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OGWG- Second Sem-Annual Report
Statement of Objectives
Geothermal Energy Outreach in the state of Oregon
Second Semi-annual Report
October, 2005
The Oregon Department of Energy (ODOE) provides information and services to the geothermal community and other stakeholders. By leading the GeoPowering the West (GPW) effort for Oregon, ODOE maintains working relationships with others, including but not limited to: Tribes, Oregon Department of Geology and Mineral Industries, USDOE, U.S. Forest Service, Bureau of Land Management, National Park Service, the Oregon Institute of Technology, Geothermal Resources Council, and the Geothermal Education Office.  This effort will help expand direct use of geothermal energy in Oregon and may lead to overcoming barriers to geothermal power plant developments.

Program activities
The following highlights the principal accomplishments during the second half-year starting April 1, 2005 through September 30, 2005:
·ODOE organized a combined third Geothermal Working Group meeting and Utility Workshop on May 11th.  This was also the third workshop of the Oregon Geothermal Working Group and was organized by the Utility Energy Forum and the Oregon Department of Energy.
This meeting was designed for utility resource personnel and focuses on the key benefits and risks of including geothermal power in a utility’s resource portfolio.  It was hosted by GPW and sponsored and supported by the following organizations: Geothermal Resources Council, Geothermal Energy Association, Geothermal Education Office, Oregon Geothermal Working Group, Columbia Geoscience, National Geothermal Collaborative, Sandia National Laboratory, and Vulcan Power.
The meeting agenda is shown on the next page, followed by presentation summaries.  The highly qualified speakers brought a mix of professional experience in all aspects of geothermal energy.  Attendees were able to:
  • Learn about geothermal power, including innovations in generation technologies,
  • Hear utilities describe power purchase agreement terms and conditions, reliability, scheduling, transmission, cost, and other issues,
  • Understand the steps necessary to get a geothermal project developed and on line, including exploration, valuation, permitting, and financing,
  • Know the difference between the cost and value of having geothermal in a utility resource portfolio, including comparison with other resource options, price stability, risk mitigation, distribution benefits, portfolio diversity, green tags, tradable offsets, fuel price projections, and customer and public acceptance, and
  • Hear about the major parts of a model purchase power agreement including terms, scheduling, dispatching, price, performance, penalties, incentives, and transmission.
About 25 people attended the Workshop.  A copy of the major presentations can be found on the Oregon Geothermal Working Group page of the Oregon Department of Energy web site.


SalemConvention Center
200 Commercial Street, SE
May 11, 2005
8:30 am     Welcome and Introductions
Guy Nelson, Utility Energy Forum
Carel DeWinkel, Oregon Department of Energy
Curtis Framel, USDOE Western Regional Office
9:00           “Getting a Geothermal Power Project Developed and On Line”,
                        John Pease, Bonneville Power Administration
                        Al Waibel, Columbia GeoScience
                        Dave McClain, McClain and Associates
10:00         Break
10:20         Geothermal Energy Portfolio from a Utility Perspective
Moderator – Alex Sifford, ECOS Consulting
Marilynn Semro, Seattle City Light
Ken Dragoon, Pacificorp
John Pease, Bonneville Power Administration
11:20         Oregon Renewable Energy Plan, Carel DeWinkel, Oregon Department
                 of Energy
11:40         Lunch Hosted by Vulcan Power
                  Luncheon Speaker: The Role of Geothermal in a Diverse Utility
                  Portfolio; Roger Hill, Sandia Labs
1:00 PM    Power Purchase Panel - Alex Sifford, ECOS Consulting, Chair
                        Marilynn Semro, Seattle City Light
                        Ken Dragoon, PacifiCorp
                        Jeff Nelson, Springfield Utility Board
2:00           Break        
2:15           Questions and Answers Session
Moderator – Guy Nelson,  Utility Energy Forum
Dennis Davis, BLM Consultant
Steve Munson, Vulcan Power Company
Al Waibel, Columbia Geoscience
3:00           Adjourn
Speaker Highlights (see website for presentations)
Curtis Framel gave a full overview of the GeoPowering the West program and its goals. 
John Pease of BPA presented the first half of his slides focusing on past efforts BPA has taken to purchase geothermal power.
Al Waibel covered geothermal power technologies in use today and general environmental impacts.
David McClain discussed the probable steps necessary to develop a power project at Newberry volcano.  Past drilling by his former firm produced one “discovery” well.  Two or more “confirmation” wells that can be flow tested for 30 days are the ideal next step.  New baseline biological data and air quality permits would be necessary.  A state siting permit may or may not be required depending on size (<35MW).  Dave went on to discuss the geothermal power industry and where it might be currently in models of industrial life cycles.
Marilyn Semro gave a presentation on Seattle City Light’s Integrated Resource Planning process.
Ken Dragoon addressed Integrated Resource Planning from PacifiCorp’s angle i.e., modest growth each year requires about 60 MW of new supplies each year.
John Pease of BPA presented the second half of his slides focusing on steps needed to sell power to BPA today, especially transmission access.
Carel DeWinkel covered sections on geothermal energy in the recently completed Oregon Renewable Energy Plan.  He encouraged folks to download a copy from the ODOE website. 
Roger Hill of Sandia National Lab discussed showed the results of a study on optimizing western power companies generating sources.  The study found that generating mixes with larger geothermal shares have no greater expected cost or risk.  In fact, there exist mixes with larger geothermal shares that exhibit lower expected cost and risk compared to conventional sources.
Marilyn Semro gave a second presentation on how Seattle City Light solicits and purchases power supplies.
Ken Dragoon covered some of the salient power purchase contract items, specifically cost transmission and counter party security.  He added emphasis on new risk management strategies in place at his utility, and a desire to hold the green tags if any.
Jeff Nelson of Springfield Utility Board described his utility’s experiences in the power markets and shared the results of a customer survey.  While his utility once again buys all of its power from BPA, Jeff encouraged developers to offer power to groups of utilities e.g., Northwest Power Pool, Pacific Northwest Generating Cooperative, etc.  The survey indicated that their customers preferred geothermal last over other renewable power sources.  His advice was to keep and expand education efforts before the general public. 
The final Q & A session concluded with speakers suggesting that 30 years of efforts at Newberry volcano are still useful providing public education efforts are maintained to new residents, who number over one half of the current Central Oregon population. 
Program discussions assessed the value of bringing future meetings to the smaller towns in eastern Oregon with low temperature resources.  Burns, LaGrande, Lakeview and Vale each have modest direct use applications operating.  These include mushroom farming, greenhouses and space heating.  Exploration for high temperature resources has taken place in Vale.  Economic development efforts can leverage existing operations and look for project expansion rather than only new industries.  Working with local economic development organizations can attract new projects based on their current focus and experience drawn from other Oregon counties.
ODOE prepared a summary of Oregon Geothermal Working Group (GWG) activities, status and next steps for the GeoPowering the West summit in September.  The summary is intended to provide a uniform means to understand the success of the past activities and to facilitate sharing between states.   The summary is in Appendix A.
ODOE facilitated a brief assessment of the Christmas Valley area in Lake County Oregon.   This is in response to a request from Lake County Commissioners to stop dismantling energy transmission infrastructure to allow evaluation of the renewable energy potential in the area.  The preliminary assessment for geothermal resource use is shown in Appendix B.
ODOE has initiated a discussion with the Malheur County Onion Growers Association to evaluate the use of geothermal heat to dry onions for the onion flake market. A meeting is scheduled for the end of November. The GeoHeat Center will be involved in the technical feasibility study.
ODOE has initiated discussions with the Southeastern Alliance of county and economic development officials to explore ways to promote geothermal energy use in the region.
  • During this period revisions to the ODOE website reflected current GeoPowering the West activities.  Besides bringing some uniformity to the website, staff added a page for Geothermal Working Group materials, including agendas, meeting notes and presentations.  Meeting minutes for the May meeting were added along with speaker presentations.  The design and layout is professional. 

NEW Revised ODOE Geothermal Website  
Renewable energy index
Geothermal Energy Home Page
Oregon Geothermal Resources Map
Oregon Geothermal Working Group
More information on geothermal energy

Appendix A
GeoPowering the West
Oregon Activities Summary
July 6, 2005
Alex Sifford and Carel DeWinkel
Oregon Department of Energy
Salem, OR
The Oregon Department of Energy (ODOE) provides information and services to the geothermal community and other stakeholders.  By leading the GeoPowering the West effort for Oregon, ODOE maintains working relationships with others, including: Tribes, Oregon Department of Geology and Mineral Industries, USDOE, U.S. Forest Service, Bureau of Land Management, National Park Service, the Oregon Institute of Technology, Geothermal Resources Council, and the Geothermal Education Office. 
The first Oregon Geothermal Working Group (OGWG) activities led to the adoption of a Strategic Plan, as shown in Appendix A.  This effort is helping expand direct use of geothermal energy in Oregon and may lead to overcoming barriers to geothermal power plant developments. 
Gathering a list of approximately 40 participants in the beginning, we now have over 90 interested parties on the OGWG mailing list, shown in Appendix B.  We sent multiple mailings to interested parties and presented the first draft of the Oregon Geothermal Action Plan to these participants for input.
The OGWG kick-off meeting was held in Bend in November 2004.  Thirty-nine people showed up for the event.  Subsequent meetings were held in February and May 2005.  The first two meetings were held in Bend, the last one in Salem.  The May meeting was held in conjunction with the third GPW utility workshop (the first in Washington, the second in Idaho). 
OGWG’s Strategic Plan:
The OGWG drew from the Idaho Geothermal Energy Development Strategic Plan’s Proposed Activities as a starting point to begin drafting an Oregon Strategic Plan.  Out of eight strategies proposed in Idaho, we dropped two, leaving six for the first plan version. Appendix A shows this Plan.
The Governor’s Renewable Energy Action Plan:
The Renewable Energy Action Plan (REAP) was approved by the Governor this spring.  The Plan sets specific long and short-term goals and outlines geothermal action items.  It includes a 10 % renewable electricity generation goal by new renewables by the year 2015.  Geothermal generation could become an important part of that.  The Plan also includes a goal to review the desirability of a Renewable Portfolio Standard (RPS) and compare its effectiveness with other incentives such as a production-based payment.  Various OGWG members will be active participants in implementing this Plan.
The Public Utility Regulatory Policy Act (PURPA):
An important order by the Oregon Public Utility Commission on the rules for the Public Utility Regulatory Policy Act (PURPA) could provide a significant incentive for the development of smaller (less than 10 MW) geothermal electric generation plants. The May 13 order specifies that Qualifying Facilities of 10 MW or less will be eligible for standard 20-year contracts with fixed pricing for the first 15 years and a market pricing option for the last 5 years. Given the avoided cost that the utilities have with current natural gas prices, the avoided cost rate may be close to 6 cents per kWh plus the value of the “green power” which could add another 0.5 cent or so.
Economic Development:
 Lake County Resources Initiative, a non-profit 501(c) 3 is working on Lake County Geothermal Projects.  Lakeview has one geothermal greenhouse operating now.  Past efforts include short-term power generation at Hammersly Canyon and lobster farming.  Future geothermal direct use efforts are underway at a new prison west of town.  Western Water Development drilled a 600 ft 200°F, 300 gpm production well, cased to 200 ft.  It may be capable of producing 35 million Btu per hour of heat.  Also included is an injection well; three heat exchangers with one for the prison and the remaining two for additional development.  The Initiative’s goals include heat for an industrial park, schools, a hospital and fish farms. 
The South Central Oregon Economic Development District is marketing geothermal energy to industries using a DVD highlighting existing firms and applications.  The presentation is titled “Klamath County Geothermal Projects”. Borrowing a phrase from a local engineer, Klamath and Lake Counties can offer geothermal from “cradle to grave”: a maternity ward in the local hospital, schools, college, greenhouses, fish farms, and a funeral home all use geothermal energy.  The latest new firm to use geothermal energy in Klamath Falls is a brewpub.  The agency promotes the Oregon Institute of Technology (OIT) as an economic development tool. 
Local Sustainable Energy Groups:
The OGWG is working with the Business Alliance for Sustainable Energy (BASE), which gave a presentation on Central Oregon renewable energy activities at one of our working group meetings.  The BASE mission is to accelerate sustainable energy practices.  BASE is a joint venture of 3E Strategies and the Central Oregon Intergovernmental Council.  Past efforts include an October 2003 renewable energy event at the Central Oregon Fairgrounds. (The Pacific Northwest Section of the GRC held an introductory course preceding the same event.)   BASE has contributed to the Governors Renewable Energy Plan and promotes the idea of business clusters awakening in central Oregon and statewide.  The renewable energy industry is hard to characterize by SIC code, but 3E Strategies estimates it to be a $185 billion industry in western US and British Columbia.  BASE is soliciting founder members now and interest is very positive.  One founding member is the Confederated Tribes of Warm Springs.
Oregon Institute of Technology’s Geo-Heat Center:
The OIT Geo-Heat Center first began measuring geothermal wells near its campus in 1962.  Klamath Falls hosted the first United Nations Conference on Geothermal Direct Uses in 1974. The Geo-Heat Center has 30,000 references in its library, its website currently gets 9000 hits and 1300 users per day.  Example projects the Geo-Heat Center is currently working on include solving pump problems at a Utah greenhouse and a community well in Colorado. OIT is considering using a 196°F resource at a new “net-zero energy” dorm.  The concept is to use a down-hole working fluid heat exchanger to eliminate pumping. OIT plans to continue the interactions with local economic development officials about geothermal direct use opportunities and to promote awareness in the engineering community. 
Interaction with Native Americans:
Warm Springs Power Enterprises (WSPE) is one of the Confederated Tribes of Warm Springs’ corporations that began with the 1955 Pelton hydroelectric 105 MW project.  Round Butte is a second 350 MW hydro project and the Pelton Reregulation is the third project at 19 MW.  In addition, WSPE added wood fired turbines totaling 9 MW in 1970.  In investigating other energy options, the Confederated Tribes of Warm Springs has an Integrated Resource Management Plan with a Mission Statement for Mineral and Energy Resources:  “The prudent development of natural resources (consistent with tribal cultural framework) for the benefit of tribal members.”  One potential geothermal target is the eastern flank of Mt. Jefferson.  The Mt. Jefferson area has great cultural value and is managed by the Tribe as a Conditional Use area.  In 1990 WSPE contracted for some general geothermal reconnaissance work and preliminary resource assessment.  Once results were in, it was felt that the power market was too low to warrant further investigation. WSPE began measuring wind potential using 9 towers on reservation land in 2003, and started studying an integrated 15 MW biomass plant at its lumber mill in 2004. Such a project involves many landowner partners.  In 2005 WSPE submitted a grant application under the USDOE Tribal Energy Program.  Should the Tribe win an award, one goal of the grant would be to investigate the next geothermal exploration step. 
Industry Interaction:
Al Waibel of Columbia Geoscience and President of the Pacific Northwest Chapter of the Geothermal Resources Council, has been very helpful supporting the OGWG.  He presented a “Review of Newberry Geothermal Exploration” at the second meeting.
Vulcan Power Corporation (besides supporting a meeting luncheon) keeps the OGWG informed about proposed Renewable Portfolio Standard (RPS) legislation, drawing on lessons learned from other states. One of the critical RPS elements proposed by Vulcan Power Corp. is to set aside a certain percentage of the total renewables capacity for geothermal resources and other specific technologies. The argument is that unless such a “set-aside” is specifically stated, geothermal electricity generation cannot compete with wind farms. At the time of writing this report, no RPS legislation is likely to come out of this year’s legislative session.
Utility Interaction:
 A representative of Midstate Electric Cooperative spoke at the second OGWG meeting.  As a small rural power supplier the speaker suggested that the geothermal industry approach large utilities which can blend higher cost power supplies into its base.   However, as was the case with his utility and the Newberry geothermal project, wheeling can be structured as an attractive option for small rural utilities. 
The OGWG worked with the Utility Energy Forum to put on a geothermal workshop aimed at regional utilities. This event was May 11th in Salem.  A summary of this workshop and most of the workshop’s presentations can be found on ODOE’s website.  Speakers representing area utilities included PacifiCorp, Seattle City Light and the Springfield Utility Board.  
Fact sheet Input:
The OGWG provided input to Bruce Green of the National Renewable Energy Laboratory for a two page GeoPowering the West fact sheet on Oregon which is shown on ODOE’s website.
Website Revisions:
We began revisions to the ODOE website reflecting the GeoPowering the West activities.  Besides bringing some uniformity to the website, a page for Geothermal Working Group materials, including agendas, meeting notes and presentations is now available. 
Challenges and Opportunities
The OGWG is a dynamic organization with goals that keep evolving.  We look forward to continuing its work.
On the electric generation side, starting this fall, we anticipate a renewable energy industry-wide discussion on a renewable portfolio standard, on cap and trade carbon credits as part of the Governor’s global warming policy, and on production based incentives (particularly for the smaller projects of less than 10 MW). The OGWG members will play a crucial role in promoting geothermal energy resources in this process.
Because of the May 13, 2005 order by the Oregon Public Utility Commission on the rules for the Public Utility Regulatory Policy Act (PURPA), geothermal plants of 10 MW or less may become economically feasible. This depends on whether the geothermal industry will build and operate plants with a standard utility contract of about 6 cents per kWh for up to 20 years (plus the value of the “green power” which could add another 0.5 cent or so).
As to direct use of geothermal resources, regional workshops with established economic development organizations and working closely with county and city officials appear to be an effective way of promoting the knowledge gained in Klamath, Lake and other Oregon counties.

Appendix B
June 6, 2005
To: Vicki S. McConnell, State Geologist
From: Clark Niewendorp, Mineral Resources Geologist
Subject:  Christmas Valley, Oregon – Geothermal Energy

Introduction:  U.S. Congressman Greg Walden (R-OR) requested that the U.S. Air Force (USAF) temporarily stopped dismantling the energy-transmission infrastructure at the Air Combat Command Radar Transmitter (ACCRT) just east of the City of Christmas Valley, Oregon (Figure 1).  He is urging the USAF, together with the Bureau of Land Management (BLM), to agreed to leave the facility’s massive electrical transmission lines and support infrastructure (access roads and buildings) intact so that power generated at or near the site can be feed back into the local power grid, delivering renewable power to communities.  Government officials want to use this time to evaluate the potential for generation of alternative energy in the area, such as solar, wind power, and possibly geothermal energy in the production of renewable power.
Figure 1.  A shaded relief map of Lake County and the location of Christmas Valley.
The purpose of this report is to present a cursory survey of the geothermal potential in the Christmas Valley based on unpublished information and on knowledge of staff members.  The information sources include limited geologic mapping and the department’s database of geothermal resources.  No fieldwork was done and no sites were visited. 
Christmas Valley is a rural area in the northern portion of Lake County, central Oregon.  Christmas Valley lies in a topographic depression that has accumulated Pleistocene lake and fluvial sediments on the valley floor.  Older Quaternary age volcanic rocks (basalts and basaltic andesite) ring the valley and may underlie the sediments, but this relation is speculative for most of the valley in the absence of drill holes.
Geothermal Potential:  Figure 2 shows the location of eight water wells in the Christmas Valley containing elevated groundwater temperatures.  These wells were drilled to depths between 59 ft to 879 ft, and have temperatures between 68° F to 84° F, 20° C to 29° C.  A 3-mile buffer area around each well is assigned a medium potential for low-temperature geothermal resources (less than 84° F, 29° C).

Figure 2.  Shade Relief map showing location of City of Christmas Valley, Lake County, Oregon, with respect to geothermal districts, features and exploration wells.  Red filled square = geothermal exploration well location keyed to the well name (01 through 06 - Union Oil Company wells).  Open square = geothermal well location, not drilled.  Red outline indicates possible geothermal resource area.  Low temperature wells: blue dot = 68° F to 84° F, 20° C to 29° C; green dot = 86° F to 120° F, 30° C to 49° C; and yellow dot = 122° F to 210° F, 50° C to 99° C.  Note: Not all springs and wells may be shown.  (Well data compiled from DOGAMI’s geothermal database.)
 These elevated temperatures are not high enough for electric power generation but they suggest the possibility of a hot-water-type geothermal resource for direct applications.  (Keep in mind that geothermal potential ratings are with regard to geothermal resources rather than quantity.)
To the best of my knowledge, no geothermal exploration has been done in the Christmas Valley and its heat-flow and geothermal gradient has not been determined.  Therefore, very little is known about deeper subsurface rocks and structures.  Suffice to say that some sort of exploration will have to be conducted in order to determine Christmas Valley’s potential for a “deeper” geothermal system with reservoir temperatures of at least 320° F, 150° C and higher (temperatures needed for electric power generation). 
Therefore, I would characterize the ACCRT’s site, as being a low-potential, high-risk area meaning that there is no known, locatable geothermal resource for electric power generation or extensions to known sources.  A logical exploration approach for evaluating the potential for such a deeper geothermal system would involve testing the site’s much deeper zones with the drill.  However, a phase of detailed geologic mapping should proceed drilling to gain a better understanding of the local and regional geology. 
If testing of ACCRT’s site fails to find a high-temperature geothermal resource or no attempt is made, consider another use of the site.  It may be feasible to use the facility’s massive electrical transmission lines and support infrastructure for the distribution of electrical power supplied from the development of the geothermal systems at Glass Butte, Newberry Crater, or both areas.  As can be seen in Figure 2, efforts have been directed at deeper, exploratory geothermal drilling to the east of Christmas Valley at Glass Butte, to the northwest at Newberry Crater, and from Newberry Carter south to Indian Butte.  The red filled squares represent exploratory geothermal wells and open squares are wells sited but not yet drilled.  The Bonneville Power Administration identified Glass Butte and Newberry Crater as having areas that are developable and an economic geothermal resource for electric power generation.