Could geothermal profit from job-losses in the oil and gas sector?
The fall in oil price and jobs in the oil and gas industry means drilling rig operators are selling their services right now at half the price - Could this kickstart geothermal growth?
The current fall in the price of oil has had a severe impact on the oil job market and, even though difficult to quantify as of now, are expected to be on record job losses.
According to a local Canadian news source, this is particularly “bad news for Alberta – and bad news for the country more broadly – but a silver lining is in there somewhere, at least as far as Canada’s nascent geothermal industry is concerned. Next Monday, the Canadian Geothermal Energy Association (CanGEA) will be holding a technology transfer workshop aimed directly at oil and gas contractors looking for ways to adapt their technologies and approaches to geothermal development.”
CanGEA chair Alison Thompson said “These drilling rig operators are selling their services right now at half the price,” said Thompson. “So this is a prime opportunity for us to be more cost-competitive, but to also get out-of-work people back to work.”
In Alberta, the cost of hiring a drilling contractor in an overheated oil market can represent up to 30 per cent of the cost of a typical geothermal power project. Under current market dynamics, however, “our whole capital expenditure has just come down by 15 per cent,” Thompson said.
This is obviously good news for the geothermal industry, being able to take advantage from this dire situation for the oil industry. Maybe this will spur growth in the Canadian and even the global geothermal sector.
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Source: Coporate Knights