Renewable Energy Resources: Geothermal
by abenvirolaws in Energy Law
by abenvirolaws in Energy Law
Geothermal energy uses heat energy that is generated and stored in the Earth’s crust. This energy is captured and is then used for heating or electricity.[1] Geothermal has a lot of potential benefits:
It is also well-suited to Alberta because of our oil and gas industry. Information from this industry can supply us with extensive knowledge of the subsurface of our earth. In addition, there is a large workforce made up of geologists, engineers, drillers and other oil patch workers in Alberta, many of whom have skills easily transferable to geothermal.[3] Alberta also has an increasing number of orphan wells – or wells whose operators have gone bankrupt or cannot be found – and geothermal could help put some of these wells back to work, taking some of the strain off the overburdened Orphan Wells Association which is otherwise responsible for the clean-up.[4]
Geothermal has significant upfront costs and risks that make it difficult to develop without government financial support. Once developed however it has the benefit of not being intermittent like solar and wind. This means that it can produce power 24 hours a day/7 days a week.
Geothermal plants are also long-lasting. Power plants in California that were built in the 1970s and in New Zealand that were built in the 1950s are still operating.[5]
Currently, there are no active commercial geothermal locations in Canada, although there is one in the works in Saskatchewan.[6] We continue to lag behind other countries such as Iceland and New Zealand, or states such as California, despite our substantial geothermal potential. Canada is still the only country on the geologically active Pacific rim that has not yet accessed its geothermal potential.[7]
However, there is some positivity with a new Saskatchewan site under construction. The Saskatchewan site was announced when, in Spring 2017, SaskPower, the principal electric utility in the province, signed a power purchase agreement (PPA) with DEEP Earth Energy Production Corp.[8] This was the first PPA in Canada issued for a geothermal power facility.[9] Initial testing has shown that this site has significant geothermal potential and DEEP Earth Energy Production Corp is continuing to move forward with the project.[10]
Alberta is also working on retrofitting an oil field with geothermal technology in order to power the field and provide energy for the entire operation.[11]
In addition to these projects, there have been a few legal and political moves in recent years that have attempted to increase support for geothermal production in Canada. For example, the 2017 Federal Government Budget allowed more types of geothermal projects to take advantage of tax breaks and incentives[12] and an Alberta Member of Parliament tabled Motion 122, a private members bill, that called on the federal government to encourage geothermal initiatives to clean up orphaned and abandoned wells in western Canada.[13]
However, certain major legal issues still exist, the first of which is a lack of legislation that defines what geothermal actually is – is it water or is it a mineral? In conjunction with this, is the question of whether we can own heat and, if it can be owned, who would be the owner – the owner of the water or the owner of the minerals?
One challenge is that although geothermal is becoming more common across the globe, there is still no consensus on how to define and regulate geothermal resources.[14] In fall 2020, the Alberta government released the Geothermal Resource Development Act which defines geothermal as “the natural heat from the earth that is below the base of groundwater protection”.[15] This Bill only received royal assent in December of 2020 so it is still too early to see how this will affect the geothermal industry.
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[1] Natural Resources Canada, “About Renewable Energy” (29 June 2016) Government of Canada online: http://www.nrcan.gc.ca/energy/renewable-electricity/7295#what.
[2] S.E. Grasby et al., “Geothermal Energy Resource Potential of Canada” (2012) Geological Survey of Canada Open File 6914 at VI.
[3] Carol Linnit, “Geothermal Could Put Thousands from Alberta’s Oil and Gas Sector Back to Work” (4 May 2016) The Narwhal online: https://thenarwhal.ca/geothermal-could-put-thousands-alberta-s-oil-and-gas-sector-back-work/.
[4] Matthias Alleckna, “Does geothermal energy have a place in Alberta?” (23 October 2017) energyrates.ca online: http://energyrates.ca/geothermal-energy-place-alberta/; Matt Jeneroux, “Geothermal will unlock the hidden potential of Alberta’s orphan wells” (3 May 2017) online: http://mattjeneroux.ca/mp-matt-jeneroux-tables-motion-to-encourage-geothermal-development/; Orphan Well Association, “Welcome to the Orphan Well Association” online: http://www.orphanwell.ca/about/.
[5] U.S. Geothermal, “About Geothermal” online: http://www.usgeothermal.com/about.
[6] Cory Coleman, “Feds providing $25m for geothermal power plant after deepest well in Sask. history drilled” (11 January 2019) CBC News online: https://www.cbc.ca/news/canada/saskatchewan/deepest-well-sask-history-geothermal-plant-1.4975061.
[7] Alberta Power Law, “Is There a Place for Geothermal Energy in Alberta’s Electricity Future?” (4 July 2017) Alberta Power Market online: https://albertapowermarket.com/2017/07/04/is-there-a-place-for-geothermal-energy-in-albertas-electricity-future/.
[8] DEEP Earth Energy Production, “Developing Geothermal Resources to Meet Increasing Energy Needs with Sustainable, Clean and Renewable Energy” online: https://www.deepcorp.ca/>.
[9] DEEP Earth Energy Production, “Developing Geothermal Resources to Meet Increasing Energy Needs with Sustainable, Clean and Renewable Energy”.
[10] DEEP, “Canada’s First Geothermal Production and Injection Well Test Exceeds Expectations – First 20 MW Facility in Design Phase” (10 September 2020) online: https://deepcorp.ca/canadas-first-geothermal-production-and-injection-well-test-exceeds-expectations-first-20-mw-facility-in-design-phase/.
[11] Katie Willis, “Looking for hot water: Geothermal pilot project marks new era for energy in Alberta” (25 February 2019) University of Alberta Faculty of Science online: https://www.ualberta.ca/science/science-news/2019/february/geothermal-energy-oil-field-pilot.
[12] Drew Anderson, “Alberta geothermal industry celebrates federal budget but challenges remain” (24 March 2017) CBC News online: http://www.cbc.ca/news/canada/calgary/alberta-geothermal-tax-incentives-federal-budget-challenges-1.4039677.
[13] Matt Jeneroux, “Geothermal will unlock the hidden potential of Alberta’s orphan wells”.
[14] Ingimar G. Haraldsson, Legal and Regulatory Framework – Barrier or Motivation for Geothermal Development? (March 2012) United Nations University Geothermal Training Programme at 1 online: http://www.os.is/gogn/unu-gtp-sc/UNU-GTP-SC-14-17.pdf.
[15] Bill 36, Geothermal Resource Development Act, 2 Sess, 30th Leg, Alberta, 2020, s 1(1)(d).
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