A geothermal exploration project underway for nearly a decade at Lakelse Lake has received an interest-free federal loan of more than $3.6 million.
This will give the project the opportunity to continue developing the potential to draw superheated water from underground so the heat can be used for various industrial and domestic purposes.
Kitselas Geothermal Inc. (KGI), a partnership between the Kitselas First Nation and Calgary-based Borealis GeoPower, has identified areas on the east side of Lakelse Lake on which it wants to drill but first needs permits from a provincial agency.
Alison Thompson from Borealis GeoPower said the loan from a federal agency called the Pacific Economic Development Agency of Canada will be used to pay for drilling expenses and work required in asking the B.C. Energy Regulator for the drilling permits.
There had been expectations KGI would be drilling this past summer, expectations that drew protests and worries from some Lakelse Lake residents who feared the impact of well drilling on private property and on the area’s water table.
KGI has obtained subsurface drilling rights from the provincial government, giving it the ability to drill on private land provided it follows accepted work standards.
Information sessions held earlier this month indicated KGI was doing environmental assessments and planning on how to minimize disturbances from drilling and on soil composition to determine drilling viability. The company is also outlining reclamation work once drilling is finished.
“We didn’t drill this summer and we won’t be drilling until the well authorization is provided to us,” said Thompson.
Should there be sufficient water to be pumped to the surface, KGI has been clear it will only be selling the heat.
“Our project remains focused on supplying heat to industrial users in the Terrace region,” said Thompson.
Geothermal heat is regarded as one way to stop using fossil fuels as a heating source for different applications.
The loan of $3.658 million comes from the federal Pacific Economic Development Agency of Canada’s Jobs and Growth Fund.
Information from the agency indicated the loan will be forwarded to reimburse costs as KGI reaches specific project targets.
“For this project, some of the major milestones include Kitselas Geothermal obtaining drilling permits, completing well testing and reservoir assessments, completing final well drilling, completing the engineering design of the pipeline, and finalizing pipeline constructions,” said a statement from the agency.
At one time, Skeena Sawmills appeared to be interested in a pipeline pumping heat to its Skeena Bio-energy pellet plant to dry pellet material instead of using natural gas. But the sawmill and pellet plant are now under receivership.
Interest in the potential for Lakelse Lake area geothermal dates back to 2013 when Borealis and a joint venture partner acquired an exploration permit for approximately 2,900 hectares, stating then it believed a successful project could lead to a power plant producing 15 megawatts of power.
That year it received $2.4 million from the federally-financed entity called Sustainable Development Technology Canada to develop a precise way of drilling production wells.
Its partners in that effort were Enbridge and the Kitselas First Nation.
Enbridge has since bowed out and the Kitselas and Borealis formed Kitselas Geothermal Inc. The company has been the beneficiary of provincial grants and, in 2022, Shell signed up as a joint development partner.