Enhanced Oil Resources & GreenFire Energy evaluating CO2-based geothermal

Alexander Richter 11 Sep 2009

Enhanced Oil Resources Inc. (TSX-V: EOR) today announces a joint venture with GreenFire Energy (GreenFire) to evaluate the potential for CO(2)-based geothermal power production (CO(2)G(TM)) from the St Johns Dome area, located in Apache County, Arizona and Catron County, New Mexico.

The agreement calls for the construction of a demonstration plant that will utilize supercritical carbon dioxide from the dome to drive a demonstration geothermal power facility to be located nearby. The demonstration project is expected to commence in 2010 with the drilling of up to four deep wells to access high heat crystalline rock underlying the dome.

The construction of the demonstration plant will commence during 2011 and will initially be sized for 2 megawatts and will require up to 5 million cubic feet per day of CO(2) at a purity of 95% for a period of at least 2 years. If the demonstration project is successful, modular commercial-scale plants, each with a generating capacity of approximately 50 megawatts may be built nearby.

At maximum potential build-out using natural CO(2) from the St. Johns Dome, the joint venture may have a generating capacity of 800 megawatts and may require up to 500 million cubic feet of CO(2) per day for up to 25 years.

The region in which the St. Johns Dome is located contains six major coal-fired power plants that collectively emit about 90 million tons of CO(2) per year. If a carbon tax is enacted, then the most economic way for these power plants to sequester their carbon may be through CO(2)-based geothermal energy production at the dome. As the CO(2) is cycled through the rock, a portion of it is sequestered into the surrounding geologic materials. The power generated by the geothermal plant can then drive the carbon capture technology, which is energy intensive, at the coal-fired power plants.

Potentially, over 3,000 megawatts may be generated at the dome using anthropogenic CO(2). The St. Johns Dome area is considered to be in an optimal location at which to develop CO(2)-based geothermal energy. This is due to its combination of a large volume of low cost natural CO(2), the likely presence of a thermal
reservoir underlying the region and a local connection into the power grid. As power plants around the world begin implementing carbon capture and sequestration, many additional sites for CO(2)-based geothermal energy projects may become available.

The joint venture intends to apply for funding from the Department of Energy through the federal stimulus plan. In 2009, the DOE allocated $350MM for geothermal energy projects. It has, however, allocated more than $3B for carbon capture and sequestration projects. Similar federal funding opportunities will likely exist in 2010 and beyond, with considerably more in the proposed climate bill. The joint venture considers the St Johns project to be eligible for funding through carbon capture and sequestration programs.

The agreement between EOR Inc and GreenFire provides each party an option to participate for a 50% interest in the demonstration plant and any future commercial plant. GreenFire will act as the Operator of the geothermal project and EOR will act as Operator of the St. Johns field development.

Mr. Barry Lasker reports, “The agreement with GreenFire opens up an additional exciting opportunity for the Company to monetize the resource at the St. Johns dome. Our business plan to bring CO(2) to the Permian Basin remains firmly in place; however, in today’s carbon constrained world the potential to extract
our Helium resource, sequester our CO(2) and generate renewable energy for the Country all within the confines of the St. Johns area represents an intriguing opportunity for the Company. We are excited to work with the team at GreenFire and we will provide additional details when they come to hand.”

To read the full announcement use link below.

Source: Company release via Reuters