It’s unfortunate that AltaRock is having such a tough time with its enhanced geothermal systems (EGS) project in northern California. The company has suspended drilling on its first well, citing “geological anomolies,” and it plans to regroup and figure out next steps. Nobody said EGS projects would be easy, and all of this is a learning experience for AltaRock.
Meanwhile, I’m encouraged to see interest in tapping geothermal energy as a byproduct of oil and gas production in the Canadian west. A British Columbia-based company called Free Energy International has signed a deal with an undisclosed oil and gas exploration and production company in Alberta, in an area known as Swan Hills. Free Energy will build two 1-megawatt geothermal plants that take hot water — a co-product of oil and natural gas during the pumping process — and extract the heat from it to generate electricity. The $7 million project will tap wells that are around 9,000 feet deep, and temperatures of the fluids can easily reach 170 degrees F in high volumes. After the heat is extracted from the water using heat exchangers, it is used to run an Organic Rankine Cycle (ORC) power plant. The water is later pumped back into the ground. Free Energy will build, own and operate this binary cycle plant and the oil company has agreed to buy all the electricity produced for the same rate it was paying to a previous supplier.
I’m hoping this new approach will catch on in Canada’s oil patch, the same way it’s being tried out in Texas. Indeed, a new Calgary-based company has recently been formed called Borealis Geopower, which was recently awarded $2.6 million from the Alberta Energy Research Institute to develop a similar project in the province. “Hot water resource is readily available through the existence of numerous deep, end-of-life oil and gas wells in the Canadian Foothills and the use of hot water resource for electricity production has the potential to increase energy efficiency and offer carbon offsets for the oil and gas companies,” Borealis states on its Web site.
These are the kinds of geothermal projects that could really take off, particularly if companies such as Borealis and Free Energy can prove them to be economical for oil companies trying desperately to reduce their carbon footprints as cap-and-trade approaches. If they can demonstrate this works, it will also capture the attention of the Alberta and Canadian governments. Having 100MW-plus geothermal plants built in Canada would be nice, too, but this kind of distributed geothermal energy generation makes oodles of sense and should be pursued with vigour.