This data-file tabulates the greatest challenges and focus areas for harnessing deep geothermal energy, based on reviewing 30 recent patents from 20 companies in the space.
The economic opportunity is exciting, with levelized costs of 10c/kWh in areas of ordinary geothermal gradients. Strong progress is also outlined in our deep-dive research note into the topic.
The patents confirm that the largest challenges 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.
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.
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.
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.
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.
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.