The Heat Beneath Our Feet

On 20^th January 2021 the 46^th President of the United States of America, Joe Biden, was inaugurated. Undoubtedly, some readers will rejoice at this news and others will despair. I’m not going to comment on that, and I’m not going to say which camp I fall into. What I can say is that it’s likely that President Biden will be less friendly to fossil fuel industries than was his predecessor, but also that he is likely to be more favourably disposed to alternative and renewable energy technologies. Not just in the USA but in many countries around the world, in response to concerns about climate change and also as part of a growing movement to “build back better” after the Covid-19 pandemic, we are likely to see increasing levels of investment and funding available for the energy transition.

In a previous post I commented that the oil and gas industry can offer a lot of technology and skills to alternative and renewable energies. I suggested that if companies pivot and think of themselves as part of an energy industry, committed to providing plentiful and clean energy, they could find themselves at the forefront of a new energy revolution.

Much of the last three-and-a-half decades of my life has been built around the drilling of oil and gas wells. I’ve seen how the technology used to drill these wells has become increasingly sophisticated and capable and has benefited from increasing levels of automation. Complex well designs, and long horizontal sections, are now drilled routinely, accurately, and safely. If only there was a way of using all this knowledge and capability to accelerate the energy transition? It turns out that there might be.

For decades, countries with access to reservoirs of hot water, usually in igneous rocks, have been tapping them for heat and for the generation of electric power. These are special locations, usually close to tectonic activity. Iceland and New Zealand spring to mind.

But, as we saw in the preamble, decay of radioactive elements deep beneath our feet means that there is a plentiful, and in practical terms inexhaustible, supply of heat everywhere in the world and not just where continental plates meet. You simply have to drill sufficiently deep. Techniques are emerging for drilling wells to extract heat from hot, dry rocks by creating well systems deep underground whereby cold fluid (which could be, but does not need to be, water) can be injected and hot or supercritical fluid, warmed by the heat deep in the Earth, produced – either for direct heating or to be used in the generation of electricity. These wells can be economic at downhole temperatures of 150°C but are much better prospects as the temperature goes above 200°C and climbs towards 300°C. There is a whole “Wild West” of different techniques proposed.  Some have a single bore, with an insulated pipe for circulating cold fluid in and warm fluid out. Some use well stimulation to create local fracture networks between parallel injector and producer wells, and some drill closed loop wells whereby lateral sections either intersect with each other or with multiple vertical wells. Any of them could work. For a little more detail, see a recent blog by Jamie Beard, Executive Director of The Geothermal Entrepreneurship Organization at the University of Texas at Austin, where she interviews oil and gas industry veteran Vik Rao.

Can oil and gas drilling people contribute? Yes, indeed they already are. See, for example, the world’s first horizontal geothermal well, drilled in Canada for DEEP Earth Energy Production Corp. using a rig from Horizon Drilling and a directional drilling crew from Weatherford. The highest temperature achieved when this well was logged was 127°C, but greater riches await if the equipment used to drill and complete the well can be repurposed for higher, possibly much higher, temperatures as described above. With one or two notable exceptions, oil and gas drilling and measurement technology is generally not rated above 175°C. Of course, it becomes more difficult to develop complex electronic and mechanical systems as the operating temperature increases, but the primary reason why the oil and gas industry has not developed high temperature tools is because there has not been much demand. Extreme high temperatures (for oil and gas, this is up to 200°C) are very much considered to be niche applications. I think we can develop equipment to operate at much higher temperatures, and I outlined some thoughts on this in a recent interview with Jamie Beard. Many of the fundamental technologies that we would need to do this already exist, they just need to be combined in directional drilling and measurement tools. Of course, this would not be a trivial task, it requires a lot of hard work and application, but it’s by no means impossible. In an earlier post I quoted William Gibson, the science fiction writer: “The future is already here. It’s just very unevenly distributed.” It’s not an original quote in the context of innovation, but it serves as a very good way of describing how industries can innovate by taking things from the world around them and recombining them in order to create whole new products, services, solutions and business models.

How big could this be? It could be huge. Closed loop geothermal wells could be drilled pretty much anywhere in the world, allowing many more countries to become at least partially energy independent. The heat being generated at the centre of the Earth is estimated to be more than double global energy consumption. The US Department of Energy estimates that as much as 8.5% of all US electricity could be generated from geothermal by 2050 – that’s 60GW. If a single well contributes 5-10MW, that’s a lot of wells. And that could just be the starting point. Coal-fired power stations are being closed across the world, including in Europe and China. The United States alone has 60GW of coal fired generation that does not meet current emission standards and needs to be replaced or shut down. These coal-fired plants are, of course, connected to the electrical distribution grid, and geothermal power stations have the significant benefit of being able to provide baseload to the grid in a way that wind and solar cannot. They are “always on”. In total, 500 to 600GW may be needed to replace coal-fired generation in the US (Goldman Sachs, 2021). Geothermal, with its baseload capability, could be the perfect solution. Suddenly, we are talking about drilling a lot of wells!

Can we do this? Yes. Should we do this? Yes. When will we do this? I’m in! Please feel free to comment below or contact me if you want to discuss some more.