The Covid-19 global pandemic & the economic crisis that followed from it has been hard on everyone. We’ve seen millions of people lose their jobs, certain industries shuttered and so many families put into the hardest times they’ve ever seen, all as a part of our fight to slow this disease. That’s pushed governments at all levels to react and step into the void, spending on a level that we haven’t seen since the Second World War. It’s been an unprecedented moment and it’s brought many ideas to the table in response.
While it’s been very hard for industries that were doing alright before the pandemic, it’s been catastrophic for those that we already struggling or worse going into it. That’s meant that people working in those sectors have been hurting that much more than before and their communities suffering. That’s especially true for a province like Alberta, where the crashing price of oil exacerbated the struggles that sector was already facing. Those struggles had already been pushing some in the sector to look at ways of diversifying their businesses and to help get people back to work. One idea to help in that has been making the rounds that much more lately, with another piece coming out today from CBC Calgary on the topic. It’s an interesting prospect, one that’s time might be here:
I’ll admit up front that the idea of geothermal production and the potential re-use of existing orphaned oil & gas wells is one that I have been a fan of for a long time. When I worked on the natural resources file for the NDP’s critic on the topic in Ottawa, I thought this was an elegant potential idea that could help. This is an idea that’s being embraced more and more by experts across the board, both from the energy sector itself and the environmental movement. We’ve got trail-blazing Canadian companies like Eavor and environmental NGO’s like the Pembina Institute all talking about the potential of geothermal, which speaks to not just it’s potential economically, but it’s potential to cross the divide of our energy politics.
Geothermal energy production is common in places like Iceland and Indonesia and while Alberta’s geothermal potential isn’t as strong as those places, it’s still very good. And unlike other green energy technologies like solar and wind, geothermal is the only solution that is both clean and can deliver baseload energy to the grid. The issue of baseload has been a bugaboo for some when it comes to solar and wind, one that’s becoming less so because of battery and other energy storage technologies coming online. But still one thing that’s recognized about transitioning to greener energy sources is that we will need a mix and play to the strengths of regions.
While this geothermal potential has always been there, this moment might actually present a unique opportunity to take a big step forward in this technology. The federal government has already announced a $1.7 billion fund to help clean up orphaned and abandoned oil and gas wells in Alberta, Saskatchewan, and British Columbia. That funding will help with the remediation of those sites and put over 5,000 people to work. But while that work is going on, why not re-purpose some of those same wells for geothermal? In a piece published about a month ago, Eavor’s CEO John Redfern that with the right combination of early grants and energy pricing that speaks directly to geothermal (something that doesn’t exist yet), this new industry could “attract $4 billion in foreign investment capital, to create 400 MW of clean, dispatchable power, all the while employing 5,500 oil service workers for 4 years.”
Imagine that, creating a new “made-in-Canada” energy sector, one that could lead the world and turn into a major export sector in green energy. This is the kind of thing that Canadians have been talking about for so long, yet so far it hasn’t happened. One of the biggest barriers to that right now, that the CBC Calgary piece pointed to, is the lack of legislation around this energy. Everything from rules for regulatory approval, royalties and ownership of geothermal resources simply don’t exist in Alberta or elsewhere. Again this is where a province like Alberta could have a leg-up, by simply being able to build off of existing oil & gas legislation, as the basics of geothermal production are similar to drilling for oil. And on the federal side, one way to boost investment in this sector would be to extend exploration tax credits already available to mining and oil & gas to geothermal production.
And with all of that, you could create a new energy sector in this country, one that will allow many from the oil & gas sector to use their already-existing stills and knowledge. It’s not a panacea for the troubles that ail oil & gas, but it’s something that’s got potential in these dark days. Over a year ago we saw the start of construction of Canada’s first geothermal plant in Saskatchewan, but that seems to be an outlier so far. In an age of governments desire for green growth, this seems like a no-brainer. This is one of the rare technologies that seems to have the ability to bring all sides together and do a lot of good for all. As we start to try to exit the current crisis, we’re in and we look towards ways to not just boost our economy but make it more resilient for the longer run, geothermal seems like a great opportunity to help on many fronts. The question remains if governments, both Federal and Provincial, will jump on the opportunity. This is a rare opportunity where despite all the struggles we face, the components to make an idea like this work can all fall into place. When I see geothermal, that seems to be the case. It’s an idea that’s well suited to this moment, now we’ll see if governments agree.