papers in Community Devel­ opment No. 5 - Safford, Arizona: A Trade Area Analysis: Tucson, Arizona, Rural Information Center, 76 p.

Gibson, L.J., Worden, M.A., and Solot, M.S., 1979, Papers in Community Development No.1 -A Citizen's Handbook for Evaluating Community Impacts: Tucson, Arizona, Rural Information Center, 65 p.

Hodgson, M.L., 1978, Arizona Job Scene 1985: A Labor Market Information Publication of the Arizona Department of Economic Security, 133 p. -48- Industrial Waste Heat Survey, 1978, Rocket Research Company.

Inside Phoenix 1979, 1979: Phoenix, Arizona, Phoenix Newspapers, Inc., 152 p.

Inside Phoenix 1981, 1981: Phoenix, Arizona, Phoenix Newspapers, Inc., 128 p.

1981 Directory of Arizona Manufacturers, 1981: Phoenix, Arizona, Phoenix Metropolitan Chamber of Commerce, 200 p.

Phase II - Arizona State Water Plan: Alternative Future, 1977: Phoenix, Arizona, Arizona Water Commission, 145 p.

Population, Employment and Incame Projections for Arizona Counties 1977 ­ 2000, July 1978 & 1979: Arizona Department of Economic Security.

Population Estimates of Arizona as of July 1, 1979: Phoenix, Arizona, Arizona Department of Economic Security Report No. 12, 66 p.

Statistical Report for Financial Analysis 1969 - 1979: Phoenix, Arizona, Arizona Public Service Company, 24 p.

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