Denver, CO

Denver geothermal firm gets federal money to produce electricity from old oil field

Matt Whittaker
A warning sign on a tank at the Nevada operations where Transitional Energy will produce electricity from aging oil wells.(Photo courtesy of Transitional Energy)

By Matt Whittaker / Denver NewsBreak

(Denver, Colo.) A Front Range clean energy startup has been selected to receive millions in federal money for a project that will use hot water from oil wells to generate electricity.

The U.S. Energy Department said it selected Denver-based geothermal company Transitional Energy to receive a $2.5 million award toward demonstrating it can generate up to 1 megawatt of electricity from oil wells in an aging oilfield in Nevada.

Transitional Energy will foot the remaining $1.7 million cost of the project. The exact amounts are subject to negotiation,

"Transforming oil wells into geothermal wells could expand U.S. geothermal energy capabilities, supporting the Biden-Harris administration’s goal of a carbon-free grid by 2035," the DOE said. "This work also supports the creation of new clean energy jobs, helping transition some of the oil and gas workforce to the production of renewable energy."

Perhaps 50 megawatts in four years

Benjamin Burke, Transitional Energy's chief technology officer and cofounder, said he expects the project to be able to hit the 1 megawatt threshold in about two years and could ultimately produce 50 megawatts in four to six years.

One megawatt can power hundreds of homes. For this project the electricity generated will offset that used in the oil operations, and additional power may be sent to the local grid, although that last bit hasn't been finalized, Burke said.

The power will replace diesel generation and grid power to operate the field as well as electric vehicle charging stations the company says will help fill in gaps in “rural, disadvantaged and hard-to-reach locations.”

The Blackburn Field in Nevada, where the project will be located, first started producing oil in 1982, according to the Nevada Division of Minerals. In October, four wells operating in the field produced 1,680 barrels of oil and 66,476 barrels of water, the division said. That's nearly 2.8 million gallons of water for the month of October alone.

That water comes out of the ground hot, and Transitional Energy plans to use geothermal engines to transform that heat into electricity, Burke said.

“We look forward to implementing this innovative technology to cut our electrical costs, increase the production and extend the life of our assets,” said Michael O’Neal, president of Grant Canyon Oil & Gas, a Denver-based company operating the Nevada wells Transitional Energy will be working with.

Old wells produce higher percentage of water

Burke and chief executive officer Salina Derichsweiler, who both had years of experience in the oil and gas industry, incorporated Transitional Energy in 2020 with the hope of founding a business that was sustainable in terms of both making money and the environment, Burke said.

They originally started fundraising to buy an old oil property and start producing electricity themselves, Burke said. But they decided to focus on servicing other's oil properties first after receiving calls from owners who didn’t have the resources or knowledge to monetize their own produced water, he said.

Eventually, Transitional Energy plans to earn money both from services to other energy companies and as a geothermal operator itself that harnesses energy from both producing wells and those that are no longer in service, he said.

The prospect of being able to earn money from produced water would be attractive to many oil companies currently spending a lot of money on treatment, transportation and disposal of water produced as a byproduct of oil operations. As oil wells age, they tend to produce more water compared to oil, tipping the economics even further.

"The cost of managing produced water is a significant factor in the profitability of oil and gas production," according to the Produced Water Treatment and Beneficial Use Information Center, which is directed by the Golden-based Colorado School of Mines. "Once the cost of managing produced water exceeds the value of the hydrocarbon produced from the well, the well is usually shut down."

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Matt Whittaker writes about natural resources industries, including oil and gas, mining, renewable energy, agriculture and cannabis. He's been based in the Denver metro area since 2013. You can follow him on Twitter @mattswhittaker.

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