Geothermal power is probably the lowest-profile renewable energy option we have. It doesn't get nearly the attention that wind and solar power do--even from me--although it has been quietly cranking out about 0.4% of the US electricity supply for many years. That roughly matches the expected output of all the wind turbines likely to be installed here this year. I've commented previously on the striking similarities between geothermal exploration and production and the processes and risk profile of oil and gas E&P, but I don't believe I've ever mentioned a small but potentially important overlap between the two: geothermal heat extracted from the fluids produced from oil and gas wells. The potential contribution of "geothermal hydrocarbon co-production" (GHCP) might not be as large as from conventional hydrothermal reservoirs or engineered geothermal systems (EGS), but this approach has the advantage of capitalizing on additional energy from a source that's already being exploited.

In its report on the US geothermal industry earlier this year, the Geothermal Energy Association listed five projects involving GHCP and related efforts to tap the mechanical energy of high-pressure gas reservoirs, or geopressured fluids. The Department of Energy has recognized this potential and provided partial funding for several of these projects under its stimulus programs. GEA also cited an estimate from Southern Methodist University's Geothermal Energy Program that GHCP from the onshore Gulf Coast region alone could provide up to 5,000 MW of reliable power. That doesn't include the potential for using the large volumes of produced water in new or abandoned wells to tap the energy of higher-temperature rock formations underlying the hydrocarbon reservoirs using engineered geothermal systems (EGS).

The benefits of these approaches for low-emission power generation seem obvious, but it's worth considering why they might be attractive for oil and gas companies that are mainly focused on producing hydrocarbons for processing and sale, not electricity. GHCP addresses two key, related problems of many mature US oil fields. The first is water, which in many cases is injected underground as part of "secondary recovery", in order to increase the total fraction of hydrocarbons recovered from an oil field during its life. Together with water already present in these reservoirs (as distinct from the shallower aquifers used for drinking water and irrigation) this contributes to high "water cuts"--large volumes of water produced with the oil and gas that sometimes exceed oil volumes by a factor of 20:1. If this water is in contact with hot rock, it will bring some of that heat to the surface, where it can be recovered using binary geothermal technology. SMU estimated total produced water from US oil production at 50 billion barrels per year.

That's an enormous volume of water for the industry to handle and dispose of in an appropriate manner, and it gives rise to another problem that GHCP can help tackle. It takes a lot of electricity to pump all that water out of the ground, process it, and pump it back down. That power must either be purchased or generated onsite. If GHCP can just provide enough power to cover an oil field's operating power requirements, it represents a significant savings in the cost per barrel of oil produced. The SMU study suggests that there is also an opportunity for net electricity production, representing another potential revenue source for an oil project. Depending on the investment required, that could improve overall project economics.

I see another, less obvious benefit for geothermal hydrocarbon co-production. The US geothermal industry hasn't attracted anything like the investment that's gone into wind and solar power; it is starved for capital. As a result, it can only tap a small fraction of the potential power from US hydrothermal reservoirs, let alone the orders-of-magnitude larger potential of EGS. If these projects don't offer quite the economic payoff of oil and gas production, they at least closely resemble what the oil industry does day in and day out, while being almost completely unlike what firms involved in wind, solar or even biomass power do. GHCP could be a natural bridge for more of the oil and gas industry, which its much larger capital, skills and technology base, to expand into geothermal energy that doesn't involve any hydrocarbons.