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HomeMy WebLinkAboutCity of Akutan Addendum to Geothermal Technical Feasibility Report - July 2011 - REF Grant 2195475 ADDENDUM Akutan Geothermal Resource Assessment July 22, 2011 By Amanda Kolker, AK Geothermal Alan Bailey, Geothermal Resource Group ADDENDUM: Akutan Geothermal Resource Assessment 2 Summary On June 30, 2011, a report was submitted to the City of Akutan entitled the “Akutan Geothermal Resource Assessment.” This report recommended the targeting the upflow zone, with chemically benign fluids and temperatures approaching 572 °F (300 °C), for geothermal energy production. This zone appears to exist at >6000’ depths below the 1500 ft2 (0.5 km2) fumarole field. Unfortunately, this zone cannot be reached by a vertical well due to steep and hazardous terrain, and will have to be targeted via directional wells across the fumarole field. An important unresolved issue in the June 30 report was the trade-off between the cost and practicality of constructing a pad at high elevations (closer to the target) but with difficult access, versus drilling from the valley (further from the target) from an area with easier access. A recent site visit by an experienced drilling engineer has, unfortunately, not completely clarified this issue. The site visit did identify two areas – one in the valley and one at high elevation near the fumarole field – that could both potentially host wellpads and facilities. However, there are problems associated with both options. First, there is some uncertainty about the suitability of the valley wellpad sites that are within reach of the upflow target. Also, the valley option requires 3200’ of horizontal offset from the wellpad, requiring a highly engineered directional drilling operation(s). The high elevation option is also a challenge as it requires additional road up steep terrain. Despite these challenges, either solution appears feasible. Pending detailed economic and technical evaluation of these two options, the valley option is now considered preferable based on the many advantages of valley-based project development. The other alternative should continue to be examined in case the valley option turns out to be less economically attractive and in case production needs to be augmented with further drilling in the future. Site Visit Findings, July 2011 On July 8-13, drilling engineer Steve Nygaard (Geothermal Resource Group) and Akutan Geothermal Project Logistics Manager Bob Kirkman (RMA Consulting) made a visit to the geothermal area. The purpose of the investigation was to verify the feasibility of drilling pads, access roads, base camp, and power plant facilities in the following general areas: 1. Hot Springs Bay Valley (HSBV). The main objective in the valley was to investigate how close to the fumarole target a wellpad could be sited from the valley side. The issue is a creekbed with banks that gradually steepen towards the target. 2. Fumarole field. The team was to investigate whether there was sufficient flat ground at high elevation (>900’) near the fumarole field to site a wellpad, base camp, and plant facilities. The team was also to investigate the best option for road access to the fumarole field area. ADDENDUM: Akutan Geothermal Resource Assessment 3 Hot Springs Bay Valley 1. Wellpads and wellfield design The July field team identified 3 sites in the northwest corner of the valley – V1-A, V1-B, V1-C – that could potentially reach the proposed target via directional drilling. These sites follow Fumarole creek up towards the target and get successively closer with V1-C being the closest. However, these locations will require a substantial degree of site preparation, including cut and fill operations for the wellpads and possibly the road; slope stabilization; stream diversion; and possibly additional site mitigation. In addition to the site concerns, another problem with valley-based drilling operations is that the proposed wellpad that is closest to the target – site V1-C – is still offset from the target by 3200’ or greater. This is of concern because drilling directionally to achieve a horizontal offset of 3200’ poses several technical challenges that could quickly escalate drilling costs. First, to reach a target of 6500’ below mean sea level (MSL), a deviated well with 3200’ horizontal offset would have a measured depth of over 7700’, escalating drilling costs. Second, V1-C must achieve an angle of 33.5°/ 100 ft. to reach the target, but such an angle will likely make pumping the well impossible. This would be a problem if well does not flow. Fig. 1 shows a map and calculated trajectories of deviated wells towards several targets (upflow, outflow, and/or a fault with downflow for reinjection purposes). Figure 1. Map showing wellpad sites V1-A, V1-B, and V1-C, with a plant location at site 1. Annotations show distance to target and max. deviation angle (e.g., maximum deviation for a well drilled from site 1C is 33.5°/ 100 ft. to obtain a lateral distance of 3200’). Assumptions: each well will be drilled to 6500’ below MSL, each well is deviated (directional) with trajectories are based on a target 6500 below MSL. ADDENDUM: Akutan Geothermal Resource Assessment 4 Road access and facilities The road access to the valley sites V1-A and V1-B is straightforward. According to Steve Nygaard, “Without a doubt the best technical solution would be to extend the harbor road over Saddleback to site 1. It would be cheaper and faster to build, especially if you could get started using the equipment currently on the harbor construction building site (save on mobilization costs). With the direct road from town, you wouldn’t need to build much of a base camp…” The road from Akutan Harbor to sites V1-A and V1-B would run about 4 miles. Locating the power plant, base camp and other facilities is also straightforward for the valley sites. As shown in Fig. 1, the plant and other facilities could be sited just east of the wellpad(s). It is uncertain at this time whether a road could be constructed to wellpad V1-C. According to S. Nygaard, “After alternate site 1 C, the cost to build the road would escalate appreciably due to the steep slope of the canyon but doable (if the hillside formation is stable enough)… A geotechnical geologist or civil engineer would have to confirm that the hillside is stable enough to cut a path into it.” Fumarole Field 1. Wellpads and wellfield design The field team identified one site suitable for one or more wellpads, camp, and plant facilities near the fumaroles. Steve Nygaard noted that “it wouldn’t be that difficult to construct a drilling pad on either side of the fumaroles.” An area of relatively flat ground was located to the west of the fumarole area, at site labeled F-A. Site WS-3 (relabeled F-B) was judged inaccessible based on poor road options (Fig. 2). Figure 2. Map showing the location of wellpad site F-A relative to the other proposed sites. The 19-acre area outlined in blue appears to be suitable for wellpad and other facilities. The site labeled WS3 is no longer being considered due to access issues. F-A ADDENDUM: Akutan Geothermal Resource Assessment 5 The 19+ acres of relatively flat ridge line shown in Fig. 2 is attractive from the point of view of site development as well as from a drilling and resource perspective. This area merits further investigation as an alternative to the valley sites. Road access and facilities B. Kirkman identified a route up to site F-A from HSBV, ascending from a location near slimhole well TG- 4 (blue circle in Fig 2). As in the proposed route to sites V1-A-C, the road to access site F-A would begin at Akutan Harbor and cross the saddle into HSBV. At the western end of HSBV, instead of turning north it would continue up a gradual hill to the east and then north towards site F-A. This route is marked by a white path in Figs. 2 and 3. Reaching the ridge line may be challenging, as there are steep intervals which would require building switchbacks, and the site is roughly twice the distance from the 2010 camp location. This route would have an estimated length of about 4.5 miles from Akutan Harbor. Hence, this area will require an additional ~1/2 mile of road from HSBV, compared to sites V1-A-C. Figure 3. Map showing the location of wellpad site F-A relative to the other proposed sites, courtesy of B. Kirkman. This location would be suitable for wellpad and other facilities. The site labeled WS3 is no longer being considered due to access issues. Another alternative investigated during the site visit was access from the north side of HSBV to sites near the fumarole field. The field team followed a route from the second cove on Hot Springs Bay; however, they did not recommend it, noting that the terrain steepens quickly. ADDENDUM: Akutan Geothermal Resource Assessment 6 Drilling plan and wellfield design From a resource perspective, drilling closer to the target from sites F-A or F-B is preferable. The probability of success will be higher because the wellpad is closer to the target, and because the trajectory appears to cross one or more faults at near-perpendicular angles, rather than subparallel angles (Fig. 4). Figure 4. Map showing of proposed wellpads (white circles with crosshair) and well trajectories (white arrows), overlain on resistivity data for 400m below sea level. Isotherms show temperatures at 400m below sea level corresponding to conceptual model 2 (line CM2; see Resource Assessment for details) with outflow beneath the mountain to the north of HSBV. Also shown are mapped and inferred fault traces. However, the recent site evaluation suggests that a wellpad could be sited in HSBV within reach of the upflow target at location V1-C. Due to several advantages of geothermal development in the HSBV, this option is favored at the present time. A logical approach would be to begin by drilling at site V1-C and then making a decision whether to drill at V1-A or V1-B based on the drilling results. However, further engineering and economic evaluations of all sites must occur before a final decision is made. The location of reinjection wells is unresolved at this time. This is because the reservoir geometry is still unconstrained due to lack of subsurface data near the fumaroles. Understanding reservoir geometry is important because it is easy to “miss the target” with reinjection. Hence, additional exploration and drilling data are needed to constrain the reinjection site. F-A V1-C,B,A F-B ADDENDUM: Akutan Geothermal Resource Assessment 7 Conclusions The next phase of drilling on Akutan will target the upflow resource, with temperatures anticipated between 428-572 °F (220-300 °C). A recent evaluation of the access and drilling issues involved in targeting a well on the upflow resource has identified a provisional direction for future drilling efforts. However, a financial evaluation of the two options has not been performed. A detailed evaluation of the following issues must be conducted before a final decision is made: 1. Cost of engineering a wellpad at Site V1-C. 2. Cost of engineering a wellpad at Site F-A. 3. Cost of drilling directionally 3200’ from site V1-C to a TVD of 6500’ beneath the upflow target, plus evaluation of associated issues (rig type and availability, transportability of rig, ability to pump well, etc.) 4. Cost of drilling directionally 1200’ from site V1-C to a TVD of 6500’ beneath the upflow target, plus evaluation of associated issues. 5. Cost of building a road to site V1-C from Akutan Harbor. 6. Cost of building a road to site F-A from Akutan Harbor. 7. Evaluation of environmental impact of road and pad alternatives. Pending the above information, the next phase of drilling will provisionally be staged in Hot Springs Bay Valley, with wellpads located at the top of the valley and boreholes aimed directionally beneath the upflow area. If the valley wellpad sites, upon further evaluation, are deemed unsuitable or too expensive, or if the valley wells do not produce sufficiently for power production, drilling should instead be staged at a high-elevation site just west of the fumarole field. The 19+ acres of relatively flat ridge line near site F-A is attractive from the point of view of site development as well as from a drilling and resource perspective. Reaching the ridge line may be challenging, but increased road construction cost may be allayed by reduced pad construction costs and, perhaps more significantly, decreased drilling costs. This area merits further investigation as an alternative to the valley sites. At this time, it is recommended that permit applications for drilling be submitted for no less than ten sites, listed below. Additional sites may be identified upon review of aerial photography (pending). 1. V1-C1 2. V1-C2 3. V1-B1 4. V1-B2 5. V1-A1 6. V1-A2 7. F-A1 8. F-A2 9. F-B1 10. F-B2 In addition to the financial evaluation described above, additional exploration prior to drilling should focus on identifying faults and evaluating their control on the upflow system. This could upgrade the valley wellpad sites by extending the target southeastward from the fumaroles. It will also provide parameters useful in planning trajectories for both production and reinjection.