June 17, 1997

MIT, University of Alaska to Develop Small-Scale, High-technology Forestry, Mining and Other Industries

June 17, 1997  NR 11-1997

CAMBRIDGE, Mass. - The University of Alaska and the Massachusetts Institute of Technology (MIT) today announced a strategic partnership of the two universities to promote the development of small-scale, high-technology forestry, mining and other industries to create jobs for local people in remote areas with minimal impact on the environment.

The development of new technologies is aimed at adding value to raw materials which are now uneconomical to develop, thereby allowing small businesses and cooperatives of ten or more employees in rural or remote areas to sell a product at a price that will support high-wage jobs.

"The university is proud to be involved with MIT in the development of new technologies that will help Alaskans add value to their resources and create jobs in rural and remote communities," said Dr. Jerome B. Komisar, president of the university. Komisar and Dr. Charles M. Vest, president of MIT, signed the memorandum of understanding.

"This partnership," said Dr. Vest, "has several visionary goals: developing exciting new technologies, improving the economies of remote and complex regions, supporting the aims and aspirations of native populations, and promoting environmentally sustainable growth. We are passing from an era of power and speed to a time of fundamental rethinking. What are the exciting technology frontiers going forward?

They are the kind that this project is going to address. Lots of students will really be excited at being involved in this."

The memorandum of understanding notes that "Alaska is the first, but not the only, test region suited to this undertaking." The initial projects identified include timber-based fuel products that could be economically developed on a small scale, mini-mining with local energy sources, and small-scale energy extraction technology.

Representatives of Native corporations also hailed the project. Gerald Booth, vice president of Cook Inlet Region, Inc., speaking on behalf of other economic organizations representing 40,000 indigenous Alaskans, said the agreement will speed up achievement of their goals of developing resources and creating jobs for Native Alaskans.

Gail Cheney, a Native Alaskan, graduated from MIT with a degree in urban studies and planning in 1994 and went back to her village, Kake, where every one of the 624 residents is related to her. She worked for the Kake Tribal Corporation, one of the Native regional corporations.

"I really like this project because it's really needed," said Ms. Cheney, a 1988 graduate of Juneau Douglas High School. "At Kake, 100 miles south of Juneau, we will run out of timber in five years, so we have to look for development opportunities. It's not easy. I did cost analyses of many projects, and with just the natural resource product, either the cost of transportation was too high or the cost of power was too high to make the project feasible."

Faculty from the University of Alaska and MIT, in a report on the project, stressed the need for a technological edge to make the projects feasible. "Consider a community of 100 to 500 people located near a relatively small and conventionally uneconomical ore deposit. If the community is also located near an energy source such as coal, a river (hydro) or a gas deposit, a small scale electrical plant can be put in place using modern fuel cell technology or hydroelectric generators." The plant would provide economical power for the community, the mining operations and the ore-to-metal processing.

"The capital investment can be reduced 50-to-100 fold, and jobs are created for 20 to 30 families," they said. By coupling mining of Alaska's resources of chrome, zinc, gold, silver, copper, nickel and other minerals with appropriate technology, the local business can fly out lighter loads of high-value metal rather than trying to send tons of low-value ore via snowbound roads. Because their overhead is low, the product will bring enough revenue at competitive prices to generate high-wage jobs, said the report by Dean Robert H. Trent of the School of Mineral Engineering at the University of Alaska Fairbanks; Professor Thomas W. Eagar, head of MIT's Department of Materials Science and Engineering; and Professor Carol E. Lewis, head of the Department of Resources Management at the University of Alaska Fairbanks.

"Their jobs are their profit," said MIT's Professor Eagar. In an interview, he said these tiny corporations or cooperatives could compete on price with giant corporations provided the small organization added enough value to make the product worth $1 or more per pound. The overhead costs would be low. "They don't have to turn 20 percent over to Wall Street investors. Small-scale industries will create middle-class jobs, be environmentally sustainable, reduce the capital investment required and inhibit monopolies of scale."

Looking at forestry, the MIT and UA faculty said, "Forest product production in Alaska is largely round logs, chips, and until recently, pulp. Transportation costs are prohibitive for these low-value products." With a small investment of perhaps $1 million to $10 million, they said, a small-scale facility can take a small amount of wood, convert its cellulose to plastics or chemicals, drastically reduce transportation costs, and increase by ten-fold or more the value received by the local workers. Cheap micro chemical reactors, a few inches long, may be adaptable to be set up in parallel for small-scale processing of wood products.

"Thousands of pounds, rather than millions of pounds, of wood fiber could be converted to high value plastics and chemicals," they said. Lignum, for example, could be taken out of trees and made into cellulose acetate via fermentation.

"We can create a new economic concept for remote and complex regions based on the vast resources previously untapped. This will add to the diversity of Alaska's economic base and enhance its economic prosperity. It will also contribute to the prosperity and productivity of the nation as a whole by adding value to previously raw resources. New technologies will make these manufactured resource products competitive and add to the tax base of the federal government and the states."

In an interview, Professor Lewis said she saw opportunities for the program both in rural areas just outside the main cities, as well as the more than 200 tiny remote villages with 10 to 250 residents.
Project activities include but are not limited to technology development, economic and business feasibility analysis, mini-industry advancement based on value-added considerations, natural resource processing and downstream manufacturing alternatives to large-scale conventional investment and marketing assumptions. The agreement states, "Both parties are committed to a phased approach with progressively larger research budgets from government and industry sources anticipated, as initial efforts verify success. This will only include funds from federal sources which are awarded by a competitive or peer-reviewed process."

Alaska Leaders Enthusiastic
Alaska's political leaders, who were unable to attend the Monday noon signing ceremony at MIT, issued statements greeting the announcement with enthusiasm. Gov. Tony Knowles, in a statement read by University of Alaska President Jerome B. Komisar, said that what is most needed "is to try to develop technology that is kind to people and kind to the environment."

Sen. Ted Stevens wrote that 130 years ago, Sen. Charles Sumner of Massachusetts led the debate for the purchase of Alaska. "His argument that Alaska was too valuable in natural resources to be lost to another great power was indeed far-sighted. I'm confident Sumner would approve of the memorandum's goals of promoting the development of technology appropriate to our region and our natural resources for the economic well-being of Alaskans, particularly those in small rural communities," he said.
Sen. Frank Murkowski commented, "This partnership will help create important new technology certain to improve working and living conditions in Alaska and other parts of rural America."

Rep. Don Young, in his message, said, "Your innovative approach to the problems of extraction, processing and marketing of Alaska's natural resources can prepare Alaska for the next century. Through your emphasis on technologies which can target small concentrations of mineral resources in remote areas, as well as the emphasis on the value-added aspect of these technologies, much-needed jobs can be created in remote locations."

Bob Miller, UA, 907-474-7272
Kenneth D. Campbell, MIT, 617-253-2700