Economic doom contiues to wreak havoc on Alberta. Several upgraders are on hold in the province, and now Suncor has announced it will cease construction of its Firebag project. Engineers in Calgary are getting laid off in the hundreds, as the province’s economy sheds some of its employees. Meanwhile, small oil & gas drillers have tons of surplus equipment and experienced workers idling by.
You’d think some enterprising person might put the drillers together with the engineers and design a geothermal project in the province.
Not so, says Michael Moore, a Calgary economist who’s onto the alternative energy scene in the province. The collapse in conventional energy prices has made alternative energy projects uneconomical. But that’s just due to human shortsightedness. People don’t look for alternative energy sources until conventional energy prices spike through the roof. Then, when they go to build it during boom times, all the capital and labour are used up, drilling for oil.
What goes up, comes down, though, so it might be possible to build a viable alternative energy project during economic lulls.
Geothermal energy has been considered as a way to “make the tar sands greener”. Furthermore, the deepest well in Alberta is located up near Fort McMurray. We’ve got all this capital and labour located in the northern regions of the province, and it’s experiencing a slowdown.
Amongst alternative energy sources, I am partial to geothermal, because it solves some problems generated by wind and solar. I think solar and wind get more political attention because it’s something you can easily grasp. If there’s no wind or sun, though, you’ve got no power. Geothermal is alternative energy’s Steady Eddie – it’s on demand, all the time (relatively speaking), it’s free, and it can achieve economic interia in Alberta because it uses similar drilling equipment.
Think about it:
* Alberta has thousands of abandoned wells. At least one of those must be able to heat some water.
* Our drillers are out of work – between not working and earning 1/2 of what you earned before, you’d probably choose to work on a geothermal drilling rig.
* Alberta’s conventional drilling is declining, and producers already pump water downhole to get a 95% to 5% water-to-oil ratio. Encore Energy Systems changes the economics of this by utilizing the heat from the water as well.
A slowdown in conventional energy does not have to make alternative energy unprofitable. These projects might be made profitable in the future when energy prices spike again, if they are built with cheaper inputs during slowdowns. It’s time for Alberta to stop it with the myopic oil fetish and look at developing something else. We can be drilling these geothermal wells when oil prices are low, and capital, labour and expertise are unemployed by conventional drilling.
Link: A fine list of technologies that can get energy out of “warm” geothermal conditions.
