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Yukonomist: Whitehorse Troughbillies

Yukon could take its hot rocks to the bank

Remember that old show The Beverly Hillbillies, where some country bumpkins became fabulously wealthy when the family shack turned out to be sitting on millions of dollars worth of oil?

What if it was actually us sitting on top of massive energy riches?

But instead of the “black gold” mentioned in the old show’s cheesy intro ditty, we might have an even more improbable source of wealth: hot rocks.

The experts prefer to call it geothermal energy. If you’ve been to Takhini Hot Springs, you’re familiar with the geological phenomenon.

As you may recall from Geology 12, the Yukon is located on the Ring of Fire. The planet’s core is full of red-hot liquid rock, and the movement of continental plates means that their rub points along the Ring of Fire are particularly prone to earthquakes, volcanoes, and patches where hot magma is tantalizingly close to the surface. We also have lots of low-level radiation in our rocks, which contributes significantly to subterranean heat.

A study performed in 2016 for the Yukon government by the Canadian Geothermal Energy Association (CanGEA) determined that the Yukon has significant—and potentially massive—geothermal potential.

The engineering calculations are daunting, and are rough estimates rather than bankable feasibility studies, but the ranges of power suggested by the report range from 1782 megawatts to 19,704 megawatts. That is roughly 15 to 200 times the territory’s current electrical capacity.

Keep in mind that geothermal can serve our power needs in several ways. Super-hot water can create steam and hence electricity, and even water at moderate temperatures can be pumped around buildings to heat them.

There are a half dozen regions of the Yukon flagged as having particularly high potential. One is Whitehorse, particularly the area just west of the city.

“You just happen to have some of Canada’s best resource,” CanGEA chair Alison Thompson told the News when the study came out. “Your territory is just a prime candidate to get this industry going.”

Meanwhile, despite possibly sitting on a potentially massive source of underground energy, we surface dwellers continue to drive tanker trucks of oil and LNG up from Alberta.

Statistics Canada says the Yukon used the equivalent of 184 million litres of oil or natural gas liquids in 2016. A big chunk of that was for heating, and a growing amount to generate electricity.

Intriguingly, the folks in Chena, Alaska are already using geothermal for electricity and heating. Their rocks aren’t very hot, so they use a boiler system with a special liquid with a low boiling point. This generates electricity, enough heat for greenhouses and even enough surplus heat to keep a building full of ice sculptures frozen year round.

Can you imagine how great it would be if your heat just poured out of the ground?

You could have pipes of hot water circulating around Whitehorse neighbourhoods, replacing oil and propane furnaces. Geothermal is steady, so a nice complement to solar and wind electricity. And you don’t have to pay the carbon tax.

But geothermal energy has not gone mainstream in Canada, or in the Yukon. There are lots of challenges. For example, you can spend millions drilling and not quite find where the hottest hot springs are. You might find water that’s not hot enough or flowing in sufficient quantities to make the economics work. And buying the latest Swedish technology requires big up-front investments.

Nonetheless, the technology keeps getting better and drilling keeps getting cheaper as the frackers push new technical boundaries.

I spoke to Carolyn Relf, an expert at the Yukon Geological Survey, who confirmed both the theoretical potential of geothermal and reminded me of the geological and technical challenges.

They have been doing some extremely interesting research, including drilling two wells. One was in the Tintina Trench near Ross River, and the other near the Takhini Hot Springs in partnership with the development corporation of the Ta’an Kwächän First Nation. The latter hole, near the bottom of its 500 metre length, started to get warmer fast. Not hot enough to generate electricity, but very promising.

Each well cost around half a million dollars, and the research budget didn’t permit them to drill more wells or go deeper on the Hot Springs well and confirm if the temperatures kept going up.

Based on these results, it may be time to take some calculated risks and ramp up the research program. We burn 184 million litres of fuel per year. Say a third goes on heat and electricity in the Whitehorse area, and it costs $1.25 per litre. Assume again a third of Whitehorse’s oil and propane heating systems could be converted to neighbourhood hot-water heat or electricity.

That means our hot rocks could be worth the equivalent of $25 million a year in oil spending by Yukoners.

That’s $25 million a year in perpetuity, or at least a few billion years until the planet cools. The “net present value” of a stream of cash like that, using the federal government’s ten-year bond rate, is a lump-sum value of $1.7 billion.

The number is even bigger if you assume a growing population, more electrically heated homes and the arrival of electric vehicles.

With that kind of number as the prize, albeit uncertain, it seems worth having the Yukon government spend five or ten million dollars on a drilling and exploration program over the next few years. The territorial budget faces many demands, but it is able to raise spending by $88 million this fiscal year. Prioritizing just ten percent of this increase for a project with such huge long-term economic potential could make a lot of sense.

It might not work, and if it doesn’t we shouldn’t hold it against them. The biggest shame would be to look at the enticing heat maps of the 2016 CanGEA report and not even try.

Note: Readers who enjoyed my Tesla column will be interested to hear that Georg Teepe sent me a photo of his Tesla in Tuktoyaktuk. Georg read the column while driving his Tesla from his home in California to Tuktoyaktuk, and seems to be the first person to drive an electric vehicle to the Arctic Ocean.

Keith Halliday is a Yukon economist and author of the MacBride Museum’s Aurore of the Yukon series of historical children’s adventure novels. He is a Ma Murray award-winner for best columnist and received the bronze for Outstanding Columnist in the 2019 Canadian Community Newspaper Awards.