Biggest-Ever BLM Geothermal Lease Sale Reaps $638,000 in Nevada

By Abigail Sawyer, California Energy Markets; September 20, 2019; No. 1557

Abigail Sawyer interviewed Jim Faulds for this news story, and she and California Energy Markets graciously allowed us to print the text of this copyrighted article below.

https://www.newsdata.com/california_energy_markets/southwest/

California Energy Markets; September 20, 2019; No. 1557, page 16

Copyright © 2019, NewsData LLC. Unauthorized reproduction is strictly prohibited.

[SUMMARY, page 1]: “Recent research on geothermal potential in Nevada, improved technology, and increasing interest in carbon-free and renewable energy resources is driving geothermal interest in the state, experts say. Geothermal lease sales continue in the largest-ever offering of parcels on federal lands following a Sept. 17 auction that brought in nearly $638,000 in bids in the state. At [18], geothermal heating up in Nevada.”

[STORY, page 16]: “A federal Bureau of Land Management geothermal lease sale in Nevada on Sept. 17 attracted more than three times as many bidders as a similar auction held last year. The auction was the largest, by acreage, of any geothermal lease sale BLM has ever held, according to a news release.

The auction alone brought in nearly $638,000 from lease sales on 102,403 of more than 384,000 acres offered. An additional 64,000 acres were leased in noncompetitive sales the following day, Alex Jensen, geologist and geothermal program lead for BLM Nevada, said in an interview. Parcels offered as part of the original auction remain available for noncompetitive lease-purchase for two years, Jensen said.

In October 2018, BLM sold leases on 2,321 of more than 27,000 acres offered and brought in $26,422 in receipts, according to the bureau’s Nevada office.

Jensen said the auction indicates growing interest in geothermal power generation, which he attributes to interest in renewable generation resources generally and geothermal’s ability to provide zero-emissions baseload power with a lower per-acre disruption footprint than solar and wind.

Advances in research and exploration technology and regulatory pressure to meet renewables portfolio standards and greenhouse gas-reduction goals are other factors that make geothermal attractive, Jim Faulds, director and state geologist with the Nevada Bureau of Mines and Geology at the University of Nevada, Reno, said in a phone interview.

Geothermal’s main drawback, Jensen said, is upfront costs for exploration. “It costs between $2 million and $7 million” to drill a well between 3,000 and 8,000 feet deep in the hope of finding a system, he said. With Nevada’s fault-controlled systems, he explained, the well must hit a fault precisely in order to generate power.

“If you miss by 200 feet you could have spent $2 to $7 million on an unusable well,” Jensen said. It’s extremely capital-intensive to take a project all the way to production, “but it essentially means you’re buying the next 35 years’ worth of fuel for your power plant,” he said.

The largest bid in this week’s sale, $20 per acre for a 4,800-acre parcel, came from Western States Environment and Resources of Houston, according to the BLM release. WSER beat out Terra-Gen to pay $96,000 for the parcel, located immediately adjacent to Terra-Gen’s 67-MW Dixie Valley Power Plant in Churchill County.

Churchill County is the “epicenter” for geothermal in Nevada, Faulds said. He and his team are nearing completion of a five-year project funded by the U.S. Department of Energy that resulted in the identification of two new geothermal systems in the state. The three-phase project involved studying the characteristics of known geothermal systems, doing a detailed study of five promising areas, and then drilling preliminary wells to demonstrate the existence of a system.

The area in the Granite Springs Valley system identified in the project received bids in the sale, Faulds said. The second system, in Gabbs Valley, is even more promising from a geothermal perspective, he said, but it runs adjacent to a wilderness area and was not offered in this sale.

Bidders realize that certain parcels come with environmental strings attached, affecting their usefulness, Jensen said. If a parcel is located in a bighorn sheep habitat, for instance, exploration must cease during lambing season. A lot of the unsold parcels were on sage grouse habitat, he said.

As long as bidders diligently explore and develop their parcels, pay their annual rent and comply with BLM rules and environmental regulations, the leases are valid for 10 years with an option to extend. Once a geothermal power plant goes into production on a parcel, that parcel is held as long as the plant is operational. At that point, the leaseholder pays royalties rather than rent.

Interest in geothermal speculation spiked in 2008 and remained high in 2009, Jensen said. Since that time, “a lot of companies learned it was a lot more difficult and expensive than they had realized.”

During that time, DOE distributed “a decent amount of money” for geothermal research, which has remained stable due to congressional support, Faulds said.

The BLM in its release said the Nevada lease sale reflects the Trump administration’s goal of promoting America’s energy independence. DOE’s Geothermal Technologies Office 2019 GeoVision report suggests that “improving the tools, technologies, and methodologies used to explore, discover, access, and manage geothermal resources would reduce costs and risks associated with geothermal developments.” Such reductions, the GTO estimates, could increase geothermal generation to 60 GW of capacity by 2050.

Jensen said tremendous geothermal resources exist across the country, particularly in Western states, Alaska and Hawaii. He estimated that as much as 1.5 GW of potential in the Salton Sea area of California could go on line within 10 years if there were incentives to explore and develop the systems.

“You could drill anywhere on Earth, and there’s no chance you won’t hit heat eventually,” he said.”

Earth’s Heat Gives States Another Option for Clean Energy Goals

  • Nevada exploring geothermal’s potential for electricity, heating
  • Cost, risk impede development

By Brenna Goth, July 15, 2019 06:01AM ET, Bloomberg Law.
Read the full story here: Earth’s Heat Gives States Another Option for Clean Energy Goals.

“Tapping heat beneath the Earth’s surface for electricity and other uses is gaining ground among policy makers, especially out West, as states seek to expand their options for meeting more aggressive renewable energy goals.

Geothermal energy’s promise lies in its ability to constantly produce power with limited environmental impacts, unlike resources such as wind or solar that are weather-dependent and have other challenges.

It also has the potential “to power the global electric grid many times over” with a nearly unlimited supply, Susan G. Hamm, director of the Energy Department’s geothermal technologies office, says in the introduction to its analysis on the subject.

While geothermal energy represents a small fraction of the power used in the U.S., production could increase by more than 26 times over roughly three decades with the right technology and policy changes, the analysis said. But the risk and cost of developing new projects could hamper the industry’s growth.

One major state player, Nevada, wants to tackle those issues as its utilities move toward getting half their electricity from renewable sources by 2030.

A new initiative in the state, which is second only to California in U.S. geothermal electricity generation, directs lawmakers to audit geothermal potential and propose changes that could boost the resource.

Environmental considerations for geothermal projects vary by technology and include water use, greenhouse gas emissions higher than for wind or solar, and seismic hazards. Utilities, though, face few choices for energy sources that both meet their climate change goals and can stabilize the grid, said Paul Thomsen, vice president of business development for the Americas at renewable energy company Ormat Technologies.

“This renewable resource really is a problem solver,” said Thomsen, who also chairs the Geothermal Resources Council policy committee.

Nevada Resort Shows Potential

Nevada is taking a broad approach to analyzing its geothermal potential and impediments. Policy proposals will go to the Legislature for approval.

Lawmakers and researchers will weigh how to map geothermal resources, and the necessary technology and financial support to use them. They will consider applications like using geothermal directly to heat public buildings, and figure out how to integrate the power source with the solar, mining, and lithium industries.

Increasing geothermal use is a matter of national security for state Sen. Pat Spearman (D), who sponsored the initiative. Breaking reliance on foreign oil became a priority following her military career, she said.

“I need the experts working on this with me,” Spearman said.

Some state leaders see potential in a Reno resort’s use of geothermal for heating, which can use underground water at lower temperatures than are needed to produce electricity. The 1,621-room Peppermill Resort Spa Casino produces all of its own heat from its onsite geothermal plant.

Geothermal use at the property dates back to the 1970s. A 4,400-foot-deep production well drilled more than a decade ago replaced boilers and now saves the property $2.2 million per year on its natural gas bills, according to Peppermill representatives. Its carbon dioxide emissions also decreased by 12,000 metric tons per year.

“We were on a known aquifer. So we knew the water was down there and we were able to utilize it,” said John Kassai, the resort’s central plant and geothermal engineering manager.

Risk Reduction, Faster Permitting on Table

Market demand for geothermal is increasing with higher state renewable energy requirements, particularly in places awash with solar, said Thomsen, from the Geothermal Resources Council. The Department of Energy is among agencies looking at how to make development cheaper and faster.

Exploring and developing resources deep underground poses unique challenges. Permitting and land access issues can also increase cost and project length.

The geothermal industry doesn’t have the research and development budget to address those issues, Thomsen said. Legislation proposed in Congress seeks to help, as does federally-funded research.

A project out of Nevada aims to reduce the risk of geothermal exploration to make the energy more economical, said James Faulds, director of the Nevada Bureau of Mines and Geology at the University of Nevada, Reno, that is leading the Energy Department-funded research.

Most geothermal resources are “blind”—they don’t have hot springs or other signs at the surface, said Faulds, who is also a professor at the University of Nevada, Reno.

The research looks at multiple characteristics of known geothermal systems, including fault locations, to find patterns that can indicate potential new resources. The goal is to make it quicker and cheaper to find and drill undiscovered systems; Industry would be responsible for actually developing the resource. Recent exploratory drilling at two areas the research identified found new geothermal systems. That result is an “enormous success” and shows promise for reducing risk, according to a statement from the Energy Department’s Geothermal Technologies Office.

To contact the reporter on this story:
Brenna Goth in Phoenix at bgoth@bloomberglaw.com

To contact the editors responsible for this story:
Gregory Henderson at ghenderson@bloombergenvironment.com;
Susan Bruninga at sbruninga@bloombergenvironment.com;
Anna Yukhananov at ayukhananov@bloombergenvironment.com

New Exploration Survey 2017/2018 

Nevada Mineral and Energy Resource Exploration Survey 2017/2018
by Michael W. Ressel

Year: 2019
Series: Exploration Survey ES-2018
Version: previously issued as “Nevada Exploration Survey” by Nevada Division of Minerals; third issue of the new NBMG series “Exploration Survey”
Format: 20 pages, color
View/download/purchase full report:
http://pubs.nbmg.unr.edu/NV-exploration-survey-2018-p/es2018.htm

Exploration survey 2017/2018 flyer:
http://nbmg.unr.edu/_docs/es2018flyer.pdf

The Nevada Bureau of Mines and Geology (NBMG) carried out an online survey of companies exploring for new mineral and geothermal resources in Nevada during 2017 and 2018. The Nevada Commission on Mineral Resources and the Nevada Division of Minerals commissioned and provided partial support for the survey. The economic impact of mineral and energy production in Nevada from existing resources is well known. Indeed, Nevada ranks first in the U.S. in the value of its nonfuel minerals produced in 2017. In spite of its high minerals production, the impact of exploration activities, which focus on discovering new resources in Nevada, is poorly understood due to limited data. Exploration activities are burdened with high risk as substantial investments are not guaranteed to result in mineable resources. Indeed, only rarely do exploration programs result in successful resource extraction, and then only after many years of capital investment and development activities. Despite this, exploration success is imperative for the continued well-being and sustainability of natural resource industries in Nevada.

A goal of this survey was to gather data to better assess the impact of exploration on Nevada’s economy. The survey’s focus was to collect company data on exploration expenditures and the number of employees involved in exploration in 2017 and 2018. Expenditures were subdivided by various categories and participants were asked to rate the relative importance of external factors on their exploration programs. The survey includes data from 172 companies that actively explore for mineral and geothermal resources in the state. The dollars spent and personnel employed in exploration is a minimum, because records suggest as many as 315 companies actively explored in Nevada in recent years.

The results from this 2017–2018 survey show that Nevada’s exploration spending of $461 million in 2018 reflects a 31% increase from 2017 and a 42% increase from 2016 levels. Despite major increases in 2018, spending remained substantially lower than in the commodity boom year of 2011, when more than $674 million was spent on exploration. Results from the current survey are consistent with global exploration trends and reflect a modest increase in most commodity prices since 2016, when the last survey was undertaken. Major findings are included in this publication.

Stepping Up Outreach for the Fallon FORGE Project

By Bridget Ayling

Members of the Fallon FORGE team staffed a booth at the Fallon Cantaloupe Festival and Country Fair, 24–27th August 2017, to meet the Fallon community and provide them an opportunity to meet us, ask questions and learn more about the Fallon FORGE project. The booth was a success: we spoke with many locals and visitors to the region, and the majority were interested to learn more about our activities and are supportive of the project going forward. We also attracted the younger generation via our swag options (drink bottles, etc.), geothermal core samples borrowed from NBMG’s core facility (the Great Basin Science Sample and Records Library), and a microscope set-up with petrographic thin sections available for viewing. Outreach activities for the Fallon FORGE project are ongoing, and will become increasingly important if the project makes it into the next phase of the FORGE initiative—this will be determined in spring/summer 2018.

Representatives of the Fallon FORGE team at the beginning of the festival:
ready to go and spread the word about geothermal! Photo: Bridget Ayling

New NBMG/DGSE graduate student Kurt Kraal guides a future geologist
in looking at geothermal thin sections under a microscope. Photo: Bridget Ayling

Visitors at the booth learning more about the Fallon FORGE project. Photo: Bridget Ayling

If you want to learn more about the Fallon FORGE project, Dr. Bridget Ayling will be the guest speaker for the DGSE seminar series this Monday, September 11.

The Geothermal Technologies Office Announces Play Fairway Analysis Phase III Selections

The Geothermal Technologies Office Announces Play Fairway Analysis Phase III Selections

Release from the US Office of Energy Efficiency & Renewable Energy (July 20, 2017):
https://energy.gov/eere/geothermal/articles/geothermal-technologies-office-announces-play-fairway-analysis-phase-iii

“The U.S. Department of Energy’s Geothermal Technologies Office (GTO) announced it will continue funding for 5 projects aligned with Phase III Play Fairway Analysis (PFA) activities. GTO will award up to $5 million in additional funding to five of the original 11 projects from the 2014 PFA Funding Opportunity Announcement. The awards will address the overarching theme of uncertainty quantification and reduction in geothermal exploration, specifically through the development of Geothermal Play Fairways.

The concept of “play fairway analysis” has been used to identify potential locations of blind hydrothermal systems in the western U.S. A play fairway analysis defines levels of uncertainty with respect to the presence and utility of geothermal system elements, and translates them into maps to high grade the geographic area over which the most favorable combinations of heat, permeability, and fluid are thought to exist. Phase III moves the projects into an exploratory drilling campaign that will test the Phase I and II developed models’ ability to discover new resources. Once identified, hydrothermal resources can be brought online quickly with current technologies, supporting the near-term expansion of renewable energy in America.

This systematic approach early in the exploration process can reduce costly drilling and improve the probability of successfully tapping the vital mix of high temperatures and sufficient water flow necessary to generate electricity from geothermal energy. By improving success rates for exploration drilling, this data-mapping tool will help attract investment in geothermal projects and significantly lower the costs of geothermal energy.

The selected Phase III awardees are:

Nevada Bureau of Mines and Geology, University of Nevada‐Reno – Reno, Nevada
Utah State University – Logan, Utah
University of Hawaii – Honolulu, Hawaii
University of Utah – EGI Great Basin – Salt Lake City, Utah
Washington Division of Geology and Earth Resources – Olympia, Washington”

Nevada Active Mines and Energy Producers

e60

Authors: John L. Muntean and David A. Davis
Year: 2017
Series: Educational Series 60
Version: supersedes Educational Series 49 and 54
Format: 11 x 17 inches, color
Scale: 1 inch = 4 miles
View/download here: http://pubs.nbmg.unr.edu/NV-active-mines-and-energy-2016-p/e060.htm

Site locations and information on this map were obtained from a variety of published and non-published sources with the last updates made in January 2017. All sites shown on this map have had some form of production activity during 2016.

This map was prepared in cooperation with the Nevada Division of Minerals.

Meet the Geothermal Energy Center’s new director: Bridget Ayling took over the director position at the GBCGE last spring

bayling_sq_pic

News from Nevada Today
Article by Michael Olinger, Nevada Today, 1/3/2017

http://www.unr.edu/nevada-today/news/2017/bridgetaylinggbcge?utm_source=newsletter010517
http://www.unr.edu/nevada-today/news/2017/bridgetaylinggbcge

“The Great Basin Center for Geothermal Energy got a new director last spring, and she travelled a long road to get to her new post.

Bridget Ayling was born in New Zealand. She has worked in Australia, Papua New Guinea and Antarctica.

“I think I’ve been really lucky to travel to some amazing places just through my job, you know, and get to some pretty rugged places to do science,” Ayling said. “Everywhere you go, every country you go to, it’s a new landscape.”Bridget Ayling

The high desert of the Great Basin is the latest landscape to welcome Ayling, who has been interested in geology from a young age. Early fascination with limestone rocks and the fossils contained therein was met with encouragement by her parents, who fostered it with the gift of numerous books.

Ayling has spent over a decade working in the geothermal energy sector, most of that time for the Australian government. After dabbling briefly in the oil and gas industries, she saw the post at the GBCGE as a unique chance to get back into the geothermal work that she loves.

“Nevada is a state that has many geothermal resources,” Ayling said. “We’re really richly endowed with geothermal.”

Since her arrival at the University, Ayling has been hard at work on a number of projects, such as reviving the National Geothermal Academy, which operated on campus from 2011 to 2014 before going dormant for the last two years. The academy is a summer program where students spend time studying drilling and reservoir engineering for geothermal energy. She is also a member of the Nevada Bureau of Mines and Geology.

Additionally, Ayling has been working on the Frontier Observatory for Research in Geothermal Energy (or FORGE) project, a Department of Energy initiative seeking to develop a field test site for geothermal system technology development and testing. A site in Fallon was one of five potential test sites initially chosen by the DOE, who narrowed their options to two in September, with Fallon being one of those sites. Ayling and the GBCGE are currently waiting to see if their site is the one ultimately chosen by the DOE.

As of the fall semester, Ayling has not taught any classes, but that is set to change in the spring. Ayling’s class, Geology 407/607, will focus on Earth’s energy resources. She describes it as “a pretty ‘big picture’ course.”

She is also working to set up her own independent research that will shape the center.

“It takes time to build a team and have visions for what it can be in the future,” Ayling said. “It’s going to take time to realize that and actually get the funding to support it. It’s fairly small, and my key areas so far have been doing a fair bit of outreach, so doing talks at public forums, like the Geological Society of Nevada. I’ve talked up at the Desert Research Institute. Conference talks, that kind of thing. So, a bit of outreach to raise awareness that we have a center. It exists, and I’m here, and hopefully going to take it to some pretty cool places.”

University research professor Jim Faulds, a colleague of Ayling, is very happy about the work that she has done so far, and the work that lays ahead.

“She has hit the ground running at the University and is already pursuing many new opportunities in geothermal research that will earn enormous rewards for the state and Great Basin region,” Faulds said.

Ayling shares Faulds’ enthusiasm.

“The Great Basin Center is an exciting place to be,” she said. “I think to be here in Reno and to be director of the center is great.”