Deep Earth Plans Canada’s First Geothermal Power Amid Oil Wells

Deep Earth Energy Production Corp., a closely help developer, is planning Canada’s first geothermal power plant that will tap into heat resources underneath oil and natural gas fields in Saskatchewan, according to Chief Executive Officer Kirsten Marcia.

The project may cost C$35 million ($33.9 million) and would have 5 megawatts of generating capacity, Marcia said today in a telephone interview. Construction is expected to begin in 2014.

The region is already home to oil and gas production companies that have studied the geology and documented reserves of heat energy needed to run geothermal power plants since the 1950s. Deep Earth may eventually build additional facilities in the area, some with as much as 20 megawatts of capacity, Marcia said.

“We’re drilling into a giant, deep hot ocean that’s already well known,” she said. “This is a 45-story-thick deep, hot aquifer that literally goes for hundreds of kilometers.”

Deep Earth, based in Saskatoon, Canada, plans to tap into heat resources at least 2 miles (3.2 kilometers) below the surface in the Williston Basin, an area encompassing parts of Montana, North and South Dakota and Saskatchewan.

The region has about 35,000 wells and oil and gas producers bring up large amounts of heated fluids that are reinjected into the ground, Marcia said. “The oil and gas industry today is a hot water industry with a 5 to 10 percent oil cut,” she said. “This is wasted energy that for 60 years has been ignored.”

Geothermal Systems

Deep Earth’s power plants will use binary-cycle technology, in which heat from geothermal fluids is harnessed to produce vapor that drives a turbine.

SaskPower International Inc. is expected to buy the electricity, though no contract has been finalized, Marcia said. Saskatchewan’s government-owned utility plans to contribute to a C$2.2 million engineering study this year to evaluate the region’s geothermal-energy potential.

Deep Earth has raised about C$2 million from investors in Saskatchewan, Alberta and Ontario with experience in drilling and resource development, Marcia said. She wouldn’t name them.

The U.S. is the world’s top producer of geothermal power, and “it looks quite odd that Canada doesn’t have a single megawatt yet,” Marcia said. “Canada is late to the party.”

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editor responsible for this story: Will Wade at wwade4@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.