Natural Resources Committee on April 4th, 2017

[Alison Thompson]

Absolutely.

We've talked about having to address some of the risks with geothermal, but in one sense geothermal is very predictable. Every three kilometres it's about 100°C no matter where you go on earth. I could be drilling in Poland or I could be drilling in Hinton, and if I go down three kilometres I'm going to hit about 100°C. In the Hinton area, and all across Alberta, in the Rocky Mountain Trench, some of the wells are five kilometres deep, so they're already at the 150° level. There are some wells in northeast B.C. that approach 180°C. In our industry we'd say they found geothermal, but what they're after, of course, is natural gas.

I'll go back to this idea about using infrastructure for more than one thing. The well has already been drilled, mainly for natural gas prospecting, and now we want to co-produce that well to not only use the natural gas and pipeline that away, but to send the hot water waste from that well first through a community. We do a heat exchange at the community, so their heat is transferred into something more benign, like a glycol loop. They can use that for productive measures as opposed to having to burn fossil fuels, and then that water is returned to the oil well or the gas well, where it had come up originally, and the oil and gas company itself was already processing it and dealing with it on site. It is a very closed loop. We're sending heat away to a community in the form of water, but the water itself comes back to the disposal well of the oil and gas site.

We have, literally, 800,000 wells that have been drilled in Alberta alone, not to mention Saskatchewan and northeast B.C. Right now there are several tens of thousands that are abandoned and several tens of thousands that are suspended. The producers have gone bankrupt because of commodity prices, not because the well went bad. We can repurpose what's coming out of those wells to perhaps just be a geothermal product, or the geothermal product may add enough revenue to now allow the operator to also sell its natural gas at a profit.

We're looking at having more revenue per infrastructure, so you get more capital intensity, in a positive way, out of the infrastructure. Hinton is really the poster child in Alberta, as well as northeast B.C., for infrastructure that's already penetrated useful temperatures to make both power and heat.

[The Chair, Liberal, James Maloney]

You have about a minute and a half left if you want to use it.

[Jim Eglinski, Conservative, Yellowhead, AB]

Go ahead.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Thanks for the opportunity.

My area of Valemount is a region that is looking at geothermal as potentially closing the loop. It's at the end of a transmission line, and one of the weaknesses is if a power line goes down, you lose all your power, and you don't have the benefit of a backup loop. I see geothermal as potentially addressing these kinds of energy needs wherever.

You said when you drill down 3,000 metres, you're guaranteed to have that certain level of temperature. Can you talk a bit about that ability to really put geothermal wherever? Costing is a concern as Mr. Strahl had been mentioning. We'd met before and we'd talked, too, about needing government funds to make it profitable or make it viable. Can you speak to current projects that are viable today, and that are occurring, as you said, the two that you mentioned?

[The Chair, Liberal, James Maloney]

Very quickly.

[Alison Thompson]

Sure. Again, there's that analogy...geothermal anywhere...3,000 metres or three kilometres down will be at 100°C. But like oil and gas, oil and gas is more plentiful in some areas and geothermal is more plentiful in other areas. In this particular location in Valemount, it's a triple point of three mountain ranges, and very active for geothermal, so you're probably going to have to drill wells that are well less than three kilometres. Valemount is on the end of a long radial line, a 300-kilometre line, of BC Hydro. Even though it's grid-connected, it's very unstable, and having another form of baseload power.... We're not like wind and solar. We actually produce all the time. We're more like a dam. But what MP Zimmer didn't mention is that Valemount itself is not on a natural gas line. It trucks in propane from Alberta. In that way it's off-grid for heat. With the ability to have a baseload power to back up a BC Hydro transmission system and to avoid having to bring in propane, and then all the extra emissions with just the transportation, you really get two birds with one stone, and, of course, increase the vibrancy of the community with whatever they do with the heat. In this case it might be food; it might be for resorts that may be going into the area. It's an enabler. Geothermal energy is an enabler, which is why the countries that are using it really use it in the merit order. They use geothermal energy first, then hydro dams, and then things like wind and solar and natural gas peaking. On the merit order, it's usually sought after and it's a primary form of energy.

[The Chair, Liberal, James Maloney]

Okay, thank you.

Mr. Casey.

[Bill Casey, Liberal, Cumberland—Colchester, NS]

Thank you, Mr. Chair.

Thanks very much for attending the committee today.

I'm going to focus on geothermal. You mentioned Cumberland Energy Authority. That's in my riding. Just for the committee, for 100 years miners dug coal mines in Springhill, Nova Scotia; and there are miles of mines that go down miles.

[Alison Thompson]

Yes.

[Bill Casey, Liberal, Cumberland—Colchester, NS]

They're now sealed off after explosions and fatalities. They were sealed off in the 1950s. They're filled with water at 20° to 25°.

There are several industries that have used that incredible resource, but it's never seemed to me that we've maximized the purpose. You've outlined a broader vision of the use for that geothermal energy. Could you just expand on some of the opportunities that might be there that we've missed?

[Alison Thompson]

Sure. Springhill was a beneficiary of geological survey of Canada funds. This is going back a few decades. It was one of the poster-child projects they funded. Currently Springhill, Nova Scotia, through the Cumberland Energy Authority, has a district heating system. There are many small businesses on the system, including a greenhouse and a plastics manufacturer. You can see the variety of different commercial and industrial uses for that heat.

If you think about a place like Nunavut, a couple of weeks ago it was -26°C. Maybe Nunavut doesn't have Canada's greatest geothermal resources, and maybe Nunavut cannot make electricity, but can they get 30°C water that can bring, as a preheat, energy up to that level, and then perhaps still need diesel to top it up to take it to a more useful level for electricity? Absolutely. What we've done is we've taken it to about 50°C. A diesel would have had the supply; instead, it does it more naturally with geothermal. So even in places where you can't replace diesel or natural gas with geothermal, you can at least do it as a pre-treatment and significantly address the volume of fossil fuels that are being burned.

Back to the question around imagineering, there are currently over 200 uses of geothermal in the world, everything from livestock heating to the greenhouses, the fish farms we talked about, cement kilns, pulp and paper, and even heating roads and sidewalks to cut down on accidents and insurance claims as well as to make main street more vibrant so people could actually shop at any time. That's what Iceland has really pioneered. If you go there at any time of the year, there's no snow in the downtown core, because they're piping this kind of waste heat that costs very little to use, but it actually increases their economic activity downtown.

If you can think about it, it can be done. Why don't we do it in Canada? Sometimes it's permitting and sometimes it's this kind of parity we don't enjoy with the other renewables. But really, we're not being entrepreneurs in this sense. We need to tell people that the resource exists, the skills exist, and it's available. We say, “What would you do with the heat?” The best answer I ever heard to the question, “What would you grow with geothermal energy?” was “a whole community”.

[Bill Casey, Liberal, Cumberland—Colchester, NS]

For years we have tried to attract attention to this geothermal. A funny thing happened a couple of years ago. Five scientists came all the way from Chile just to see the geothermal in Springhill because it's so unique. They learned a lot from that visit. They were fascinated by our ice stadium where every seat is heated because it doesn't cost anything.

[Alison Thompson]

That's right.

[Bill Casey, Liberal, Cumberland—Colchester, NS]

I think it's probably the only one. It was amazing to me that they came all the way from Chile, but it's hard to get people from the capital city of our province, Halifax, to come to look at this geothermal and consider the advantages.

Can your organization, CanGEA, help find a way to utilize this incredible resource and reduce emissions in a sustainable way? Is that what CanGEA does?

[Alison Thompson]

We do. Because there is a dearth of reports available, we filled that gap for some of the provinces and territories and did a gap analysis of what you would grow, the most profitable thing to grow, or other uses of geothermal. Our most recent publication is for the Yukon government. That was funded by CanNor, which is obviously a federal fund.

We're just stealing ideas from other countries and Canadianizing them. That's certainly the inspiration. Also, the workshops we give really give people the tools to think out of the box and help them work through the economics of it and the policy barriers that may be in place.

[Bill Casey, Liberal, Cumberland—Colchester, NS]

What can the Government of Canada do, more than they are now, to put a spotlight on geothermal as an alternative energy source?

[Alison Thompson]

I think we need to get a bells and whistles demonstration going. It is a little bit of “build it and they will come”. People need to—

[Bill Casey, Liberal, Cumberland—Colchester, NS]

Like Springhill?

[Alison Thompson]

Like Springhill. There are also projects in British Columbia that are permitted and ready to go. Just show people what you can really get out of a project: again, the heat, the power, the diversity of jobs, the main street activity, and perhaps these other side industries. Show people that it's a Canadian resource and a Canadian talent that can drill with less risk and less cost than some other countries and how it can help in strategic locations like our north, communities at the end of a transmission line, or communities that may be off-grid for natural gas.

[Bill Casey, Liberal, Cumberland—Colchester, NS]

You mentioned a plastic factory.

[The Chair, Liberal, James Maloney]

We're out of time. You can do it really quickly.

[Bill Casey, Liberal, Cumberland—Colchester, NS]

You mention a plastic factory and it's Ropak Can Am. They have factories all over the world and the one in Springhill is the most efficient because of their very low energy costs. It wasn't a question, but a comment.

[Alison Thompson]

Absolutely.

[The Chair, Liberal, James Maloney]

Thank you very much to our witnesses. Your evidence is very helpful and I think we can all agree we're performing up to the ideas.

We will adjourn for the day. Thank you.