Province of British Columbia in Canada is planning to auction geothermal drilling rights

Alexander Richter 23 Jun 2009

The province of British Columbia in Canada is preparing to auction off geothermal drilling rights in 2009. The government will give "plenty of notice given and plenty of information on how geothermal drilling rights will be auctioned off and what happens when a company wishes to exercise those rights.

Reported in Canada, “the provincial government (of British Columbia) is getting ready to sell off the rights to drill below several thousand acres on the east side of Lakelse Lake in hopes of finding enough super-heated steam to turn turbines to generate electricity.

Already the site of Mount Layton Hotsprings, a recreational user of geothermal energy, the area is considered to have enough commercial potential to generate electricity and is just one of four places in BC coming up for bid.

Provincial Energy minister Blair Lekstrom said his officials are still working out exactly how many hectares will be put up for bid.

And he said there’ll be plenty of notice given and plenty of information provided on how geothermal drilling rights will be auctioned off and what happens when a company wishes to exercise those rights.

“Our plan is to certainly have this happen in the near future. In 2009 for sure,” he added of the provincial timeline.

“We do want to do this correctly right from the beginning. Otherwise we’d be facing an uphill battle all the way,” Lekstrom continued.

Also needed would be an agreement with the BC Transmission Corporation to run the power through its lines to the city, he added.

Alberta-based geothermal energy consultant Craig Dunn calls the energy source an almost perfect example of green power.

“Unlike run-of-river or wind, this is constant,” said Dunn of the supply of heat and steam that’s contained underground.

There are very few emissions and a much reduced physical footprint is required compared to other ways of producing electricity, he added.

The east side of Lakelse Lake drew interest about 20 years ago and BC Hydro once estimated it contains potential to generate between 10-50 megawatts of electricity.

The area is attractive not only for its geothermal potential, but also for its proximity to the BC Transmission Corporation power line running between Terrace and Kitimat, said Dunn.

“We refer to electricity as a perishable product,” he said, in the sense that the further it is from entering the power grid, the more expensive a project becomes.

“The area has a huge advantage in terms of the economics,” Dunn continued.

Even if there is a power line virtually next door, Dunn said there’s a significant capital cost in putting in the power producing infrastructure.

But after that, running costs are relatively low considering the dependability of the power source.

Dunn conceded those costs are high right now compared to coal-fired generating plants or power from BC Hydro’s massive dams.

But as demand for power grows and as government policy changes to emphasize and encourage green generation, the price BC Hydro will pay private power producers will become more attractive, he added.

“There’s going to be a rush to geothermal,” Dunn predicted. “Geothermal is attracting the kind of entrepreneur who does not think six or eight months out, but the kind of person who thinks eight or 10 years out.”

Generated by heat stored in the earth, geothermal power production involves drilling into permeable pockets of superheated water and steam found deep underground. Thermal energy is stored within the rock and fluid in the earth’s crust.

Once tapped, these reservoirs provide geothermal plants with water hot enough to generate electricity.

Current law has the provincial government owning all of the rights to geothermal resources if the temperature of those resources rise above 80C. It can then auction off those rights as is the case for the Lakelse Lake area and the three other areas of BC.

At the moment, there are no geothermal power plants in BC.”

Source: Northern Sentinel, BC Local News