This article was written by Peter Massie, director of the Cascade Institute’s Geothermal Energy Office in Ottawa. The version of record of this op-ed appeared in The Globe and Mail.
Co-produced natural gas and geothermal power project in Swan Hills, Alberta, Canada (source: FutEra Power Public Report, January 2023)
Ever since the introduction of the National Energy Program in the early 1980s, a broad swath of Alberta’s population has believed that the rest of Canada is ripping the province off, and a significant minority now sees secession as an appealing option.
But we can flip the script. Edmonton and Ottawa can move from conflict to collaboration by establishing a set of drilling test centres. These centres would position Alberta and Canada as global leaders in geothermal power. Most importantly, they’d help draw our country together at a time when we’re at risk of falling apart.
The economic opportunity is immense: The International Energy Agency forecasts geothermal could be the largest source of new electricity after wind and solar by midcentury, attracting US$2.1-trillion of investment.
Geothermal requires drilling deep underground to tap Earth’s heat, bring it to the surface and generate electricity. It can potentially provide vast quantities of zero-carbon, baseload, dispatchable power with a small landscape footprint. It’s ideal for delivering on the federal government’s commitment to make Canada “the world’s leading energy superpower in clean and conventional energy.”
But there are challenges. Drilling deep in hard rock is expensive, so costs have to come down sharply to make geothermal power competitive. Reducing these costs demands world-class expertise in geology, drilling, wellbore engineering and other fields.
Alberta has such expertise in abundance. It also has Canada’s deepest oil and gas wells and a supply chain that’s highly aligned with geothermal power projects. And because the province’s oil sands industry already uses heat to melt bitumen, its engineers are uniquely positioned to figure out how to drill in extremely hot rock.
Ottawa can play a key role, too. The federal government provides more than twice as much funding for energy R&D as the provinces combined. In addition, federal scientists and engineers in CanmetENERGY and National Research Council labs have experience working with industry to solve tough technical problems.
Test centres are the ideal way to bring all these advantages together to make the geothermal breakthroughs the world needs. They are platforms where the best minds from industry, academia and the public sector team up to solve well-defined, high-impact problems. And they have a track record of success.
In the 1970s, when wind energy was uncompetitive and niche, NASA created a series of test centres across the U.S. that facilitated collaboration among industrial champions such as Boeing and General Electric. The results were extraordinary: a 20-fold increase in power output in just a few years and advances that unlocked decades of cost declines.
Across the Atlantic, Denmark’s Riso National Laboratory for Sustainable Energy transformed wind companies such as Vestas into world-leading firms valued in the billions.
Today, the U.S. Department of Energy’s Frontier Observatory for Research in Geothermal Energy (FORGE) provides a dedicated test site to lower barriers to entry for innovative geothermal firms. In just five years, drilling costs have fallen 50 per cent, and performance has far exceeded key metrics. Fervo, a private firm backed by Bill Gates, has leveraged FORGE’s know-how to finance a 500-megawatt geothermal power plant and sign a contract to power Google’s data centres.
But as the U.S. has built a groundbreaking geothermal observatory under the strategic direction of the DOE’s Geothermal Technologies Office, Canada has largely observed from the sidelines, providing ad hoc support for a handful of projects. If we want to compete globally in the geothermal space, we need to embrace an industrial policy built around partnerships between governments and the private sector.
The good news is that Alberta has used this approach to supercharge innovation before. In the 1970s and 80s, the Alberta Oil Sands Technology and Research Authority revolutionized heavy oil production to unlock enormous oil sands reserves. An initial $100-million public-private investment has since generated almost $1-trillion in returns.
The federal government is also recognizing the value of such partnerships. It recently catalyzed action on small nuclear reactors by working with key stakeholders to develop a roadmap and action plan for the emerging industry. Going forward with geothermal, it could collaborate with Alberta and the private sector to develop a similar roadmap and set up a co-ordinating research authority.
It should also help fund test centres. Premier Danielle Smith's government has already pledged $50-million for what it’s calling the Alberta Drilling Accelerator. The federal government could match that commitment and, together with the province, seek additional dollar-for-dollar investment from the private sector. A $200-million investment would immediately vault Canada into a world leadership position in geothermal power.
It’s time for Canada to unite around a big, bold, smart bet on Canada’s drilling strengths. Let’s work together to develop and deploy a world-changing technology from the ground down.