Why Is Canada Freezing out Geothermal Power?

Canadians are some world's best at advanced exploration and drilling technologies. Not surprisingly, members of the Canadian Geothermal Energy Association (CanGEA) also produce more than 20 per cent of the world's geothermal energy. They just don't do it here. The almost complete absence of government support means that all of this green energy infrastructure in being installed somewhere else. That's right -- the total geothermal energy capacity in Canada is zero. 

That is a shame, considering that geothermal energy is a clean, continuous base-load power whose source is the virtually unlimited heat from our planet's interior. Unlike other renewables such as wind or solar, geothermal plants can operate 24 hours a day, rain or shine. 

While the upfront costs for geothermal can be considerable, it is ultimately very cheap energy. According to CanGEA chair and founder Alison Thompson, "it has the lowest levelized cost of any power source in the world, even coal."

Canada's advantage

Thompson points out the ironic reason Canadians are so good at geothermal is because there has been so much focus here on fossil fuel extraction. "I come from the oil patch. We have developed enormous expertise in advanced exploration and drilling techniques. These are exactly the skills you need to develop geothermal resources."

So if Canadians are among the best geothermal experts in the world, why aren't they doing business here? "Most of our membership are die-hard Canadian entrepreneurs, but they are forced to operate in other countries because there is so little support for the industry here. We are just so frustrated that it doesn't need to be like this."

A good example is seen south of the border. U.S. federal and state governments aggressively support the industry through loan guarantees, grants, tax incentives and a streamlined permitting process. Countries like New Zealand and Iceland have invested vast resources developing their geothermal with big payoffs. 

And here in B.C.? "The provincial government processes copious amounts of permits for oil, gas and mining development, while they only gave out four permits for geothermal in 2010 and that was after intense influencing from CanGEA," said Thompson. "These were also the first permits issued since 2004."

US invests millions in geothermal mapping

Support for exploration is another big gap. The U.S. Geological Survey has invested millions in mapping identified geothermal targets that so far total 30,000 MW of potential generating capacity. This is more than all the coal-fired plants in Canada combined. In contrast the Canadian Geological Survey invests virtually nothing in this type of work. "We are very disappointed in the level of exploration support from the government thus far, but remain hopeful that they will soon see the value in assisting this emerging natural resource," said Thompson. 

Canadian tax law is another obstacle that in some cases favours fossil fuels over clean energy. For instance, companies doing oil or gas exploration are able to write-off dry holes whereas geothermal companies are not. Likewise companies installing steam boilers for bitumen extraction can recover these expenses from their taxes while geothermal companies installing boilers for clean energy generation are out of luck. "Geothermal energy was never contemplated when they wrote these rules," said Thompson. "We'd like an equal playing field."

And what could Canada do with a major investment in our abundant and completely undeveloped geothermal resources? CanGEA estimates that for $20 billion, we could install 5,000 MW of clean perpetual power, while creating 30,000 person years of manufacturing and construction employment and 9,000 permanent jobs. This could be achieved by 2015 if we start now. 

Interestingly, 5,000 MW of geothermal power would be almost six times larger than the generating capacity of the Site C dam, could be built in half the time, and would be 45 per cent more cost effective per unit of energy. 

And while $20 billion sounds like a lot of money, it is less than two thirds what the Canadian taxpayer will provide over the next 10 years in natural gas write-offs for Alberta oil sands operators -- some of the wealthiest corporations in the world. 

The 'holy grail' of renewables?

This is only scratching the surface. The figures from CanGEA only deal with near surface conventional geothermal. The emerging field of enhanced geothermal technology may access ancient heat from far greater depths and has the potential to transform energy use by tapping into virtually limitless power anywhere on the globe. 

An instructional video on enhanced geothermal energy.

This technology requires some of the same skills used in the controversial practice of hydrofracking. But instead of fracturing underground shale deposits to release trapped natural gas, enhanced geothermal tries to fracture hot granite formations at much greater depths to create closed loop water circulation for electricity generation. Some consider this the holy grail of renewables due to the vast amount of clean continuous power that could be tapped, if it can be made to work. 

A recent study found that enhanced geothermal could potentially supply all of Canada's electrical generating capacity. A similar report from MIT predicted the U.S. could realistically meet close to 10 per cent of it generating requirements by 2050 using this technology, and this clean capacity would be cheaper than either nuclear or carbon capture at coal plants.

Of course drilling holes more than five kilometers down to make enhanced geothermal a commercial reality is very challenging, requiring great skill and experience. There is a good chance that the first team to pull off this historic milestone will be Canadian. It's virtually a sure thing they will be doing it somewhere else. 

[Editor’s note: The geothermal energy generation source discussed in this article is not to be confused with ground source pumps tapped a few meters underground and used for heating and cooling, which The Tyee reported on here.]