Baseload, Geothermal

Examining the Technological Overlap Between Oil, Gas and Geothermal

The intersection of the oil and gas and geothermal industries is one that is rich in unexpected ways, be it in drilling technologies or the new frontier of co-production of both fossil fuels and geothermal power from the same well. The revolutionary drilling technology oil and gas companies employ while creating critically-deep wells has migrated over to geothermal, allowing new, difficult to access renewable resources to be harnessed. Meanwhile, in Canada and the U.S., the potential of geothermal energy coproduction at scores of previously existing oil and gas drilling sites is a hot topic — a potential way for oil and gas companies to diversify their energy portfolios and invest in clean baseload energy.

Geothermal in Oil and Gas Fields

Maria Richards, head of Southern Methodist University’s Geothermal Lab and a lead researcher on the intersection of oil and gas and geothermal, views geothermal as an opportunity for the oil and gas industry to eventually transition — following layoffs in the oil and gas industry after fossil fuel prices plummeted, Richards observed many industry professionals reaching out to SMU’s lab about opportunities in the geothermal field due to similar technical skillsets. At SMU’s annual “Power Plays: Geothermal Energy in Oil and Gas Fields” conference, many players in the oil and gas industry were represented, including major oil companies like Shell.

However, for a smooth transition in areas like coproduction, certain criterion must be met, Richards explained. Technology at the surface must evolve, and for the next five years, Richards believes the oil and gas industry will be a resource for collecting data and lithology. Research into the occurrence of geothermal resources overlapping fossil fuels will be a focus. Their intersection, including coal plants like President and Chief Technology Officer at AltaRock, Susan Petty’s, area of expertise “must be further explored,” Richards stressed. In Petty’s assessment, currently, 50,000 MW of aging coal-fired generation needs to be repowered or shut down as they fail current emissions standards. Repowering with Enhanced Geothermal Systems, or EGS, would take advantage of existing infrastructure, producing zero emissions with very low cost to operate and keeps jobs.

Their synergies are still being recognized. Richards highlighted Will Gosnold of the University of North Dakota’s (UND) demonstration site in the Williston Basin, where Gosnold developed a concept known as waterflooding. At a significant depth, fresh hot water is pulled out alongside oil without mixing. Following that, eight cooling fans on the oil and gas pad cool the water and then reinject it into the rock formations. This lubricates the oil, allowing it to flow, while Access Energy’s two turbines generate a gross 250 kw of power, creating a hybrid of geothermal and oil technology. This system is applicable for the oil and gas industry’s future utilizing already existing geothermal fluid at fossil fuel sites.

Richards views the future of oil and gas and geothermal overlap as lying in EGS, where geothermal fluid is pumped into cracks in the ground to create a geothermal system. Unfortunately, Richards noted, from 2004-2006 the U.S. Department of Energy (DOE) didn’t allow for EGS studies in sedimentary basins — the geology for most oil and gas resources. Richards explained there is a missing opportunity for EGS/sedimentary basin geothermal projects at sites where the oil and gas industries are already creating EGS-suitable environments. Richards characterized this as “frustration and disappointment from the research side,” but believes that if payoff issues are overcome and economic incentives for geothermal development at oil and gas sites are created, more hybrid technologies like Will Gosnold’s waterflooding can be created and instituted on a permanent basis.

New Technologies from the Department of Energy

As highlighted by a DOE spokesperson, the DOE division of geothermal expertise, the Geothermal Technologies Office (GTO), has long been involved in exploring innovative links between fossil fuels and geothermal and promoting technologies like EGS through the FORGE program. The GTO is currently exploring opportunities to partner with industry to deploy binary geothermal power systems in operating commercial oil and gas fields and also exploring coproduction.

A hot topic is the search for in demand mineral resources such as lithium. Mineral recovery activities within the GTO program are exploring approaches to remove the dissolved valuable, strategic or critical materials from elevated temperature fluids. Once demonstrated, these advancements may be applicable to recovering potential resources from the produced fluids from oil and gas. The DOE program is also conducting an evaluation of elevated temperature fluids to assess the potential for these dissolved minerals within geo-fluids and oil and gas fluids to establish a resource estimate for the U.S.

As touched on in Will Gosnold’s project, in May 2016, DOE announced the launch of the nation’s first commercial enterprise to co-produce electricity from geothermal resources at an oil and gas field. With support from GTO, researchers including Will Gosnold at UND successfully generated geothermal power from hot water that flows from wells in the Williston Basin in western North Dakota. This technology can offset the need for costly transmission construction and reduces energy costs at remote oil fields. The facility started generating electricity for the first time in late April, with a nameplate capacity of 250 kW.

Additionally, the project received the Geothermal Energy Association Honors award for Technological Advancement. This award recognizes the development of a new, innovative, or pioneering technology to further geothermal development. The DOE and UND partnership earned this award for launching the first commercial project that produces geothermal power from an oil and gas well.

A final area of overlap between oil and gas and geothermal, the DOE spokesperson explained, is in technology. A significant number of subsurface technologies utilized by O&G industries can and are utilized by the geothermal industry for EGS, but technological advances in either sector accrue benefits to both, as the subsurface challenges and needs facing both the oil and gas and EGS industries are similar. As an example, high temperature tools developed by industry, with operating parameters that allow those tools to be deployed in extremely hot subsurface conditions, can be utilized by the oil and gas industry as they expand to deeper and hotter commodity extraction, as well as the EGS industry as they develop hot geothermal reservoirs. Similarly, stimulation and drilling technologies are used by both industries, so advancements in this area benefit both sectors. Finally, improved wellbore integrity technologies, zonal isolation technologies, and lower cost fiber optic cables would profit both industries.

The Future of Coproduction

Loy Sneary, president and CEO of Gulf Coast Green Energy, partnered with ElectraTherm, SMU, and the DOE in 2011 at a site in Denbury, Mississippi, to demonstrate the power of geothermal coproduction at oil and gas sites using the aptly-titled Green Machine. Oil and gas companies typically separate oil and hot, briny water that comes up with the fossil fuels and pump them into separate wells. “In other countries, companies produce electricity from the hot water,” Sneary explained.

Figure: Loy Sneary’s Green Machine. Credit: Gulf Coast Green Energy

At the Denbury demonstration site, the water was funneled into a separator tank from the oil and, using Electratherm’s Green Machine, the diverted hot water had its heat removed to generate 32 kWh and was then reinjected. The water temperature at Denbury was not as hot as other oil and gas areas, which can generate more (65 kw) when there is hotter water, enough to power about 60 homes. There are even potential wells with 500 kW in certain geologic areas.

“We are offsetting electric consumption on the site with power generated from hot water,” said Sneary during the time of the demonstration. “It has been talked about for a long time, people have been researching it and there have been a lot of concepts tested — this is the first time it’s really been done with a modular solution, installed in 50 hours and with the entire system mounted to a tractor-trailer skid.”

Halley Dickey, Vice President of Industrial Builders, Inc. said of coproduction: “It is feasible wherever there is existing oil and gas infrastructure, and we may see more applications utilizing existing infrastructure in the future, particularly as electricity prices rise over time.”

However, there is a question whether coproduction is currently profitable, Dickey noted: “Is it economically viable to pursue coproduced fluids as a viable business model for (coproduced) geothermal developers or O&G companies?” Dickey concluded that as we see electricity prices rise over time, these “alternative approaches” to geothermal such as utilizing coproduced fluids or geopressured resources will potentially become economically viable. Eventually, it may be possible to have many small coproduced projects that can be economically justified, if offtakers — utility or corporate — would get some special rate/tariff that shifts their economics to positive — similar to initiatives that have spurred off-grid solar.

The potential for new development at the intersection of geothermal and fossil fuels is substantial, and the opportunities are plentiful. Just one — coproduction — could add substantially to our energy supply with DOE estimating that an average of 25 billion barrels of hot water are produced annually from oil and gas wells within the U.S. But in the final analysis, Dickey would say “it really is all about the money.”

The geothermal industry is entering a brave new world of technological exchange with the oil and gas industry and pulling in many existing technologies to create innovations or build upon the geothermal fluid already extant in oil and gas fields with systems like the Green Machine. Advanced drilling technology is allowing geothermal players to access richer resources, and there is a major opportunity for oil and gas corporations looking to expand into renewables like geothermal. In the wake of COP21 and a shifting energy landscape, the overlap of geothermal and oil and gas may prove a ripe ground for both industries looking to move forward in new and creative ways.