As oil crashes, ‘America’s untapped energy giant’ could rise

Posted: April 10, 2020 by oldbrew in Energy, geothermal
Tags: , ,

Geothermal Power Plant in Iceland [image credit: Wikipedia]


Geothermal energy is expensive even compared to renewables, but are the economics about to change? Maybe not, as the Russians and Saudis seem to have called off their oil production war, so sudden availability of lots of experienced but out-of-work shale drillers may not happen, although the virus factor continues. Also subsidy rates are biased towards intermittent wind and solar, compared to more reliable geothermal power sources.

The coronavirus oil crash could be good news for this renewable energy underdog, says Grist.

Disruptions to supply chains and slowdowns in permitting and construction have delayed solar and wind projects, endangering their eligibility for the soon-to-expire investment tax credits they rely on.

There’s another form of renewable energy, however, that might see a benefit from the recent global economic upheaval and emerge in a better position to help the United States decarbonize its electricity system: geothermal.

Geothermal energy comes from heat beneath the earth’s surface that we can tap into to generate electricity and to heat and cool our buildings. In a report released last year detailing the growth potential of geothermal energy, the Department of Energy called it “America’s untapped energy giant.”

Unlike wind and the sun, subsurface heat is available 24/7, perpetually replenished by the radioactive decay of minerals deeper down.

But compared to wind and solar farms, geothermal power plants are expensive to build. The cost can range from $2,000 to $5,000 per installed kilowatt, and even the least expensive geothermal plant in the U.S. costs more than double that of a utility-scale solar farm.

Engineers have to drill thousands of feet into the ground to reach reservoirs of water and rock hotter than 300 degrees F in order for the plants to be economical. Plants generate electricity by pumping steam or hot water up from those reservoirs to spin a turbine which powers a generator.

Experts told Grist that drilling can account for anywhere between 25 to 70 percent of the cost of a project, depending on where it is, the method of drilling, and the equipment required. But now, the companies that supply the machinery and services for drilling are starting to slash rates.

That’s because they are the same suppliers the oil industry uses, but oil companies are idling drilling rigs and cutting contracts left and right. They’re getting pummeled by the largest oil price crash in decades, the result of plunging demand due to the pandemic and a glut in supply because of a price war between Saudi Arabia and Russia.

On Tuesday, the U.S. Energy Information Administration revised its short-term outlook for crude oil production, predicting a steep decline through 2021. All of the suppliers who are normally digging for oil are now eager for new business.

Full article here.

Comments
  1. oldbrew says:

    No surprise to find Grist poses as a big believer in human-caused warming, whether for commercial reasons or not:

    The way that humanity tackles this pandemic parallels how it might fight climate change. Sign up for our semi-weekly newsletter, Climate in the Time of Coronavirus.

    No thanks 🙄

  2. spetzer86 says:

    Now all we have to do is identify major volcanic sites in the continental USA that mimics Iceland. It should also be close to a major population center so line-loss doesn’t further degrade the cost/benefit calculation. I’m not thinking of all that many (Washington state near Mt Rainier, maybe. Yellowstone is pretty remote)

  3. oldbrew says:

    Potential Geothermal Resources for Akutan, Alaska
    Release Date: JANUARY 9, 2014

    Eruptive activity at Akutan Volcano has occurred at least 27 times since historical observations began in the late 1700s. The most recent eruption occurred in 1992. In March 1996 a seismic crisis that included several thousand earthquakes produced ground cracks at three locations across the island. That event did not culminate in an eruption.

    https://www.usgs.gov/news/potential-geothermal-resources-akutan-alaska

    But putting structures up and drilling near volcanoes in earthquake zones must have its challenges.
    – – –
    USGS: Geothermal Resource Study Areas (with map)
    https://www.usgs.gov/media/images/geothermal-resource-study-areas

  4. we don’t use oil to generate electricity …

  5. pochas94 says:

    As oil prices drop solar, wind, geothermal will become competitive. Sure.

  6. ivan says:

    That will only work if the Dems in the US manage to get their ultra expensive ‘green new deal’ through both houses and past the president. But then all things ‘green’ are nothing more than a way for some people to line their pockets with tax payers money.

  7. Stuart Brown says:

    Sort of inspired by pochas94, and sort of off topic

    https://energypost.eu/how-much-subsidy-do-evs-need-to-be-competitive/

    Well, y’know, all you need to do to make stuff competitive is subsidise it enough!

  8. oldbrew says:

    The point is that ex-oil workers might be available for geothermal work. Nothing to do with geothermal replacing oil itself.

  9. Saighdear says:

    I believe the Arabs and the Russians have reached an agreement to cut oil production by 10% or so , tonight … Will I , won’ I order in more Heating oil for next winter ? Money in bank doing nothing, and if it will be, it’ll be carted out by a starved Government after this crisis

  10. Graeme No.3 says:

    The first drill hole is only the start. The hot water acts as an excellent solvent for all the muck you don’t want and you have disposal problems (known in industry – but not in green circles as pollution) and clogging of the well.
    The attempt in Australia to trial geothermal (using taxpayers money) was a failure. Any idea of drilling into radioactive granite is doomed to be similar. In NZ they have been using geothermal for many years but have to drill new holes regularly. They also found that there is a limit on the amount of energy available.
    The best site in the USA would seem to be the Yellowstone caldera. Would the Greens accept drilling in a National park, lots of pollution and energy derived from radioactivity?

  11. oldbrew says:

    Oil price rise likely…
    https://oilprice.com/Energy/Energy-General/There-Is-Still-Hope-For-Oil-Prices.html
    – – –
    Funny how all the supposed miracle cures for oil, coal, gas and even nuclear turn out to be fraught with problems. Costs, technical issues, grid instability, scaleability – the list goes on. But we’re still supposed to believe the ‘net zero’ nonsense.

    22 MARCH 2019
    South Korea accepts geothermal plant probably caused destructive quake

    The nation’s energy ministry expressed ‘deep regret’, and said it would dismantle the experimental plant.
    https://www.nature.com/articles/d41586-019-00959-4

  12. chrism56 says:

    For my sins, I am an engineer at a 60 year old geothermal power station. They do really work and produce relatively cheap reliable power, but there is very limited potential for more of them. But they aren’t what are proposed here.
    The Grist article is about hot dry rock geothermal which is just a boondoogle with less chance of success than fusion reactors. South Australia and Cornwall have good examples of the failures that give geothermal a bad name. The drilling technolgy doesn’t exist to go to 5km in temperature above 200°C, even with exotics as titanium casings. They can’t control the fraccing needed to get permeability, and the heat flow out of hot rock is a lot slower than modelled because the fractures don’t match their assumptions.

  13. chrism56 says:

    Graeme – your comments about NZ are factoids. The new wells are drilled often because of casing issues (it is very hard to get good cement jobs in high permeability ground). The re-injection can be well managed, but what happens is to maximise the steam out of the fluid, they lower the separation pressure. This concentrates up the silica and the fluid needs to be acidised to manage it before re-injection. Those wells are prone to scale up rapidly if the acidification isn’t well controlled. The cost of new wells is just a “fuel” cost and on say 100MW baseload generation fields (850GWh pa), is often just a well a year, costing maybe $10M. This is maybe a third of the operating costs Do the economics yourself

  14. George Reagan says:

    I came from the oil rich south plains of Texas and went to Texas Tech and studied mechanical engineering, petroleum engineering and geology. After graduating in 1973, I went to work for Geophysical Services Inc (GSI) (Texas Instruments) in Dallas (Richardson) and did velocity interpretation of seismic data (Land and Marine). When the bottom fell out, I went to work for Gearhart-Owen (oil patch services of Harold Owen and Marvin Gearhart). When they split up I worked for Gearhart Industries in Open Hole/Cased Hole survey services/Haliburton Logging Services (HLS) then transferred to Haliburton Services in Carrolton and developed their Single Point Contact tool for use in exploratory drill pipe/rig floor data collection. When the bottom fell out, again, I went to work for an old friend of Marvin, Computalog/Precision Energy Services/Weatherford Intl. With almost 45 years of oil patch, I retired. During that time I worked with Sandia Labs on their geothermal probes and experimented with metal seals. Most of the modern day well drilling dealt with deep hostel environment high temp conditions requiring metal/engineered polymer seals and high temp electronics and Dewar flask.
    This gets into the use for geothermal water injection wells for use in steam generation for steam electrification. Another depth of several hundred meters in geothermal zones would be enough.
    The Earth’s hot mantle is the perfect source for our solution. High temp metals would be the head for steam reception with typical drill pipe being the center carrier pipe. After the water system normalized at, let’s say, standard flow of 500*F steam the generator would be operational. I have though for the last several years of working for projects like this. It would be a dream job for an old hick farm boy from the flat lands. Regards, George Reagan, Fort Worth, TX, retired engineer.

  15. oldbrew says:

    If chrism56 is right about ‘very limited potential for more of them’, we can dismiss the ‘untapped energy giant’ claim.

  16. chrism56 says:

    The standard industry guidelines ues the resistivity boundary at a specified depth to define a geothermal field. Usually it is 180°C) fluid present that is exploitable if (and it is a big if) there is permability. You can use fluid that is cooler by binary technology, but costs rapidly rise as temperature drops. Within that resistivity boundary, if the rock has permeability, the rule of thumb is 20-40MW per square kilometre – the higher number for hotter fluid, which can be up to about 300°C. The only way to find permeability is by drilling, which has typically a 50% success rate within a known resource.
    In active volcanic countries like NZ, Philippines and Iceland, there is significant potential on the size of their grids. Many of the geothermal fields are at some distance and not connect to active volcanoes. In places like northern Europe and the US east of the Continental divide very little potential, so ye,s the claim by the report which Grist cites relies on EGS (aka hot dry rock) which is pie in the sky stuff.

  17. chrism56 says:

    George The wells need to be deeped significantly over standard practices. We use drag bits in the volcanics, but those trash out rapidly in hot sedimentary rocks. Tricone bits disintegrate after maybe 100m drilling so that is a lot of fishing. Even at 200°C, there are a lot of issues with things like cementing. Geothermal drilling is a lot different to O&G. The wells have to be larger diameter and need more casings. Six strings just to get to 2km aren’t uncommon. Even the instrumentation has to be a lot different. You can’t do a lot of fancy logging in holes that melt PTFE.
    Even hot geothermal is a low grade energy source. If we take your numbers, 260°C fluid will produce about 7-8MW out of 100t/h massflow from a well. If that is separated at say 3.5bg, there is about 25% steam. The rest is water at 150°C. You may be able to get more steam by a secondary flash at a lower pressure, but then you come up against the silica saturation temperature which needs acidification down to about pH5.5 to manage.
    Now this separated water, possibly acidified, plus maybe the cooling tower blowdown at 30°C, needs to be reinjected to be reheated by an EGS system. That needs very good permeability between the injection and production, but not so good that the fluid bypasses hot rock and doesn’t reheat. And it needs to do this day in day out for 30 years.
    And that is the nub of the issues

  18. George Reagan says:

    Thanks Chrism for the headsup with real data points. This would require lots of high tech metals like the MP35N Metals and maybe even some Beta Titaniums or Inconels like 718. Water jet drills might be used instead of conventional rotary tribits. Insulating ceramic cements would be required for all but the bottom heated section. The danger from HP steam would be a major consideration during drilling ops and might require special equipment. Regards, GSR

  19. chrism56 says:

    George
    We use PDC bits but they are totally different from O&G ones. They are specials and have a price tag to suit. For a number of reasons, they often drill underbalanced. The BoPs are similar to oil industry ones – fortunately it is a lot easier to kill a kick on a geothermal well, just lots of cold water.
    The typical geothermal well has maybe 1km of open hole below the casing shoe. The full length slotted liner (nominally 50 by 15 sized slots and about 60 holes per metre) is not cemented in. You need a lot of holes to get the mass flow out , especially when the permeability isn’t good. They need to run the liner before they run instruments or rig down as the holes are very prone to collapse. On production, bottom hole pressures can drop by 100bar so lots of potential for liner damage.
    A typical well may have 500 tonne of steel casings and a similar amount of grout. All casings are fully cemented with heavyweight cement returns needed. Any water in voids will collapse the casing on heatup. So it is not cheap to replace these materials with exotics.
    The rock being investigated for EGS may be totally different to volcanics in conventional geothermal fields I note it is very easy to drill in materials that have no permeability.

  20. chrism56 says:

    Here is a paper on the problems of PDC in geothermal.

    Click to access Imaizumi.pdf


    We have gone way past that. In the second to last hole drilled, going past the shoe, the bit did over 1000m of dacite (9″ sized hole), then trashed itself in 10m of greywacke. Bottom hole temperature was about 295°C.
    As usual in the industry, we don’t share our detailed knowledge. There was millions of dollars (and lots of fish) spent gaining it.

  21. oldbrew says:

    even the least expensive geothermal plant in the U.S. costs more than double that of a utility-scale solar farm

    With plenty of gas available, it’s hard to see much point in throwing money at geothermal in the U.S. – unless you’re terrified of minor trace gases in the atmosphere, that is.

  22. chrism56 says:

    That price comparison is wrong. It is done on the basis of nameplate MW, not GWH. For the latter, conventional geothermal plant is about 5 times more energy than solar and three times that of wind. GWh is what gets you your income. Over the 5 year survey cycle on our plant, we count on a load factor of 95% nameplate rating.
    The big commercial disadvantage of the geothermal is it can’t load follow. It is baseload. The other is that many of the sites in California and Nevada are in the back of beyond, mostly on Federal land. That is a long way to get transmission lines in and for staff and contractors to travel. Makes operating costs high.

  23. Steven C says:

    Since water vapor is a much more potent greenhouse gas than CO2, it seems like geothermal is actually causing even worse “pollution” than fossil fuels. If you include the incredible amounts of sulphuric acid in the steam then it can hardly be called “green”. Free the Carbon, Save the Earth!

  24. oldbrew says:

    Greenhouse mythology is an obvious nonsense, but if people prefer to look the other way, be it on their own heads 🙄

  25. Chris Morris says:

    Steven The sulphuric acid goes in the separated water which is reinjected back into the ground. The water vapour emissions are comparable on a MW basis to those of a cooling tower at a themal station cooling tower or the water in the combustion gases of coal or gas fired plant. But never let nasty little facts get in the way of a good story.

  26. Chris Morris says:

    Geothermal power plants emit greenhouse gases. Mainly CO2 at a rate 70-200kg/MWh – less than half that of natural gas CCGTs and quarter that of coal. The binary plants that are about half the US geothermal powerplants have dry cooling towers so their water vapour emissions are zero.

    And Oldbrew, if fracced natural gas is available, it is better to have CCGTs and OCGTs, but many places don’t have the gas. Even if they did, they need pipelines to be built, which means consenting process is difficult. The capital costs for LNG imports and distribution are very high unless you have an existing infrastructure to feed into. The LTSAs needed for GTs have a lot of fishhooks and the operating costs are a lot higher than operators realise. Especially with all the GE Frame 6s going down because of poor OEM QA, but that is a different story for another thread.

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