This is one way to turn liabilities into assets–and it’s sure to grow in the future.
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 Resources-University of North Dakota project in the Williston Basin is producing 250 kW of power from two water source wells. The units fit into two shipping containers, and costs US$250,000. This type of micro-generation 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 wellhead-sourced, 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.
Originally published in Alberta Oil Magazine on Nov 2nd 2016 By Elizabeth Lappin.