| OGWG - First Semi-Annual Report |
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| Statement of Objectives |
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October 2004 through March 2005
Geothermal Energy Outreach in the state of Oregon
First Semi-annual Report
May 10, 2005
The Oregon Department of Energy (ODOE) provides information and services to the geothermal community and other stakeholders. By leading the GeoPowering the West effort for Oregon, ODOE maintains working relationships with others, including but not limited to: Tribes, Oregon Department of Geology and Mineral Industries, USDOE, U.S. Forest Service, Bureau of Land Management, National Park Service, the Oregon Institute of Technology, Geothermal Resources Council, and the Geothermal Education Office. This effort will help expand direct use of geothermal energy in Oregon and may lead to overcoming barriers to geothermal power plant developments.
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| Program activities |
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The following highlights the principal accomplishments during the first half-year starting October 1, 2004 through March 31, 2005:
- We organized the first Geothermal Working Group meeting on November. 9. We sent multiple mailings to interested parties, made the meeting arrangements and discussed the first draft of the Oregon Geothermal Action Plan with several stakeholders. We took the Idaho Geothermal Energy Development Strategic Plan’s Proposed Activities as a starting point to begin drafting an Oregon Strategic Plan. Out of eight strategies proposed in Idaho, we dropped two, leaving six for the first plan version. Thirty-nine people showed up for the event.
The agenda was as follows:
09:00 – 09:15 Welcome/Introductions – Carel DeWinkel, Oregon Department of
Energy
09:15 – 09:35 GeoPowering the West Initiative – Status Report, Curtis Framel,
USDOE
09:35 – 09:45 Oregon Geothermal Outreach, Carel DeWinkel, ODOE
09:45 – 10:05 Discussion of the state’s Draft Renewable Energy Plan, Carel
DeWinkel, ODOE
10:05 – 10:30 Review Actions Items from Collaborative meeting July 2003, Alex
Sifford, Ecos Consulting
10:30 – 10:45 Break
10:45 – 11:05 Industry Perspective/GRC Section Activities, Al Waibel, Columbia
Geoscience
11:05 – 12:00 Discuss the draft OGWG Action Plan
12:00 – 01:15 Lunch (on own)
01:15 – 02:30 Discuss draft OGWG Action Plan and consider committee creation
02:30 – 02:45 Break
02:45 – 03:45 Refine OGWG Action Plan goals
03:45 – 04:00 Discuss next steps
We discussed all six proposed strategies as stated in the OGWG Action Plan and made some revisions. Other comments were solicited via email for discussion at the next meeting. The revised draft is shown in Appendix A.
- We provided input to Bruce Green of the National Renewable Energy Laboratory for a two page GeoPowering the West fact sheet on Oregon.
- The second working group meeting was held in Bend on February 9th, 2005. The Agenda was as shown below:
09:00 – 09:15 Welcome/Introductions – Carel DeWinkel, Oregon Department of
Energy and Alex Sifford, Ecos Consulting
09:15 – 09:30 Bradley Winters, Board of Commissioners, Lake County,
“Lake County’s Interest in Geothermal Development.”
09:30 – 09:50 Jim Walls, Lake County Resources Initiative,
“Lake County Geothermal Projects.”
09:50 – 10:10 Andrew Stuedli, SC Oregon Economic Development District,
“Klamath county geothermal projects.”
10:10 – 10:30 Scott Aycock, Business Alliance for Sustainable Energy, Central
Oregon.
10:30 – 10:45 Break
10:45 – 11:15 Gene Culver, Geo-Heat Center,
“What Information is Available and How do we Use it?”
11:15 – 11:45 Jim Manion, Warm Springs Power Enterprises, “Renewable Energy
Projects.”
11:45 – 01:00 Lunch (on your own)
01:00 – 01:30 Al Waibel, PNW Chapter of the Geothermal Resources Council,
“Review of Newberry exploration and suggested next steps.”
01:30 – 02:00 Bill Kopacz, Midstate Electric Coop., “Midstate’s interest in Distributed
Generation.”
02:00 – 02:30 Steve Munson, Vulcan Power Comp., “Lessons learned from RPS
promotion in other states.”
02:30 – 02:45 Break
02:45 – 03:45 Refine OGWG Action Plan – Two Breakout sessions: Electricity
generation and Direct Heat
03:45 – 04:00 Brief report of each break-out session
04:00 – 04:15 Wrap up and Discuss next steps
Highlights of the meeting:
Carel DeWinkel, Oregon Department of Energy started the meeting at 9:00 A.M. with Welcome and Introductions. Carel discussed the current OPUC rulemaking for 10 MW and less renewable power plants. The process is yielding positive results that should allow transparent bidding. He also briefly discussed the Farm Bill Value-Added program announcement.
Jim Walls, Lake County Resources Initiative, a non-profit 501(c)3 organization that has done some forest health work in the past. Jim, who is also a Lakeview Town Council member, gave a presentation on “Lake County Geothermal Projects” which will be posted on the ODOE website. Lakeview has one geothermal greenhouse operating now. Past efforts include short-term power generation at Hammersly Canyon and lobster farming. Future geothermal direct use efforts are underway at a new prison west of town. Western Water Development drilled a 600 ft 200°F, 300 gpm production well, cased to 200 ft. It may be capable of producing 35 million Btu per hour of heat. Also included is an injection well; three heat exchangers with one for the prison and the remaining two for additional development. Their goals include heat for an industrial park, schools, a hospital and fish farms,
Andrew Stuedli, South Central Oregon Economic Development District, gave a presentation on “Klamath County Geothermal Projects.” His agency is marketing geothermal energy to industries using a DVD highlighting existing firms and applications. Borrowing from a local engineer, Klamath and Lake Counties can offer geothermal from “cradle to grave” i.e., a maternity ward, greenhouses, fish farms and a funeral home use geothermal energy. The latest new firm to use geothermal energy in Klamath Falls is a brewpub. His firm promotes Oregon Institute of Technology as an economic development tool.
Cylvia Hayes, Business Alliance for Sustainable Energy (BASE) gave a presentation on Central Oregon renewable energy activities. The BASE mission is to accelerate sustainable energy practices. BASE is a joint venture of E3Strategies and the Central Oregon Intergovernmental Council. Past efforts include an Oct. 2003 renewable energy event at the Central Oregon Fairgrounds. (The Pacific Northwest Section of the GRC held an introductory course preceding the same event.) BASE has contributed to the Governors Renewable Energy Plan and promotes the idea of business clusters awakening in central Oregon and statewide. The renewable energy industry is hard to characterize by SIC code, but her firm estimates it a $185 billion industry in western US and BC. BASE also provides public relations e.g. recent articles gone national. A legislative survey is underway and forthcoming events include an “Is Biomass Green?” workshop in May 2005 and another renewable energy forum in Oct. 2005. BASE is soliciting founder members now and interest is very positive. One founding member is the Confederated Tribes of Warm Springs.
Audience members asked about the value of geothermal energy in $ per CO2 ton? E.g., biomass is above $1.25/ton and below $12/ton. We will continue looking into this subject.
Gene Culver, Geo-Heat Center gave a presentation on “What Information is Available and How do we Use it?” Gene first began measuring OIT geothermal wells in 1962 while an engineering professor. Klamath Falls hosted the first United Nations Conference on Geothermal Direct Uses in 1974. The Geo-Heat Center has 30,000 references in its library, its website gets 9000 hits/day and 1300 users/day. Example projects the Geo-Heat Center is currently working on include solving pump problems at a Utah greenhouse and a community well in Colorado. OIT is considering power generation using 196°F at a new “net zero” dorm. Concept is to use downhole working fluid heat exchanger to eliminate pumping. Gene also suggested talking with local economic development officials and increasing awareness in the engineering community.
Audience members asked ground source heat pump installers in Central Oregon Speakers suggested the Geo-Heat Center and local electric cooperatives for names.
Jim Manion, Warm Springs Power Enterprises gave a presentation on “Renewable Energy Projects” WSPE is one of the Confederated Tribes of Warm Springs corporations that began with the 1955 Pelton hydroelectric 105 MW project. Round Butte is a second 350 MW hydro project and the Pelton Reregulation is the third project at 19 MW. In addition WSPE added wood fired turbines totaling 9 MW in 1970. In investigating other energy options, the Confederated Tribes of Warm Springs has an Integrated Resource Management Plan with a Mission Statement for Mineral and Energy Resources: “The prudent development of natural resources (consistent with tribal cultural framework) for the benefit of tribal members.” One potential geothermal target is the eastern flank of Mt. Jefferson. The Mt. Jefferson area has great cultural value and is managed by the Tribe as a Conditional Use area. In 1990 WSPE contracted for some general geothermal reconnaissance work and preliminary resource assessment. Once results were in, it was felt that the power market was too low to warrant further investigation. In 2003 WSPE began measuring wind potential using 9 towers on reservation land. In 2004 WSPE started studying an Integrated 15 MW biomass plant at its’ lumber mill. Such a project involves many landowner partners. In 2005 WSPE submitted a grant application under the USDOE Tribal Energy Program. Should the Tribe win an award, one goal of the grant would be to investigate the next geothermal exploration step.
Al Waibel, PNW Chapter of the Geothermal Resources Council, presented a “Review of Newberry exploration.” He provided handouts including photographs of drilling and a USGS geologic description. His client, Northwest Geothermal and Vulcan Power are currently waiting for a power purchase agreement.
A general discussion of Newberry volcano development activities by audience members ensued. California Energy Co. (CalEnergy) drilled two deep core holes (3,800+ ft.) and two deep production test wells (10,000+ ft.). This exploration confirmed a granodiorite intrusive at a depth below 9,000 ft. The exploration confirmed a large heat anomaly with bottom hole temperatures in excess of 600° F. One production rest well was dry and tight. One production test well flowed for several hours on its own from fracture zones in the granodiorite. Reservoir engineers felt that a cold water zone was entering the production casing above the hot water zone and decided to case off this entry. When the casing cement job was completed, the well was flushed with cold water. The well had heated to over 400° F and the job was done in the middle of winter with circulating fluid being just over 34° F. The casing was cemented at the top and held at the bottom by debris in the well bore (sand, cutting). The well casing contracted and pulled apart. The well was a total loss. CalEnergy was not able to get a reservoir test report based on the limited rig test. CalEnergy then made a decision that after spending several million dollars that the project did not meet its economic and schedule expectation and was in its judgment not economic.
The alternative facing CalEnergy was at Medicine Lake, California. There, CalEnergy had three proven production wells and a reservoir report indicating 50 MW reserves. The cost of moving the contract to Medicine Lake was less than $3 million, which included the cost of a new EIS and legal cost for the contract work. The Medicine Lake project could be financed as soon as the EIS and power purchase contracts were approved. Even though the power price was going to be lower at Medicine Lake (BPA wanted a rate reduction to move the contract) the economics of Medicine Lake were better because the wells were shallower by several thousand feet. The power line was longer by 10–14 miles. Even with higher transmission line cost the Medicine Lake project had a high rate of return. The costs of further exploration at Newberry to confirm the resources was estimated to exceed $6 million.
Also, the resource data indicated that reservoir development may require drilling wells on adjacent leases not controlled by CalEnergy. The company did not want to joint venture with the lessee and was unable to negotiate a royalty agreement with the lessee. In total, the Medicine Lake project had a lower risk profile and similar rate of return so the decision was made to move to Medicine Lake.
To be successful at Newberry the land position will need to be consolidated and two to four exploration wells (each ~ $2 million) will need to be drilled and tested to confirm the resources can support a 25 to 50 MW power plant.
Bill Kopacz, Midstate Electric Coop. gave a presentation on “Midstate’s Interest in Distributed Generation.” Upon hearing the previous discussion, Bill’s first words were “Go to large utility which can blend higher cost power supplies into its base. However, as was the case with his utility and the Newberry geothermal project, wheeling can be structured as an attractive option for small rural utilizes. His presentation covered a prospective waste heat recovery power project at a gas compressor station in his service territory. The proposed technology comes from, ironically, geothermal binary power applications. The project has three attractive features: a projected cost of $34 per MWh, peak power production and a high capacity factor. Bill also introduced Midstate employee Adam Perry, who is LEED certified and who is helping the cooperative design its new headquarters to be meet the LEED Silver level.
Steve Munson, Vulcan Power Corp., “Lessons learned from RPS promotion in other states. Steve provide a handout on his presentation. See handout. Five strategies leading to legislative or initiative means.
The remaining meeting attendees then went over the second draft OGWG Action Plan. Comments were incorporated into the next revision. The meeting adjourned at about 5:00 P.M.
- We began revisions to the ODOE website reflecting the GeoPowering the West activities. Besides bringing some uniformity to the website, we’re adding a page for Geothermal Working Group materials, including agendas, meeting notes and presentations. We lay out proposed revisions in the table below. Carel will review and convey these changes to the ODOE Web manager.
- We continued working with Guy Nelson of the Utility Energy Forum to plan the first geothermal workshop aimed at regional utilities. This event will be May 11th in Salem.
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| Appendix A |
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Oregon Geothermal Energy Development Strategic Plan
Proposed Activities
September 2004 to October 2006
MISSION STATEMENT
The Oregon Geothermal Working Group promotes the use of Oregon’s geothermal resources for power generation and direct use applications.
STRATEGIC OBJECTIVES
Strategic Objective 1:
Organize an Oregon Geothermal Working Group and Implement a Strategic Plan.
Strategic Objective 2:
Educate the stakeholders and increase public awareness of Oregon's geothermal energy resources, rules, laws, benefits and cost-effective applications.
Strategic Objective 3:
Promote the establishment of laws, legislation, and policies that encourage the development of geothermal energy for direct use and power generation.
Strategic Objective 4:
Increase technical knowledge and understanding of Oregon's geothermal resources and their uses.
Strategic Objective 5:
Promote financial assistance for geothermal energy projects.
Strategic Objective 6:
Promote non-generating applications of geothermal energy.
Strategic Objective 7:
Promote opportunities for geothermal electric power development.
Strategic Objective 1:
Organize an Oregon Geothermal Working Group and Implement a Strategic Plan.
Action Plan:
a. B y November 2004, organize a Oregon Geothermal Working Group to review, adopt, and implement the Oregon Geothermal Energy Development Strategic Plan. The Oregon Department of Energy will facilitate and support this group.
- Through September 2006, conduct regular working group meetings to review progress of the Strategic Plan. This will include disseminating information to Oregon geothermal energy stakeholders through the Oregon Geothermal Working Group email list and ODOE website.
Strategic Objective 2:
Educate the stakeholders and increase public awareness of Oregon's geothermal energy resources, rules, laws, benefits and cost-effective applications.
Action Plan:
- Through September 2006, sponsor and/or coordinate educational activities (e.g., workshops, symposiums, etc.) to promote the uses of geothermal energy (e.g., space and water heating, aquaculture, industrial applications, power generation) to various groups.
- Through September 2006, network with resource centers i.e., OIT GeoHeat Center, Geothermal Education Office, NREL in developing educational programs for interested parties, potential users and community leaders in the use of geothermal energy.
Strategic Objective 3:
Promote the establishment of laws, legislation, and policies that encourage the development of geothermal energy for direct use, power generation and cascading applications.
Action Plan:
- Through September 2006, educate appropriate legislative committees and others influencing energy policies.
a. By January 2006, identify organizations to promote the drafting of legislation, which may include renewable portfolio standards, set asides, system benefit charge, and tax credits.
b. Through September 2006, provide technical support to those involved in drafting legislation.
- Through September 2006, work with the Oregon Public Utilities Commission to promulgate rules promoting utility purchase of geothermal power.
- Through September 2006, explore for possible links with new farm bill to support direct use applications in agriculture.
- Through September 2006, encourage the Oregon Congressional delegation to support legislation to promote development of geothermal resources for direct use and power generation.
Strategic Objective 4:
Increase technical knowledge and understanding of Oregon's geothermal resources and their uses.
Action Plan:
a. Through September 2006, promote efforts to improve and update existing geothermal resource databases and maps. Information will be collected from the OIT Geo-Heat Center, the Dept. of Geology & Mineral Industries and the Geothermal Resources Council. Such information will be distributed as part of Strategic Objective 1.
Strategic Objective 5:
Promote financial assistance for geothermal energy projects.
Action Plan:
a. Through September 2006, compile and disseminate information on available government financial incentives.
Strategic Objective 6:
Promote non-generating applications of geothermal energy.
Action Plan:
a. By June 2005, identify and characterize geothermal resources in Oregon suitable for non-generating applications, and make such information regarding the same publicly available.
- By December 2005, develop a repository of technical, financial, regulatory and other relevant information on non-generating uses of geothermal energy.
- Coordinate with the Oregon Economic Development officials and others in conducting studies that document the rural economic impacts of developing geothermal energy resources for direct use.
Strategic Objective 7:
Promote opportunities for geothermal electric power development.
Action Plan:
a. By June 2005, identify and characterize resources in Oregon suitable for geothermal electric development, and make information regarding the same publicly available.
b. By June 2005, make information pertinent to geothermal power plant siting, acquisition of financing, etc. publicly available.
c. By December 2005, determine from rural electric cooperatives (including aggregators such as Pacific Northwest Generating Company) their near-term interest in pursuing geothermal development in Oregon
d. Through September 2006, work with other stakeholders to resolve existing transmission constraints that could impede development of geothermal electric generation.
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