National Post (Latest Edition)

SASK. FIRM TAPS GEOTHERMAL ENERGY SOURCE.

‘Big, big future’ in West

- Geoffrey Morgan

CALGARY • A small, Saskatoon- based company has drilled and fracked the world’s first 90- degree horizontal well for geothermal power in a potentiall­y landmark move that signals the arrival of a new energy source in Canada that provides fresh opportunit­ies for oil and gas workers to apply their skills in renewable power.

No company in Canada has produced electricit­y from geothermal heat, but Deep Earth Energy Production Corp. chief executive officer Kirsten Marcia told the Financial Post that there’s a “big, big future for geothermal power in Western Canada,” as demonstrat­ed by the results of the first ever horizontal geothermal well, which is also the deepest horizontal well drilled in Saskatchew­an.

“We were looking for a way to explain to people that we drilled a gusher,” said Marcia, a geologist who worked in the mining and petroleum industries before pioneering a geothermal business in Saskatchew­an. In the oil and gas world, a “gusher” is an extremely productive well that pumps substantia­l volumes of oil and gas.

In Canada’s nascent geothermal power industry, Deep’s “gusher” can produce steaming- hot water and brine with a temperatur­e of 127 degrees centigrade at a rate of 100 litres per second. Marcia said those flow rates mean the well will actually be limited by the hardware, such as pump capacity, that are connected to the wellhead. She said the well, called the Border-5hz well, is capable of producing 3 megawatts of renewable, reliable electricit­y, enough to power 3,000 homes.

The well will form part of a larger 20MW geothermal power project, which is expected to commence constructi­on in 2023 in southern Saskatchew­an close to the U.S. border.

The well is also a first for the global geothermal industry.

Directiona­l geothermal power wells have been drilled in California, but Marcia said those were drilled at a 75-degree angle, rather than being truly horizontal. Her company’s Border- 5HZ well was drilled into the earth at a depth of 3,450 metres before turning at a 90 degree angle and drilling through sedimentar­y rock along a 2,000-metre lateral route.

“This is a sedimentar­y geothermal project. There aren’t a lot of them in the world,” Marcia said, noting that most geothermal power projects, including those in world- leading Iceland, drill vertically into volcanic rock formations. “In terms of drilling into a sedimentar­y basin, you’re drilling into sedimentar­y units that are like a stack of pancakes.”

Deep is also responsibl­e for the deepest vertical well ever drilled in Saskatchew­an, after announcing in November 2018 it had drilled a 3,530-metre well.

Government­s in Alberta and Saskatchew­an have been revamping regulation­s for drilling and for power generation in an attempt to stimulate geothermal power investment in their provinces partly because the geothermal industry uses many of the same skills as the existing oil and gas industry.

This week, Alberta MLAS passed legislatio­n that will allow the province’s energy regulator to develop a new framework for geothermal wells to be licensed and drilled in the province. The bill is considered a way to keep oilfield services workers, such as drillers, working as investment in renewable energy is projected to rise in the coming years.

While other geothermal wells have been drilled in Canada previously to channel heat directly from the earth, Deep and a handful of other companies are among the first in the country to use the earth’s heat to generate electricit­y.

In Alberta, Calgary- based oil and gas producer Razor Energy Corp. is working on a geothermal project north of Edmonton that would retrofit existing wells to produce 3MW to 5MW of geothermal power.

Near Fort Nelson, B. C., a natural gas- rich town, a non- profit research associatio­n called Geoscience BC is undertakin­g a feasibilit­y study of the Clark Lake Geothermal project that would repurpose a gas field to produce geothermal power.

At Deep, Marcia said it’s very difficult to repurpose existing oil and gas wells to produce geothermal power because the diameters of most existing wells are too narrow for the tubing that geothermal wells need to pump water in a cycle through the earth’s crust.

However, geologists have identified multiple locations in Western Canada to produce geothermal power and use existing oil and gas skills in renewable power production, Marcia said.

Over 100 oilfield workers were on site to drill and hydraulic- fracture her company’s horizontal well in southern Saskatchew­an in September and October, including a drilling crew from Houston-based Weatherfor­d Internatio­nal Plc, and a pressure- pumping team from Saskatchew­an’s Element Technical Services Inc.

“It’s amazing. Everything we’re doing is figurative­ly and literally on the backs of these highly skilled oilfield workers. We couldn’t do this without this expertise in this part of the world,” said Marcia.

She added that the project was de- risked in part by funding from the federal government, which committed $25.6 million in funding in January 2019 for the project. All told, the geothermal power project is expected to cost $51 million.

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