Enhanced Oil Resources Inc. and GreenFire Energy Work Together to Develop CO2 based Geothermal Power Plant

Enhanced Oil Resources Inc. (TSX-V: EOR) is partnering with GreenFire Energy to evaluate the potential for CO₂-based geothermal power production in the St. Johns Dome area -- in Arizona and New Mexico.

The joint venture will construct a plant that will utilize naturally occurring carbon dioxide (CO₂) from the St. Johns Dome area to drive a demonstration geothermal power facility.

Volcanic activity long ago gave the St. Johns Dome area potentially the largest undeveloped source of carbon dioxide in North America. The area is ideally suited for the project due to its combination of a large volume of low-cost, pure, natural CO₂, the likely presence of a thermal reservoir underlying the region, and a local connection into the power grid.

The project will use Greenfire’s new CO₂G technology. Unlike conventional water-based geothermal energy CO₂G uses carbon dioxide as the working fluid. But the process has similar foundational designs to water-based geothermal in that Greenfire will produce the CO₂ through wells just as super-heated water is produced in a conventional geothermal process. The CO₂ is cycled through a heat exchanger which creates stem for the turbines that generate power. The CO₂ is reinjected into the geologic formation in an emissions-free, closed-loop system. The technology has the potential to have the lowest combined capital and operational costs of any scalable power generation system.

The demonstration project is expected to commence in 2010 with the drilling of up to four deep wells to access high heat crystalline rock underlying the dome. The construction of the demonstration plant will commence during 2011 and will initially be sized for 2 megawatts. If the initial project is successful, the companies will build modular commercial-scale plants, each with a 50 megawatt generating capacity. The joint venture could have a generating capacity of 800 megawatts. GreenFire will act as the operator of the geothermal project and EOR will act as operator of the St. Johns field development.

Eventually the joint venture hopes to use the process to generate power using the CO₂ emitted by coal-fired power plants. The region contains six major coal-fired power plants that collectively emit about 90 million tons of CO₂ per year. The CO₂G process can cycle the gas through the rock, sequestering it into the surrounding geologic materials – which already hold naturally occurring CO2. The power generated by the geothermal plant can then drive the carbon capture technology, which is energy intensive, at the coal-fired power plants. Potentially, over 3,000 megawatts may be generated at the dome using CO₂ generated by power plants.

If the federal government enacts a carbon tax, then the most economical way for these power plants to sequester their carbon may be through CO₂-based geothermal energy production at the dome. As power plants around the world begin implementing carbon capture and sequestration, many additional sites for CO₂-based geothermal energy projects could become available. CO₂G could become the only scalable, renewable energy source that also sequesters carbon.

The joint venture intends to apply for funding from the Department of Energy through the federal stimulus plan funds allocated for geothermal energy projects. The companies may also apply for funding available to carbon capture and sequestration projects.