The petroleum industry is at a crossroads. A perfect storm of declining reserves, aging oilfields, increasing costs for exploration, operating, and decommissioning, volatile oil prices, and the uptick trending of “green” energy … it has never been more important to make the most out of existing reserves, assets and infrastructure.
Geothermal energy is an emerging worldwide energy market. Geothermal often gets overlooked in a world of PV, CSP, wind and hydro; however, geothermal offers more reliability (average 95 per cent capacity factor), lower carbon emissions and lower maintenance costs compared to these more “glamorous” renewable energy sources.
Geothermal has some major barriers to entry to the mainstream energy market. The largest barriers include the high-initial capital costs related to drilling and constructing new geothermal wells, long payback periods, and the risk associated with unknown formation performance when drilling in a new area.
Using proven technology, expertise and reservoir data from the petroleum industry, this unlikely partnership can provide a springboard for the geothermal industry to enter the mainstream renewable energy market, while at the same time benefiting the petroleum industry. If the initial capital costs for drilling geothermal wells could be reduced by utilizing existing oil field infrastructure, while also minimizing risk by using existing oilfield data, the barriers to entry for geothermal suddenly come tumbling down.
Recent advancements in energy conversion technologies and Enhanced Geothermal Systems (EGS) technology have made incorporating geothermal in the oil field a viable and exciting emerging-energy market. In 2009, the American Recovery and Reinvestment Act (ARRA) funded several projects demonstrating electricity generation from geothermal fluids, produced from active, abandoned, or marginal oil and gas wells. Federal tax incentives, the Department of Treasury Cash Grant and the DOE Loan Guarantee program combined with aggressive state renewable portfolio goals are expected to drive growth in the geothermal industry in the near term.
Because geothermal wells use many of the products and expertise developed by and for the oil and gas industry, this investment in a clean-energy future could create a new revenue stream for fossil- fuel-based companies. By leveraging both expertise and the infrastructure already in place, the oil and gas industry players can be part of the global clean- energy solution.
Geothermal can be incorporated into the oilfield in three key ways: First, generate electricity from the hot, co-produced brine from active wells. Second, convert abandoned wells to geothermal wells for electricity production, thereby utilizing an existing asset, reducing carbon footprint, and generating renewable energy revenue. Third, employ existing oil field technologies to engineer reservoirs for EGS.
The United States alone produces about seven million barrels of co-produced fluid every day. Much of this co-produced fluid is hot enough to generate electricity. New developments in low-enthalpy turbines, such as the Organic Rankine Cycle units, produced by Ormat Technologies, Inc., Pratt & Whitney Power Systems and others have made it possible to generate electricity from water temperatures as low as 90°C, as successfully demonstrated at the Rocky Mountain Oil Test Center located in Casper, Wyoming.
Revitalizing abandoned wells with geothermal energy requires the well logs, performance data and workover history to evaluate if the well can survive the extended life and the geothermal extraction process. Ongoing research indicates the most economical ways to retrofit these wells, include running a full liner inside of the old well and cementing it in with slurry, using an expandable casing/liner or a swellable packer which can target specific zones that may need rehabilitation. Abandoned wells that are already plugged can be drilled out.
EGS is the most challenging of the geothermal resources in terms of up-front capital costs and well completions; however, it can benefit greatly from proven technology and practices of the oil and gas industry. EGS involves hydraulically fracturing the rock to allow injected water to flow through the rock formation, heat up, and then be pumped to the surface in a production well. EGS has high-drilling costs because of the need for two wells (injection and production), and the hydraulic fracturing needed for the system requires the casings to withstand very high pressures and temperatures.
Incorporating geothermal in the oil field maximizes return on investment by using existing infrastructure longer and more efficiently, by reducing dependency on the electricity grid, by lowering oilfield electricity costs, by minimizing decommissioning costs, and by reducing carbon emissions.
A single megawatt hour (MWh) of electricity generated from geothermal water (rather than diesel) will reduce carbon dioxide emission by 760 kg. Over the course of a single year, assuming 90 per cent capacity factor (and geothermal is usually more on the order of 95 per cent), a typical 1MW plant reduces annual carbon dioxide emissions by 6,000 metric tons. As of 2011, the U.S. has about 3,100 MW of installed geothermal electricity, which translates into about 18.6 million metric tons of mitigated CO2 emissions.
The SMU Geothermal Laboratory will host its fifth international conference dedicated to Geothermal Energy Utilization Associated with Oil & Gas Development June14-15 on the SMU campus in Dallas. Leaders in technology, resource development and finance from geothermal and oil and gas industries attend this conference for the networking opportunities necessary for successful project development. This year the SMU Geothermal Laboratory is also offering a half-day Geothermal 101 short-course on June 13th.
This focused two-day conference brings together leaders from both business and research to discuss specific issues relevant to expanding geothermal electrical production in oil and gas fields. It is a remarkable opportunity for oil and gas companies to have a new stream of revenue for low-yield producers or initial high-water volumes. Participants can learn how to take these wells and instead of abandoning them, energize them with geothermal power.
Online registration is available at http://smu.edu/geothermal and early registration rates are available through May 20, 2011. For more information about the conference, contact Cathy Chickering at 214.768.1510 or email@example.com.
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