Development Resources
Resume:
NEW MEXICO ENERGY, MINERALS and
NATURAL RESOURCES DEPARTMENT
BILL RICHARDSON
Governor
Joanna Prukop
Cabinet Secretary
Tom Mills
Deputy Cabinet Secretary
A STRATEGIC PLAN FOR
NEW MEXICO GEOTHERMAL
RESOURCES DEVELOPMENT
Prepared
by
James C. Witcher
Southwest Technology Development Institute
New Mexico State University
Prepared for
U. S. Department of Energy
Submitted to
New Mexico Energy, Minerals
and Natural Resources Department
Santa Fe, New Mexico
AUGUST 31, 2004
Office of the Secretary 1220 South St. Francis Drive Santa Fe, New Mexico 87505
Phone: 505-***-**** Fax 505-***-**** * http://www.emnrd.state.nm.us
Cover photo courtesy of James C. Witcher
A STRATEGIC PLAN FOR
NEW MEXICO
GEOTHERMAL RESOURCES
DEVELOPMENT
Prepared
by
James C. Witcher
Southwest Technology Development Institute
New Mexico State University
Prepared
for
U. S. Department of Energy
Submitted to
New Mexico Energy, Minerals
and Natural Resources Department
Santa Fe, New Mexico
AUGUST 31, 2004
DISCLAIMER
This report was prepared to document work sponsored by the United
States Government. Neither the United States nor its agent, the United States
Department of Energy (DOE), nor any Federal employees, makes any warranty,
express or implied, or assumes any legal liability or responsibility for the
accuracy, completeness, or usefulness of any information, apparatus, product, or
process disclosed, or represents that its use would not infringe privately owned
rights. Reference herein to any specific commercial product, process, or service
by trade name, trademark, manufacturer, or otherwise, does not necessarily
constitute or imply its endorsement, recommendation, or favoring by the United
States Government or any agency thereof. The views and opinions of authors
expressed herein do not necessarily state or reflect those of the United States
Government or any agency thereof.
ii
ACKNOWLEDGEMENTS
Brian Johnson, New Mexico Energy, Minerals and Natural Resources
Department (EMNRD), and members of the New Mexico Geothermal Energy
Working Group (NMGEWG) are thanked for their direction and assistance in
formulating a New Mexico Geothermal Resources Strategic Development Plan.
The enthusiasm, energy, and advice of Bob Donohue (FishiNewMexico), Dan
Hand (Chevron Texaco), Roger Hill (Sandia National Laboratories), Ward
Huffman (DOE-Golden), Brian Johnson (EMNRD), Dave Norman (New Mexico
Institute of Mining and Technology), Jay Spielman (U.S. Bureau of Land
Management Santa Fe), and Jack Whittier (McNeil Technologies) was especially
helpful.
iii
EXECUTIVE SUMMARY
The New Mexico Geothermal Resources Strategic Development Plan is
an action document of the New Mexico Geothermal Energy Working Group
(NMGEWG) designed to foster and champion the goals of the U.S. Department
of Energy s (DOE) GeoPowering the West (GPW) initiative in New Mexico. The
Federal GPW program is a commitment to dramatically increase the use of
geothermal energy through cooperative efforts that link the power industry,
geothermal users, and state and tribal governments with technical and
institutional support, educational outreach, and limited cost-shared funding.
An important overall goal of the plan is to greatly increase public
awareness of the benefits and potential of geothermal energy. Expansion of
geothermal electrical power generation to several sites in New Mexico is highly
desirable. In terms of rural economic development, continued expansion of the
geothermal greenhouse and geothermal aquaculture industries has obvious
priority. Likewise, the innovative use of geothermal resources in other
agricultural or industrial sectors may provide new opportunities for economic
growth. Many geothermal space and district heating opportunities exist in New
Mexico. The use of geothermal heat pump technology appears to have
important advantages for many areas in New Mexico.
Because geothermal represents an important potential vehicle for
economic growth and geothermal is an environmentally clean form of indigenous
and renewable energy, identification of incentives and mitigation of barriers is
very important. Incentives and barriers fit into several broad areas that define the
major objectives of the plan. These objectives are:
Education
Policy
Resources
Financial
Utilization
Sustainability.
iv
Several key action items, designed to address specific barriers or issues, are
outlined under each of the major objectives. Action items have a time frame of 1
to 4 years for implementation and completion, which may be modified by the
NMGEWG if focus or priorities change.
The NMGEWG will coordinate, assist, and perform the action items
in the plan. Action Committees will be established as needed under the
objectives of the plan.
The New Mexico Geothermal Resources Strategic Development Plan
recognizes that geothermal is more than energy. Geothermal is a potentially
powerful vehicle for important rural economic development. The future of direct-
use geothermal may include chile and onion drying, cheese and milk processing,
additional aquaculture, greenhouses and district heating. Binary electric power
generation provides opportunities for cascaded direct-use development or
combined heat and power (CHP). Changes in Federal royalty and Federal and
State leasing rules will encourage the use of the State and Federal geothermal
resource for direct-use applications and help spur much needed economic
development in rural areas. A thermal (Btu) utilization incentive for renewables
that includes direct-use geothermal is highly desirable and should probably
include solar and biomass energy also. Because much needs to be learned
about the resource base, increased exploration and characterization activities are
encouraged and recommended in order to ensure geothermal use and
sustainability. The high upfront capital costs of geothermal development require
innovative financing and an awareness of the lower backend costs and
advantages. Education of the nature and advantages of geothermal to the
public, potential users, regulators, legislators, government policy makers, and
financial institutions and advisors is crucial to advance geothermal use in New
Mexico. Previous successes in geothermal direct-use in the State and the New
Mexico Geothermal Resources Strategic Development Plan provide a basis to
expand the State geothermal resume and accelerate geothermal development.
v
TABLE OF CONTENTS
Page
1.0 Introduction 1
2.0 Geothermal Resources and Reserves 2
3.0 Classification of Geothermal Resources 3
4.0 Legal Definition of Geothermal Resources 7
5.0 New Mexico Geothermal Resource Base 7
6.0 Current Geothermal Utilization in New Mexico 11
6.1 Introduction 11
6.2 Electric Power 11
6.3 Aquaculture 12
6.4 Space and District Heating 13
6.5 Greenhousing 13
6.6 Ground-Coupled Heat Pumps 14
7.0 Economic Impact 14
8.0 Geothermal Development and Resource Characterization 16
9.0 Barriers to Development 16
10.0 Policy and Future Development 17
11.0 New Mexico Geothermal Strategic Development Plan 19
11.1 Working Group 19
11.2 Mission Statement 19
11.3 Education 20
11.4 Policy 21
11.5 Resources 22
11.6 Financial 22
11.7 Utilization 23
11.8 Sustainability 24
12.0 Conclusion 24
13.0 References 25
APPENDICES
A. Ground-Coupled Heat Pump Technology Action Plan
B. NMGEWG Meeting Summaries, May-August 2004
vi
LIST OF TABLES
Table Page
1. Geothermal resource classifications 6
2. New Mexico geothermal greenhouse economic benefits and
energy savings 15
3. Energy and economic assumptions 15
vii
LIST OF FIGURES
Figure Page
1. McKelvey Diagram for geothermal resources 4
2. Map of the Valles caldera region 5
3. Physiographic Provinces of New Mexico 8
4. New Mexico geothermal resources 10
5. New Mexico geothermal utilization 12
viii
1.0 Introduction
The New Mexico Geothermal Resources Strategic Development Plan is an
action document of the New Mexico Geothermal Energy Working Group (NMGEWG)
designed to foster and champion the goals of the U. S. DOE GeoPowering the West
(GPW) initiative in New Mexico. The Federal GPW program is a commitment to
dramatically increase the use of geothermal energy through cooperative efforts that link
the power industry, geothermal users, and state and tribal governments with technical
and institutional support, educational outreach, and limited cost-shared funding.
An important overall goal of the plan is to greatly increase public awareness of
the benefits and potential of geothermal energy. Expansion of geothermal electrical
power generation to several sites in New Mexico is highly desirable. In terms of rural
economic development, continued expansion of the geothermal greenhouse and
geothermal aquaculture industries has obvious priority. Likewise, the innovative use of
geothermal resources in other agricultural or industrial sectors may provide new
opportunities for economic growth. Many geothermal space and district heating
opportunities exist in New Mexico. The use of geothermal heat pump technology
appears to have important advantages for many areas in New Mexico.
Because geothermal represents an important potential vehicle for economic
growth and geothermal is an environmentally clean form of indigenous and renewable
energy, identification of incentives and mitigation of barriers is very important.
Incentives and barriers fit into several broad areas that define the major objectives of
the plan. These objectives are:
Education
Policy
Resources
Financial
Utilization
Sustainability.
Several key action items, designed to address specific barriers or issues, are outlined
under each of the major objectives. Action items have a time frame of 1 to 4 years for
Page 1 of 28
implementation and completion and may be modified by the New Mexico Geothermal
Working Group (NMGEWG) if focus or priorities change.
The NMGEWG will coordinate, assist, and perform the action items in the plan.
Action Committees will be established as needed under the objectives of the plan.
In order to link the plan to present day geothermal awareness and development
in New Mexico, several important questions are briefly discussed. Among these are:
What are geothermal resources and reserves?
How are geothermal resources classified?
What is the legal status and definition of geothermal ownership?
Where are New Mexico geothermal resources found?
How is geothermal currently used in New Mexico?
What is the economic impact of geothermal use in New Mexico?
What are some of the barriers to the use of geothermal resources?
The following sections briefly answer these questions and provide a framework to use,
understand, and bench mark the strategic plan.
2.0 Geothermal Resources and Reserves
Geothermal resources are useable manifestations of the Earth's heat energy.
While some of this heat energy is from the formation of the earth, much of the heat
energy that creates mountains, moves the continents, and drives volcanoes is
generated by the decay of radioactive uranium, thorium, potassium, and many other
less abundant radioactive elements. In a real sense, the earth resembles a gigantic
low-grade natural nuclear reactor. In fact, geothermal may represent the largest
useable energy resource base available to man.
In order for practical use, the earth's heat needs to be concentrated near the
surface in a form that is technologically accessible, economic, and sustainable. A
McKelvey Diagram helps to understand the earth's geothermal resource base (Figure 1)
(Muffler and Guffanti, 1979). The vertical axis of the diagram shows the degree of
economic feasibility while the horizontal axis represents the geologic certainty or
probability that a particular geothermal resource category is present. The geothermal
resource base beneath an area would be equivalent to all of the heat in the Earth's crust
Page 2 of 28
as referenced to the local mean annual surface temperature. The accessible
geothermal resource base refers to a subset of the geothermal resource base that can
be tapped using the technology of today or the technology of the foreseeable future.
Geothermal reserves are proven, economic, and measured geothermal resources.
Most of the potentially economic and accessible geothermal resource base in New
Mexico is unexplored and inferred and has not been drilled, tested, and confirmed. An
example would be the Valles caldera in northern New Mexico where a geothermal
reserve with around 20 MWe (megawatt electric) power potential is known beneath
Redondo Creek (Figure 2). Some geologic indicators suggest that the ultimate
economic geothermal resource of the Valles caldera may be much greater than current
reserves estimates. Additional exploration, drilling, testing, and production experience
are required to adequately evaluate the resource potential of the Valles caldera.
3.0 Classification of Geothermal Resources
Geothermal resources are lumped into several classification schemes,
depending upon potential use or geologic setting. One of the most commonly used
A high temperature (>356oF;>180oC)
classifications applies temperature (Table 1).
resource can be utilized with conventional turbine technology to produce electricity.
Intermediate temperature (194-356oF; 90-180oC) resources are suitable for many
industrial heat applications and for electrical power generation using binary-power
Low temperature (
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