Utilizing Oil & Gas Experience to Expand the Geothermal Industry

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Utilizing Oil & Gas Experience to Expand the Geothermal Industry

With the crash in oil prices caused by Russia-Saudi Arabia supply negotiations and the COVID-19 pandemic, there has been increased interest in green energy in Alberta.   Is there a way for green energy and the oil and gas industry to work together to bring investment back to oil and gas producing provinces, create jobs, and provide a greener future?  One technology does allow for synergies between the Oil & Gas industry and green energy - Geothermal.

On April 29th 2020, there was a rare and exciting collaborative announcement from the oil and gas and geothermal industries.  Industry groups from both oil and gas and geothermal sectors have created an alliance to promote the development of renewable technologies in Canada.  These groups include: Clean Energy Canada,  Canadian Association of Oilwell Drilling Contractors (CAODC), Petroleum Services Association of Canada (PSAC), Geothermal Canada, Clean Resource Innovation Network (CRIN), as well as Oil and Gas and Geothermal companies such as Beaver Drilling, Terrapin Geothermics, DEEP Corp. and Eavor Technologies.  This group hopes to create opportunity for Alberta and for Canada by providing clean energy sector jobs to develop renewable technologies in Canada.

But what does this announcement mean, and what are the quickest steps to utilizing geothermal energy?  A previous blog post from GLJ, What is Geothermal Energy? What is Canada’s Potential?, focused on what is geothermal energy, and temperatures Western Canada can achieve for geothermal development.   A first thought for most people when they hear the word geothermal is geothermal power, i.e. produce hot water to power a turbine and generate electricity.  But geothermal has many more uses which can easily and readily be exploited at many different temperatures.  Electricity generation from geothermal reservoirs requires extremely hot reservoir temperatures of usually >120°C.  Many commercial and agricultural industries on the other hand can utilize geothermal heat at temperatures as low as 40°C.  Below is an illustration depicting some industries which can benefit from geothermal heat.

 

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Figure 1: Geothermal Direct Use Applications. Deep Geothermal has many uses besides electricity generation (Geothermal Education Office, 2005)

 

Looking at geothermal for electricity generation, there are currently four companies in Canada actively working on projects to generate electricity from geothermal resources. These companies include DEEP Corp. currently drilling a project near Estevan, SK; Terrapin Geothermics who is in the exploration phase for developing a project south of Grand Prairie, AB; Razor Energy Corp. which is looking to utilize oil & gas co-production at their South Swan Hills oil field in Alberta and; Eavor Technologies who is in the exploration phase for several projects around Canada after their success pilot project near Rocky Mountain House, AB.  The first three projects will use produced formation water to power a binary cycle power plant, where as Eavor has their own unique solution using a closed loop system which uses conduction to heat fluid in the wells rather than producing formation water.  Development of these conventional geothermal power projects is a lengthy process, as power projects require a tremendous amount hot water (>120°C) to power these plants.  Both Terrapin and DEEP are aiming to have five megawatt (MW) conventional geothermal energy projects.  Sanyal and Butler in 2010 published a paper correlating reservoir temperature to potential power generation at a constant flow rate.  Using this correlation, and estimated reservoir temperatures of 120-140°C, these projects will need a water supply of around 300 liters per second.  To convert to barrels per day, both these projects would require approximately 160,000 barrels of >120°C water per day to generate 5 MW of energy.  Geothermal wells are designed differently to oil and gas wells as they have larger diameter production casing (9 5/8 – 13 3/8”) and larger electrical submersible pumps to handle a tremendous amount of fluid.  But it takes time and money to explore for and test these hot permeable reservoirs which are capable of the high flow rates required for geothermal power.

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Figure 2: Based on an empirical correlation of net  power per 63 liters/second of water and temperature of produced water (Sanyal and Butler, 2010), projects in Western Canada could estimate 1MW of power per 63liters/second of water produced.

 

On the other hand, heat projects require lower temperatures, and depending on scale, lower flow rates.  This will allow projects to get off the ground much quicker as there are many more, high permeable medium temperature reservoirs in the Western Canadian Sedimentary Basin.  Suspended oil and gas wells capable of high flow rates have the potential to be repurposed for geothermal heat.  As well, produced water from oil and gas activities can be utilized for geothermal heat, and allow for an additional revenue stream.

One Calgary based company, Vermilion Energy, has utilized geothermal heat produced from their oil and gas fields in France and the Netherlands to provide heat to greenhouses and housing.  Produced hot water from their oil and gas activities flows into a heat exchanger which provides heat to greenhouses. The produced formation water is then re-injected into the formation to maintain reservoir pressure.  Vermilion Energy in France has set up an excellent synergy between the oil and gas industry and green technology.  This synergy can be easily mimicked in Canada.

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Figure 3: Schematic of how Vermilion Energy utilizes hot water produced from oil & gas activities to geothermally heat greenhouses (Vermilion Energy, 2020)

 

In Canada, we have the potential to utilize geothermal heat as a supply of clean reliable heat to industries such as greenhouses, fish farms, food processing plants, etc.  Utilizing geothermal heat will create jobs finding, drilling, and constructing end use facilities, as wells as permanent jobs at these facilities.  With the ability to have additional greenhouses in Canada, it will help secure a domestic supply chain.

With a quick look at reservoirs in Western Canada which have i) high permeabilities, ii) moderate temperatures, iii) aquifer support and iv) proximity to populated areas, the Leduc Formation fits the bill.  The Rimbey-Meadowbrook-Leduc reef trend may tick all the boxes for a geothermal heat project.   Weydt et al. (2018) completed a study on geothermal potential for carbonate aquifers in Alberta and discussed the Rimbey-Meadowbrook-Leduc trend amongst others as potential candidates.  Due to variability in carbonate reservoirs with dolomitization and fracturing, some reservoirs may be able to have high deliverability rates. The plethora of oil and gas data and knowledge in Western Canada will help the geothermal industry understand temperature and flow potential of these reservoirs. Below is a map of the Leduc Formation with bottom hole temperatures from well logs which finished drilling in the Leduc Formation. In the reefs along the Rimbey-Meadowbrook-Leduc trend, bottom hole temperatures reach 50-80°C which are adequate for heat supply to greenhouses and other industrial and agricultural activities.

 

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Figure 4: Bottom hole temperatures of wells in the Leduc Formation. Temperatures reach 50-80°C which is adequate for geothermal heat production. Leduc reefs are displayed in blue, and wells with bottom hole temperatures are displayed by colour in small circles.  See the scale on the left for temperature values.

 

Western Canada has the potential to become a major geothermal player in the world.  What if oil and gas and geothermal industries in Canada partnered with the Orphan Well Association to repurpose orphaned well sites and converted them to geothermal heat sites?

With the help of the provincial and federal government to encourage geothermal development, as well as industry to embrace geothermal in our provinces, we will be able to capitalize on the clean heat and electricity from the earth.  The oil and gas industry has the skill and know how to help pave a path forward for decades of clean renewable energy. If you or your organization is interested in geothermal, GLJ is happy to speak with you about how we can help with all levels of geothermal development from exploration and reservoir modeling to resource estimation and economics.