Crude oil prices give geothermal a break
Record low crude oil prices could become
a major opportunity for the geothermal
power industry.
Over the past few decades, researchers have looked at various uses of geothermal energy, but drilling costs make
it cost prohibitive for commercial use.
But with oil prices around $30 per
barrel, state-of-the-art rigs have been
idled and drilling prices have fallen dramatically. That’s where scientist-turned-businessman Bruce Cutright
sees an opportunity.
“It’s time to make this commercial,”
said Cutright, who spent several years
working as a researcher for the University of Texas Austin’s Bureau of Economic Geology and founded Thermal Energy
Partners LLC in 2010.
The Austin-based company is now
looking to take advantage of lower drilling costs to build a string of geothermal
power plants across Texas and the globe.
Cutright estimates that geological
formations in the Texas Gulf Coast and
South Texas region can generate up to
2,500 megawatts of carbon-free and
emissions-free power. “Texas is a gold
mine of geothermal, but unfortunate-
ly, because of cheap natural gas, we as
Texans haven’t used geothermal energy,”
Cutright said.
Taking advantage of low crude oil prices and idled rigs, Thermal Energy Partners teamed with Corpus Christi-based
Orion Drilling for its future projects.
Orion Drilling Marketing Executive
Brett Schellenberg said the company
has a fleet of 17 drilling rigs but that only
about half of them are in use.
Schellenberg said the company’s rigs
can easily be adapted for use in geothermal projects.
“In a time like this when oil prices are
so depressed, the name of the game for
us is diversification,” Schellenberg said.
A 10-megawatt geothermal power
plant used to cost $50 million, but Thermal Energy Partners reports that lower
drilling costs have reduced that to $30
million in the United States.
Some customers are already taking
advantage of the break in prices. Thermal Energy Partners recently secured a
power purchase agreement from officials
on the Caribbean island of Nevis.
James Jackson,
left, and Bruce
Cutright with
Thermal Energy
Partners LLC
Under the 25-year deal, the company is building a 9-megawatt geothermal
power plant that is expandable and could
potentially export 40-50 megawatts of
additional power to neighboring islands.
Working out of San Antonio, Thermal Energy Partners Chief Development
Officer James Jackson is scouting cities,
military bases, large businesses and factories that are ideal candidates for geothermal power.
Jackson is meeting with McAllen city
officials on Feb. 9 to discuss a 10-megawatt power plant that will use 2 acres of
land to both generate electricity and provide desalinated water.
Geothermal power is finding support
from politicians. Port of Corpus Christi
Commissioner Barbara Canales told
the Business Journal that unlike solar and
wind, geothermal power plants run 24
hours a day and would continue to provide power even during a hurricane.
“What we love about geothermal
is that it’s an off-the-grid and secure
source of energy,” Canales said.
‣GEOTHERMAL POWER
GENERATION COMPARISON
THE HEAT IS ON
WHAT IT COSTS TO
PRODUCE THE SAME
ENERGY
MAPPING OUT TEMPERATURE CHANGES IN TEXAS
Electricity can be generated from many
sources. Figures from the U.S. Energy
Information Administration show how
much each of them costs per megawatt.
With low commodity prices, natural gas
is the cheapest source of power, but
geothermal companies say their prices will
go down due to low crude oil prices, which
have resulted in lower drilling costs.
Type of Power
$ / MWh
Geothermal
$47.90
Natural Gas ACC
$64.40
Wind
$80.30
Hydroelectric
$84.50
Coal
$95.60
Nuclear
$96.10
Biomass
$102.60
Solar PV
$130.00
SOURCE: U.S. ENERGY INFORMATION
ADMINISTRATION FOR PLANTS COMING ONLINE
IN 2019
A CLOSER LOOK
This map from the State Energy
Conservation Office shows the hot
spots for geothermal power in Texas.
Geologists believe the best areas are
along the Gulf Coast and south of San
Antonio.
SOUTH TEXAS A ‘HOT
SPOT’ FOR GEOTHERMAL
POWER
While there’s no doubt Texas is energy
rich in carbon-based fuels, there is a clean
source of power many are unfamiliar with
that rests below existing oil and natural gas
reserves.
Geothermal power uses heated water
trapped deep inside the earth to generate
electricity with no carbon emissions.
The State Energy Conservation Office
reports that the best geothermal pockets
are 12,000 feet below the surface in a
band that runs parallel to the Gulf Cost.
Geological layers with water as hot as 320
degrees can be found just south of San
Antonio in McMullen, Webb, Starr and
Zapata counties.
Because the water is under great
pressure, drilling to those depths enables
the superheated water to rise to the
surface without using pumps. Geothermal
power plant operators can use the steam
to generate electricity, condense the
steam to liquid and reinject it into the well
where it is reheated.
If made commercially viable,
researchers estimate that Texas has the
potential to generate more than 2,500
megawatts of geothermal power in an area
that stretches along the Gulf Coast from
the Sabine River to the Rio Grande.
EAGLE FORD SHALE INSIGHT
A Look at Geothermal Power Plant Designs
Thermal Energy Partners wants to take advantage of low drilling prices to build out
a series of geothermal plants along the Gulf Coast and deep South Texas.