Geothermal: Digging Beneath the Surface
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Geothermal energy is potentially the largest source of energy in the world today—with energy supply potential vastly more than the global total of oil and natural gas combined. Geothermal is renewable and will most likely last for billions of years. Its carbon footprint is minimal. It is stable. We can predict the power output of a geothermal power plant with remarkable accuracy. Geothermal power plants can produce electricity consistently, running 24 hours a day, 7 days a week, regardless of weather conditions. Actual power output is very close to total installed capacity.
Yet, current global geothermal energy use lags far behind other energy sources, comprising only 1% of overall energy production. A study by the US Geological Survey concluded that at least 70% of global geothermal resources have yet to be discovered. And they exist throughout the world.
Failure To Launch
So why has the vast potential of geothermal energy remained substantially untapped? Numerous answers have been put forward. Some say that until recently it has been a straightforward business calculation. With hydrocarbons incumbent and prices comfortably high, what would be the business rationale for diverting resources—human, technological, and otherwise—to an energy resource that hasn’t proved its value?
Ignorance and misunderstanding also play a role. “For a vast majority of the population, if you ask about wind and solar, most understand what the resources are and what their value proposition is,” said Vikram Rao, executive director of the Research Triangle Energy Consortium and former vice president and chief technology officer of Halliburton. “If you ask about geothermal on the other hand, most people think of Iceland, Yellowstone, and heat pumps.”
There is confusion among the general public, even among smart practitioners in the energy transition space, as to what geothermal energy is. Geothermal ground-source heat pumps used to heat individual homes are not the same as the generation of power by geothermal on an industrial scale.
Geothermal’s slow progress recalls the oil and gas industry of the early 1900s when only a fraction of the resource could be tapped with the then-existing technologies, and only in areas where “black gold” and other obvious signs of oil and gas existed at the surface and could be developed. Geothermal energy development over the past century has evolved in much the same way. Geysers, steam vents, hot spots, and other obvious surface signs of geothermal energy have been developed, but the resources that are not visible have been largely ignored because of heavy upfront costs.
“Conventional, hydrothermal (steam) geothermal energy today comes from places where, by chance, the right conditions—heat, permeability, and the presence of substantial amounts of water—all occur naturally very close to the surface. And looking at Earth’s total landmass, the number of places where those unique conditions occur is incredibly small,” Rao said. In the past, that imposed severe geographical limitations on the resource and quashed interest.
As a result, geothermal has been largely absent from the public energy debate, energy policy discussions, and strategic plans of major energy companies.
“But if you drill deep enough, you reach boiling, even supercritical temperatures. Temperatures sufficient to produce geothermal energy efficiently can be found in most places on Earth. If we harden existing directional drilling technologies to operate at higher temperatures, we could drill for geothermal energy anywhere in the world,” he said.
Unlike hydrothermal, hot but essentially dry, impervious crystalline basement rock—also known as HDR (hot, dry rock)—is found almost everywhere deep beneath the earth’s surface. Good prospects for development are located over deep granite covered by 1.9–3.1 miles of insulating sediments that slow heat loss.
The idea of mining deep HDR for heat rather than fluids was described at the turn of the 20th century. In 1963, a geothermal heating system that used the heat of natural fractured rocks was built in Paris. But it wasn’t until 1970 that the concept of enhanced—or engineered—geothermal systems (EGS) for HDR originated at the Los Alamos National Laboratory. The Fenton Hill project, the first system for extracting HDR geothermal energy from an artificially formed reservoir, was created in 1977.
Fluid injected from the surface under high pressure opened pre-existing joints in the basement rock, creating a man-made reservoir close to a cubic mile in size. Boreholes drilled from the surface and surface injection pumps and associated plumbing were used to recover the earth’s heat from hot, dry regions via closed-loop circulation of pressurized fluid. The fluid injected into the reservoir absorbed thermal energy from the high-temperature rock surfaces, then served as the conveyor for transporting the heat to the surface for practical use.
Early EGS projects were fit-for-purpose and not repeatable, which led to high costs and ultimate failure to scale. Tracking and investing were pulled back, and Fenton Hill reportedly still contains the only truly confined, flow-tested HDR geothermal energy reservoirs anywhere in the world.
John Redfern, president and CEO of Eavor Technologies, a startup focused on closed-loop geothermal systems development, said, “Geothermal looked like a renewable answer. Looking at the skill set, it should be the automatic place for the oil and gas industry to go in the transition. Several times, we made it to the altar; then we were jilted. Finally, the two industries parted ways. The reason: scalability.”
Rao agreed. “Geothermal was small, nichy, and expensive. It was certainly not an opportunity that would have interested any oil major because it was just too geographically limited,” he said. “We’ve seen that over the years; operators tried to invest in projects, only to painfully divest and walk away.”
Winds of Change
Then things began to change. One change was in the way we meet demand for power.
For many years, power grids were designed for a 24/7 baseload level of demand to be satisfied by coal, gas, and nuclear, with peaks requiring different power generation technologies. Wind and solar have upended that paradigm, with the goal now being to fill as much demand as possible with the cheapest source of power.
The consensus is that instead of a 24/7 baseload source or sources that are dispatchable but difficult to turn on and off, the need is for flexible on/off sources. Solar power and batteries complement one another in this area. Many think that geothermal energy could be an excellent complement to wind. If wind disappears for 2 to 3 weeks, there will never be enough batteries on the system to make up for the lull, particularly in the Northern Hemisphere, according to Michael Liebreich, president and CEO of Liebreich Associates and chair of the advisory board for Eavor. Geothermal power can fill the gap.
Dramatic changes have also occurred in oil and gas technologies and operations in the past decade. Hydraulic fracturing and other technologies enabled the shale boom. At the same time, the offshore industry made great strides in high-pressure/high-temperature technology development.
“Now we find ourselves in a situation in which entirely new capabilities in drilling and exploration make deep, very hot geothermal development look approachable,” said Rao. “We are talking about building on a new technology base to exploit the heat in reservoirs rather than the fluid. What this means is that geothermal is no longer a niche play. It’s scalable, potentially in a highly material way.
“Scalability gets the attention of the industry,” Rao continued. “It’s required for industry to pursue the opportunity profitably. If we are now considering a possible future of being able to drill for geothermal energy in most places, instead of just where the resource is close to the surface and easy to access, that changes the calculus. This is a completely different world than 10 years ago.”
Events of the past several months have accelerated this transformational thinking. The clock is ticking on aggressive carbon-neutrality commitments made by many international oil companies. Climate concern has seized global public consciousness. Hydrocarbon-divestment movements are gaining traction. As renewables have become commoditized and benefited from decades of government subsidy, favorable regulatory conditions, and public support, their cost has steadily decreased.
The effect of the lagging recovery of demand for oil and gas as a result of COVID-19 has had a significant impact on the industry’s workforce, which may help to further facilitate the transfer of the industry’s services, technologies, and expertise to geothermal development.
The 2020 oil-price collapse and associated industry job losses, along with heightened environmental-social-governance (ESG) compliance and the need for a new form of green, flexible power to stabilize grids and operate alongside expanding intermittent renewable sources are driving renewed interest in developing geothermal resources. And belief is growing that transfer of technology and expertise between oil and gas and geothermal could be a game changer.
Rao contends that oil and gas producers and service companies, while well on their way to becoming power producers, are doing so in areas where they are not fully leveraging their strengths, people, and technologies. He thinks stronger focus on geothermal could accelerate scalability of geothermal development and its benefits for energy transition. For example, he points out that the two most promising, commercially scalable geothermal development concepts—EGS, and closed-loop systems, also known as supercritical, advanced geothermal systems (AGS), or “radiator” systems—require core competencies much closer to those of the oil and gas sector than do solar and wind power.
“I think that makes the pivot to geothermal not only realistic, but also obvious, even inevitable,” Rao said. “Another point is that it really is not a pivot in the sense that I expect geothermal to be a material addition to an oil and gas portfolio.”
“There are a lot of opportunities for crossover of people and technologies between the two sectors,” said Todd Zahacy, senior engineering consultant in the E&P Division of C‑FER Technologies, an Edmonton-based upstream research and development company. Zahacy was co-chair and moderator of the Geothermal Resources Council (GRC)-SPE Virtual High-Temperature Well Cementing and Integrity Workshop in September, the theme of which was exploring geothermal and oil and gas synergies.
“Now is becoming an ideal time to pull the two sectors together,” he said.
Zahacy, Rao, Redfern, and others predict that the number of conferences and workshops devoted wholly or partially to geothermal/upstream oil and gas crossover opportunities will proliferate over the next several years as both industries realize the benefits.
One recent example is Pivot2020, a week-long virtual event of 11 moderated roundtables whose panelists included leaders from the oil and gas and geothermal industries, academia, governments, national labs, and startup companies. The event was hosted by the Geothermal Entrepreneurship Organization (GEO) at The University of Texas at Austin and the International Geothermal Association (IGA), along with industry and organizational partners. Approximately 6,600 people attended the virtual event, according to Jamie C. Beard, executive director of GEO.
Owning the Future?
“Some service providers have worked in both the geothermal and oil and gas sectors for a long time; operators, not so much,” Rao said. “In the near term, oil service companies should start engaging in geothermal projects to a greater degree.
“Looking farther down the road, say in the 5- to 10-year range, my guess is that a critical mass of operators are going to throw their hats into this arena, and the oil and gas service companies who have positioned themselves as leaders in high-temperature and -pressure drilling are going to own this future,” he said.
The business model will remain as now, he continued; operators will explore for and produce geothermal energy, and technology and service providers will drill and complete the wells. “The opportunity is in the here and now for energy service companies to get out in front. I recognize that these are tough economic times for investment. Even so, it is worthwhile to note that while the parallel does not strictly hold, all the key enablers of shale oil and gas were invented in the oil-price doldrums of the 1980s,” Rao said.
For Further Reading
SPE 195523 Can Unconventional Completion Systems Revolutionize EGS? A Critical Technology Review by F. Guinot and P. Meier, Geo Energie Suisse AG.
DNV GL. 2019. Energy Transition Outlook.
International Energy Agency. June 2020. Geothermal Tracking Report.
Geothermal: Digging Beneath the Surface
Judy Feder, Technology Editor
01 October 2020
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