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Baker Hughes and geothermal

Thursday, March 28, 2024

Geothermal energy would solve many problems but it is usually too expensive. It may be possible to reduce the costs through finding efficiencies in the process. The topic was explored at the Baker Hughes annual meeting in Florence

Everybody would like to see geothermal energy becoming more mainstream, rather than a niche energy source as it is now. And also using it for power generation, not just heat.

The operating costs are not so high, but the costs of drilling or adapting wells can be the same as drilling oil and gas wells. So it can be said that geothermal has the same risks and costs as the oil and gas industry but much lower revenues.

The challenge, says Ajit Menon, Vice President of Geothermal, Baker Hughes, is to 'make it more economic'.

Mr Menon sees that Baker Hughes can play a key role here, having expertise in all areas of well construction and production from its oil and gas background, including subsurface, drilling, production and fluids management.

Mr Menon sees that there could be big interest in geothermal in continental Europe, as a means of replacing gas for heating.

Geothermal can work well in areas with volcanic activity, since there can be more hot fluids closer to the surface. If there are natural fractures in the rock, this helps the heat to flow around.

'I think we're in the beginning of transforming the geothermal sector,' said Alexander Helling, CEO of Baseload Capital, a company which finances geothermal projects, particularly in Japan and Taiwan, speaking at the meeting.

Improving predictability

One way to reduce geothermal costs is to improve the predictability of projects, Mr Menon says.

In oil and gas drilling, one in eight wells turns out to be dry. That not only increases the costs of making a productive well, it also makes the whole project look more uncertain, so investors will seek higher returns as a condition of investment.

Geothermal projects to date have turned out to be even higher risk. '40 per cent of geothermal wells in North America don't do anything. In Germany 50 per cent of wells for heating don't do anything,' he said. Unsuccessful projects do not help build support for future projects.

The risk of poorly performing wells could be reduced by having a better understanding of the fracture network and how fluids can move around the subsurface.

Risks might also be reduced with better use of remote operations, making it easier to involve geothermal experts in the drilling, since there are not many geothermal experts in the world, he says.

Reducing costs

The costs of drilling geothermal wells might also be reduced with more automation and more remote operations, so less people are needed on the wellsite, Mr Menon says.

Geothermal wells might be drilled in a 'factory approach', like US shale wells were.

There can also be ways to retrofit existing wells to produce geothermal heat, including from having a working fluid circulating down the well, getting heated, and coming up again, rather than producing hot water.

Dry oil wells or wells which no longer produce oil and gas could also be repurposed for geothermal.

Close partnerships are also very useful in making geothermal projects more economic, such as between service companies and operators, he says.

The economics can also be improved by developing multiple revenue sources. The heat can be used firstly to generate electricity, and then 'leftover' heat can be used to heat local buildings, he says.

Baker Hughes and geothermal

Baker Hughes' strategy is to act as a 'technology provider' on geothermal projects, helping to reduce risks, and better connect subsurface expertise and systems with surface expertise and systems, he says.

It can bring in its expertise in well construction, pumps, compressors and turbines, and work out how the process can be made more efficient.

With its broad expertise on different areas of geothermal, 'We bring more to the table,' he says.

Baker Hughes can use its subsurface expertise to help ensure wells are placed in the best location, including to take advantage of fracture networks, he says.

Baker Hughes has made an investment in Baseload Capital, a Swedish investment fund specialising in geothermal, with plans to spread geothermal expertise around the world.

In December 2022, it launched the 'Wells2Watts' consortium in the US, to explore technologies for transforming abandoned wells for geothermal energy production. Members include Continental Resources, INPEX and Chesapeake Energy Corporation. It has a test well in Oklahoma, where it is able to evaluate a closed loop solution.

In February 2023, Baker Hughes and Fortescue Future Industries announced a MOU to work together on green hydrogen, green ammonia and geothermal projects.
For geothermal, Baker Hughes will provide its expertise in geothermal subsurface analysis, geothermal well services, emissions measurement, monitoring and carbon reinjection, as well as digital solutions for asset performance management and process optimization.

In March Baker Hughes announced that it is working together with Egg Geo, a company specializing in engineering feasibility and network design for geothermal district heating projects, based in Florida. The two companies would together provide an 'integrated solution for geothermal projects from conception to delivery.'

Lithium as a by-product

Dr Horst Kreuter, geologist and managing director of Vulcan Energy Resources of Karlsruhe, Germany, is exploring if it is possible to extract battery grade lithium from geothermal fluids. This would provide a second possible revenue source, as well as providing a much needed alternative source of lithium.

Mr Kreuter has been working in geothermal for 25 years. He explained the project talking at a technical session at the Baker Hughes Annual Meeting in Florence in January.

Mr Kreuter's company uses an aluminium sorbent to extract lithium - this process can work at concentrations down to 100mg / litre.

There are not many parts of the world with subsurface waters containing lithium, he said. In the Alsace / Rhine valley of Southern Germany and France, the water is 180mg per litre of lithium, enough to make lithium extraction viable.

It is also necessary to have rocks with high permeability for the overall process to be viable, he says. There are parts of Germany with waters containing up to 300mg/litre lithium, but low rock permeability, so fluids cannot be produced.

Mr Kreuter is keen to develop relationships with the oil and gas industry, in particular to involve industry expertise in reservoir management and drilling. This can also be a way for oil and gas companies to continue in business in central Europe if oil and gas production becomes uneconomic, he says.

Associated Companies
» Baker Hughes (BHGE)

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