Oil’s Chaos May be Opportunity for Clean Tech

May 9, 2020

If you’re a company with expertise in drilling holes, or building big platforms offshore, you might be a bit at loose ends right now, what with oil at negative prices in some markets.

And you might be looking toward how you’ll re-enter the world after the Corona crisis abates.
Do you just say, “OK, let’s get back to work in the same business” with all the same already-existing contradictions and limitations, a business that every well informed investor knows is time-limited, and perhaps even more so now than 6 months ago – or do you brainstorm something different that you can do with the same employees, skillsets, and equipment?

New Republic:

Geothermal potential here, though, is enormous. The U.S. Geological Survey, in 2008, estimated that geothermal in California could provide up to 15,000 megawatts of power—about a fifth of the current capacity of the state’sexisting power plants. That capacity grows in tandem with technological breakthroughs. A 2019 study from the Department of Energy found that geothermal power has the potential to provide between 16 and 20 percent of the country’s electricity. 

Tim Latimer helped found Fervo Energy in 2017 after starting his career as an engineer in the oil industry in Texas. “The skill I had developed to that point was poking deep holes in the ground,” he told me. “What I learned in researching geothermal was that I could do that for no-carbon energy.” Fervo specializes in applying technologies used in natural gas extraction—like hydraulic fracturing and distributed fiber-optic sensing—to geothermal power. “We use all the same equipment” as in natural gas fracking, he says, “but the systems we design with them are quite different.”

The collapse of oil prices in the last several weeks has been a boon to his business. Oilfield service companies, wracked by sweeping layoffs around the country, have been keen to offer Fervo equipment at lower rates than usual, now that there’s less competition from fossil fuel drillers. “As equipment is going into storage, people are really interested in putting that equipment to work,” Latimer said. “We’re getting more interest from service companies and better prices.”

Every member of Fervo’s team got their start in the oil and gas business. “It’s a seamless transition,” Latimer says. “If you’re somebody who knows how to operate that drilling rig and have spent your career learning how to make decisions on the drill site, it’s very easy. We’ll use drilling rigs that may have just come off an oil and gas well. Technically, there are things that have to be different. Our engineers have to learn different things about how the wells work, but from a workforce standpoint, it’s highly similar.” 

While still tiny in terms of deployment, and facing geographic limitations, geothermal could be a major complement to renewables, since it’s available around the clock, rain or shine, wind or no wind. Some firms have also explored the possibility of recovering lithium from the superheated brine unearthed in geothermal power production before it’s reinjected underground, potentially producing a critical ingredient in the batteries that store solar power and increase reliability. That’s a serious side benefit, given the great need for lithium going forward, if society is to transition off fossil fuels.

World Bank Blog:

With decades of experience building offshore oil platforms, oil and gas majors are uniquely positioned to manage the logistical, technical, and recruitment challenges of creating offshore wind farms.  

Much of the technical skill needed to build offshore wind platforms is identical to that in offshore oil and gas, an industry that has constructed platforms in the North Sea and elsewhere for decades. This expertise extends to floating wind technologies, which many experts predict are the energy growth engine of the future. 

Floating platforms, largely adapted from the oil and gas industry, are tethered to the sea floor while giving the top-heavy wind turbine enough stability to operate effectively. Most can be assembled on land and then towed out to sea. 

In 2017, Norway’s biggest petroleum company, Statoil – which last year renamed itself ‘Equinor’ – began constructing the world’s first floating offshore wind farm near Peterhead in Aberdeenshire, Scotland using gigantic 250-meter-high Hywind turbines . 

The Equinor staff who built the wind farm situated 25 km off the Scottish coast were once the same men and women who assembled Statoil’s oil and gas platforms. New suppliers – some with oil and gas experience, others with marine operations – were brought in for additional expertise. Once completed, the giant wind turbines set sail on heavy lifting tug-powered vessels that Equinor use to bring oil and gas platform parts out to sea. 

As companies like Ørsted and Equinor lead the green energy revolution, other oil and gas majors look to establish their offshore wind footprints.  

In September 2019, the French oil and gas company Total announced that the group is poised to enter the UK offshore wind sector

Encouraged by the success of its Scottish floating wind farm, Equinor is planning development for its first offshore wind lease in the U.S., an 80,000-acre area off the coast of New York.  

In March 2019, Royal Dutch Shell submitted a bid to build two wind farms in the Dutch North Sea. This followed an announcement by the European oil major that it is planning to cut the carbon footprint of its operations and product sales, pledging to invest $2 billion annually in clean energy, mostly offshore wind. 

Until now, the global offshore wind market has been largely located in the North Sea where there are shallow waters, access to strong, consistent winds and a high-power demand from nearby countries with sophisticated electrical grids. 

Although gusty offshore winds are bountiful in emerging markets, some of the best areas are in water depths that make the fixed foundations of the North Sea impossible. Furthermore, some of these areas are subject to cyclones, typhoons and seismic events not seen in Europe. 

But advancements in floating wind technology are opening new frontiers and making offshore wind a viable option for emerging markets with deeper water and unpredictable weather cycles. A new World Bank Group report estimates that the technical potential for offshore wind in eight emerging markets – Brazil, India, Morocco, the Philippines, South Africa, Sri Lanka, Turkey and Vietnam – is 3.1 terawatts, about three times the installed electricity generating capacity of all EU countries. 

2 Responses to “Oil’s Chaos May be Opportunity for Clean Tech”

  1. rhymeswithgoalie Says:

    Nerd note: “Superheated brine” is tougher on equipment materials than the typical mud and proppants used in oil/fracking wells.

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