On the island of Nevis in the Caribbean, its 11,000 residents are on the verge of an energy transformation. In about two years, their cost of electricity will no longer fluctuate with market prices, and not even a hurricane will stop it from flowing. In fact, over a 25-year period, residents will save an estimated $100 million in energy costs, based on today’s pricing.
This is because in late 2022, this island in the Lesser Antilles will bid farewell to diesel, which it has imported for more than five decades to power its electrical grid, taking huge bites out of its gross domestic product.
Severing its ties with fossil fuel power generation will also reduce Nevis’ carbon footprint and, it is hoped, lead the way for similar transitions all over the world.
How is this possible?
It is the result of a strategic conversion to geothermal energy developed by GeoFrame Energy, a newly created partnership between Schlumberger New Energy, AAPG Member Bruce Cutright and business partner Dan Pfeffer. Their goal is to make geothermal energy the most cost-effective and reliable means for providing clean, sustainable power. They are beginning in Nevis, with plans for similar projects in the Caribbean, the United States and North and South America.
Cutright has 35 years of experience in the oil and gas industry and serves as the chair of AAPG’s Energy Minerals Division’s Geothermal Group. He urges oil and gas professionals to look at the industry in a broader scope.
“Everyone is bemoaning the fact that the petroleum industry is slowing down. The economy is part of the reason, but there’s also the feeling that it is a great contributor to climate change. Whether or not that is true, we have to follow where society is leading,” he said. “AAPG is a petroleum organization. But younger members are seeing it in the broader context as an energy organization. We have the science and engineering capacities to identify high heat flow areas and productive reservoirs, so why aren’t we doing that?”
Texas alone has the potential for supplying all of the United States’ energy needs for 700 years with geothermal energy, Cutright said, citing a 2019 GeoVision report entitled, “Harnessing the Heat Beneath Our Feet,” published by the U.S. Department of Energy.
The United States has the ability to increase geothermal power generation 10- to 20-fold by 2050, producing 50 gigawatts of electricity from geothermal sources, the report states. Furthermore, the International Geothermal Association expects worldwide geothermal generating capacity to double in the next 15 to 20 years and to continue growing.
Silver and Brine
As a former senior research associate at the Bureau of Economic Geology at the University of Texas at Austin, Cutright worked for the State of Texas Advanced Resource Recovery program, helping oil and gas companies improve production of existing resources. For every dollar funded by the state, Cutright and his team returned $32 to $38, generating roughly $500 million in severance tax value for the state. The key to that success was understanding geophysics and drilling technologies, he said.
That work piqued his interest in geothermal energy, knowing that the water cut, or brines, was always considered a waste product.
“But these brines are hot, and the heat represents an energy source all by itself,” he said.
“Back in western Nevada in the 1800s when everyone was looking for gold, they found that it was wrapped in a grey mineral that was regarded as waste until someone figured out it was silver,” he said, referencing the birth of Silver City.
With funding from the U.S. Department of Energy, Cutright developed the Texas Geothermal Resource Group at the BEG in 2010, and four years later formed his own company, Thermal Energy Partners, with Pfeffer. He left the BEG in 2016 to run the company full-time as interest in geothermal energy grew.
“Petroleum geologists can make a difference in developing geothermal energy simply by doing what we are very good at,” Cutright said. “Brines are a valuable resource, and with the applicable technology we can produce renewable, sustainable energy at competitive market rates.”
A 2006 report titled, “The Future of Geothermal Energy,” from the Massachusetts Institute of Technology, estimated that the United States could produce 2,000 times the annual domestic energy demand from geothermal sources, providing renewable energy sustainably for centuries.
Although the United States is the largest producer of geothermal energy today, Cutright’s sentiments echo the report, which states, “In spite of its enormous potential, the geothermal option for the United States has been largely ignored.”
Leveraging Oil and Gas Data
Texas has more than 1.4 million oil, gas and exploration wells that provide information on deep formation properties and formation temperatures. The United States has in excess of 4.5 million wells that provide similar information. These, along with supporting geologic studies, form the essential basics of geothermal exploration.
Yet renovating oil and gas wells to harness geothermal energy might not be ideal, Cutright determined. Many are simply too small in diameter to produce the flow rates necessary for useful geothermal power generation.
Although renovating an oil or gas well might typically cost 50 or 60 percent less than drilling a new well, Cutright concluded that because of too many unknowns, “it made more sense to have a purpose-designed well to produce geothermal fluids.” In fact, wells drilled specifically to produce geothermal water and steam can yield nearly double the produced energy than renovated oil and gas wells.
Geothermal wells are designed to produce fluids from the full thickness of a producing formation.
“We are not worried about intervening clay layers. We can perforate the entire formation because we want to maximize fluid flow to that well,” Cutright explained. “We as petroleum professionals have to understand efficient ways to capture hot fluids, not just oil or gas.”
In his initial research, Cutright focused on deep sedimentary basins, using data from existing oil and gas wells.
“You can find conditions that are above 350 degrees. These have not been exploited to date by energy companies for geothermal energy,” he said. “That’s what got me into this field.”
A key factor in assessing the state of the geothermal industry was to understand its successes and failures. Cutright started mapping bottomhole temperatures and studying roughly 300 active geothermal sites around the world. For every site operating below 10 percent of its intended design capacity, he looked for the reasons why. Geothermal projects cannot afford dry or underperforming wells, and failures to understand the site geology and deep flow systems often contribute to poorly performing projects, he said.
At one time, Chevron was the largest producer of geothermal energy in the world, having successfully designed wells and operated more than 350 megawatts of geothermal generation in the Philippines and Indonesia. The major sold the wells approximately four years ago for nearly $4 billion.
“It’s a great investment if you know how to put a program together and if the per-well cost is managed well,” Cutright said.
Hoping for a Parachute
Over the years, Cutright has been building a global map of subsurface geothermal resources largely based on data from the oil and gas industry. Today, it is supported by a staggering 6 to 8 terabytes of data and is used to identify new and undeveloped geothermal resources.
Pfeffer focuses on developing strategic business plans and attracting investors, showing how the resource is both clean, affordable and highly competitive with wind and solar energy.
“People have the ability to understand that the wind blows and the sun shines. We have to go the extra step and prove that this resource, which you cannot see, really exists,” Pfeffer said. Their extensive dataset of geothermal resources has completely eliminated the need to prospect, significantly reducing risk and cost.
Highly intrigued by their data and approach, Schlumberger proposed a partnership that created GeoFrame Energy in September 2020.
“We were very interested in the way they positioned geothermal energy and their skillset,” said Ashok Belani, executive vice president of Schlumberger New Energy. “They could show that this would be successful.”
Belani said that Schlumberger’s expertise in drilling technology, subsurface characterization and construction dovetailed nicely into Cutright’s and Pfeffer’s business model.
Interested in creating a company that could provide geothermal energy on a global basis, Belani said, “Theirs was the right company at the right time to work with something that could be big. This is something that can greatly benefit the world.”
Cutright added, “We are on the cutting edge of learning how to transfer our petroleum expertise to produce renewable energy. I believe in this so strongly that I risked everything I had to do it. It’s like jumping out of an airplane and hoping you have a parachute.”
Benefits of Geothermal
By removing the need for prospecting, Nevis was able to choose geothermal over other forms of renewable energy. Compared to solar and wind, which require large footprints to operate, geothermal wells require very small land area. In fact, geothermal plants are less than one-tenth the area of solar or wind facilities, Cutright said.
Geothermal energy also is continuously available, as it relies on the continuous flow of heat from the subsurface rather than unpredictable sources tied to weather. Because the actual energy source is underground, islands that are subject to extreme weather events are ideal candidates for geothermal power. In Nevis, GeoFrame redesigned powerplants to withstand up to Category 5 hurricane winds.
“Up front, geothermal looks more expensive than solar and wind. It does take a greater capital investment,” Cutright said. “But the fuel is free. We are basically pre-purchasing the fuel to drive the plants in the future, so it’s actually cheaper.”
Because the fuel is pre-paid, it is possible to predict with certainty what future energy costs will be.
“In one fell swoop we are eliminating diesel, and it will be a dramatic reduction in the cost of power,” Pfeffer said. “We have a passion for what we are doing. We can see a nice return but we are actually doing something really good for people and the environment.”
“Petroleum will always be important. We’re not leaving it behind,” Cutright added. “But we need to think as energy professionals. This is within the areas of expertise of our members and has the capacity of changing the world.”