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Recent elections in Alberta could change the landscape for geothermal

Calgary skyline with Saddle Dome, Calgary, Alberta (source: flickr/ Stephen Desroches, creative commons)
Alexander Richter 7 May 2015

The recent elections in Alberta, Canada, might flip the table in favor of geothermal. We asked Alison Thompson, Chairman and Managing Director of CanGEA about the impact of said results.

Following the political earthquake with the results of recently held provincial elections in the province of Alberta, Canada, there are big hopes for change. With an economy built on oil extraction, the province has been lagging behind when it comes to renewable energy support and development. The low oil price right now puts the energy-sector dependency of the province in the spotlight. The economics of deriving oil from the oil sands in the province are simply not favorable anymore for development or – in some cases – even the operation of existing projects.

Different renewable energy organizations have urged the province for a long time to do more on the support for renewable energy development, so now the time might have come. With the difficult economic situation due to the oil crisis, it might be difficult to get the financial support the sector hopes so, but at least there might now some hope.

The Canadian Geothermal Energy Association (CanGEA) has been rather vocal on promoting geothermal energy and the opportunities for tapping into the energy and oil sector know-how for geothermal development in the province.

Following last night’s election results, we spoke with Alison Thompson, Chairman and Managing Director of CanGEA.

These elections seem to be a huge political earthquake. Do you think the current oil crisis might have played a decisive role in these elections?

Yes, the current oil price caused the former government to prepare a provincial budget that was lower than previous ones that have been extensively funded from oil and gas royalties, resource land sales, etc. Public services were intended to be cut, all the while not changing very much about how the oil industry contributes to the economy. When the public voted on Tuesday night, it was a vote of non-confidence to how that budget was structured. It will now be re-crafted and presented to the province by the New Democratic Party (NDP)

How much does the province’s economy depend on the oil sector? Does it depend too much on the oil sector?

Alberta doesn’t have a sales tax and instead relies upon funds from the oil and gas industry to balance its budget and to save for the future in our Heritage Fund. Alberta has been blessed with a lot of natural resources, not all of them are hydro-carbon based, but the government has not supported alternatives on the same playing-field they way they have with fossil fuels. Some would say, and I believe, the province has depended too much on the oil and gas sector, at the expense of diversifying.

A recent study debunked the myth that the oil sands industry was a large Canadian employer and instead showed how the beer industry (a Canadian staple) was actually a larger employer across the country! I think it is important for the general public to understand that the oil sands have had a place to play in our history but they are not the be all and end all that some have been led to believe.

How could a changed political landscape affect the renewable energy sector in the province?

The NDP have articulated a plan for a much earlier phase out of the Province’s coal fired power generation plants than the Conservatives had.CanGEA has been very active over the past few years extolling the virtues of geothermal power as a base-load alternative. The previous government had committed to phasing out coal and substituting with natural gas, over a 50 year time frame.

Our current work at the association includes a Keynote Luncheon later this month discussing the negative impacts of coal-fired power. We are hosting it at the Calgary Petroleum Club to make a not so subtle point that there is a new kid on the block. We also authored a report entitled “Un-Natural Gas: Alberta’s Dirty Substitute for Geothermal Energy” that paints a picture of how renewables can work together to support the provincial electricity grid. Turning to another fossil fuel doesn’t have to be the only option.

How would you describe the geothermal potential in Alberta?

While Alberta does not have magmatic geothermal resources, it hosts one of the world’s largest Hot Sedimentary Aquifers – the Western Canada Sedimentary Basin. And by Hot, we mean Hot! Our geothermal favourability and resource mapping work, which we completed in 2013, showed that massive quantities of water above 120 degree Celcius are currently being produced only to be discarded as waste by the oil and gas industry.  Our expectation is that, like other countries that have HSA resources, we certainly could be producing distributed geothermal power. Even more exciting will be to follow Germany and France’s lead and use our HSA system for the direct use of heat. With all of our sunshine, and geothermal heat, I see greenhouses and soil warming in our future.  District heating is also a large opportunity.

Could the oil crisis actually be an opportunity for geothermal in the province or even Canada?

Even before the oil crisis, CanGEA has been hosting Technology Transfer Workshops with various industries. We completed ones for Mining and Aerospace & Defence last year. At the time, we had a lot of raised eyebrows about why we would bother with the A&D industry. The recent announcement by the European Space Agency about exploring for geothermal from space served as huge vindication for our local efforts to collaborate with the industry.

We’ve completed a workshop with the Oil and Gas industry in February and have one with the Carbon Capture and Sequestration industry on May 22.

The oil crisis has provided an opportunity to better engage with the Oil industry as their supply chain service companies are in need of new markets right now. And employees from the oil companies themselves have been laid off in record numbers. Their geoscience and project management skills are 100% transferrable to the geothermal industry.

The silver lining for our industry is that drilling can be >25% of the entire cost of a geothermal power plant. With drilling costs now down 20-30% due to less competition from the oil industry, there is a significant opportunity to bring on geothermal projects for even lower costs than already competitive world-wide Levelized Costs of Electricity (LCOE).

Carpe Diem! and we encourage everyone interested in the Canadian geothermal industry to be powEARTHful and join us.