Something to Remember: Key Climate Milestones in 2015

  • Began with the warmest winter on record globally.
  • Hottest year on record globally.
  • Toronto had the hottest Christmas Eve on record for a Canadian city, with the thermometer reaching 15.4 degrees C.
  • 2015 was last year we’ll see atmospheric CO2 concentrations below 400 parts per million, above which the global climate starts getting wacky.
  • The average global temperature increase averaged 1 degree C above pre-industrial times for the first time.
  • Tropical cyclone Patricia went off the hurricane category scale with winds of over 320 km per hour.
  • The Arabian peninsula was hit by two consecutive cyclones, unprecedented in the region.
  • After four years of drought California was the driest it has been in 500 years.
  • Jurisdictions such as B.C. and Alberta had their worst-ever wildfire seasons.
  • Record flooding hit northern England, winter tornadoes hit Texas and record heat crippled southern Australia.
  • Year ended with the North Pole being warmer than Toronto, Chicago, Boston, and even some parts of California.
  • And, we got a binding global climate agreement in Paris…. Yay!

Could proposed B.C. refinery be the future of liquid fuels?

A shorter version of this story appeared originally in the Toronto Star.

By Tyler Hamilton

As oil giants headquartered in Calgary face the reality that the best days for their industry could be behind them, the towns of Chetwynd and Dawson Creek in northwestern British Columbia hold out hope that better times lie ahead.

It is on about 1,000 acres of land straddling both municipalities that a small B.C.-based company called Blue Fuel Energy plans to build an industrial-scale refinery that could create enough low-carbon gasoline to fuel 20 per cent of vehicles in Canada’s third-largest province.

Called the Sundance Fuels project, it’s expected to create about 1,500 construction jobs and another 150 permanent positions. But beyond a boost to the local economy, the project carries broader significance for what it represents to Canada’s petroleum sector: a path to phasing out the “fossil” from its fuels in a world that must dramatically reduce its greenhouse-gas emissions.

Juergen Puetter 100414 for printBlue Fuel chief executive Juergen Puetter, the mastermind behind the $2.5 billion-plus project, has coined the term “liquid electricity” to describe the clean synthetic fuel his venture will produce. Initially, Blue Fuel’s pump-ready gasoline will be made from plentiful B.C. natural gas, not Alberta crude oil, and will have a carbon footprint 10 per cent smaller. It will achieve this by making its refinery more efficient than conventional refineries and using zero-emission hydro and wind power from B.C.’s grid to drive as many steps in the process as possible.

Not bad – enough, in fact, to comply with low-carbon fuel standards in B.C. and California – but nothing to brag about.

It’s just the start, says Puetter, whose ambition seems to have no limit. “By having the refinery in place, we could ultimately make our fuel not just low carbon, but 100 per cent renewable,” he says.

PROVEN TECH

How would that work? It comes down to basic chemistry. Any refinery that makes gasoline is just juggling carbon and hydrogen molecules – hence the word hydrocarbons. The molecules in natural gas are reformulated into something call synthesis gas, which in turn is refined into methanol. In Blue Fuel’s case, it plans to use technology licensed from ExxonMobil to convert that methanol into gasoline.

But natural gas, or any fossil fuel for that matter, doesn’t have to be the original hydrocarbon source. Puetter’s longer-term plan is to install machines called electrolyzers that use clean B.C. electricity to split water into oxygen and hydrogen gases. Carbon would come from the CO2 emissions captured from existing industrial facilities or, as technology evolves, directly from the air. Over time, the idea is that the supply of waste CO2 and renewable hydrogen will grow and the use of natural gas will shrink. Eventually, the fossil in the fuel is squeezed out of the final formula.

“Nobody so far has been able to prove this to be fundamentally wrong,” says Puetter, conceding that it’s been a challenge raising the capital to get the project moving. Still, he’s aiming for gasoline to start flowing out of Sundance by 2020. “If I told you this has been easy I’d be lying.”

Puetter isn’t a mad inventor who hatched the idea in his garage. He has a track record, having founded several successful businesses – including Bionaire, a maker of indoor environmental control products, and Hydroxyl Systems, a water and wastewater treatment company. He developed the first commercial wind farm in B.C. and for five years sat as chairman of federally funded Sustainable Development Technology Canada, where he is still a board member.

The fact that Michael Macdonald, former senior vice-president of global operations at Methanex, the world’s largest methanol maker, joined Blue Fuel as its president lends serious credibility to the venture; as does the decision by RBC Capital Markets to lead the company’s hunt for financing.

Blue Fuel is also not the only company pursuing this idea. The first commercial plant to produce gasoline from natural gas began operation 30 years ago in New Zealand, and in 2011 a company called Carbon Recycling International opened up a small refinery in Iceland that makes methanol out of captured CO2 and hydrogen produced from clean electricity.

Screen Shot 2016-01-09 at 10.52.45 PMEven German carmaker Audi is testing the waters. It has partnered with a company called Sunfire to make “e-diesel” made from CO2 and renewably produced hydrogen. A portion of its clean fuel has also been made from CO2 captured directly out of the air using technology developed by Zurich-based Climeworks.

Closer to home, a Calgary-based company called Carbon Engineering wants to use CO2 collected from its own air-capture technology to produce gasoline using a different process than the one Blue Fuel has chosen. “Our vision has always been about doing this at large scale,” says company CEO Adrian Corless.

Puetter says he can see Carbon Engineering one day becoming a supplier of CO2 to Blue Fuel. “But first we need to reduce the cost of CO2 capture,” he says. “It’s coming down, but it’s not economical yet on a large scale.”

CARBON NEUTRAL GASOLINE?

Still, the technology exists and it’s easy to see a future where the liquid fuels we use don’t add carbon to our atmosphere. It’s a tall order. But if oil is truly an economic addiction, synthetic fuel made from recycled carbon could be what methadone is to a heroin addict, and would address the reality that not all vehicles – from big trucks to airplanes – can run on battery power alone.

“There’s a market opportunity coming that really is quite extraordinary,” says Puetter, envisioning a day when big oil companies make their products with clean energy, instead of using fossil fuels to extract and produce dirtier fossil fuels.

The oil giants, after all, are already in the business of making liquid hydrocarbons. They have the project management experience, engineering skills and deep pockets needed to gradually transition from fossil to clean synthetic fuels, and the existing infrastructure – such as pipelines – to get their product to market.

“We believe we’ll be the first plant that is truly a gateway to that future,” added Puetter. “Our refinery will hopefully be a poster child for bridging the fossil fuel industry to renewables.”

Leah Lawrence, president and CEO of SDTC and past chair of the Calgary Chamber of Commerce, said Blue Fuel Energy is an important piece of the ultimate puzzle: what Canada’s energy sector might look like in a carbon-constrained world.

“For the first time we’re seeing a rapid uptake of technologies where before we couldn’t see how they all fit together,” said Lawrence. “Now we’re seeing it. Now you can see how a transition might happen.”

So is the oil industry paying attention? Does it care?

“It’s astounding how the oil boys club in Calgary is unwilling to change,” says Puetter, admitting that what he’s trying is “outside the box” and without precedent in Canada. The financial community has been an equally tough sell. “All they see is the risk. They don’t see the upside,” he says.

This article was part of a series produced in partnership by the Toronto Star and Tides Canada to address a range of pressing climate issues in Canada leading up to the United Nations Climate Change Conference in Paris, December 2015. Tides Canada is supporting this partnership to increase public awareness and dialogue around the impacts of climate change on Canada’s economy and communities. The Toronto Star has full editorial control and responsibility to ensure stories are rigorously edited in order to meet its editorial standards.

Low crude prices aren’t the only reason big oil should worry

This story was originally published in the Toronto Star.

By Tyler Hamilton

When solar entrepreneur Jeremy Leggett bumped into Suncor Energy boss Steve Williams at the World Economic Forum in 2014, odds were high that tempers would flare.

The two men were among about 40 dinner guests – a mix of CEOs, pension fund managers, economists and government leaders. They had gathered in Davos, Switzerland, to talk about “short-termism” in the financial and corporate worlds and how it undermines efforts to tackle climate change.

At one point during the dinner, Leggett recalls in his book The Winning of the Carbon War, Williams mentioned the difficulty he had in pushing through a 50-year investment plan for the oil sands.

Leggett, who is also non-executive chairman of London-based financial think tank Carbon Tracker, asked Williams after the dinner if he was concerned the investment would become stranded; that within five decades the world would no longer need what Canada’s largest oil company had to offer.

SteveWilliams“Clean energy can’t do the job oil does… Clean energy can’t be economic,” Williams snapped. To which Leggett replied: “But we are already in the process of doing that… Doesn’t that make you worry just a little about your 50-year plan?”

In Leggett’s book, the exchange ends there. But it continued – and got heated, to the point where a red-in-the-face and clearly insulted Williams stormed off in anger.

THAT WAS THEN…

Back then Williams had less reason to worry. Brent crude was priced at around $107 (U.S.) a barrel and meaningful political action on climate change, both in Canada and internationally, was largely absent.

Two years later the fossil fuel industry is under siege. Brent prices have plunged by two-thirds to below $40 (U.S.) a barrel, and the International Energy Agency says a recovery shouldn’t be expected anytime soon.

At the same time, Alberta now has an ambitious climate plan that includes a carbon tax and hard cap on oil sands emissions. And just last week, 196 countries approved a binding global climate deal in Paris.

The Paris agreement seeks no less than a peaking of greenhouse-gas emissions “as soon as possible” and a de-carbonized global economy within the second half of the century. It is through the lens of this new, irreversible reality that Canada’s oil sands industry must move forward in competition with every other oil-producing nation.

“Most people in the industry have been to some extent surprised at how quickly change has happened over the past 12 months,” said Chad Park, executive director of non-profit sustainability consultancy The Natural Step Canada.

Park is heading up an initiative called the Energy Futures Lab, which has assembled a group of experts from academia, industry, government and civil society to come up with a low-carbon transition plan for Alberta.

Current CO2 emissions from oil sands production sit at around 70 megatonnes, twice as much compared to 10 years ago. Alberta’s new climate plan calls for a ceiling of 100 megatonnes.

Two years ago, when the oil sands were riding high on above-$100 oil, the industry would have hit that emissions ceiling by 2020, according to projections from Environment Canada. But with sub-$40 oil, development has slowed substantially. At today’s rates of production based on current technology, the industry could delay reaching its emissions cap to 2030, possibly later.

“No new projects are being built,” said economist Dave Sawyer, CEO of Ottawa- based EnviroEconomics. “Right away the market has taken care of all that new growth.”

It creates space for Alberta’s economy to diversify, which has never been more crucial. “We can argue about the pace and the strategy, but the idea of transition is now part of government policy,” said Park. “Some are getting the message. Some aren’t.”

Suncor, under Williams’ leadership, seems to get it more than others. He was one of four oil sands CEOs who backed Alberta Premier Rachel Notley’s climate plan and, rather than dismissing the events in Paris, he flew there to listen and learn.

These days, he says, Suncor’s goal is to be “the last man standing,” implying that many in his industry will fall. He says he’ll tackle low oil prices and an emissions cap in Alberta by boosting operational efficiencies and using new technologies to reduce costs and emit less GHGs per barrel of oil.

Dan Zilnik, president of Oil & Gas Sustainability, a consultancy in Calgary, said limits on global emissions will, over time, keep more fossil fuels in the ground. But not all fossil fuels, oil producing regions and individual projects will be threatened equally.

He equates it to a game of musical chairs. “For Alberta and for the companies invested in the oil sands, the challenge is to position some portion of their reserves to be consistent with a carbon constrained world, either by being first to find a seat, or by being faster – lower-carbon – that the competition,” said Zilnik.

But eventually, by the end of this century, all seats will be taken away and the music will stop for fossil fuels, assuming the political will behind the Paris agreement and the advance of clean, renewable technologies prove lasting.

That means being better and more efficient at producing oil won’t be enough as we approach the second half of this century. Companies, such as Suncor, will need to ask themselves what they want to be when they grow up in the low-carbon economy.

So how might it all play out? Expect the following actions from oil companies over the coming years…

PLAN & DISCLOSE

CarneyBank of England governor Mark Carney, in his role as chair of the international Financial Stability Board, announced in Paris that he was creating a climate disclosure task force to be led by former New York City mayor Michael Bloomberg. The task force will encourage companies to disclose the risks that climate change pose to assets and operations, and will create standardized guidelines for how those risks should be publicly disclosed.

Guidelines will be voluntary, though there will be immense pressure on companies to embrace them. Over time, they could become mandatory through national securities regulators.

Carney said investors deserve to know if climate change and responses to it will affect their investments. Does a company have a strategy to reduce its carbon footprint consistent with each country’s commitment under the Paris agreement?

“It’s a reasonable question to ask,” said Carney, who has stressed previously, “the more we invest with foresight, the less we will regret in hindsight.”

With such disclosure, more capital will flow to companies with a transition plan and projects that carry the least climate risk.

LOWER-CARBON BARRELS

Days after the Paris summit, the CEO of global engineering giant WorleyParsons sent a memo to employees about the “significant business change” that would soon hit the company’s customers, which in the oil sands include Nexen, Devon, Suncor, Statoil, Total and Shell. “These customers will need to adapt to remain relevant,” the memo said. A long-time WorleyParsons employee told the Star: “I’ve never heard this tone before from the brass.”

Making existing operations more energy-efficient will lower costs and per-barrel emissions. Expect more oil sands projects to capture and reuse waste heat and embrace alternative processes that consume less energy. What energy that is used will increasingly come from clean electricity such as hydropower, instead of natural gas. There’s also potential for capturing CO2 emissions and recycling them into high-value industrial chemicals, though purchasing offsets through international carbon markets will be the least-cost option.

“The pace at which the pieces of the carbon pie crumble is going to be based on advancements in low-emission technologies,” said Chad Park of Energy Futures Lab.

UNDERMINE COAL

The Paris agreement, at minimum, aims to keep the rise in average global temperatures “well below” 2 degrees C compared to pre-industrial levels. To stay below that threshold, Citigroup estimates that one-third of oil reserves, half of natural gas reserves, and 80 per cent of coal reserves need to stay in the ground.

Burning coal emits the highest amount of CO2 per unit of energy it delivers, so coal is first on the firing line when it comes to emissions regulation and carbon pricing. This explains why most big oil companies support a carbon tax, which will hurt coal much more than oil. The reality is that every tonne of coal that gets left in the ground leaves more of the global carbon budget to oil. From hereon in, oil majors will be jockeying for a bigger piece of that fixed budget to extend the life of their traditional businesses for as long as possible.

We’ve already seen that in Alberta. Remember, it was four CEOs from the oil industry who happily stood on stage with Premier Rachel Notley when she announced a climate plan that includes phasing out all coal-fired power generation.

FILL UP ON NAT GAS

When burned, natural gas emits about 25 per cent less CO2 than oil and 50 per cent less than coal, so it makes sense for big petroleum companies to lean more heavily on this resource. It helps big energy companies lower their carbon footprints and capture an even larger share of a shrinking global carbon budget. It also makes use of existing expertise in drilling, hydraulic fracturing, and pipeline transmission.

This is why oil giants like ExxonMobil are investing more these days in natural gas, demand for which is expected to grow as electric utilities in Canada, the United States and Europe switch from coal to gas-fired power generation. Within that context, Shell’s recent $70-billion takeover of BG Group, the world’s largest liquefied natural gas supplier, makes a whole lot of sense.

Relying more on natural gas, however, is not a long-term climate solution. What it does do is buy the big oil companies some time. Natural gas will also be needed over the short and medium term to manage the variable nature of wind and solar energy systems, at least until large-scale energy storage becomes more economical.

BUY & SELL

Heading into 2016, the industry is certain to consolidate. Independent policy think tank Chatham House, in a report released in July, says a period of adjustment is expected in the transition to a low-carbon economy in which financially strong companies acquire strong assets currently belonging to weaker companies. “High-cost and high-risk projects will be abandoned or deferred,” it says. “Companies whose existence relies on such projects will be taken over or broken up, and countries that depend on them for future development will have to revise their strategies.”

To a certain extent, low oil prices have already sparked some merger and acquisition activity. Suncor’s hostile bid to acquire Canadian Oil Sands is an example. Deal making is expected to heat up as deep-pocketed players seek lower-carbon assets that keep them in the game longer.

REDIRECT CASH FLOW

After Paris, it’s widely believed that the petroleum industry is entering an “ex growth” phase, meaning demand for oil will level off and eventually begin to decline as national emissions regulations tighten and clean energy alternatives become more affordable.

In this environment more investors will be asking: Why spend billions of dollars exploring for oil in the Arctic that likely won’t be needed? The same question will be posed to any company proposing to break ground on a new oil sands project.

“Now, it will be all about running sunk assets into the ground,” said Dave Sawyer of EnviroEconomics. For existing oil sands projects, “they have all this built capital already producing significant amounts of oil, and they can pretty much sell it at any price.”

Risky, high-cost exploration plans will be avoided, leading to reduced capital spending. Cash flows will be returned to shareholders through dividend increases or share buybacks that prop up stock prices. Alternatively, if a company is determined to stay relevant in a low-carbon world, those cash flows can be used to fund aggressive diversification.

DIVERSIFY OR DIE

If companies choose to fight for a lasting role in the low-carbon economy, they will need to start investing more of their cash flows into non-fossil alternatives. “Many companies are asking themselves, are we a pure play upstream oil and gas company, or do we want to be something bigger and broader than that?” said consultant Dan Zilnik of Oil & Gas Sustainability.

Jumping into renewables is not a slam dunk. The expertise that oil companies have is with massive, highly centralized multibillion-dollar projects with decades-long time horizons. Most renewable power projects, by comparison, run in the hundreds of millions of dollars and are built in a matter of years, not decades.

They also involve the movement of electrons over wires, not molecules through pipelines. Solar development, for example, couldn’t be more different than oil development, which is grounded in geology and mining. It’s like asking an NFL football player to turn tennis pro.

Many already dabble in wind and solar. “Whether or not they are thinking about doing more, we need to recognize that oil and gas companies are already amongst the biggest players in the renewables game,” said Zilnik, pointing to Suncor and Enbridge as domestic leaders.

But holding and bankrolling a renewable asset and letting it operate independently is much easier than transforming core competencies, which is a rare feat for an incumbent with magnetic attraction to the status quo.

An oil company’s drilling and engineering expertise would be better directed to geothermal power development, while refinery and pipelines operations could transition to biofuels, hydrogen or synthetic oils made from recycled CO2. “You could see Suncor also turning its Petro-Canada gas stations into EV charging stations,” said Dave Sawyer of EnviroEconomics.

ELECTRIC CAR WILD CARD

How quickly the world moves to electrify transportation may, in fact, be the biggest determinant of how fast global demand for oil falls.

In a post-Paris economy, that transition will need to accelerate, said Fatih Birol, executive director of the International Energy Agency (IEA). “The IEA has shown that if global warming is to be limited to 2 degrees, at least a fifth of all vehicles on roads by 2030 should be electric.”

The bad news for the oil industry is that batteries costs for EVs continue to fall. The U.S. Department of Energy estimates such costs have dropped by more than 60 per cent since 2009. Research indicates that energy storage is expected to follow the same growth and cost trend as solar power technologies.

General Motors, for example, surprised many in October when it said the battery system in its new Chevy Bolt all-electric car, which hits dealerships this year, costs around $145 per kilowatt-hour.

That’s a huge breakthrough, considering average costs were thought to be between $300 and $400. Citigroup, UBS and consultancy McKinsey predicted the $200 milestone would be hit sometime between 2017 and 2020, so GM’s revelation is eye-opening. Consider also that Citigroup has called $230 the point at which electric cars begin to pose a serious threat to conventional gasoline-fuelled vehicles.

John Mitchell, an associate research fellow with policy think tank Chatham House, said mass production of a low-cost battery capable of carrying a vehicle hundreds of kilometres is the biggest threat to oil.

“That will change the transport market profoundly,” he said.

We may not be there yet, but we’re getting pretty damn close.

Continue reading Low crude prices aren’t the only reason big oil should worry

The rise of Cli-Fi says something about our times

Four years ago, having just published a book of non-fiction, I was drawn to the idea of experimenting with fiction writing. Specifically, I wanted to write a dystopian novel that was a cross between Logan’s Run and Blade Runner.

Climate change and the eventual draconian measures to keep it under control – declining country-assigned population caps, for one – would drive the narrative through characters who, in an increasingly carbon-constrained world, suddenly and unexpectedly found themselves among society’s most vulnerable.

Working title: Cap and Cull.

Why venture into fiction? It seemed to me like a better way to educate people about an otherwise complex – and I expect for most – boring topic. I tried to do this in my book Mad Like Tesla. The idea there was to lure people into learning about alternative energy technologies and climate challenges by telling the stories of real-world inventors and entrepreneurs doing some pretty inspiring, and arguably wacky, work.

The book did okay, at least by Canadian standards, selling about 5,000 copies. A far cry from the 600,000 sold as part of Margaret Atwood’s Maddaddam Trilogy, or for that matter the 30 million copies of Hunger Games – both books set in a world disrupted and devastated by climate change.

Despite being popular with Tesla and energy nerds like myself, the problem with my book is that it preached largely to the converted. The challenge, and this is where I think good fiction becomes important, is to reach the people not already singing in the choir. That means telling a compelling story. It is through protagonist and antagonist, action, love, suspense, treachery and dare say a dose of hope that historical and scientific facts about climate change, and an informed perspective about its impacts on our future, become more accessible – and palatable – for the masses.

I’m not alone in this thinking. Bernie Bulkin, former chief scientist at oil giant BP, wrote a commentary for Huffington Post in 2013 that spoke to the growing importance of what has come to be known as “cli-fi” – or climate fiction.

“It has seemed to me lately that cli-fi has to be one part of the answer to the problem many of us are trying to solve: How do we engage people more broadly and more deeply on climate change?” he wrote.

The word cli-fi, as far as we know, has been around since climate blogger Dan Bloom coined it. It started to gain traction, however, after writer Scott Thill, reporting for Wired magazine, included it as a keyword in a movie review of The Age of Stupid, a pseudo documentary about of a climate-ravaged world in 2055 and the missteps of humanity that led to it.

Since then, it seems the presence of the cli-fi genre in popular culture has grown, perhaps alongside our collective angst as the real impacts of climate change and the challenges of managing it become clearer. It’s not that eco-apocalypse theme novels are new, but it’s clear those anchored specifically around climate change have been on the rise in recent years.

CarbonDiariesSo much so that B.C.’s Moon Willow Press launched a website in August 2013 called Clifibooks.com (since renamed Eco-fiction.com), which reviews cli-fi novels and maintains a database of such books. Many of those books are aimed at young adults. These include Not a Drop to Drink by Mindy McGinnis, Floodland by Marcus Sedgewick and Saci Lloyd’s The Carbon Diaries 2015.

And let’s not forget self-publishing, yet another cultural barometer of the public’s climate angst. Diana Rissetto, a New York-based publicity agent for self-published authors, approached me last November about Declan Milling’s Carbon Black, a cli-fi thriller.

At the time, I asked Rissetto if she’d seen a rise in the number of self-published cli-fi books crossing her desk. “Actually, yes!” she replied, as if surprised by her own answer. “We’ve had three in just the past few months.” Prior to that, she hadn’t seen any.

Film, of course, is also playing a big role. Again, we’ve seen movies in the past that can be interpreted as cli-fi, even though they don’t mention the words climate change. George Miller’s 1979 classic Mad Max and its superior sequel, Road Warrior, are among my favorites. Another (lower quality) example is the 1995 film Waterworld, starring Kevin Costner trying to survive in a world flooded by melting ice caps.

But as a dystopian theme, climate catastrophe seems to be a more popular backdrop these days. The South Korean film Snowpiercer, the blockbuster Interstellar by Christopher Nolan, and Young Onesstarring Michael Shannon are recent examples.

To what degree are cli-fi books and movies impacting today’s youth? It’s difficult to say, as one could just as easily ask how much youth are impacting growth of the cli-fi genre.

What’s clear is that today’s teenagers and young adults, as digitally connected as they are, know more than any other generation that the fiction they see in popular culture could well be the reality they inherit.

A perfect marriage of geothermal and mining

Geothermal developers often struggle to make their projects economically viable, while mining companies are finding it increasingly difficult to get social license for new projects.

Given these two market challenges, the U.S. Department of Energy (DOE) is taking a closer look at the idea of recovering minerals from the hot brines that geothermal power plants pump out of the ground. These mineral-rich fluids contain a variety of rare earth elements and other valuable metals, but at conventional geothermal plants the only thing that gets extracted today is the heat.

A wasted opportunity? That’s what the DOE thinks. In summer 2014, the department committed more than $4 million to nine geothermal projects aimed at recovering both heat and minerals from brines. Work on those projects started in October, with results expected by fall 2016 or earlier.

“This is effectively ‘solution mining by nature’, and minerals dissolved in these fluids represent potential resources,” according to a DOE paper presented in January at a geothermal energy workshop at Stanford University.

For geothermal developers, added revenues from harvested minerals represent a way to move projects forward that might otherwise lack a business case – for example, if the heat resource at a particular site isn’t quite high enough. For mining companies, geothermal mineral recovery represents a sustainable path forward for an industry under pressure to reduce its environmental footprint.

“This is the future of mining,” said Gary Billingsley, a director with Saskatoon-based Star Minerals Group, a partner in one of the DOE-funded projects. “It’s a natural step in the evolution of mining, and certainly something I’m pretty keen on.”

No such research is being funded by the Canadian government, despite the country’s vast mineral resources and efforts by the Canadian Geothermal Energy Association (CanGEA) to raise awareness of the opportunity.

“We are delighted that Star Minerals received DOE support for their innovation, but what can the Canadian, provincial and territorial governments do to create these opportunities at home with our own world class resources?” said CanGEA chair Alison Thompson.

Star is working with Pacific Northwest National Laboratories (PNNL), the University of Oregon, the DOE’s Office of Energy Efficiency and Renewable Energy, and consultancy Barr Engineering on the testing of advanced sorbent materials that can separate certain minerals from brine flows.

The two-year project will look specifically at ways to extract rare earth elements and precious metals. The sorbents already show promise based on preliminary tests conducted by PNNL, according to the DOE.

The sorbent is, in essence, a designer molecule attached to a substrate. The molecule has an affinity for grabbing specific metals out of the fluid that flows over it. It’s not an entirely new activity – the mining industry has been using a similar approach with what’s called “solution mining” for many years.

The innovation, explained Billingsley, is being able to strip those metals off the molecules at the kind of flow rates, volumes and low mineral concentrations characteristic of a geothermal power plant.

Star Minerals is particularly interested in rare earth elements such as dysprosium, a name derived from a Greek word that means “hard to get.” It’s one of several rare earth metals used to create permanent magnet alloys for use in electric vehicles, wind turbines and other green technologies. China dominates the market, so finding new domestic sources has grown in importance.

“If you’ve been in the industry for as long as we have, which is about 40 years, there are getting to be fewer and fewer places to mine, and fewer places to look for these particular types of metal,” Billingsley said. “To us, it’s a lot better if you can target recovering them from waste streams or geothermal brines or oil-field brines. It makes a lot more sense.”

ADDING VALUE TO GEOTHERMAL

It’s a message that Thompson of CanGEA has been sending to the mining industry over the past year. By working together, geothermal developers and mining companies can help each other out, she said. The association recently released a chemical analysis report showing the best places in western and northern Canada to mine for both heat and minerals. “It’s hard to get companies to take it seriously,” Thompson added.

One seven-year-old company that has taken it seriously is California-based Simbol, often considered the poster child of geothermal mineral recovery. Operating in the state’s Imperial Valley, it has partnered with several geothermal power producers, which after extracting heat from hot brine flow have agreed to let Simbol extract lithium, manganese and zinc compounds from the fluids before they’re injected back into the ground.

Based on the operations of a pilot plant between 2011 and 2014, Simbol knows its process works – at least for producing high-purity lithium carbonate, an essential ingredient of lithium-ion batteries used in electric cars – but efforts to break ground on a large-scale commercial plant this year have reportedly stalled.

Last February, it was reported that Simbol – which was one of the company’s that received DOE research funding last fall – had dismissed most of the employees working at its demonstration plant. It was a sign, some observers said, that the company is having a difficult time raising capital for its commercial plant, which at full production capacity is designed to produce enough lithium for more than a million electric cars.

Simbol co-founder Luka Erceg, who was chief executive before leaving in early 2013, said he has completely severed ties with the company but continues to believe in the larger mission.

“I’ve always been bullish on mineral extraction from brines,” he said. “This is clearly an area with a lot of potential.”

If it can be made to work with geothermal brines, the DOE believes the approach can also be used with fluids that are co-produced with oil and gas operations.

The how, what and why of transitioning to a post-Paris world