ThermaSource

Hot stuff┬áGeothermal power is a growing renewable energy source, which is good news for ThermaSource, Inc., a leading geothermal drilling, engineering and consulting firm, executive vice president Jim Hanson tells Ruari McCallion. No one who has watched a volcano erupt, experienced an earthquake or watched a geyser blow off steam can fail to be impressed with the power of the planet. The challenge is, as always, how to control and tap it.  Geothermal power generationÔÇöextraction of heat from the earth, one of the planetÔÇÖs renewable energy sourcesÔÇöhas been around for nearly 100 years in various parts of the world, and itÔÇÖs approaching its 40th anniversary in the US.The leaders in the geothermal field have historically been Iceland, New Zealand and Italy, which is only natural, since they have hot springs and volcanic activity in abundance. However, this has changed over recent years. Some universities dropped their geothermal programs when the industry was slow; however, University of Auckland recently re-established its geothermal certification program.ÔÇ£The United States now has more geothermal power [megawatts in production] than Iceland and New Zealand combined and is the number one world producer of geothermal energy,ÔÇØ says Jim Hanson, executive vice president of ThermaSource, Inc. ÔÇ£The US built its first geothermal power plant in the late 1960s, in the geysers in Northern California. Northern California is located right along the Pacific ÔÇÿRing of Fire,ÔÇÖ a fruitful source of geothermal power, as geological activity is closer to the surface than, say, the Midwest. But itÔÇÖs possible to tap into power pretty much anywhere on earth; it just depends on how far down youÔÇÖre prepared to drill. ThermaSource has also worked in the Philippines, Mexico, Indonesia, Costa Rica, El Salvador, Australia, Japan, Canada and the western United States, all of which are located near or on the Ring of Fire.ÔÇØ Today could be regarded as the second coming of geothermal power in the US. During the early 1970s, when the price of oil increased fourfold, many oil companies got involved in geothermal. As oil prices subsided, their interest waned. ÔÇ£The return on investment isnÔÇÖt fast enough for oil companies, I believe,ÔÇØ says Hanson. ÔÇ£With oil or natural gas, you drill the hole, start producing and haul or pipe the resource off to a power station or production facility. A geothermal bore requires a power station onsite before itÔÇÖs productive, so itÔÇÖs two to three years before you get a return.ÔÇØ In the US, 28 different states have mandatory Renewable Portfolio Standards (RPS). This requires a state to have a percentage of total energy produced originate from a renewable source. The new administration has mentioned a mandatory 10 percent RPS nationwide. The current RPS standards and the potential future RPS mandates are extra incentives for geothermal developers.Geothermal power is, in principle, quite simple. Wells are drilled to extract steam or hot water, which drives turbines to generate electricity. The largest geothermal power plant currently operating is 500 megawatts, though that may change when AustraliaÔÇÖs EGS project comes on line. In Australia, the talk is of 60,000ÔÇô120,000 MW from a ÔÇ£familyÔÇØ of turbines. EGS (Enhanced Geothermal Systems, also known as ÔÇ£hot dry rockÔÇØ) is a technology that has yet to be made commercially viable. The idea is to drill two wells close to each other, one production well and one injection well. The injection well first hydrofractures, or reactivates, the weaknesses in the rock, which creates a fracture system connecting the two wells, allowing the water that is injected through the well to flow throughout the hot dry rock. The production well then extracts the steam or hot water for power. Once EGS is proven commercially viable, geothermal energy can be drilled in nearly every region of the world, if you drill deep enough to find hot dry rock.With volatile oil prices, legislative pressure, and the reality that new resources are in short supply and in increasingly hostile areas, the tide is turning, and major companies are reviving their interest in renewable energy sources. ÔÇ£Chevron has geothermal operations in the Philippines and Indonesia; Shell is active in El Salvador; ConocoPhillips and ExxonMobil are actively talking abut geothermal,ÔÇØ Hanson says. ÔÇ£Calpine has operations in the Geysers, and CalEnergy is involved in Utah and Nevada, as well as Southern California. TerraGen Power, a New York company, is expanding its operations throughout the western US.ÔÇØ All this activity is good news for ThermaSource, which was founded in 1980 by Louis E. Capuano Jr. The company began its own drilling operations in 2006, when the chairman and CEO decided he no longer wanted to wait in line for rigs from drilling companies, who tend to be focused on oil and natural gas. ThermaSource started work on six new projects in 2008, ranging from the geysers area in Northern California to Truckhaven in Southern California. ThermaSourceÔÇÖs recent overseas operations included work with the West Indies Power Company as a contractor for its projects in the Caribbean, and it is currently pursuing three other Caribbean islands for geothermal production.ÔÇ£The formation and depth of the well is determined by the geology of the region,ÔÇØ says Hanson. ÔÇ£On the Pacific Rim, you may have to drill between 3,000 and 9,000 feet. Northern California is most productive between 8,500 and 11,000 feet. If youÔÇÖre drilling in the Midwest, you may have to go down as much as 25,000 feet to reach hot rock.ÔÇØ ÔÇ£In June 2006 there were three of us working for the company. We bought one service company and formed three more; weÔÇÖre trying to be a one-stop shop for our customers. As of mid-December 2008, we had 273 employees. If the investment atmosphere goes where we want it, weÔÇÖll have 350 people by the end of 2009,ÔÇØ Hanson says. ÔÇ£We own nine rigs at present and operate two more. The newest rig for our fleet comes off the production line at the end of next quarter.ÔÇØ ThermaSource has a combined 120 years of geothermal drilling experience among its senior management team. This experience is an invaluable resource for energy companies, geologists and state authorities alike. Revenues from drilling have risen 65 percent between 2006 and 2008. If plans are realized, 2009 will see an additional 50 to 65 percent increase in revenue. ┬á