Gradient: Geothermal Adds Value for Old, Existing Oil Wells

Oil and gas producers could be sitting on potential opportunities to cash in on heat beneath their feet using existing infrastructure, according to a geothermal expert.

By turning unused or unproductive wells into geothermal energy producers or co-producing geothermal energy from active oil and gas wells, the oil and gas sector could crack open revenue streams while meeting their own electricity, heat and cooling needs.

There are about one million active wells in the U.S. and a significant number of low flow and mature wells that have been around for decades with separation systems, flow lines and central facilities already in place. Gradient Geothermal CEO Benjamin Burke called the potential opportunity huge.

“Where it’s safe to reuse them, whether in a co-production setting alongside a mature oil and gas operation or in an oil end-of-life scenario for the well or for the field, I think it’s the most capital-light approach,” Burke told Hart Energy. “It’s one I think that should always be looked at as an opportunity.”

As the need for clean, reliable and affordable energy grows with expectations for a surge in power demand, some companies are bringing the oil and geothermal worlds together in pursuit of lower-carbon energy.

When geothermal piggybacks onto oil and gas operations, “the economics generally look really good because ... the cost of running the oil field are already baked into running the oil field. So, the geothermal just becomes an additive value benefit for the well operator and/or for the region or for the grid,” Burke said.

When no oil and gas is involved, the economics depend on how much energy is needed to bring the fluid to the surface compared to how much power is generated. “Every situation is different when it comes to the economics there.” The same goes for geothermal wells capturing heat.

“With just heat, you can sell all the heat potentially. And so, it’s a matter of making sure that there’s enough of a nearby market there for that.”

Wellbore workovers also factor into project economics. “Whether that costs $20,000 or $100,000, the economics of the project have to sustain making the wellbores safe from a wellbore integrity standpoint.”

Finding candidates

Gradient Geothermal, which is working with Chord Energy on a geothermal project, taps into geothermal resources using its HXC System fit-for-purpose Organic Rankine Cycle (ORC) generator equipment.

The equipment is used to cool produced fluids and generate onsite geothermal electricity that can be used on-site or on the grid. The modular system comprises a heat exchanger, the ORC unit and a dry cooler. The process utilizes existing wellbores, existing fluid production and can utilize the existing workforce.

What makes an old oil and gas well, or an active well, a good candidate to become a geothermal producer?

Electricity can be generated from some low-temperature geothermal resources. According to the National Renewable Energy Laboratory, temperatures for such resources are typically around 300 F (150 C) or less.

From a geothermal power generation standpoint, the temperature must be at least 150 F to 160 F (66 C to 71 C) with a required flow minimum of about 2,000 bbl/d, Burke explained. If one well doesn’t work for flow, several wells could be aggregated.

“That’s where the beauty of using a central facility works out,” he said. “You don’t have to rely on individual wells to bring you the thermal mass needed. You can rely on multiple wells for that. But if the temperature is not there for power gen, it’s not there.”

When it comes to heating or cooling, any temperature can work, he said. The pool of potential candidates is greater.

“The challenge with direct use is you have to be somewhat co-located by the resource into which you’re going to put the heating or the cooling application. … You don’t have to worry about flow minimums. You don’t have to worry about exact temperatures. It’s more around tailoring the heat need or the cooling need to the wells that are around there.”

Transforming wells into geothermal producers, however, is not without challenges.

Wellbore integrity is among them, especially for orphaned or abandoned wells that may have been sitting idle for decades, according to Burke.

“You don’t want to pump water to surface that could, in that process, leak into other reservoirs or aquifers, or start releasing methane into the atmosphere in an unintended way,” Burke said. “So, wells need to be tested, and in some cases remediated, to … [ensure] wellbore integrity” and that no harm comes to the environment.

Work in progress

The Denver-based company recently moved into the procurement, installation and commissioning phase for its project at the active Blackburn oil field in Nevada. About 4,200 bbl/d of fluid are being produced with an oil cut of less than 1%, he said. The project—one of several selected in 2022 by the U.S. Department of Energy’s Wells of Opportunity grant program—involves the generation of geothermal energy at the site and the construction of new electric vehicle charging infrastructure.

Gradient is also working on a feasibility study funded by Colorado that evaluates using a 1950s era shut-in well to generate heat for municipal buildings and possibly, residences, along with some power generation for the town of Pierce, Colorado.

“Fluid would come up from through a well, go through a heat exchanger and then go to injection back into the subsurface. So, we would never be using up that water in any sense,” Burke explained. “It’s always going back in the same reservoir. What would be going off to the buildings would be clean water, just at temperature as needed.”

A similar heat exchange project is underway in North Dakota. Gradient is also working with Chord Energy in North Dakota, removing heat from produced fluids and using those resources to create electricity. The project was one of three funded in part by grant from the North Dakota Industrial Commission’s Clean Sustainability Energy Authority. The grant was awarded to Enerplus Corp., which merged with Chord in 2024.

“We’ve already had one unit set up and running with Chord,” Burke said, “and we’re looking forward to fully executing on the grant project with additional units starting potentially in the summer.”

Using geothermal equipment to replace fluid chillers in the oil and gas world is seen as a winning solution.

“There’s a multibillion-dollar market out there for fluid chillers that run off of grid power or run off of diesel generators and cool the fluids,” Burke said. “We can bring our equipment in, provide that cooling duty, but also make power in the process rather than having to buy power off the grid.”

He called it a cheaper solution and “a real no brainer for operators” that is economic without incentives now.

Coproduction of oil and gas with geothermal is not difficult, according to Burke.

“We put a heat exchanger onto three feet of a pipe and pull the heat off. It’s a very simple process and can be immediately economic for the operator,” he said.

Looking forward

Geothermal is getting attention in the Williston Basin and other areas as the company carries out more projects.

Gradient Geothermal plans to start a geothermal cooling project similar to Blackburn in the Haynesville, focusing on HPHT gas.

“Whether an operator has liquids to cool or gas to cool or potentially a mix of both, we can provide that solution,” Burke said. “Our overall goal was to find heat waste in the oil and gas industry and help operators be more efficient with their operations and monetizing, in some cases, that thermal waste for the operator’s benefit.”

Expectations are that more oil and gas companies will add geothermal to their toolkits.

Burke said he believes more oil and gas companies will turn to geothermal solutions when operators realize such solutions are not science projects but are technologies that are commercial today and work without incentives.

“No one wants to invest in a science project when you’re running an operation that’s very financially focused,” Burke said. “And so, the more the geothermal industry demonstrates that this works now, and that this is not a science project and that this can be value added now, I think we’ll see more uptake.”