GEOTHERMAL 101: WITH A CANADIAN EMPHASIS!

John Hirschmiller, P.Geo. August 27, 2020 ACKNOWLEDGEMENTS

2 LAND ACKNOWLEDGEMENT

We would like to take this opportunity to acknowledge the traditional territories of the people of the Treaty 7 region in Southern Alberta. The City of Calgary is also home to Métis Nation of Alberta, Region III.

3 WHO IS GLJ?

• GLJ Ltd is a leading energy resource consulting firm. With comprehensive industry expertise and client-focused philosophy, GLJ provides technical excellence to a global client base.

• The company’s long-term record of • Effective June 1, 2020, success comes from an experienced GLJ Petroleum Consultants Ltd. team of professionals who have an became GLJ Ltd. absolute commitment to delivering high- • Our new address: quality results for their clients. 1920 – 401 9th Ave SW Calgary AB T2P 3C5

4 OVERVIEW

• What is Geothermal? – History – Geothermal on the World Stage – Geothermal Uses (Power vs Heat) – Types of Geothermal Systems – Evolving Technologies (EGS and Closed Loop) – Types of Geothermal Plants

• What is Canada’s Potential? – Geothermal Gradient – Calculations and Maps – Temperature of the WCSB – Opportunities with Oil & Gas

• Current Canadian Projects

5 WHAT IS GEOTHERMAL?

Geo = Earth Thermal = Heat

Geothermal = Earth + Heat

Geothermal is heat that is stored and generated within the Earth, partially residual heat from the planet’s formation and partially new heat generated by radioactive decay within the Earth’s crust.

Two type of Geothermal: Geothermal Energy – Electricity Geothermal Heat – Commercial and Residential heating

6 WHY GEOTHERMAL?

• d

7 GEOTHERMAL VS. GEO-EXCHANGE

Geothermal Geo-Exchange

http://geothermalheatpumpconsortium.org/

8 HISTORY

• First Geothermal projects date back to the 3rd century BC in Mount Lisan in China.

• 1st century AD Romans used local hot springs for public baths and infloor heating in Aquae Sulis (Bath, England).

• 14th Century AD, Chaudes- Aigues, France designed the first residential heating

The Roman Baths, Bath England (Google Images) networks.

9 HISTORY – ELECTRICITY GENERATION

• The World’s first Geothermal Power generating well was in 1904 in Larderello, Italy. It powered 5 lightbulbs.

• In 1911 the first power station in Larderello was built. It was capable of producing 250kW by 1913.

• In the 1960s Geothermal Energy started to see an increase around the World.

• Recently (last 20 years) geothermal has seen an increase in activity.

http://www.reuk.co.uk/wordpress/geothermal/larderello-worlds- 10 first-geothermal-power-station/ GEOTHERMAL IN THE WORLD

• As of 2019, there was 14,900 MW of geothermal production capacity in the World.

• The World in 2017 used 2,440,000 MW. (International Energy Agency, 2018)

• Geothermal Energy accounts for 0.6% of the supply of electricity in the World.

• Canada currently has Zero Geothermal Electricity production.

(ThinkGeoEnergy, 2019)11 GEOTHERMAL HEAT

• Many European cities are heated on a municipal heat network.

• Some cities (Paris, Munich, Rotterdam etc.) are tying in geothermal wells to their heat networks to provide heat for houses. – Heat Exchangers

• Munich area diagram on left.

http://www.proyectos-de-geotermia.com/about-geothermal-energy 12 GEOTHERMAL HEAT USES

• Besides residential or commercial building heat, there are many uses for geothermal heat.

• From agriculture to food processing and industrial uses, geothermal can provide clean reliable heat to these industries.

• Many applications of geothermal heat do not require very hot temperatures.

(Geothermal Education Office, 2005) 13 CONVENTIONAL GEOTHERMAL

• Two wells are drilled into a hot permeable reservoir (dublets). • One of the wells (producer) pumps hot water brine to the surface. • The cooled water brine is pumped back underground (injector).

– These hot permeable reservoirs are often difficult to locate as they usually need to be close to a heat source such as volcanos, in a rift valley, or target deep rock strata in sedimentary basins.

http://www.greenfireenergy.com/geothermal-technologies-compared.html 14 EXAMPLE: CONVENTIONAL GEOTHERMAL (GEYSERS CALIFORNIA)

• Largest Geothermal Field in the World – Geysers California

• Similar to many countries (Kenya, Indonesia, Iceland, Italy, Japan, Philippines, Hawaii, etc.)

• Magma Chamber below superheats water in a permeable reservoir creating steam and ultra hot water (>200C).

http://stevecotler.com/tales/wp-content/uploads/2009/07/the-geysers-schematic_2.jpg 15 ENHANCED GEOTHERMAL SYSTEMS (EGS)

• Drill into hot basement rock, or volcanic rock. • Pump cold water down to fracture the rock, “hydrosheer” • Produce from the fracture system similar to conventional geothermal. • Trials in Nevada (Current), France/Germany Rhine Valley, Australia

(Olasolo et. al, 2015), http://www.greenfireenergy.com/geothermal-technologies-compared.html 16 CLOSED LOOP (EAVOR LOOP)

• Generate Electricity/Heat via conduction rather than production of water/steam.

• Connect multiple multilateral wellbores at depth.

• Flow fluid though one set and back

through the other creating a loop. 3,500m

• Can be used for Electricity generation or District/Commercial Heating.

(Eavor Technologies Ltd., 2020) 17 CLOSED LOOP (GREEN FIRE ECO2G)

• Green Fire Energy, has a closed loop pilot in California, called ECO2G

• Used in a very deep, very hot single well bore.

• A working fluid (sCO2) is pumped down the wells inner tubing, and hot working fluid it pumped up the wellbore.

• This fluid then powers a Generator.

(Green Fire Energy) 18 GEOTHERMAL PLANTS

Dry Steam Flash Steam Binary Cycle

1 Wellheads 2 Ground surface 3 Generator 4 Turbine 5 Condenser 6 Heat exchanger 7 Pump

• Steam Only • Steam & Water • Temp ~60 - 200C • 240-300C • >200C • Water only • O&G cogeneration as • Geysers and • Commonly used well as conventional Larderello Only in high temp geothermal environments. • Sedimentary basins

(Wikipedia, 2019) 19 POWER VS FLUID

• Based on an empirical correlation of net power per 63 liters/second of water and temperature of produced water projects in Western Canada could estimate 1MW of power.

• A 5MW project would require 160,000 barrels of >120C water per day.

(Sanyal and Butler, 2010) 20 CANADIAN POTENTIAL GEOTHERMAL GRADIENT

• Bottom hole temperatures (BHT) measured from wireline logs are lower than actual temperatures due to cooling from drilling mud.

• Using temperature from pressure data or drill stem tests allows for a close approximation to actual reservoir temperature.

• We can correct BHT using well test data.

22 WCSB GEOTHERMAL GRADIENT

370,000 BHT and 50,000 Test Data Temperature points • In sedimentary basins (regional scale) we can assume gradients are linear though the basin. • We can apply a bulk shift to the BHT of 10-20% increase to correct BHT to AOFP or DST data (this still may be low).

Modified AAPG/Kehle Method. 23 WCSB GEOTHERMAL GRADIENT

• We can map the geothermal gradient calculated at each well across the WCSB.

• Gradient ranges from ~20C/km to 45C/km.

24 WCSB TEMPERATURE POTENTIAL

• We need to understand the thickness of the basin, or depth to basement to calculate the maximum potential.

• Re-arrange this formula to solve for

Temp at Depth (assume surface temp Horn River & is 5C) Liard Basins

푇푒푚푝 푎푡 퐷푒푝푡ℎ = (퐺푒표 퐺푟푎푑𝑖푒푛푡 ∗ 푇푉퐷) + 푆푢푟푓푎푐푒 푇푒푚푝

25 TEMPERATURE AT BASEMENT WCSB

• Temperature along the foothills reaches over 200C close to basement at >5km of depth.

• The Williston Basin (Southern Sask.) has potential of up to 150C at ~3km.

Horn River & Liard Basins

26 TEMPERATURE SLICES AT DEPTH (WCSB)

27 TEMPERATURE SLICES AT DEPTH (WCSB)

28 ADDITIONAL INFORMATION NEEDED

• Flow rate (DST Data)

• Long term effects – Reservoir Aquifer Support – Understand Water Rock Interactions (heat and cooling effects)

• Reservoir pressure (parasitic load)

29 CO-PRODUCTION WITH OIL & GAS (EXAMPLE)

• A Canadian Company (Vermilion Energy) in France and The Netherlands, has created a synergy between Oil & Gas and Geothermal.

• From their Oil & Gas activities the produced water is used to heat greenhouses as well as some housing complexes.

https://www.youtube.com/watch?v=UuYM5Db_Fpg

30 GEOTHERMAL HEAT POTENTIAL CANADA (EXAMPLE)

• Bottom hole temperatures of wells in the Leduc Formation.

• Temperatures reach 50-80C which is adequate for geothermal heat production.

• Leduc Formation has: – high permeabilities – moderate temperatures – aquifer support – proximity to populated areas

31 WHAT CAN THE O&G INDUSTRY & GOV’T DO?

• Establish a Regulatory Framework in Alberta – Modified O&G Framework to allow for Geothermal

• As Canada is known around the worked as an ethical Oil & Gas producer, we need to show that Canada can lead an effort to showcase what O&G and Geothermal can do together. – This needs to happen at an operator, provincial and national level.

• Start with low hanging fruit with heat projects, as we can utilize this medium temperature produced water. (ie. similar to Vermilion Europe)

32 GEOTHERMAL RESERVES & RESOURCE'S

• There are currently 2 reserve and resource guidelines in Canada for Geothermal Resources – United Nations Framework Classification (UNFC) for Geothermal Resources (2016) • https://www.unece.org/energywelcome/areas-of-work/unfc-and-sustainable-resource- management/applications/energyseunfc-re/unfc-and-geothermal-energy.html

– CanGEA Canadian Geothermal Code for Public Reporting. • https://www.cangea.ca/uploads/3/0/9/7/30973335/canadiangeothermalcodeforpublicreporting.pdf

• Currently there is no Canadian National Instrument (ie. NI 43-101 or NI 51-101) for Geothermal resource reporting.

33 CANADIAN GEOTHERMAL PROJECTS

1. Deep Earth Energy Production Corp. (DEEP)

2. Eavor Technologies Inc.

3. Razor Energy Corp.

4. Terrapin Geothermics

5. Borealis Geopower 5 4 3 5 2

1 34 DEEP EARTH ENERGY PROJECT (DEEP)

• DEEP has drilled 6 wells to the Precambrian basement, (~3600mTVD)

• Temperatures are at >120C

• Testing Cambrian Deadwood sandstones and fractured granitic basement for flow potential.

35 EAVOR – EAVOR LITE PILOT

• Successfully tested their closed Loop technology with drilling a Pilot in the Rock Creek Formation near Rocky Mountain House, Alberta.

(Eavor, 2019) 36 EAVOR – EAVOR LITE PILOT

Drilling Rig Drilling Rig

37 RAZOR ENERGY – SWAN HILLS FIELD

• Surface water flood facilities have temperatures at 105-110C • 120,000 Bbl/day water through facilities. • 97% Water Cut • No new drilling needed • Co-Generation plant with a natural gas turbine (15MW) and Geothermal ORC 7.5MW plant • Plan to have plant online by the end of the year.

38 TERRAPIN GEOTHERMICS

• Alberta No. 1

• Developing a 5MW Geothermal Power Plant near Greenview Alberta.

• In exploration phase. Targeting deep carbonate strata.

• Secured $25.45 million investment from Natural Resources Canada Emerging Renewables Program.

39 BOREALIS GEOPOWER

• Borealis has a number of projects. • These projects are targeting high temperature geothermal systems particularly in igneous terrains. • Targeting geothermal reservoirs below surface hot springs.

(Kitselas Geothermal Inc.) 40 OTHER NOTEWORTHY GEOTHERMAL PROJECTS

• Clarke Lake, British Columbia – Fort Nelson First Nation

• Spring Hill, Nova Scotia – Cavern Geothermal

• Eavor/Little Salmon Carmacks First Nation – Yukon

41 CONCLUSIONS

• There is a strong potential for Geothermal in Canada, especially with heat projects.

• Some projects are starting to be developed, and we may be a geothermal producing nation quite soon.

• Canada needs to utilize the experience and resources from the Oil & Gas industry to help spur green investment in the Geothermal Industry. – Establishing Regulatory Framework and Resource Reporting guidelines may be key to spur investment in Canada.

42 QUESTIONS?

Thanks for listening

John Hirschmiller, P.Geo. [email protected] +1.403.266.9423

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