Stop the Press. A Group of Veteran Oil and Gas Executives Just Started a Geothermal Company.
By Bob Metcalfe
When we launched GEO back in the fall, the dream was to get a whole bunch of exciting geothermal activity going in the heart of the oil patch – with the hope that eventually, if we made enough noise, the robust drilling ecosystem around us in the state of Texas would take notice. Engage. Recognize they hold the keys to the geothermal problem set, and unleash their army of rigs, crews and technologies to solve energy. We’ve been calling this the green drilling pivot. From hydrocarbons to heat.
GEO was founded on the principle that the best way to speed breakthrough innovations into a large and slow to turn industry like oil and gas is through startups. My favorite sandbox. So imagine how excited I was to hear that a newly formed geothermal startup has emerged from the oil patch. And stop the press. It’s really something.
Meet Sage Geosystems – Sage for short. A perfect example of what happens when veteran oil and gas brains apply what they know to advance geothermal energy.
I zoomed in for a chat last week with Dr. Lev Ring and Lance Cook about their new startup. Lev is founder and CEO of Sage after fifteen years at Weatherford, one of the largest players in the oil and gas service realm. At Weatherford, Lev was Global Director of R&D and Engineering, and in just the brief time I spent talking with him about drilling, tools, oilfield methodologies, I learned more about drilling than I have in months combined. Lance Cook, a University of Texas at Austin Petroleum and Geosystems Engineering grad (hook em’), is President and Chief Technology Officer of Sage after thirty-six years at Shell, the oil and gas supermajor, where he rose through the ranks, most recently serving as VP of Technology and Chief Scientist of Wells. When I inquired about what a Chief Scientist’s role is, Lance launched into a description riddled with terms like “drilling optimization” and “drill the limit.” Turns out at Shell, he was tasked with squeezing every last bit of inefficiency out of the drilling and completions process - with turning drilling into a lean manufacturing process, and innovations into quick commercially viable outcomes. As a geothermophile aware of the techno-economic challenges associated with geothermal energy development – Swoon. Good catch, geothermal.
Both recently retired from industry, and admittedly growing tired of the golf and leisure of retirement, they started digging into “scalable” geothermal concepts. Lance connected with GEO’s Executive Director, Jamie Beard, and remembers being skeptical of the technical feasibility of scalable geothermal – that is, the concept that you can drill for geothermal energy anywhere in the world - at first. But then he started digging, and invited industry friends to dig with him, including Lev. Driven by their families urging them to “turn toward the green side of the force,” they got hooked on the idea of leveraging core competencies of oil and gas to unlock this baseload and ubiquitous form of green energy. In a few months time, Sage was launched.
So what are Lance and Lev up to with Sage?
Since Sage is still relatively stealth due to ongoing intellectual property disclosures, here’s the concept at a high level. Between the two founders and their heavy hitting industry advisory board, the company draws on 200+ collective years of oil and gas experience. Part of the concept leverages that expertise to drive down cost with straightforward technology and know-how transfer from oil and gas into geothermal.
Ok – so far so good. That gets well cost reduction part of the way there. Then what? Well – then there’s the secret sauce they call “HeatRoots.”
The way this electrical engineer looks at it, HeatRoots combine the two “scalable” concepts in geothermal energy in existence to date – ‘open to reservoir’ enhanced geothermal systems (EGS), and closed-loop advanced geothermal systems (AGS). They drill a well to about 4 to 6 km total depth. They then propagate fractures downward starting from the bottom of the well, reaching several thousand more feet in depth, and reaching much higher temperatures than the bottom hole temperature of their well. They then fill the fractures with a highly conductive slurry that is – and this is key – also convective. Think of this system like tree roots reaching downward from the well that suck up heat from the depths and deliver that heat to the wellbore. Then they place a ‘pipe in pipe’ closed loop heat exchange system with a supercritical circulation fluid in contact with their HeatRoot network. Cool right? You’ve got heat resources that would have required a well twice as deep to access, by growing some roots to feed your heat exchanger.
This combination of single well closed loop system and novel use of stimulation results in what appears to be the world’s first hybrid conductive/convective EGS/AGS geothermal system. Interestingly, it also appears to take the best of both concepts, and leave the downsides of each behind. For instance, since there is no circulation or need for connectivity in this fracture network, Lev and Lance argue there is no risk of the short circuits and poor circulation issues associated with EGS, and nearly no risk of seismicity. And because this is a single well closed loop concept, Lance and Lev argue that drilling cost is minimized, with all of the benefits of closed loop on top of that, like no emissions to air, and no environmental discharge or fluid exchanges with the subsurface during operation.
Sage is raising a seed round currently to get the concept ready to drill. They say they have their eyes on Texas for their first well, but that other sites around the US are also under consideration. And they are moving fast, with the goal of drilling a proof of concept in the first quarter of 2021.
I look forward to following Sage as they launch, and encourage others from the oil and gas industry to similarly apply their expertise to build the future of baseload clean energy. In the telecommunications world, the ‘value’ of a network is proportionally related to the square of the number of users – a little diddy they call Metcalfe’s Law. I’m eager to watch this concept play out in the context of our growing geothermal startup ecosystem. You know what they say about 1,000 flowers. Let’s kick off our green drilling boom, one innovative spin-off of the oil and gas industry at a time.
Bob Metcalfe is Professor of Innovation and Murchison Fellow of Free Enterprise in the Cockrell School of Engineering at The University of Texas at Austin. He is Principal Investigator of the Geothermal Entrepreneurship Organization (GEO).