Geothermal Project

8/12/2019 Geothermal Project

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By Heather GulaThe Humboldt Sun

WINNEMUCCA NorthernNevadas newest and perhapsmost progressive industry is set-ting up shop right here in Hum-boldt County. Nevada Geother-mal Power, Inc. (NGP), a leaderin the push for renewable energyproduction, has plans to comeonline late in 2009.

In preparation for this monu-mental undertaking, the companygave investors their first on-sitelook at the production facility lastweek.

The Humboldt-Pershing Sus-tainable Development (HPSD)partnership, chaired by SharletBerentsen, co-hosted the infor-mational tour held on Feb. 26,allowing area officials to partici-pate. HPSD has been functioningindependently of sponsorshipand is currently working ongrants and donations in order toprovide this type of liaison serv-ice for local government and areaindustry.

We are doing our develop-ment drilling and our wells arecoming up very strong theyare beating our economic modelby a good margin, NGP CEOBrian Fairbank told potentialinvestors.

Geothermal exploration hasbeen costly and is the product ofa lengthy resource investigationprocess in the Silver State. In the1990s exploration projects in thearea were focused on goldresources. Over 130 mineralexploration holes were drilled atwhat is now the Blue Mountaingeothermal site. However, explo-ration discovered more thermalresources than it did mineralresources.

It wasnt until 2006 that thecompany drilled their first pro-duction scale exploration well.There wasnt very good thermalinformation obtained in these fewholes, but you could see a widecouple of square miles that wasbasically hot, Fairbankexplained.

The first water we got washugely important and it gave useven more encouragementbecause the geochemistry of thewater was saying that our sourcetemperatures were still at highertemperatures yet in the 230-250Crange, or about 400F. And wehavent encountered those tem-peratures yet. So it means that weare just dealing with the outflowor more shallow part of the sys-tem here and it is connected atdepth. It lends me a lot of confi-dence that the system will be ulti-mately a larger system and also along-living production system,he added.

In 2007 the resource provedviable for production. Reservoirengineering began late in the year

and is expected to be completethis spring. NGP has now fin-ished a power plant design andcost bids will be complete withinthe next month.

NGP has a fixed price contractwith Ormat for the constructionof the plant and a guaranteedcompletion date has been set forDec. 31, 2009. However, the con-tractors are predicting an earlycompletion date and NGP hasannounced that production willbegin in November 2009.

Their permit allows for 14acres of power plant construc-tion, which will include facilitiessuch as the control room, offices,cooling tower, turbines and otherstructural amenities. The BlueMountain site will require 20miles of transmission lines thatNGP has routed to avoid crossingwaterways or highways.

The completed power plantwill employ 12-15 NGP person-nel and a number of specializedcontractors.

The Blue Mountain site willbe NGPs first production plant,but there are three others plannedin the basin and range province.

NGPs Pumpernickel site,located approximately 35 mileseast of Winnemucca, completedreservoir confirmation late in2007 and is showing potential for20-30 megawatts net production.Black Warrior is another futuredevelopment in Nevada indicat-ing a potential of 37-50megawatts net production.Crump Geyser is NGPs south-eastern Oregon site that has apotential production of 40 netmegawatts with a probable 60 netmegawatt production potential.

The four combined plantshave a potential to produce 200net megawatts, or enough elec-tricity to power 200,000 homes.

The site at Blue Mountain hasthe advantage of being a high

temperature, shallow resourcewith year-round access and flatsurrounding terrain for transmis-sion line construction.

This site has a confirmed 30-60 net megawatt productioncapacity, with developmentdrilling increasing the potentialto 110 net megawatts.

A 20-year, 30 megawattPower Purchase Agreement hasbeen signed with Nevada PowerResources based on the firstphase of plant production. Thiscontract has a fixed escalatingrate of $60-$70 per megawatthour. That puts a value of $375million on the Nevada PowerResource contract.

At Blue Mountain the optionfor steam-flash production wasavailable. However, in spite ofthe fact that many in the industryfeel that is the optimal productionmethod, NGP chose to pursue abinary production facility.

This decision was madebecause they feel binary process-ing is overall a more efficient useof the resource. Using binarytechnology they are able toextract more energy per unit ofvolume and they eliminate thesmall amount of emissions thatare present in steam-flash facili-ties.

Four production wells havebeen drilled at Blue Mountain atthis point. At least three injectionwells will be drilled and there is apossibility that a few more pro-duction wells will be drilledbefore the drill rig is dismantledand moved to a new site.

Injections wells, or wells at

the site where water is redeposit-

ed into the resource, are located

between 1,500 and 7,000 feet

from the production well,

depending on the underground

terrain of the area.

By the time it comes to the

surface and it goes through the

pipes and it goes to the plant its

had a chance to cool off. So if

you were to pump it straight back

down to the pool you would cool

that water and decrease you effi-

ciency, Ryan Nelson, NGP field

operation manager, explained.Director of Resource Explo-

ration Kim Niggemann added tothat by explaining that it doestake some fine tuning to reach abalance between production andinjection wells.

Nelson affirmed that under-ground research provides infor-mation that leads drillers to theoptimal location for the injectionwell. Beyond that, experimenta-tion can be done in the controlroom by adjusting every valve ofthe flow to find the perfect bal-ance between replenishing theresource and maintaining a hightemperature. The flow can even

be stopped completely if dataindicates that the thermal sourceis being cooled.

Were still trying to under-

stand about the reservoir and howthey all connect and how far east

and how far west it extends. Wehave a pad to drill to the norththat looks quite exciting, Nigge-mann explained.

Once a production well hasbeen drilled, its productionpotential is tested with the drillstill intact. This rig-on drill test isused to determine if an optimumdepth has been reached. If welldepth proves commerciallyviable, the rig is then dismantledand moved to the next site.

A testing muffler is placed onthe well site and a 48-60 hour rig-off flow test is done. Companieslike GeothermEx Inc., Welacoand Thermochem perform tem-perature and pressure surveys,take gas and water samples andconduct all the flow measure-ments, which indicate the overallproductivity of the well.

If I am happy with thoseresults, then I will release the rig.If not, we would go deeper,Niggemann explained.

The wells at Blue Mountainare relatively shallow, withdepths between 2,000 and 4,000feet. They have tapped into avery hot water source, withresource temperatures reachingas high as 374F.

The wells are currently in var-ious stages of development.Some have undergone testing toprovide final productivity read-ings and others are still beingprospected for future drilling.

The most recently drilled wellis in the process of having rig-ondrilling tests completed and isbeing purged of drilling mudbefore further readings are taken.

One of the wells drilled at thesite did not flow with enoughpressure to be productive. Itshot but the cracks arent largeenough. So when you flow it, it islike turning on your gardenhose, Niggemann said.

NGP will explore the optionof injecting into the well as ameans of opening up the fracture.

Niggemann explained that thisform of fracture manipulation isreferred to as an EngineeredGeothermal System.

This is probably the mostexciting project now in Nevada.

They have a lot of very interest-ing data and I think we are learn-

ing a lot, Glen Melosh, NGPgeologist, said.He explained why Nevada is a

prime geographic location forgeothermal energy production.

The states reputation as a

geothermal hot spot stems fromthe easy access to rich thermal

resources. About 15 millionyears ago spreading of the NorthAmerican continent caused the

earths crust to thin from approx-imately 200 feet thick to its cur-rent 65 feet deep under the north-

ern Nevada landscape. As aresult, the heat normally associ-

ated with upper mantel ascendedcloser to the earths surface.

The vertical rock formations

above the stretching point breakup as further stretching occurs.

What that means for us is thatthere is all this heat that is rela-tively shallow, then there are

these faults in the shallow rockthat allow water to circulate,

Melosh said.Over time, water has circulat-

ed through this fracture system

and been heated by the uppermantel. As it resurfaces, it heatsshallow rocks.

The heat energy used in geot-hermal power production actual-

ly comes from these shallowrocks. In this way, undergroundgeothermal waters act like a

gigantic heat exchanger.When you think about the

reservoir here, instead of think-ing that there is a big deposit ofhot water it is not a deposit it

is an actively moving heat trans-port system, Melosh explained.

NGP is currently in the stageof exploring wells near hotsprings that are easily located

and tested. At Blue Mountain,

there are still quite a few buriedfaults in the area, which is key to

potential growth, Melosh said.NGP feels that the geograph-

ic, geologic and economic condi-tions in Humboldt County makethe area perfect to address

national issues of global warm-ing, volatile energy costs and

unstable world markets throughadvancement in geothermal tech-nologies.

Geothermal project moving forwardBlue Mountain expected to come online by end of 2009

MICHAEL MICHAELSEN The Humboldt Sun

Nevada Geothermal Power, Inc. Field Operations Manager

Ryan Nelson (left) and NGP CEO Brian Fairbank open upthe valve from well 25-14 from one-fourth to full.


Nevada Geothermal Power, Inc. geologist Glen Melosh talksto the group about the geothermal well in the background.


Humboldt-Pershing Sustainable Development (HPSD) part-

nership chair Sharlet Berentsen (center) talks to CNBCdirector Fred Cowens as producer Kenin Fox videotapes theinterview.

As published in the March 4, 2008 edition ofThe Humboldt Sun; reprinted with permission.

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