Oil and gas companies have ramped up their interest in potential geothermal investments in the US and globally, according to a seasoned veteran of this low-carbon energy industry.
Ann Robertson-Tait, president of Schlumberger-owned GeothermEx who joined the consultancy and services company in the mid-1980s, said geothermal is firmly back on the radar of upstream players.
“I have worked at GeothermEx since 1985 and I've never seen as much interest in geothermal around the world as I’m seeing now. The phone is ringing off the hook,” she told delegates at this week’s World Geothermal Congress (WGC) in Reykjavik.
“There’s a real push to bring the might of oil and gas — in terms of scale of development, drilling, etc. (to the geothermal sector). They do want to come,” said Robertson-Tait.
Smaller companies may lead the initial charge in the US because they are much keener than the majors, she reckons.
Robertson-Tait admitted to feeling “really crushed” when Chevron sold its geothermal assets in 2016, but was positively buoyant at WGC about the interest exhibited by independents and junior oil companies.
“Let’s just say the enlightened oil and gas operator is coming round the corner right now,~ she said. “My feeling is that it will be the smaller operators that will really drive geothermal.”
GeothermEx — which has been involved in half of the world's geothermal projects — has been touting the deep geothermal potential of sedimentary basins, which is virtually untapped globally.
Juniors and independents, at least in the US, are studying these opportunities eagerly because they can reuse existing well stock and mitigate or avoid upstream abandonment costs.
“They have got resources in all their basins,” she remarked. “If they want to use (these resources), there are ways to recomplete wells (for geothermal use) that are not too diabolically bad.
“There’s a huge backlog of abandonment costs being deferred in the oil and gas industry, onshore and offshore, and that has been a big topic of conversation.”
Instead of spending money to abandon a well, she said oil companies could recomplete a well as “a good geothermal producer, so the heat is preserved, and we can get into deeper domains.
“Deep sedimentary basins are the domain of oil and gas, and they’re finally waking up to that,” said Robertson-Tait.
Oil and gas wells tend to be drilled deeper than purely geothermal wells, with oil companies sealing off water-rich sub-surface zones because it is not cost-effective to produce and handle huge volumes of water alongside oil and natural gas.
This process is the opposite of what geothermal producers do because the water zones are exactly what they are after.
In a basic sense, recompleting a hydrocarbon well would involve sealing off oil and gas reservoirs and opening up the water zones.
Robertson-Tait hopes this new resurgence of interest in geothermal energy by oil and gas companies will not be a flash in the pan, given the opportunities presented by the global net zero emissions agenda.
In the US, Robertson-Tait said the geothermal sector generally is in a new phase of growth, driven by energy requirements from states.
As a result, for example, on the US west coast, the California Public Utilities Commission has mandated that all utilities must provide additional clean baseload power to supplement solar and has specifically set aside 1 gigawatt of power for geothermal — this compares to the total current US capacity of 3.7GW.
A key factor driving increased demand for geothermal power has come from the industry educating and lobbying federal and state authorities about its advantages because many policy makers and legislators hold outdated views and information about the industry’s costs and low-carbon benefits.
High-profile advocates for the sector seem to have been few and far between, which is something GeothermEx and New York-listed Ormat, the world’s biggest geothermal player, are trying to change.
“Nobody knows about geothermal, but we’re really trying to fix that now by getting the word out. It’s up to us to go outside our circle,” stressed Robertson-Tait.
“We’re good at talking to ourselves,” she said, “but maybe not to the rest of the world. That’s important. We really need to look at that.”
In the US, she explained the industry has gained credibility within President Joe Biden's administration and Energy Secretary Jennifer Granholm is supportive. “Geothermal is getting into the lexicon,” Roberston-Tait said.
Plans are in hand to accelerate permitting times for geothermal projects in the US, while tax issues are being addressed.
“We’re bullish on geothermal in this new era we are entering,” said Robertson-Tait. “It is the best power source to fight climate change and keep our grids running in a stable way.”
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