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18 February 2021

Powering up Geothermal

As a drilling technology company, it’s been interesting here at Strada Global to see the focus on geothermal energy gathering pace. The Net Zero commitment to decarbonise economies means that we’re seeing accelerating interest in geothermal energy from governments. Recent media coverage has reflected this, including the World Economic Forum’s article ‘Geothermal energy, the forgotten renewable, has finally arrived’ published in December, which highlighted the rise in global geothermal investment, which exceeded $675 million in the first half of 2020, six times more than the year prior. 


From our perspective, it’s more important than ever before to demonstrate the benefits of new and innovative technology within the sector. Faster, safer, more cost-effective drilling techniques and solutions like our patented Fluid Hammer Operating System are poised to make geothermal a viable investment. 

 

At Strada, our sweet spot is drilling hard rock. We were early to see how technology could be used to pivot into geothermal projects and solve the historical issues that the industry faced, once and for all. 

 

As a background, the drilling methods traditionally used for geothermal projects have been the same drilling used for oil and gas projects. Oil and gas resources are typically found in unconsolidated grounds, so the drilling technology used to get there has been developed to drill effectively in soft rock and maintain well integrity. But it’s not a secret that as soon as a tricone bit gets to a hard section, drilling costs blow out significantly. So we looked at the market and felt we had a unique advantage to bring Strada’s hard rock drilling technology into a new and developing market place. 

 

Strada was formed in 2014, and we’ve continued to develop our technology, quite significantly now, especially over the past few years to a point where we’re very happy with our fluid hammer. It uses the same percussion principles as an air hammer, but within a patented dual circulation drilling system powered by water. 

 

As we all know, air is very good for drilling hard rock. But it has a downfall when you get very deep, as you need a lot of air and pressure to bring the cuttings back up to the surface. That incurs costs. At the moment, those costs are still cheaper than drilling with mud rotary because it’s a slow method for hard rock and drilling operators run on a day rate. That’s why we’re so excited by the development of our Fluid Hammer Operating System. This patented solution gives us all the speed of air percussion that we’re used to, but all the safety and well integrity of mud rotary drilling at the same time. You can see how it works here. Why we’re so confident about our Fluid Hammer Operating System is because it has come from the knowledge of hundreds of years of percussion drilling and hundreds of years of mud rotary drilling. All we’ve done is combined them into a really clever patented system. 


Here at Strada, we don’t think the capital costs of geothermal projects – especially drilling will change while drilling remains on a day rate. If you’re a drilling company and you have a hard rock well to drill, it’s difficult, it takes a lot of time and you have to trip up and down a lot. There’s no real incentive for that well to be complete for the driller. The longer it lasts, the more revenue there is. 

 

We want to turn that around and drill first of all as a hybrid – as there will be days when there will be a day rate – but ultimately a complete per-metre rate. Our technology is too quick to make a day rate viable for us and, importantly, a per-metre rate completely derisks a project for a client. They pay for what they get, not how many days it takes.

As the 2019 US Department of Energy GeoVision Report stated: ‘Drilling costs can account for 50% or more of the total capital costs for a geothermal project, which makes reducing drilling costs one of the most important factors for geothermal energy production to become economically viable across a range of subsurface environments.’
 

There are a lot of forward thinking companies who can see geothermal as the next step, and they can also see the hard rock geology that they’re not suited for, so they’re actively pursuing a partnership with us at Strada Global to get our equipment on their rigs, and start making them profitable. Drilling quickly and safely without blowing budgets out will help to accelerate the geothermal industry as a whole, because it lowers the risk and advances geothermal as a viable clean energy solution. That’s why it’s important to de-risk the project from the start, and ensure project level funding doesn’t include bit runs that aren’t suited to the geology. 

 

Here at Strada Global, our development pathway over the next few years will demonstrate the capabilities of our fluid hammer and then bring it to market effectively. Currently we’re very hands on with drilling companies who use our technology. We act as a subcontractor or contractor with an existing drilling company to convert their drilling rig to percussion, teach them how to use it, and ultimately deliver the well as quickly as we can, using their rigs and drilling crews but bringing in our technology and know-how.

 

 

As part of a developing industry, we believe that holding to an old fashioned mindset is damaging. You can’t do things the way they’ve always been done, because you’ll get what you’ve always got – which frankly, isn’t a development of geothermal energy. 

 

Even the oil and gas companies that we talk to know that geothermal is going to be the future. But these are utility returns, so the big gung ho high cost mentality needs to be wiped. Weight on bit isn’t going to fix the hard rock problem. These top-heavy capital incentive drilling programmes now need to suit a utility return instead of hitting a patch of oil and making those costs irrelevant. 


It needs a breakthrough, and we plan to be there when that happens. One shining success would make the entire difference between geothermal energy finally being the powerhouse we all know it should be or a forever-elusive world of untapped potential. We believe that once the geothermal industry proves success, and demonstrates how drilling technology can accelerate projects, the world will follow.

 

This article by Strada Global CEO Ben Strange was also published in March’s issue of GeoDrilling International with the title ‘The Current State of Deep Geothermal Drilling.