LAST WORD

Dear oil patch, the geother­mal in­dus­try wants your leftovers

Alberta Oil - - CONTENTS - BY ELIZ­A­BETH LAPPIN

Why the geother­mal in­dus­try wants your fos­sil fuel leftovers

ALBERTA’S HALF-A-MIL­LION OIL AND gas wells are a proud tes­ta­ment to our prov­ince’s in­no­va­tion in ex­tract­ing our rich nat­u­ral re­sources. But more than 77,000 wells are now listed as inactive, and over 180,000 are aban­doned. Con­vert­ing them to geother­mal sys­tems would put drilling and ser­vice firms back to work, pro­vide heat and power to farm­ers who cur­rently see these wells as a nui­sance, and slash the aban­don­ment costs that force some ju­niors into bank­ruptcy.

Geother­mal heat re­sources are ex­tracted in vary­ing amounts from just about ev­ery pro­duc­tive well in Alberta. It’s in the form of pro­duced wa­ter, de­liv­er­ing gi­ga­joules of en­ergy to the sur­face, but it’s con­sid­ered a waste by the oil and gas in­dus­try, and is usu­ally trucked away or piped into dis­posal wells. Oil com­pa­nies ac­tu­ally pay to throw these gi­ga­joules away.

A re­cent Con­ti­nen­tal Re­sourcesUniver­sity of North Dakota project in the Wil­lis­ton Basin is pro­duc­ing 250 kW of power from an oil-wa­ter emul­sion stream. The unit fits into two ship­ping con­tain­ers, and costs US$250,000. This type of mi­cro­gen­er­a­tion is prospec­tive in Alberta, and a hand­ful of ar­eas also have po­ten­tial for multi-MW baseload power pro­duc­tion.

In ad­di­tion to pro­duc­ing power, we can use heat for farm­ing, green­houses, pas­teur­iza­tion, veg­etable dry­ing, brew­ing and cur­ing en­gi­neered hard­wood. Imag­ine what Alberta’s fa­mously in­no­va­tive farm­ers and landown­ers would ac­com­plish if they were given the op­tion to use heat pro­duced from old wells on their prop­er­ties. North­ern com­mu­ni­ties, where a great many oil and gas wells are drilled nearby, can per­haps reap the most ben­e­fits of all. Geother­mal can re­duce re­liance on diesel fuel, and pro­vide food se­cu­rity via well­head­sourced, geother­mally heated, lo­cal green­house pro­duce.

Con­sider this. If just five per­cent of the 77,000 sus­pended wells in Alberta are prospec­tive, that’s a low of 3,850 wells. While naysay­ers may be quick to point out that the re­source is mar­ginal in Alberta, or that the tech­nol­ogy isn’t op­ti­mized yet, let’s not for­get our roots. Oil sands, shale oil and tight gas re­sources used to be con­sid­ered mar­ginal. Home-grown tech­nolo­gies like SAGD are now con­sid­ered main­stream.

Alberta’s abun­dance of nat­u­ral re­sources has eclipsed the geother­mal op­por­tu­nity. We have been chas­ing big­ger game. But a chang­ing land­scape, spurred on by grow­ing or­phan and sus­pended well lists, and Cana­di­ans de­mand­ing that the oil patch clean it­self up, is bring­ing geother­mal re­sources to light. It doesn’t mat­ter if the cli­mate move­ment has it right or not. With the typ­i­cal ar­gu­ments and mud-sling­ing set aside, our oil and gas in­dus­try can be­come more ef­fi­cient and prof­itable through in­te­gra­tion with re­new­ables like geother­mal.

Geother­mal of­fers the oil patch a unique op­por­tu­nity to re­turn bright minds to work, cap­i­tal­ize on a known re­source, op­er­ate more ef­fi­ciently, and re­duce emis­sions. As the down­turn pushes com­pa­nies into bank­ruptcy, the or­phan well list is grow­ing. Cur­rently 1,114 or­phans must be aban­doned, each with a price tag on the or­der of tens of thou­sands of dol­lars or more. It’s un­likely that the in­dus­try-sup­ported Or­phan Well As­so­ci­a­tion can cover these costs, which leaves tax­pay­ers to pick up the tab. The sit­u­a­tion is com­pounded by the AER’s re­sponse to the re­cent Red­wa­ter En­ergy court rul­ing with an in­terim dou­bling of a com­pany’s minimal Li­a­bil­ity Man­age­ment Rat­ing ra­tio to 2.0, which will hurt the in­dus­try even more.

It’s a doom and gloom story, but it doesn’t have to be. Geother­mal of­fers an al­ter­na­tive to aban­don­ment. Just like we sort our garbage ev­ery week into blue bins and black bins, old wells can be sorted into garbage (aban­don) or re­cy­cle (geother­mal). Given the cur­rent de­mand from Cana­di­ans for re­new­ables and green power, our prov­ince would be re­miss not to take ad­van­tage of what geother­mal can of­fer, us­ing lit­tle more than the oil patch’s leftovers.

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