Abandoned oil and gas wells in Alberta are on the rise — but where many see a growing liability, Alberta’s fledgling geothermal industry sees massive opportunity.
“We’ve got these old wells that we know are hot and we’re going to fill them with cement and walk away,” says Tim Davies, CEO of geothermal company Turkana. “It’s just stupid.”
There’s currently no permitting framework for geothermal in Alberta, leaving the renewable energy out of play.
“I own the well, I own the land and I own the oil. But I can’t own the heat,” Davies said. “There’s just no mechanism for that in place.”
“The oil business has drilled 400,000 wells in Alberta alone,” Alison Thompson, president of the Canadian Geothermal Energy Association, told DeSmog Canada. “They’ve already found all the hot water the province has.”
“The oil patch has those skills to get the most out of every well,” Thompson said, adding the workforce has been hamstrung by a lack of forward thinking policies. [view:in_this_series=block_1]
The number of orphaned wells — left in the wake of a mass exodus of oil and gas producers — has quadrupled in the last 12 months.
Ben Lee, owner of Raven Thermal Systems, says the oil and gas sector’s loss could be the geothermal industry’s gain.
“For the first time in more than a decade you’ve got very skilled workers that have exactly the skillset that a successful geothermal project needs,” Lee told DeSmog Canada.
Geothermal energy draws on the earth’s natural warmth to create a renewable form of energy with a low environmental footprint and virtually no carbon emissions. Importantly, geothermal provides reliable base load capacity, similar to a hydro dam or gas-fired power plant, enabling system stability.
Despite being home to enormous geothermal potential, Canada is the only country on the Pacific Ring of Fire that doesn’t use the resource to produce commercial-scale energy.
CanGEA released a report in late 2014 that found geothermal could supply all of the energy needs of British Columbia for much cheaper than the Site C dam, currently under construction.
“You’ve got top-notch geologists, reservoir engineers, drilling and completion engineers, surface engineers and all the associated landmen and everything else that comes along with a successful drilling program,” Lee said.
“They are available, and available on the cheap to some extent right now, because there is so much supply.”
Lee, who has a degree in aerospace engineering and specializes in heat transfer systems, used to work in other resource industries but last year founded Raven when he saw an opportunity to bring underutilized geothermal energy to the forefront.
But Alberta has yet to see a single geothermal operation materialize.
Lee said the regulatory climate in Canada has failed to keep pace with knowledge of Canada’s vast geothermal potential. Currently there is no licensing framework in place for the development of geothermal energy in Alberta.
For Lee and others struggling to find work in the province, waiting for policy to catch up has been painful.
“We have some very available high-end skill that’s sitting around and could be very quickly turned around because at the end of the day whether you’re drilling for oil or drilling for hot water, the process is the same.”
Craig Dunn, an exploration geologist with Borealis Geothermal, the only company in Canada to have a geothermal exploration permit for B.C., said many of the techniques used to develop oil and gas deposits are directly applicable to geothermal.
The steam-assisted gravity drainage, or SAGD, used to recover bitumen deposits in the Alberta oilsands is “basically geothermal in reverse,” Dunn said, saying with one steam is pumped into a reservoir and in the other steam is pumped out.
“I got into this because one of my last jobs was in a heavy oil play,” Dunn said.“And I thought, ‘is this the best we can do? Is this a resource we want to hand down to our children?’ ”
Canadian Companies Going Abroad for Geothermal Opportunity
Brett Erickson from FlashPoint Resources Management Inc., a Calgary-based drilling and completions firm, said his company has been busy applying its skills in Nicaragua and other countries, such as the U.S., that are open to geothermal development.
“Alberta has some of the best engineers and best mind power when it comes to drilling and power generation as a whole,” he said, but other countries “are ahead of Canada when it comes to green energy.”
“I believe it’s because we’ve got access to easier, cheaper energy like oil, gas and coal,” Erickson said. He added geothermal is expensive to start but it’s “the greenest energy out there.”
“It’s a lot more reliable than hydro or wind,” he said, “with less of a footprint.”
Erickson said it’s going to take some help to get geothermal up and running in Canada.
“It is an expensive technology but over the long term it has a payback and that’s what investors care about, the long-term payback,” Erickson said
Proving geothermal is low risk but high return has been a key struggle for geothermal companies in Canada, Erickson said. “With the downturn in oil there are investors that are sitting on money that usually would have gone to oil projects.”
“The pieces are in place for geothermal to take off in Canada.”
Thompson, who previously worked with companies interested in using geothermal energy to reduce the carbon footprint of the oilsands, said industry is eager for the opportunity to apply what they know to this new resource to reduce greenhouse gas emissions.
“If someone would just at the government level formulate a task force…we don’t need to reinvent the wheel,” Thompson said. “It’s plug and play. That’s what we’re hoping for.”