What's new in exploration

	Vol. 225 No. 2
PERRY A. FISCHER, EDITOR

Hot flashes. The beauty of geothermal energy is that it's conceptually simple: a virtually unlimited heat source beneath our feet. All that we have to do is drill for it, right? The problem is, we need rock that is not too deep, is highly permeable and comes with its own water supply for making steam. Such places exist. Most folks are familiar with California's The Geysers field, which has produced electricity for 44 years with no end in sight; it still produces almost 1,000 MW/yr. Collectively, geothermal energy provides more than 2,800 MW of electricity – comparable to 60 million barrels of oil per year, enough for 3.5 million homes. And this is only a small fraction of the US potential. There are also plants in the Philippines, Mexico, Italy and 17 other countries.

However, eventually, the water is depleted. Even if massive amounts of water could be supplied in the form of wastewater – as is being done in some places – together, these specialized requirements make viable geothermal sites few and far between. As such, these hydrothermal (steam generating) sites will probably never exceed 1% of world primary energy supply. But what if you could find shallow hot rock, eliminate the water requirement, create permeability at will, and do it all at a reasonable price? Well, then you would have something with the potential to change the world. Or at least Australia.

The concept of Hot Dry Rock (HDR) geothermal energy originated 30 years ago at Los Alamos National Laboratory in the US. Since that time, more than $500 million has been spent on R&D internationally: principally, the US, Europe and Japan.

HDR typically occurs as a massive granite body. Being richer in radioactive materials than most rock, the granite becomes a heat source due to the miniscule amount of heat generated from radioactive decay. When such a body is overlain by less-dense sediment, enough of an interruption to heat flow occurs such that, over geologic time, heat builds up in the granite, creating temperatures over 225°C (437°F).

Hot Dry Rock is explored for by drilling relatively shallow, coring boreholes, and by using existing oil and gas wells, for measuring/calculating heat flow, as well as seismic, gravity and other geophysical measurements. Generally, whenever the temperature exceeds 160°C (320°F) and the granite body is large enough and located at accessible depths of about 3 mi or less, the HDR is considered a resource. This resource, if recoverable through HDR technology, is estimated to be several trillion boe, enough for many centuries of primary energy use at today's rate. Until recently, the technology – more correctly, the imagination – did not exist to exploit HDR. Even more recent is the rapid implementation of HDR projects worldwide.

Ideally, the trick is to install a manifold or heat exchanger comprising a labyrinth of small-diameter pipes deep within the earth. That would be impractical and certainly cost too much. However, using the latest oilfield technology, an underground heat exchanger can be installed between water injecting and steam producing wells by careful design of a fracturing program.

Until a few years ago, HDR projects – less than a dozen – have all been government sponsored. These include the ongoing Soultz, France, HDR test, which has drilled two wells to 16,000 ft, completed a 189,000-bbl frac job, and established circulation between the two wells, with a third well being drilled in preparation for the installation of a small power plant later this year; and the continuing Bad Urach project in Germany, which recently completed a successful fracture stimulation at below 14,000 ft. There are several other similar projects in Japan, Switzerland and elsewhere.

In the US, the successful Fenton Hills, New Mexico, HDR test plant produced power and conducted stimulation and flow tests for 17 years (1978 – '95). Ultimately, the temperatures and flowrates were not commercial there, but much of our understanding of HDR derives from that project.

Here are some of the problems that can occur. Temperature depletion is not a serious problem, but water loss could be. Scale formation and/or fracture cementing could create flow problems. Flow short-circuiting could occur, but has not been a problem in experiments thus far. However, increasing the flowrate does tend to concentrate flow into more-direct flowpaths. Vertical fractures are the most serious concern, because they either send water downhole, which wastes it, or uphole, which cools it. To overcome these problems involves understanding the rock mechanics and stresses, good fracture design and implementation, and monitoring the fracture progress using microseismic and other techniques, to ensure that the fracture network propagates horizontally.

In the past three years, geothermal fracture projects have been started by private firms. In El Salvador, Shell is working in a joint venture with Salvadoran firm GESAL at a known hydrothermal site. If the project is successful, it will generate 2-5 MW of power. Shell believes that it can use its oilfield know-how to significantly reduce the costs of drilling and installing the subsurface fracture network.

In Australia, the HDR resource is enormous, much greater than all the oil and gas resources of the nation combined. Two states have begun licensing the HDR in a manner similar to oil leases. A maverick company, Geodynamics, has bought four licenses. Make no mistake – these folks plan to get rich – and, in any event, they have no choice, because the stock market and the press are the only viable ways that they have to raise capital. If you want to help them, perhaps yourself as well, and enjoy taking risks, it's ASX:GDY.

The company recently completed its first well, the Habanero-1, which, at 14,500 ft, is the deepest well ever drilled in Australia. It was drilled in the Cooper basin in the hottest known non-volcanic HDR resource in the world. A microseismic monitoring network has been installed in various new and existing wells to give a good map of the upcoming fracture network.

Conversion of heat to power will be provided with proven Kalina closed cycle technology from Siemens. Other familiar names including oil firms Woodside Petroleum and Santos, drilling contractor Century Resources, and frac specialist Halliburton, along with several research institutions and universities, are providing the expertise and equipment. Geodynamics, has a simple, beautifully insane plan: Replace all of the electricity now generated with coal, gas and nuclear power in Australia with HDR-powered plants. With help like that, it just might work.