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New Alliance Looks to Geothermal to Get Alberta Oil Rigs Back in Use

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  • May 4, 2020

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In what the Globe and Mail calls “a rare united front between environment and energy,” Alberta’s shattered oil drillers are looking to the emerging geothermal industry as a place to get idled rigs back in production and begin a shift to post-carbon energy.

“As the federal government works on post-pandemic economic stimulus plans, industry groups, geothermal, and oil drilling companies have created an alliance with Clean Energy Canada to promote development of the renewable technology in Canada,” the Globe reports. “The group hopes to highlight the sector as one ripe for incentives and investment, which can create jobs for displaced oilfield service workers.”

The alliance brings the geothermal industry, which generates electricity from hot water and steam extracted from several kilometres beneath the Earth’s surface, into a conversation with “the contractors who do the actual drilling, fracking, and other jobs for oil companies that call the shots,” the paper adds. “They are the first to feel the pinch when capital is cut. They came into the pandemic-induced energy crisis still hurting from the oil price plunge of 2014 and the resulting recession, which put demand for their services at historic lows.”

Alliance member Kevin Krausert, president and CEO of Alberta-based Beaver Drilling Ltd., said he expects the current slump in oil and gas drilling in Canada to last 18 months—but a new line of business in geothermal can get people back to work. “It pivots the whole tired narrative of energy versus the environment,” he told the Globe. “This is a clear example of oil and gas and environment building a new energy future for Canada where oil and gas is a part of the solution.”

So “we’re partnering with groups we haven’t partnered with in the past, because we all share the same goal.”

In a widely-circulated opinion piece last month, Krausert pointed to geothermal and hydrogen as two emerging opportunities for the fossil industry in a low-carbon world.

“The pandemic has merely accelerated the disruption that was already occurring in Canada’s oil and gas sector,” he wrote. “With climate change becoming a significant issue, we’ve long needed a new vision and a plan for the future of energy in Canada—one in which oil and gas are part of the solution, rather than part of the problem.”

While “there is skepticism that the oil and gas industry can change and adapt,” Krausert added, “I know that it can be done. After all, we’ve done it in my own company.” Two years ago, working with the University of Calgary’s Haskayne School of Business, “we placed 16 roughnecks in a two-year training program designed to build and foster the skill sets needed to build new business models that would allow us to adapt to a changing and decarbonizing energy industry. The key was that we put the workers in charge of the change.”

The workers were nervous at first, he recalled. But “moments after they started, something remarkable happened. They realized that with the courage to try something different and believe in themselves, they could find new business opportunities, implement new technology, and become the front-line super-soldiers of a new energy future.” In the next stage of Canada’s economic response to the pandemic, he added, “we need to pivot Canada’s energy sector and provide a stable future for thousands of oil service employees and their families. And these workers are an integral part of leading that change.”

In late March, the province’s Energy Futures Lab published a similar think piece that listed five future opportunities for the Alberta fossil industry: hydrogen, geothermal, lithium, artificial intelligence, and “bitumen beyond combustion” options that use tar sands/oil sands output for products like asphalt, carbon fibre, or vanadium to be used in batteries.

“Albertans understand what it means to chase a shared economic goal, and they’ve been very successful in doing that over the last few decades,” wrote Managing Director Alison Cretney and Lead Animator Chad Park. “Now, it’s time to chase a new one: a future in which the term ‘energy’ encompasses a wider range of possibilities, where we use our past strengths on new opportunities, and where these new opportunities aren’t impeded by old blind spots. It’s a future defined by economies of support, where one opportunity begets and actually advances another. That’s why these aren’t five separate tracks, but rather interconnected pathways of opportunity and possibility.”

John Redfern, president and CEO of Eavor Technologies Inc., a Calgary-based geothermal company, told the Globe his industry has long been “the mouse between two elephants”, a reference to the fossil industry and the environmental community. He sees the new alliance as a triple-win for the environment, the economy, and jobs.

“At the end of the day, the oil and gas service contractors and people in the green movement realized that this is a great win-win-win,” he said. “This is a case where you can have your cake and eat it too.”

Mark Scholz, president and CEO of the Canadian Association of Oilwell Drilling Contractors, said he supported the initiative, while warning that he’s still pursuing financial relief from Ottawa.

“During these times, where there’s not a lot of opportunities for a drilling rig contractor in this market—particularly when you have negative pricing—if we can somehow create this new market, it’s going to certainly benefit drilling contractors down the road and also in this economy,” he said. “At the end of the day, our objective is we want to put more rigs to work, full stop. We want to get our people in the field, and we want to use their equipment. If this creates an opportunity, we’ll take it.”

Yale Environment 360 has a detailed look at job and retraining opportunities in the renewable energy industries in Alberta.

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Matt Chester's picture
Matt Chester on May 5, 2020

Now, it’s time to chase a new one: a future in which the term ‘energy’ encompasses a wider range of possibilities, where we use our past strengths on new opportunities, and where these new opportunities aren’t impeded by old blind spots.

Love this quote-- it's so well said. Truth is, so much of the opposition to moving away from fossils comes understandably from people whose skillsets and expertise allows them to make a living within those industries, but by properly using them for cleaner energy projects it's the definition of a win-win

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The Energy Mix on May 5, 2020

It's completely understandable! I don't live in one of Canada's oil-producing regions, so I'm often in the position of reminding people closer by that we'd be feeling and sounding exactly the same if we saw our livelihoods at risk.

What's becoming increasingly clear in Canada, though, is that the fossil industry isn't a solution, either -- they've been on a cost-cutting binge since the price crash began in 2014, and a lot of that necessarily translates into job cuts. Which is one of many reasons that the oil-producing provinces (and states, in the U.S.) are hurt first and worst until the policy emphasis shifts to transition.

The industry does have a very large number of experienced, often highly skilled people with a wide range of skills, so there's no single solution that will work for everyone. But that just makes the transition more complicated...not at all impossible.

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