John Pritchett Senior Scientist, Leidos Inc. Member, GEA Board of Directors July 22, 2014

1. CONTROL OF FRACTURE PROPAGATION AND FLUID FLOWGeophysical Monitoring of Subsurface Electrical Transient Signals for Fracture Detection and Characterization John Pritchett Senior Scientist, Leidos Inc. Member, GEA Board of Directors July 22, 2014 Washington, D.C.

2. CONTENTS OF TALK • Introduction to GEA and the geothermal industry. • Role of rock fractures in geothermal systems. • Natural vs. synthetic geothermal reservoirs. • Monitoring geothermal fracturing operations. • Applications to other processes and industries.

3. THE GEOTHERMAL ENERGY ASSOCIATION (“GEA”) • Trade association for the U.S. geothermal industry. • Total membership, 112 companies (10 international). • Offices: 209 Pennsylvania Ave SE, Washington DC. • Mission: to represent the interests of the industry to all levels of government (federal, state, and local).

4. Plate Tectonic Processes Spreading Center Continental Plate Plate Oceanic Subducting Convection

5. Plate Boundaries “Ring of Fire”

6. Geothermal Power Plants

7. NAMEPLATE GEOTHERMAL GENERATING CAPACITIES IN MEGAWATTS, APRIL 2014From the “2014 Annual U.S. and Global Geothermal Power Production Report” by Benjamin Matek of GEA WORLD: United States 3442 Philippines 1904 Indonesia 1333 Mexico 1005 Italy 901 New Zealand 895 Iceland 664 Japan 537 All others 1332 TOTAL 12013 UNITED STATES: California 2711 Nevada 566 Utah 73 Hawaii 38 Oregon 33 Idaho 16 New Mexico 4 Alaska 1 All others 0 TOTAL 3442

8. ESTIMATED TEMPERATURE @ 6 KM DEPTHMap courtesy SMU Geothermal Laboratory, Dallas, TX

9. GEOTHERMAL’S CONTRIBUTION TO THE ANNUAL AVERAGE ELECTRICAL SUPPLY USAWORLD Electricity consumption 470 GW 2310 GW Existing geothermal capacity 3.4 GW 12 GW (0.7%) (0.5%) Geothermal’s potential with 30 GW* 196 GW** no new technology (6.4%) (8.5%) * U.S. Geological Survey ** Bloomberg New Energy Finance

10. U. S. COMMODITY MARKET VALUES ONE BARREL OF CRUDE OIL: $103.08 * ONE BARREL OF HOT BRINE: $ 0.16 ** RATIO: 644 : 1 * for West Texas Intermediate (WTI) crude on July 18, 2014 per NASDAQ. **contains 130 kg of pressurized 200°C brine; generates 1.8 kWh of electricity at $90/MWh.

11. TYPICAL RESERVOIR GEOLOGY • OIL AND GAS: Soft sedimentary rocks (sandstones, shales, sedimentary composites, etc.). Porosity usually > 10%, average rock permeability > ten millidarcies. Intergranular permeability usually suffices to support production > 200 bbl/day (1 ton/hour) of oil per well. • GEOTHERMAL: Volcanic/metamorphic hard rocks (basalts, andesites, rhyolites, granites, etc.). Porosity usually < 3%, average intact rock permeability ~ a few microdarcies. Extensive natural fractures are essential to supply commercial geothermal fluid production rates.

12. EARTHQUAKES, VOLCANOES AND GEOTHERMAL PROJECT PROSPECTS • Successful geothermal project locations are strongly correlated with regions of intense tectonic activity and/or volcanism. • Such regions often have relatively high subsurface temperatures at depths accessible by drilling. • Equally important, ongoing tectonic activity serves to create and maintain dense networks of natural rock fractures which provide the fluid conduits required to permit commercial geofluid production at rates exceeding 55,000 bbl/day (300 tons/hour) per well.

13. SEEKING HEAT, NOT JUST FLUID

14. ESSENTIAL ATTRIBUTES OF A SUCCESSFUL CONVENTIONAL GEOTHERMAL PROJECT • Abundant natural heat flow and local tectonic activity. • High subsurface temperatures at accessible depths. • Large water/steam-filled fractured permeable reservoir. • Impermeable upper seal layer to prevent leak-off. • Nearby electricity market and/or grid connection. • Absence of endangered species, national parks, etc. Simultaneous occurrences of all of these attributes are rare, so successful geothermal projects are sparse and geographically restricted.

15. ENHANCED GEOTHERMAL SYSTEMS (EGS) • Emerging technology, still in feasibility-study stage. • Approach - create synthetic fractured geothermal reservoirs by artificial means, e.g. hydraulic fracturing (“fracking” for geothermal). • EGS should substantially increase geographic areas where geothermal projects are feasible. • Activities so far restricted to pilot studies and EGS “augmentation” of conventional geothermal projects. • Long-term objective - large-scale EGS “greenfield” projects generating hundreds of megawatts apiece distributed over large parts of the country.

16. THE NEED FOR FRACTURE MAPPING AND CHARACTERIZATION • Hydrofracturing is the preferred technique for enhancing permeability and creating EGS circulation systems. • Hydraulic connections between production/injection wells must be good enough to permit fluid flow, but not too good - short circuits cause premature cooling. • Accurate fracture mapping is essential. Trial-and-error drilling costs will preclude EGS commercial feasibility. • Microearthquake (MEQ) monitoring is state-of-the-art, but MEQ’s cannot always distinguish permeable fractures and MEQ event locations may be poorly resolved.

17. DOWNHOLE TRANSIENTSELF-POTENTIAL (“SP”) MONITORING • Fracture pressurization will cause propagation of an electrokinetic SP (self-potential) signal from the fracture surface outward into the surrounding reservoir rock. • Downhole transient SP monitoring in nearby observation wells can provide additional fracture mapping data. • Combining MEQ and SP provides better drilling targets than either alone. • Accurate fracture mapping and remote sensing of fracture permeability reduces EGS project development costs.

18. ORIGINS OF SP IN THE EARTH Causes of natural voltages (“SP”) in the earth are: • Underground temperature gradients (“the earth as a thermocouple”), • Heterogeneous rock chemical composition (“the earth as a battery”), and • Electrokinetic effects caused by underground fluid circulation through pores and fractures (“the earth as a dynamo”).

19. ELECTROKINETIC EFFECTS • At a rock/water interface, potential differences cause charge separation in the molecular-scale electrical double layer, with negative ions preferentially attached to the rock surface and excess positive charge in the fluid. • The degree of charge separation is proportional to the potential difference or adsorption potential, which depends on temperature and on fluid and rock chemistry. • Fluid motion will carry separated positive charge, causing a weak distributed electric current (the drag current). • The drag current creates an electrokinetic potential gradient according to Ohm’s Law.

20. TRANSIENT SP CHANGE • Temporal changes in temperature and composition are relatively slow. Rapid SP changes arise from electrokinetic effects caused by underground fluid flow transients. • So observing temporal SP variations provides information about the subsurface flow and how it changes with time. • Hydrofracturing creates highly transient outward flows in the rock surrounding the fracture, causing SP changes during fracture pressurization and subsequent falloff.

21. RESULTS FROM SCOPING STUDY • About ten years ago, theoretical calculations were carried out to appraise the feasibility of using downhole transient SP monitoring to help characterize geothermal hydrofractures for EGS. • Numerical reservoir simulation techniques were used. A “base case” calculation was followed by over 70 more involving key parameter variations. • Since that study, SP-transient prediction capability has been incorporated into new geothermal reservoir simulation software.

22. THE BASE CASE

23. BASE CASE COMPUTED RESULTS

24. REMOTE SENSING • In the Base Case, after one month of pressurized injection, the volume within which the SP transient signal amplitude is greater than 100 millivolts is more than one kilometer in diameter. • The practical detection limit is 10 millivolts or less. • At the same time, the contact interface between the in-situ reservoir fluid and the new injected fluid has only moved outward about two meters into the reservoir from the fracture surface.

25. EFFECTS OF PERMANENT STIMULATION

26. OTHER APPLICATIONS • SP-transient monitoring of hydrofracturing in EGS reservoirs has not yet been attempted at full-scale owing mainly to a lack of suitable project sites. • The same basic approach may also prove useful for other applications requiring subsurface fluid flow management, e.g. monitoring “seal integrity” for: • “Fracking” operations for augmented oil and gas production. • Underground greenhouse-gas sequestration. • Subsurface toxic waste disposal.

27. SEAL INTEGRITY MONITORING • Purpose: to provide early warning of toxic materials leaking into the overlying potable groundwater supply. • First step: evaluate potential utility with scoping calculations analogous to those for the geothermal case.

28. Thank you!