Drilling

Enhanced geothermal: technology challenges?

Thunder Said Energy's patent review scores (on a five-point scale) for Eavor's enhanced geothermal technology. Scores higher on focus, but lower on intelligibility.

This data-file tabulates the greatest challenges and focus areas for harnessing enhanced geothermal energy, aka deep geothermal technology, based on reviewing patents from 20 companies in the space. In particular, we have focused in upon Eavor Technologies, which has a clear moat around its drilling, sealing and working fluid technologies.

Enhanced geothermal energy projects aim to access 50-300ºC temperatures in the sub-surface by drilling down to 2,000-6,000m total vertical depths. Our recent research has covered the emerging opportunities in enhanced geothermal.

But what are the key challenges for enhanced geothermal technologies? To answer this question, we have reviewed the challenges that are cited in recent patents (chart below).

Challenges for commercializing enhanced geothermal technologies identified during or patent review. The greatest remaining challenges are related to heat transfer and well design.

The patents confirm that the largest challenges for deep geothermal are drilling long multi-lateral wells, which contact sufficient reservoir volumes to transfer heat from the subsurface into the working fluids, without depleting the geothermal resource.

Recent advances from the unconventional oil and gas industry are likely to be a crucial enabler from deep geothermal, based on the comments made in the patents.

Eavor Technologies is the company that stood out most in our overview of the geothermal industry. Eavor Technologies is a private company founded in 2017, headquartered in Calgary, Alberta, employing c100 people, in order to develop a next-generation, closed-loop geothermal energy technology.

Eavor’s aspiration is that its geothermal systems can be deployed anywhere, to harness the Earth’s geothermal gradient, and provide clean, reliable, flexible baseload heat and power, without geological/exploration risk. The closed loop system does not use hydraulic fracturing, does not exchange fluids with the formation, and thus does not suffer a risk of causing water contamination or Earthquakes. Hence we have reviewed 20 patent families from Eavor.

Based on reviewing its patents, we conclude that Eavor has developed proprietary technologies to drill deep wells, into hot formations, seal them using silicates/aluminosilicates, and keep them sealed via additives in the working fluid. Specific chemical additives are clear from the patents. The full details are in the Eavor-Conclusions and Eavor-Patents tabs.

The remaining risks for enhanced geothermal technology are also discussed, based on the evidence in the patents.

Hybrid horizons: industrial use of batteries?

Gas and diesel engines can be particularly inefficient when idling, or running at 20-30% loads. At these levels, their fuel economy can be impaired by 30-80%. This is the rationale for hybridizing engines with backup batteries: the engines are always run at efficient, 80-100% loads, including to charge up the batteries, which can better cover lower intensity energy needs.

Hybrid passenger cars are the best known example, since Toyota re-introduced them in the late 1990s. c25-30% energy savings are achieved, including through engine down-sizing and regenerative breaking

Industrial applications are also increasingly taking hold as battery costs come down, achieving even higher, 30-65% energy savings. This data-file summarizes a dozen examples, from oil and gas, marine, construction and even the machinery at LNG plants.

CO2 Intensity of Drilling Oil Wells?

This data-file estimates the CO2 intensity of drilling oil wells, in our usual units of kg/boe. The calculations are conducted bottom-up, based on fuel consumption at onshore, offshore and deep-water rigs; plus drilling days and typical resource volumes per well.

Drilling wells is not the largest portion of the oil industry’s total CO2 intensity. Nevertheless there is a 50x spread between the best and worst barrels, which is wider than other categories we have screened.

Prolific fields will have the lowest drilling-CO2 intensities, particularly where they are onshore (e.g., Saudi Arabia). Infill wells at mature deepwater fields may have the highest drilling-CO2.

Can technology revive offshore oil?

The appetite to invest in new offshore oil projects has been languishing, due to fears over the energy transition, a preference for share-buybacks, and intensifying competition from short-cycle shale. So can technology revive offshore and deep-water? This note outlines our ‘top twenty’ opportunities. They can double deep-water NPVs, add c4-5% to IRRs and improve oil price break-evens by $15-20/bbl.

U.S. Shale: Winner Takes All?

Shale is a ‘tech’ industry. And the technology is improving at a remarkable pace. But Permian technology is improving faster than anywhere else. These are our conclusions after reviewing 300 technical papers from 2018. We address whether the Permian will therefore dominate future supply growth.

Should a shale rig switch to gas-fuel?

Should a shale rig switch to gas-fuel? We estimate that a dual-fuel shale rig, running on in-basin natural gas would save $2,300/day (or c$30k/well), compared to a typical diesel rig. This is after a >20% IRR on the rig’s upgrade costs. The economics make sense. However, converting the entire Permian rig count to run on gas would only absorb c100mmcfd: not much of a dent in c1bcfd of flaring, as 2020 gas bottlenecks bite. This model shows all our workings.

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