Geothermal Energy: Repurposing Oil and Gas Wells for Modular Scalable Sustainable Energy Projects
[EVENT RECAP] A Webinar with Andy Wood
By John Deneen and Rohan Jakhete
We recently had the great opportunity to hear from Andy Wood, Subsurface Manager at CeraPhi Energy, a UK geothermal startup. Wood is a manager of subsurface, geological operations, and a director with extensive international upstream oil and gas experience. He has worked in 25 countries, with extended time in the UK and Norwegian North Sea, East Africa, and Azerbaijan. He is newly recruited to the Geothermal Industry where his oil and gas skills are used to accelerate the clean energy transition and shift away from our dependency on fossil-fuel based energy resources.
Public opinion can largely affect the penetration of certain renewable energy sources, especially geothermal. Andy Wood discusses the many problems with geothermal, most of which he proves to be myths. Wood initially describes geothermal with the equation:
Geothermal = volcanoes + seismic hooliganism (drill holes, cause earthquakes) + expense + risk.
Fortunately, Wood explains this equation is entirely a myth. CeraPhi energy has worked on technology that enables electricity generation with only modest temperature gradients, which also don’t require fracking or rapid subsurface cooling. Although the initial capex for geothermal is known to be expensive, compared to other alternative energy, geothermal is very competitive and has limited financial risk. We agree on this — this is the geothermal decade.
Wood describes the benefits of geothermal and frames it as the “anywhere solution”, for good reason. Geothermal is perpetual energy, providing a baseload 24/7/365, as opposed to offshore wind which works at 40% capacity. One large drawback to solar power is addressed with geothermal — no need for mining of rare earth metals and the associated carbon footprint. If we want to accelerate our shift away from carbon-based resources, we need to impact all parts of the supply chain.
Proponents for oil and gas often cite the loss of jobs associated with shifting to renewable energy sources. Wood says there will be an estimated 50 jobs created per 1 MW of energy. A renewable solution that addresses pain points with both oil and gas and existing renewable energy solutions seems too good to be true — let’s look how it can be used.
We can use the “heat beneath our feet” for many purposes, notably heating and cooling. Instead of generating electricity, transporting it inefficiently, and converting it to heating and cooling, using geothermal energy for heating seems more logical. Local geothermal heating and cooling has zero CO2 emissions and therefore, reduces our reliance on hydrocarbons. Other uses can be for off-grid energy generation, aquaculture (fish farms), and desalination.
CeraPhi is a pioneer in the new wave of geothermal technology, using what we consider a much more practical approach to their wells. The CeraPhi geothermal well does not employ fracking, reducing environmental damage, and can essentially be placed anywhere on the planet where temperatures reach a suitable level (no volcano needed). The self-contained closed-loop design of CerPhi’s well, combined with the shallow (~5km) and vertical drilling, makes installation cheaper and faster than traditional wells and overall giving it a longer effective lifetime. Furthermore, removing fracking from the equation gets rid of the need for intense exploration and the associated costs and risk of failure.
One of the most novel and intriguing elements of Andy’s presentation was his discussion of CeraPhi’s ability to retrofit defunct and failed oil and gas wells with a geothermal well to produce net-zero energy. Not only is this repurposing cheaper than drilling an entirely new well from scratch, but it can help solve the growing issue of abandoned wells, millions of which sit collecting dust and posing a number of problems. While of course a financial issue, costing up to tens thousands of dollars each to plug, which is often a burden left to state governments, abandoned wells can leak natural gas and leech toxic chemicals into local water supplies. Retrofitted wells from CeraPhi and others in the geothermal sphere would not only help combat these issues, but bring about new assets that not only produce clean energy, but in the long run can make a company money. This is especially true for failed wells, which otherwise would be an utter commercial failure.
Retrofitting wells already appears like one incentive for O&G companies to begin further investment in geothermal energy (not to mention the large overlap in necessary expertise), but another is the possibility of co-production of oil/gas and geothermal energy. CeraPhi’s CoPro well can be installed in a new or existing oil/gas well to co-produce the two energy sources. With similar drilling depth and the relative ease of combining the two sources, it seems like a perfect marriage. However, some would argue that this encourages continued use of fossil fuels and detracts from the goal of net zero emissions, which of course has some truth to it. This was controversial even among HUCEG, so note that the following is merely the view of the blog’s authors. The two of us consider co-production to not only be tolerable, but necessary, at least temporarily.
While of course switching to renewables overnight sounds amazing, we recognize that fossil fuels cannot be phased out instantaneously. It will take decades before they can feasibly be phased out of the energy sphere, and even longer before the same can be said for manufacturing (i.e. plastics). We consider co-production an excellent incentive to help O&G companies hop onto the renewable energy wave, something so crucial to not only the planet’s survival, but their own. Fossil fuels are going to obsolesce eventually, and geothermal would be an excellent (perfect, really) transition for O&G companies. However, we affirm that no new oil or gas wells should be drilled, and instead we believe in fitting only existing wells with co-producing geothermal wells is the way to go. This, while still optimistic, seems the most practical course for change in the energy industry, which continues to wreak havoc on the climate.
We part with a question to the reader, to be pondered specifically and more generally. How could you convince an O&G company to fit their wells with a co-producing geothermal well, when it could mean months of lost oil production? And more generally, how can industries which will be phased out in the energy transition be expected to dig their own grave, even if it is what is best?