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Geothermal Insider

After close to a decade of serving the Southern Ontario region,
GeoSource Energy has been on the front lines of the geothermal industry,
we caught up with CEO and co-owner Stan Reitsma to discuss the
industry, and Ontario Regulation 98/12.

After close to a decade of serving the Southern Ontario region, GeoSource Energy has been on the front lines of the geothermal industry, we caught up with CEO and co-owner Stan Reitsma to discuss the industry, and Ontario Regulation 98/12.

GeoSource Energy is owned by three brothers: George, Stanley and Peter (missing) Reitsma.

How has the industry evolved over the past decade?
The type of work that is happening has changed an awful lot. From 2004 to 2006, it was almost all residential with these geothermal grants to retrofit the houses, but commercially there was very little. That’s now changed…The business has transitioned and I think really commercially and privately, for private business, it’s matured an awful lot in the past 10 years. While it’s not mainstream yet, it’s starting to become that way. In fact, we’re seeing it with condos now in Burlington and Hamilton. The Burlington, Hamilton and Milton area is a real hotspot for geothermal condo buildings.

As people become more aware of geothermal, are you seeing your customer base steadily growing?
I would say the developers that have gone with geo on one building have always continued. I have not seen anybody come away from it; once they’ve done it, they keep doing it and that would suggest to me that they like it, it’s selling, it’s working for their sales and once they understand how it works, they’re happy with it. A lot of our job is education and we’ll continue to do that until we hit a five per cent market share. Then customers will be aware of it.

How has technology evolved over the same time period?

The tie-in of geothermal boreholes at Ironstone Condominium in Burlington, Ont.

The drill rigs and drill bits – we see sonic rigs now and drill rotary machines – all these machines can get a casing in the ground quickly and pull it back out quickly. That technology has changed around in 10 years like you wouldn’t believe. There really wasn’t a geothermal drill rig available; it was all truck-mounted rigs. Now everything that we’re using is tracked, especially in commercial work. We’ve gone from six-inch or 4-3/4 inch holes down to 3-7/8 inch holes just to reduce all the costs associated with drilling and grouting. The dollar number per foot has gone down a lot, and that’s partly because the technology’s better. When we started if we could do 200 to 300 feet a day we were ecstatic. Now we can average 1,500 to 1,600 feet a day. We’re now looping and grounding three 600-foot holes a day, type thing. So the pricing’s coming down because the production has gone up, but in a way it’s making it more affordable for the geothermal systems to go in. The economics are there, there’s no doubt.

The other thing we’ve seen in development is the concept of what they call a utility, where someone comes in and opens a loop field and gets revenue from the building for, say, a 30-year period. That concept started to develop in 2006 and 2007. Now it’s becoming commonplace. A lot of developers will use their construction financing to put the loop or geo field in and they use some sort of take-up financing afterward and they continue to own the loops. The condo then pays a yearly or monthly fee to them for the investment. The fact that there’s financing available for these systems will really start boosting the industry to date most geo systems are essentially out-of-pocket cash, which makes them tough to move forward. The banks have not been particularly interested in funding geothermal systems for big buildings, but as the industry matures that will also start to change.

How do you stay on the leading edge of new technologies in the industry?
We tend not to watch the industry and follow the leader; we try to be the leader, at least in our business. For example, the PDC bit in 2006, nobody was using them; now they’re ubiquitous, they’re everywhere. We demonstrated it at a ground water demo in 2007 and people were wondering how we were drilling so fast. We were competing with a hammer-drilling guy and we were drilling twice as fast. 

Another example is how we apply our drilling to the full construction approach. We do a lot of our geothermal loop fields under buildings prior to construction and we needed to figure out a way to drill from surface prior to excavation. So we pioneered a technique where we drill from surface, bury our loops down 20 feet below grade so the tops of the loops are down, so when they go to excavate they don’t hit anything. Then we come back after they’ve gone to subgrade and we find our loops again, dig up the pipe, attach them, hook them up and bring them into the mechanical room at that point. We’ve done about 20 projects like that now, anywhere between 30 and 80 bore holes. That’s a niche for us.

What effect did Ontario Regulation 98/12 have on the industry?

GeoSource on the job at a geothermal project in Milton, Ont .

As an industry stakeholder of the Ontario Geothermal Association, I was invited to sit in on the meetings with people from Queen’s Park and the MOE. When the details came out for Reg. 98/12 there were things in there like 50 feet of casing into the rock cemented in on every bore hole. We figured it would double the cost of geothermal bore holes and loops. As soon as I saw that, I thought that’s it, the industry is finished. I was distraught. We could not get them to move off of that casing… Eventually we came up with the idea of a bridge plug, which is basically a big rubber donut with steel grippers. You send it down the hole with the hydraulic setting tool that you put water pressure on from your drill rig and it basically pulls on this and forces it to widen out and squeeze into the hole. We proposed that to the MOE and that seemed to satisfy them. Every geothermal driller in Ontario now has to have a bridge plug setting tool in case of an unbelievable situation.

They also insist now that the casing is grouted into the rock with bentonite to prevent gas migration up around the casing. For us that turned out to be a godsend because we discovered that we could get our casing out easier after…It was a fortuitous benefit of the reg. From my end, and this is not the same sentiment that everyone has, but I think the regulation needed to happen, it was just too bad that it happened in this manner. It was a reaction as opposed to being proactive. It was so brutal and abrupt that it raised an awful lot of anger, mistrust and fighting because of it.

How did the federal government’s end to the ecoEnergy Retrofit Program affect the industry?
It’s something that a lot of people would like to see come back, certainly for the heat pump guys, but for the drilling industry, the reality is that it’s the commercial side that has the big projects happening and they are unaffected by grants. There are virtually no grants for those; there never were.

Are there any exciting future plans for GeoSource Energy that readers can watch for?
We have some new drilling technology that we’re working on. We don’t know how it’s going to turn out so I can’t give too much detail on it yet. We’re also developing a new grout that we’d like to bring out. We’re working with some people to do this and we’re hoping that it turns into something. That should roll out in the next six months or so. Another thing that we’re really working towards in our business is getting more involved with the buildings and trying to push technology forwards, so things like an integrated pipe system that uses the hot/cold water distribution in a building to bring the heat and cool around the building…So you save money on the HVAC side and those numbers are surprisingly large and they’ll pay for the drilling. You can easily save a million dollars inside of a $30-million building and then that money can be used on the drilling side, for example.

This interview has been edited and condensed.

Julie Fitz-Gerald is a freelance writer based in Uxbridge, Ont., and is a regular contributor to Ground Water Canada.