SA geothermal builds up head of steam

NEW figures have confirmed South Australia's dominance in the rapidly emerging sector of geothermal energy.
SA geothermal builds up head of steam SA geothermal builds up head of steam SA geothermal builds up head of steam SA geothermal builds up head of steam SA geothermal builds up head of steam

The Department of Primary Industries and Resources of South Australia's 2007 annual review of petroleum says 23 companies are now exploring for geothermal energy in South Australia in 235 licence areas covering 110,000 square kilometres.

Geothermal explorers in SA have already spent $118 million and have committed to spend a total of $680 million by 2013, according to PIRSA.

This represents more than 80% of all licence applications and work program investment forecast for geothermal energy around Australia.

At a national level, the work programs for 2002 to 2013 in 277 licence areas are worth $851 million, and this excludes up-scaling and deployment. There are now 10 Australian Securities Exchange-listed hot rock companies and more are expected to float.

PIRSA petroleum director Barry Goldstein is also chairman of the Australian Geothermal Energy Group, which was formed to provide support for the commercialisation of Australia's geothermal resources.

He recently returned from the United States after a series of presentations on the geothermal sector to top investment banks and energy players, including global oil companies.

The key objective of the trip was to encourage equity investment and debt finance for geothermal projects as they moved into their development phase.

"The world is watching our geothermal explorers," Goldstein said.

"Many of the people I presented to knew of Habanero and were following its progress. South Australia is being viewed as the world's laboratory for hot rock geothermal resources."

He said overseas experts were astounded at the growth rate of Australia's geothermal energy industry and, given the worldwide urgency to find new energy sources that could cut carbon emissions, they were studying how this progress had been achieved.

Many parts of Australia are prospective for hot rock geothermal resources, according to Goldstein. But South Australia has emerged as the centre for geothermal energy through a combination of widespread natural prospectivity and a state government eager to support the development of the sector.

"South Australia's high heat-producing granites are well known and are the reason the state has such vast areas of high temperatures at relatively shallow depths of four to five kilometres - well within the range of existing drilling capabilities," he said.

"We also have extensive horizontal fracture systems, which are very advantageous for flows of hot water between geothermal wells. These have developed from stresses on the Australian tectonic plate as it converges with Indonesia."

The PIRSA annual review describes how the South Australia Government seized the initiative in geothermal energy.

In the late 1990s, during consultation for the state's Petroleum Act 2000, the private sector told the State Government it was interested in South Australia's geothermal potential. Ashton Energy was interested as early as 1996 in developing geothermal energy for the Olympic Dam project.

The Government decided to regulate geothermal licences under the new petroleum act because most of the prospective areas were thought to be under the Cooper Basin and would be explored using petroleum drilling technology.

In October 2000, the first geothermal exploration blocks were released and a year later the State Government granted its first geothermal exploration licences (GELs).

Since August 2004, over-the-counter applications for GELs have been accepted over the entire state.

Geothermal exploration is not regarded as mining under the Commonwealth Native Title Act, and therefore does not require a right to negotiate process. The average time between lodging a GEL application and granting a licence in South Australia is now only about three months.

First published in the February issue of Petroleum magazine

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