Dense? Yes. Esoteric? Yes. Interesting? Err...hopefully?
I took the opportunity to condense some new ideas and perspectives into another article, and was again lucky to have my work approved for publication by the International Geothermal Association. This article will appear in the 84th edition of the IGA's quarterly review. It details how the geothermal industry can cooperate with the oil and gas industry. I'm now beginning work on my third article, which will target collaborations with the mining industry here in South America. Enjoy:
Cully Cavness, Thomas J. Watson Fellow
The geothermal industry shares commonalities with many technically related, but otherwise disconnected industries. A non-exhaustive list of technically overlapping industries includes: oil and gas (drilling, reservoir engineering), waste heat recovery (heat exchanger thermodynamics), industrial corrosion and scaling management (piping and equipment protection), wind and solar power (financing and grid connection challenges), emissions abatement (H2S regulations in California or in Iceland, for example), and fossil fuel power plants (turbine-generator engineering, control systems, operations). This list could easily expand to include many other industries and professions that bear similarities to geothermal energy.
These industrial and technical synergies present a valuable opportunity for the geothermal industry – collaboration could easily increase efficacy and efficiency, reduce risk, and ultimately increase profitability. A previous article in the IGA Quarterly (Ed. #83) explored collaborative ventures and future possibilities between the geothermal industry and the Asian waste heat recovery industry. This follow-up article aims to deliver a similar analysis of developments and possibilities with the oil and gas industry.
Specifically, the cutting edge of geothermal development, Enhanced Geothermal Systems (EGS), can leverage the experience and technology of the Oil and Gas (O&G) industry. The O&G industry presents opportunities in directional drilling, reservoir stimulation, and fracture proppant. Additionally, oilfields present an interesting prospective market, as showcased by a case study in Colorado.
EGS is a frontier method of geothermal energy extraction. EGS proponents seek to drill into hot rock with low permeability and/or water levels insufficient for conventional geothermal development, then fracture the rocks and inject and recover a working fluid, thereby creating an artificial geothermal reservoir. EGS techniques and technologies are fraught with all the uncertainty and risk of newness, but the methods also promise to unlock boundless resources and opportunities if they can be mastered. The majority of the earth’s geothermal potential is trapped in areas that are not currently accessible to conventional geothermal methods, but which could be harnessed with the ideas of EGS.
Companies like AltaRock Energy, Geodynamics, Petratherm, Ormat, GeothermEx, as well as the American Department Of Energy and other international agencies all have interests in developing the highly prospective EGS industry. Success will depend on advances in a variety of techniques and technologies.
At the surface, developers must apply highly efficient heat exchangers and turbine-generator systems to optimize their power cycles for lower temperatures and/or flow rates. Rankine and Kalina Cycle technologies both offer this ability, with the latter being a particularly effective option for the low-temperature scenarios that typify current EGS development.
In aspects of drilling and reservoir engineering, success is largely contingent on the amount of surface area that can be accessed by circulating fluids. A combination of technologies developed by the oil and gas industry will be critical in this area.
Multistage hydraulic fracturing and directional drilling (both originated by the petroleum industry) will likely be fundamental technologies for EGS, as they allow for the targeting and expansion of artificial reservoirs. Once reservoirs have been created through hydraulic fracturing, the burden then becomes to maintain the productivity of those reservoirs. Reservoirs will become less volumetrically productive when either of the following occurs: porosity decreases (through chemical scaling or the physical collapse of pore space), or permeability decreases (when physical or chemical effects decrease the interconnectivity of pore space). Here, in porosity and permeability maintenance, through the use of proppants, for example, we may also find help from the Oil and Gas industry.
Beyond technologies and methodologies, the hydrocarbon industry may also provide an interesting market for geothermal power. Consider the fact that oil and gas fields consume massive amounts of power for their operations, often exist in remote locations far from transmission lines, and often generate power using purchased diesel or locally produced natural gas, which could otherwise be sold profitably into pipelines.
The above criteria form the exact backdrop of a scenario currently playing out in the Raton Basin, southern Colorado. Pioneer Natural Resources USA, Inc., an independent oil and gas company is developing a Coal Bed Methane (CBM) field in the Raton Basin. Raton not only boasts significant CBM resources, but also a curiously elevated geothermal gradient, which inspired the author’s thesis in geology, and led to ongoing collaboration between Pioneer Natural Resources, the Colorado School of Mines, the Institute of Earth Science and Engineering in New Zealand, and the Colorado Geological Survey in a study of the potential for an EGS development under the CBM field. . If successful, Pioneer would at least be able to substitute geothermal power for locally consumed natural gas, then sell the offset gas at a profit. Ultimately, however, the project could expand to provide regional power and demonstrate potential for other hot sedimentary basins, hugely expanding the applicability of geothermal energy.
Part of Pioneer’s attraction to the project is the tremendous overlap and synergy between the geothermal and O&G industries. Existing well bores provide exploration data to delineate the thermal anomaly, representing a dramatic cost savings to the high-risk frontend of geothermal development. Further synergies are offered by the technical expertise and infrastructure already in place at the gas field. Pioneer has drilling equipment and drilling teams, hydraulic fracture and well completion equipment, drill pads, offices, existing geophysical data and analysis, as well as experts in local geology and conditions. And, of course, Pioneer already owns land and subsurface mineral rights. Doubters only need to look at Chevron, the world’s largest producer of geothermal power, to understand how powerful these synergies can be. Origin Energy (an Australian Oil and Gas company) also recently purchased 40% of Energia Andina SA (a Chilean geothermal outfit), and provides another look at how petroleum and geothermal can marry.
To conclude, perhaps it is incorrect to view the “conventional energy” industries like oil and gas (or even coal) as diametrically opposed to the goals and purposes of geothermal energy. True, geothermal energy must compete on price against natural gas and coal, and there’s the pollution issue, but at the same time there are tremendous mutually beneficial opportunities to be harnessed from collaboration with hydrocarbon-based industries. After all, most of the drilling and power generation technologies that drive geothermal today were initially developed for hydrocarbon extraction or combustion. Perhaps the best approach is to embrace other industries like oil and gas, learn from their expertise, and potentially even develop new research, technologies, and projects together.
Cully Cavness is a Thomas J. Watson Fellow researching industrial synergies for the geothermal energy industry in Iceland, China, Spain, Argentina, Chile, and the United States. He is a geologist and native of Denver, Colorado, USA. He currently resides in Buenos Aires, Argentina.
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