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Geothermal: The Green lining to Alberta’s Oil Crash?

February 15, 2010

On this weeks episode of Terra Informa I spoke to Ryan Saunders, VP of the University of Alberta Energy Club. Here is the full discussion we had about the energy club and a variety of topics on geothermal technology including possible oil sands applications, barriers & benefits to this type of development, and how to support this form of renewable power.

One area we didn’t cover in the discussion is the potential use of abandoned or out of use well for the use of geothermal power generation. Ryan was a coauthor on a report submitted to the Alberta Research Council Ingenuity Challenge titled GeoNow, A novel approach to geothermal energy in Alberta. This report took a detailed and through look at what opportunities for geothermal power generation through abandoned or decommissioned well’s exist in Alberta.   The use of abandoned wells instead of drilling new holes is advantageous because of lower risk as a result of roughly knowing the the temperature of the wells, thus decreasing the cost of construction costs. The GeoNow report estimated that `the total amount of initial capital investment that (could) be saved is approximately 30 to 60 million dollars. This amount is an incredible 40% reduction in construction costs for a typical 20 MW geothermal plant. With this reduction in price, construction cost for the geothermal plant is competitive with a traditional gas or coal based plant’. Such an opportunity requires a precise convergence of numerous variables related to underground thermal gradients,  the underground geology (rock permeability,porosity, and reservoir recharge rates),  proximity to electrical transmission lines and electrical demand as well as  the location of abandoned wells and their associated type, depth, and date of abandonment (GeoNow).

The Alberta Geological Survey and the Alberta Research Council have studied the feasibility(technical and economic) of harnessing Alberta’s geothermal resources and estimated that the translated potential energy of the Alberta’s geothermal waters is roughly equivalent two to five trillion barrels of oil. One of the areas of greatest potential, The Viking Formation aquifer, exists between 1,000 to 3,000 meter with a temperature range of 33 C to 99 C  (or 3.3 C for every 100 metres) with 100,000 abandoned and 20,000 suspended well sites(APEGGA). Despite the existence of these favorable variables optimal sites are not widespread to the extent seen in areas like Iceland but prevalent enough the GeoNow report was able to identified seven areas with significant potential for geothermal power generation with abandoned well sites along with respective limitations and barriers.

Underground temperature isotherms for the northern portion of Alberta (a) at a depth of 5 km (b) at a depth of 2 km.

Underground temperature isotherms for the northern portion of Alberta (a) at a depth of 5 km (b) at a depth of 2 km

For the purpose of this work, abandoned un-reclaimed wells were targeted for examination, providing a total of 41,310 potential wells. … Locations 1 & 2 have excellent thermal potential, they contain only 32 and 219 abandoned wells, respectively, and are relatively far away from electrical demand and transmission. In addition, site 6 is relatively far away from electrical demand and transmission. As a result, attention was focused on sites 3, 4, 5 and 7, with a total of 233, 700, 37, and 267 abandoned wells per site, respectively. The low amount of abandoned wells in site 5 excluded it from further consideration. The remaining three sites had their average depth examined to determine further consideration for each site. It was found that hardly any abandoned wells in these regions reached a depth of 5km; however, a noticeable portion reached a depth of 2 km. This required a major shift in attention away from temperature isotherms at 5km, Figure 2a, to temperature isotherms at 2km, Figure 2b. After examination of Figure 2b, two very specific locations north of Edmonton and south-west of Edmonton are apparent as possible siting locations. After thorough discussion with the team, the location at site 4 was chosen for further examination… There are 700 un-reclaimed abandoned
wells within Site #4… It was decided that abandoned wells must have a depth of at least 2 km, and that these wells must have been abandoned in 1995 or later. After these two requirements were applied, a total 72 abandoned wells were identified within Site #4…Figure 4 was examined for any cluster of wells, and one location was deemed more suitable than the others. This location would have 14 wells that are ‘close together’, attempting to minimize the amount of piping required to connect the wells with the generation facilities. (GeoNow)

A broader perspective of Site #4 in comparison with Edmonton

This by no means is the only location where geothermal is potentially viable in Alberta but GeoNow and the energy club see it as the most economically and technically feasible location for geothermal energy production to make substantial developments in the province.  What the GeoNow report identifies is that it is entirely possible to transform abandoned well sites into a system of geothermal wells connected to power generation plants around 20MW in size that provides base load power for the Capital region or the surrounding industrial areas. What makes this a truly feasible opportunity right now lies in the effects of the current economic crisis and the crash of the Alberta oil sector.  As Alberta Blogger abraaten of the blog Grandinite commented

small oil & gas drillers have tons of surplus equipment and experienced workers idling by. You’d think some enterprising person might put the drillers together with the engineers and design a geothermal project in the province….We’ve got all this capital and labour located in the northern regions of the province, and it’s experiencing a slowdown….A slowdown in conventional energy does not have to make alternative energy unprofitable. These projects might be made profitable in the future when energy prices spike again, if they are built with cheaper inputs during slowdowns. It’s time for Alberta to stop it with the myopic oil fetish and look at developing something else. We can be drilling these geothermal wells when oil prices are low, and capital, labour and expertise are unemployed by conventional drilling (Thousands of Engineers & Drillers Out of Work In Alberta – A Geothermal Initiative Would Be Good).

As this excerpt demonstrated the surplus of drilling expertise and available machinery offers the geothermal industry a more level playing field than labour strapped markets of the mid 2000`s. With rising numbers of unemployed in the primary industries and low capital cost now is the time for investment in developing Alberta’s geothermal and renewable energy potential. As Ryan mentioned in our discussion geothermal is advantageous due to its ability to provide consistent, reliable base load power with no fuel supply, waste or air pollution.  Geothermal is the often overlooked ingredient to a renewable energy future.  The responsiveness of widespread wind and solar  is capable of dealing with fluctuations in energy demand but with the inclusion of the steady and stable geothermal providing a large percentage of base load power, a shift towards large scale reliance on more variable forms(sun, wind, ect) of renewable power becomes increasingly feasible.

This potential has not been overlooked in other jurisdictions. In Germany, where 12.5%(and climbing) of energy is derived from renewables, a feed in tariff for renewable energy production($0.22/kWh for geothermal) has spurred the geothermal sector into a boom. Closer to home the Obama administration in their effort to increase green energy production has pledged $338-million for the geothermal sector along with low-cost loans and tax incentives, this includes funding for a project in texas which utilizes abandoned wells, similar to the project proposed by the GeoNow report. Nothing of the sort is even being discussed by the Canadian or Albertan government where mining and oil and gas industries receive numerous forms of support which is not extended to geothermal companies. Reallocating the enormous subsidies and tax breaks allocated by provincial and federal governments to the geothermal sector would in effect by an investment in developing the foundations of a strong and vibrant green energy economy. This reallocation of funds would be an effective means to increase employment in the energy industry by opening up new sectors in the industry that would also increase employment in associated support sectors.  By combining the reallocation of tax breaks and subsidies with an investment in education facilities for retraining, the renewable energy sector could  see an expansion that would support Alberta and Canada on a green path to a sustainable energy future.

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2 Comments leave one →
  1. February 15, 2010 6:01 am

    I must say this is a great article i enjoyed reading it keep the good work 🙂

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  1. Geothermal: The Green lining to Alberta's Oil Crash? « Terra Bloga | Drakz Free Online Service

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