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Calgary, Alberta - October 25, 2022

Outside, air temperatures are cooling down, but beneath the surface, temperatures are hot – perfect for harnessing geothermal energy.

This summer, the Alberta Energy Regulator began accepting applications for geothermal resource development. As part of the Government of Alberta's plan to diversify the energy resource sector, the AER was directed to regulate the development of deep geothermal resources found below the base of groundwater protection.

Developing geothermal resources is another step towards alternative, renewable energy sources in Alberta to help meet the demand for power and heat. Geothermal energy has many uses, including electrical power generation, aquaculture, and heating greenhouses. Geothermal resources will provide power and heating for residential, industrial, and commercial buildings. And oil and gas operators will also be able to use geothermal resources to power their operations.

The Potential of Geothermal

Heat is produced under the Earth's surface in several ways, including heat from the Earth's core or by friction between rock formations. There are two types of geothermal resources: deep and shallow. Deep geothermal resources occur at depths where groundwater becomes saline (salty), as outlined in the base of groundwater protection. Shallow geothermal resources, on the other hand, occur at depths closer to the Earth's surface.

Deep geothermal resources can be accessed via open- or closed-loop systems.

In an open-loop system, two wells are drilled on the surface. Water is injected into one well and heated by the hot porous rock formation. The heated water is produced from the second well and transported via pipeline to a geothermal facility, where heat is extracted from the water and used for power generation or heating. The cooled water is reinjected into the rock formation and heated, continuing the cycle.

Open loop system
Open-loop system for deep geothermal development

In a closed-loop system, a single well is drilled at the surface. Fluids other than water are injected down the wellbore and heated by the surrounding rock formation. The fluids are brought to the surface, the heat is extracted, and cooled fluids are reinjected. Also, in a closed-loop system, the fluid in the wellbore stays in the wellbore and does not directly interact with the surrounding rock formation.

Closed loop system
Closed-loop system for deep geothermal resource development

For more information, visit the AER's Geothermal Resources page.

The Regulatory Framework and Directive 089

On August 15, 2022, the AER released Directive 089: Geothermal Resource Development outlining the requirements for industry to follow throughout the life cycle of deep geothermal resource development. This regulatory framework enables the AER to meet its commitment to ensuring efficient, safe, orderly, and environmentally responsible development of energy resources in Alberta. The directive includes liability management requirements for developers, including collecting security deposits, to ensure companies meet their closure activity obligations, such as reclaiming the site after use.

“Having leveraged our experience and expertise in energy regulation, we are confident the rules and directive ensure responsible geothermal energy development in Alberta,”

- David Helmer, senior advisor, Regulatory Enhancement.

A draft directive was released mid-2021 for public feedback. The geothermal project at the AER supported engagement from Albertans when developing and informing the final version of the directive.

"We engaged with a diverse set of Albertans – including Indigenous communities, landowners, and industry members – in receiving public feedback regarding topics related to regulating geothermal resource development," says Chris Menzies, a regional engagement specialist. "This feedback helped to inform the development of geothermal rules and requirements by the AER, which will enable responsible development of Alberta's geothermal resources while ensuring public and environmental safety."

In addition to Directive 089, the Government of Alberta released the Geothermal Resource Development Rules, completing the regulatory framework. The rules establish the AER as the regulator for deep geothermal resources from the time of application throughout construction, operations, and closure and reclamation.

Since issuing Directive 089 in August, the AER has begun amending other directives and manuals to incorporate geothermal requirements. You can access more information regarding Directive 089 and the regulation of geothermal resource development in Bulletin 2022-25, the news release, or our Geothermal Resource Development webpage.

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