1. THE POTENTIAL OF GEOTHERMAL ENERGY
A ONCE AND FUTURE FOCUS OF
THE BUREAU OF ECONOMIC GEOLOGY

2. THE POTENTIAL OF GEOTHERMAL ENERGY Summary
An underestimated and largely untapped resource
Not Geographically limited, as hydrothermal sites are
Less costly than solar or wind, in ¢ per KWhr
Largest return on investment of R&D Dollars
Renewable, small footprint, negligible emissions
BEG’s skills in reservoir characterization, flow modeling and carbon sequestration are directly applicable to geothermal energy assessment and development.
THE POTENTIAL OF GEOTHERMAL ENERGY
An underestimated and underutilized resource
Not geographically limited, as hydrothermal resources are
Renewable, small footprint, negligible emissions
Less costly than solar or wind, in cents per kilowatt hour
Largest return on investment of R&D dollars
BEG’s skills are directly applicable.
Bruce L. Cutright

3. THE POTENTIAL OF GEOTHERMAL ENERGY
Bureau of Economic Geology lead earlier studies during the late 1970s, 1980s and up to 1992 investigating the Geothermal Energy potential of the Northern Gulf of Mexico
History at BEG
Don Bebout and Bob Loucks, among others lead research in 1970s to 1990s.
Oil prices dropped, and research dollars disappeared
Bebout, Loucks, Gregory 1978
Bruce L. Cutright

4. THE POTENTIAL OF GEOTHERMAL ENERGY
What Changed from 1980 to Today?
Advances in Drilling Technology that made 8 to 10km holes possible (polycrystalline diamond compact bits, slimhole drilling)
Advances in controlled fracture development that made “Engineered Geothermal Systems” practical
Advances in Binary-Cycle Heat Exchange Systems that made 100o C heat sources and up economical.
What has changed since the 1980s to 1990s?
Advances in drilling technology that has now made 6 to 8 kilometer drill holes possible, polycrystalline diamond compact bits, slimhole technology
Advances in controlled fracture development, directional drilling
All of these have allowed a redefinition of the resource base, and
Advances in binary cycle heat exchange systems
Bruce L. Cutright

5. Leveraging the Past to Define the Future
The basics:
Geology
Stratigraphy
Structural geology; fractures, stress fields
Fluid flow
Heat flow
Reservoir Characterization
Yield, Thermal Characteristics, Future Predictions
Reservoir Management, Restoration and Maintenance
Economics.
Bruce L. Cutright

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14. THE POTENTIAL OF GEOTHERMAL ENERGY
Critical Re-assessment:
DOE - MIT (2006) Study Found:
THE EXTRACTABLE RESOURCE BASE IS ESTIMATED AT 2,000 TIMES THE ANNUAL PRIMARY ENERGY CONSUMPTION OF THE UNITED STATES IN 2005.
OVER HALF OF THIS ENERGY IS IN GEOPRESSURED ZONES IN THE NORTHERN GULF OF MEXICO
Key point is now, what is the magnitude of the resource?
The short answer is, there is from 1,200 to 2,000 times the annual primary energy needs of the United States in extractable geopressured-geothermal resources.
The majority of this reserve is in the northern Gulf of Mexico
Sediment Thickness Map of US
Bruce L. Cutright

15. THE POTENTIAL OF GEOTHERMAL ENERGY
Table 1.1 Estimated U. S. Geothermal Resource Base to 10km Depth by Category
(Modified from "The Future of Geothermal Energy, MIT 2006)
Category of Resource
Thermal Energy, in ExaJoules (1EJ = 1018 J)
Thermal Energy in Barrels of Oil Equivalent
Hydrothermal
2.40E+03
9.60E+03
4.13E+11
1.65E+12
Co-Produced Fluids
9.44E-02
4.51E-01
1.62E+07
7.76E+07
Geopressured Systems
7.10E+04
1.70E+05
1.22E+13
2.92E+13
US Primary Energy Consumption (2008)
94.14
1.81E+10
COMPARISON OF FOSSIL FUEL EXTRACTABLE RESERVES TO GEOTHERMAL GEOPRESSURED/CO-PRODUCED FLUIDS EQUIVALENT ENERGY RESERVES
Source
Estimate of Extractable Reserves
Reference
Canadian Tar Sands
300 BBLSOE
Edwards, 1997
Orinoco Heavy Oils
267 BBLSOE
Green River Shales
139 BBLSOE
U. S. Proven Reserves of Crude Oil
21.3 BBLSOE
EIA 2008
Geothermal Geopressured Geothermal Resources
29,200 BBLSOE
Blackwell, 2006
Magnitude of the resource
In comparison to annual energy use of the US
In comparison to other, Unconventional Resources
In rough numbers, over 100 times what might be available from shale oils, tar sands or heavy oils.
Bruce L. Cutright

16. THE POTENTIAL OF GEOTHERMAL ENERGY
Comparison of the costs per kilowatt hour to generate electricity from alternative/renewable sources versus hydrocarbon sources
How does the production of electricity by geothermal energy compare with other “Renewables”?
Cheaper than Wind, Photovoltaics, concentrating Solar.
Competitive with Oil and Natural gas.
Still more expensive than coal or hydroelectric
But will compete with coal if a carbon tax is imposed.
Geothermal is cost competitive with oil and natural gas and is less expensive than solar and wind. Only coal, without carbon tax costs, is less expensive than geothermal
Data from NREL in constant 2005 dollars
Bruce L. Cutright

17. What Our Partners are doing
Chevron is the largest producer of geothermal energy in the world, with operations in Indonesia and the Philippines.
US energy companies Unocal and Gulf Resources are willing to invest US$1.2 billion in geothermal and natural gas projects in the Philippines
What are our partners doing?
Chevron, for example is the largest producer of electrical energy using geothermal resources in the world, but none of this is in the US.
Unocal and Gulf Resources are investing substantially in the resources
EXXONMOBILE still reports, in their 2008 annual report, that geothermal energy is “geographically limited” In case no one told them, so is oil.
Source: Chevron Geothermal
Bruce L. Cutright

18. What are our Industrial Partners Seeing
What are our Industrial Partners Seeing? The Classical, but limited, hydrothermal/magmatic resource
The world-leading geothermal energy company Reykjavik Energy (Orkuveita Reykjavikur) has established US$800 million in capital to invest in new geothermal projects
Why haven’t our partners focused more on geothermal energy?
Still perceived as a geographically limited resource
Still perceived as messy, polluting, problems with fluid disposal.
But these projects are hydrothermal sites that are limited in geographic extent.
Bruce L. Cutright

19. What Our Partners are doing Binary Cycle Rankine Engine
Raser Technologies Hatch Geothermal Power Plant
constructed in just six months
Modular power plant design.
Can produce power from geothermal resources that were previously thought to be not hot enough for commercial power production.
The new paradigm is Raser Technologies Binary Cycle Rankine Engine
Modular, efficient.
Bruce L. Cutright

20. What the Business is doing
The Market reflects this new technology efficiency.
Comparison of ExxonMobil, Chevron and BP’s 5 year stock price history to Ormat Technology’s 5 year history.
Five Year Stock Price Trends
ORA = Ormat Technologies (geothermal)
XOM = ExxonMobil
CVX = Chevron
BP = British Petroleum
Bruce L. Cutright

21. Why Geothermal? Why Now? The Economics have changed
geothermal is now cost-competitive with petroleum, and lower cost than solar and wind.
The Resource Base has changed
no longer only hydrothermal-magmatic but widely distributed geothermal heat flow
The extractable resource is 2000 times the annual demand of the US.
The regulations have, or will change
Favoring non-CO2 emitting energy sources
In Summary, Why Geothermal? Why Now?
The technology has changed, radically revising the economics of geothermal energy’s use in the production of electrical energy.
And, as a result, the resource definition has changed, completely revising the identified resource base from a geographically limited magmatically linked hydrothermal resource to a widely distributed and efficient conductive heat flow resource.
Bruce L. Cutright

22. Sponsored Research Opportunities
Geothermal Energy – Sponsored Opportunities
The American Recovery and Reinvestment Act: $350 million new investment in this technology.
Geothermal Demonstration Projects = $140 Million
Enhanced Geothermal Systems Technology Research and Development = $80 Million
Innovative Exploration Techniques = $100 Million.
National Geothermal Data System, Resource Assessment, and Classification System = $30 Million
Private funding opportunities for BEG, at this time, equal or exceed the federal or state opportunities.
Sponsored Research Opportunities
Government Funded opportunities equal to 350 million
Immediate private funding opportunities exceeding 10 to 20 million
Bruce L. Cutright

23. The Bureau’s Immediate Opportunities $11.6 Million over 3 years
Technology Interface System, $3.6 Million over 2 years
Towards Field Testing of CO2 as Operating Fluid for EGS, $4.9 Million over 2 years
Geothermal Energy from Coproduced Fluids, $452,791 for 1 yr. (potential for $MM over 5 years)
Geothermal Energy From Geopressured Resources $361,191 for 1 yr. (potential for $MM over 5 yr)
Geothermal Data Development, Collection and Maintenance, $2.28 Million over 3 years
he Bureau of Economic Geology’s existing outstanding proposals:
Database assembly and management 2.28 million or 750,000 per year
1 million over the next year from private firms, with potential to continue this over 2 to 5 years.
Heat mining fluids research, 5 million over next 3 to 5 years
Bruce L. Cutright

24. The Bureau’s Long Range Opportunities
Everything we have learned about petroleum reservoir characterization, development and production is applicable to Geopressured / Geothermal Development
3-D Geo-Model
The Bureau of Economic Geology’s long term opportunities?
Everything we have learned about petroleum reservoir characterization, development and production is applicable to Geopressured / Geothermal Development.
Streamline Modeling
of Fluid Allocation Factors
Streamline Fluid
Allocation Factors
Source: BEG and I-Reservoir, Inc.
Bruce L. Cutright

25. Where is the Cutting Edge?
Primary Focus is on Geopressured Zones having Thermal-Kinetic-Chemical Energy Content
Combining geothermal heat extraction using supercritical carbon dioxide
Links geologic sequestration of CO2 with non-polluting, renewable energy production
Results in improvement of heat extraction efficiency by 40% to 180% (Pruess, K. 2006)
Provides a methodology for coal fired power plants to recover the energy penalty incurred in CO2 capture
Metal – Organic heat carriers (MOHC) offer
additional improvements in efficiency, at a cost.
Bruce L. Cutright

26. Thank you Cooper Basin Bruce L. Cutright
Flow tests at Cooper Basin EGS Site, Australia (Geodynamics, 2005)
Bruce L. Cutright