Geothermal Offers Combined Climate Change And Jobs Solution To Troubled Oilpatch
Alison Thompson didn’t take to geothermal resources promotion from an environmentalist perspective.
Indeed, her background includes 20 years in the oil and gas and coal industries. But that doesn’t stop her from extolling the green credentials of the often-misunderstood resource in addition to its job creation potential—no small details in a province persevering through a prolonged oil and gas price slump.
“I didn’t come to geothermal from a treehugger perspective,” said the chemical engineer who got her first taste of the science when investigating the potential to apply geothermal to oilsands production in northern Alberta.
Suncor Energy Inc., her employer at the time, and other oilsands producers were investigating the possibility of using deep geothermal wells to heat and power oilsands production. They found it to be uneconomic, but when Thompson learned more about the other, more practical applications for geothermal, she was hooked.
And given her background as co-founder and managing director of the Calgary-based Canadian Geothermal Energy Association (CanGEA), she was perhaps the perfect candidate to promote the combined potential of geothermal and oil and gas.
In Alberta, the greatest potential lies in that combination, through the use of either the plethora of existing oil and gas wells or the province’s extensive knowledge base of its subsurface—gained through decades of oil and gas exploration—to drill fit-for-purpose geothermal wells into the highest potential reservoirs of hot fluids.
That opportunity is vast, she insists, and could be tapped right now, putting laid-off oilfield workers back to work.
What are the barriers? One of the biggest is education, Thompson says. The very term geothermal, for starters, confuses the situation. It applies equally to the entirely different concept of heating and cooling buildings using shallow boreholes, tens of metres deep, to transfer room-temperature fluids from the subsurface into buildings to heat in winter and cool in summer.
The term also applies to tapping magma-heated subsurface water found in tectonically active areas like Iceland and California, where high-temperature water is piped from much deeper to the surface to spin turbines to generate electricity at utility scale. Thompson believes such potential power lies in Alberta’s mountainous areas—and certainly throughout much of neighbouring B.C., which like California, lies on the Pacific Ring of Fire—but that remains to be proven. It is also costly, both to find the resource and to drill deep into hard rock.
Further confusing the geothermal equation is the new science of the enhanced geothermal system (EGS), or artificial, engineered geothermal. Not yet commercially proven, EGS involves drilling a pair of wells deep enough to encounter hot, but usually dry, rock, fracturing the rock between them, and cycling water down one well, through the hot rock and up the other well. The hot water or steam then drives turbines at surface to produce power. Though costly, EGS opens up the possibility of generating baseload geothermal power virtually anywhere.
A 2007 Massachusetts Institute of Technology study found that a public investment of less than $1 billion—less than the cost of a single clean-coal power plant—spread over 15 years would probably be enough to overcome technical hurdles and do initial large-scale deployment of the technology. The generating capacity by 2050 could be 100 billion watts, or about 10 per cent of the U.S.’s current generating capacity.
Research is also underway in Alberta for more exotic forms of geothermal, such as through supercritical CO2. But why, asks Thompson, should the province be training for a marathon when it hasn’t yet learned to crawl in the geothermal space?
Leveraging oil and gas
She suggests far larger gains can be made by simply bringing geothermal drilling and completions technology up to date to current oil and gas standards and applying it to the province’s well-known hot sedimentary aquifers. And therein lies one of the biggest advantages for Alberta, home to some of the best geoscience expertise and subsurface knowledge in the world.
“Our province is already a pincushion of wells. Somewhere around 400,000 wells have been drilled. They are not all active right now, of course, but it is an amazing database of where the best places to go [for hot fluids] are. So one of the applications would be, on a small scale, using what we have already drilled. These wells have been sized for oil or gas operations rather than for geothermal, but there are hot enough fluids coming up that you can make micro-electricity out of it,” she said.
“But unfortunately this is where the inspiration stops. When a big utility company hears the well is already drilled but can only make 250 kilowatts of power, it loses interest. And that is where the microgeneration rules and the entrepreneurs need to come in, and I think at this point now the taxpayer also needs to come in. A lot of these companies, because of the price of oil and gas, are going bankrupt. We have some 700 orphan wells and growing, and these orphan wells are now our taxpayer liability.
“Could we not be repurposing these for micro-electricity? If they are already near a distribution line, the only capital you need is to buy a $250,000 generator, and then we could have entire fields of microgen, which [would then be] multiplied by wells that are useful, which could be numbered in the tens of thousands, and we now have a utility amount of power in a small amount of time.”
Besides its baseload power potential—geothermal is even more reliable than coal and nuclear power—another often-overlooked benefit of geothermal is its heat production. “When we are talking about energy, heat often is overlooked, and yet there is a lot of money in heat, especially in a northern climate like ours.” The heat energy can be used for everything from greenhouses, as in Iceland, to district heating, material drying and pasteurization.
Fit-for-purpose geothermal wells
The other application involves leveraging existing geologic knowledge to drill into the highest-opportunity sedimentary areas with new wells. “The oilpatch has found these reservoirs. They know where the hot stuff is, so instead of using existing infrastructure, we could build our own fit-for-purpose geothermal wells. Those are going to be large diameter, much like SAGD [wells], 10–12-inch diameter, and they are going to go down to the hottest place that we know and bring up as much water as possible.
“Power is a function of temperature and flow—those are the only two variables in the equation—and these wells have been known around the world to produce about five to 10 megawatts each just using what Mother Nature will give you if you drill a simple vertical well. That’s still not the 50 megawatts or 500 megawatts a utility may be looking for, but for small towns or people off-grid, this is a lot of power,” Thompson noted.
“And in fact, in some places, I think geothermal could be free. So where we are paying for orphan wells, let’s repurpose them. If we want to give an additional revenue stream to struggling oil and gas producers and if they can sell oil and gas from their watering-out well and also get a CO2 credit and provide some micro-electricity, this is enough to keep them employed and in the game and actually get more of the resource. For a company that is struggling, it can sell another commodity already coming out of their pipe, so I think this is a no-brainer.”
Those technologies that created the unconventional shale gas and tight oil revolution—horizontal drilling and hydraulic fracturing—have the potential to similarly transform the geothermal enterprise. Horizontal drilling has only recently been introduced to the sector, with the first such well drilled in Iceland only recently, improving the well’s flow by more than 50 per cent. And hydro-shearing, the analogue to fracking in the geothermal space, is only starting to take hold.
“The intersection here with technology is truly why I am even involved myself in geothermal. It might come as a surprise to the oilpatch to know that the geoscience applied to geothermal is literally decades—20 to 30 years—behind,” Thompson said.
“On the completions side, I would stress that we don’t frac, but we do hydro-shear, which is in the same family as fracking, though it’s a different sort of application. It’s below formation pressure so that you are not causing the sort of rubble-ization as rock fracking does, and we don’t use proppants. It is a completion technology that is just starting to be used.
“There are companies now that are buying up geothermal companies, which typically already have power purchase agreements for their product, and the technology company will redo their wells. The advantage is the geothermal seam is already found, and by going back in and hydro-shearing, they are getting a lot more flow and hence power. They are also starting to do horizontal wells to bring in far more flow than we have had in the past. With a power purchase agreement, you have a guaranteed buyer, and now you are basically doubling the amount [of power] that you are selling, all for a few technology tweaks. This is where the game is right now: geoscience has done so much for the oil and gas industry and can now do the same for geothermal.”
While Alberta by definition has no geothermal reserves—since reserves need an economic market, which requires the ability to have a power purchase agreement—CanGEA estimates the geothermal measured resource from oil and gas wells alone would amount to about 5,000 megawatts of widely distributed power. In total, Alberta currently has about 16,000 megawatts of installed generating capacity, over half of which is coal generated.
As an added bonus, a transfer of jobs directly from the struggling oilpatch could come with the technology transfer to geothermal.“There is a wholesale transferable opportunity to bring workers from oil and gas—be it the drilling rigs, the geoscience people, the managers, the marketers, the entire supply chain—over to the geothermal industry,” Thompson said. She added, “If you compare a geothermal plant to a natural gas power plant, the same size and the same electricity to sell for the same price, the geothermal plant will create 17 times more jobs.”
But other barriers remain in a jurisdiction that has focused on oil and gas to the detriment of other sectors for too long, she said, such as regulatory barriers and tax advantages favouring fossil fuels. For example, some oil and gas exploration write-offs are not available to geothermal explorers, accelerated capital cost write-offs for equipment available to other sectors are not applicable to geothermal heat production and even permitting remains a problem. B.C. is the only province that has any sort of tenure mechanism for geothermal projects.
“Right now you can own an open pit mine in this province, but you can’t get a geothermal permit. So there are some pretty low-cost, easy political changes that could happen. We just need to reframe this as not a problem, but in fact as an opportunity, as another commodity that could be sold.”
Originally from Pickering, Ont., Thompson has lived and worked in rural Alberta communities like Drumheller, Edson and Pincher Creek for companies that include PanCanadian Petroleum, Suncor, Nexen Inc. and Royal Dutch Shell plc. She also worked in Kansas for an integrated coal utility. She holds bachelor and master of chemical engineering degrees from McGill University and a master of business administration from Queen’s University in Kingston, Ont. “It was a science and technology MBA, open only to people who have a science background, where all your training, all your case work, is about improving technology and using technology transfer to improve industries and businesses.”
She has led CanGEA since 2007, sits on the boards of Borealis GeoPower, Youth Science Canada and the International Geothermal Association, and is an Expert Evaluator for the European Commission. She is also a Fellow with Natural Step’s Energy Futures Lab and is involved in other outreach and policy development organizations.
Thompson hopes her legacy will be using her technology transfer expertise today to help bring about a new energy sector for the province tomorrow. “I have one foot firmly planted in renewable energy—geothermal—and the other firmly planted still in oil and gas technology, and I have been trying to act as a bridge between them. It has gone slower than I thought it would, but it is accelerating now under the new [Paris] climate treaty as well as the new federal government,” she said.
Geothermal technology in brief
- The physical facilities required for a geothermal power plant include production and injection wells, a gathering and injection system, a power generation plant and a transmission line.
- Production wells are constructed by directional drilling from a small number of drill pads (as few as three, depending on the size of the reservoir), thus reducing both project costs and potential environmental impacts. Typical well depths are 3,000 meters or less.
- Wells are drilled using established technology similar to that employed in the oil and gas industry.
- The gathering system consists of pipelines that transport the steam or hot water from the wellheads to the generating plant, which uses standard turbine technology. An injection system uses non-productive wells to return process water to the underground reservoir.