Late in 2008, George Bush’s Department of Energy committed $6 million to Sausalito-based AltaRock Energy (as part of a consortium…see addendum below) for energy production using Enhanced Geothermal Systems (EGS). EGS technology works by by injecting water down a deep well into hot rock, fracturing the rock and creating steam which is piped to the surface where it turns turbines and generates electricity. Yesterday, the project was halted due to drilling problems.
From an AltaRock Energy press release dated September 2, 2009:
AltaRock Energy Inc. has encountered a number of physical difficulties in the drilling of well E-7, the first well planned as part of its engineered geothermal systems (EGS) demonstration project in the Geysers, resulting from geologic anomalies particular to the formation underlying this well location.
Problems with the drilling, executed by Nabors Industries under contract from AltaRock, were made public on August 19 in the New York Times:
[T]he project has been delayed because the bit on a giant rig, meant to drill more than two miles underground, has struggled to pierce surface rock formations, [anonymous federal] scientists said. The bit has snapped off at least once and become repeatedly fouled in a shallow formation called cap rock, and the drillers have twice been forced to pull it out and essentially start the hole over again.
The Times and Reuters also noted that AltaRock, in addition to the DOE commitment, has raised $30 million in venture capital from investors such as Google and the investment firms Khosla Ventures, Advanced Technology Ventures, Vulcan Capital, and Kleiner Perkins Caufield & Byers.
Further review of AltaRock’s drilling had been requested by Anderson Springs Community Alliance (ASCA), a group of citizens concerned about the increase in local earthquakes since large-scale water injection began in the late 90’s. Anderson Springs is just a few miles from AltaRock’s drill site. ASCA president Jeffrey Gospe, a resident of Santa Rosa and Anderson Springs, said that federal regulators disclosed that once the AltaRock/Nabors rig got stuck for a third time after only 800 feet of new drilling, AltaRock halted the project and released the rig. He guessed that AltaRock had been spending about $100,000 per day, and had already gone through $12-14 million of their capital. “I think there’s now a 50% chance that AltaRock will pull out of the Geysers completely and move to Nevada or elsewhere, someplace that doesn’t have such a high level of seismicity.”
In July, in response to such concerns about engendering large earthquakes, the Department of Energy and the Bureau of Land Management forbade AltaRock to fracture rock until completion of a study comparing the potential for engendering large earthquakes in The Geysers with the experience of a similar EGS project near Basel, Switzerland, that did create a 3.2 quake in 2006. After that event, the Basel project was shut down. The DOE/BLM report, according to Gospe, is expected to support AltaRock’s claim that mitigation of earthquakes is practicable., but with AltaRock’s cessation of drilling, the study may now be less important. The real question, Gospe said, is, “Can you really believe that AltaRock can do this with no seismic effect, if they can’t do the easiest part of the project? They could not even complete the drilling phase in an area where wells 8,000 feet deep are routine.”
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Note: EGS is a acronym for “Enhanced Geothermal Systems” and “Engineered Geothermal Systems,” both of which refer to the same technology.
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Prompted by John Stewart’s comment below, I changed the opening to this post. It used to read (incorrectly):
Late in 2008, Barack Obama’s Department of Energy, led by Nobel laureate Steven Chu, committed $6.25…
Here is the relevant information from DOE:
AltaRock Energy Inc. and Northern California Power Agency, University of Utah, Texas A&M University, Science Applications International Corporation, Temple University (Seattle, WA): to use an innovative stimulation process to create an EGS reservoir that will drill below the permeable zone, stimulate in the contained zone with infrastructure in place, and increase power production (up to $6,014,351)