Pagosa Verde presents risk versus benefits of continuing project

Last week, Pagosa Verde president Jerry Smith presented the Pagosa Area Geothermal Water and Power Authority (PAGWAPA) with an analysis of the risks associated with continuing to explore the local geothermal aquifer.

“What you guys asked for was a risk analysis of going forward with the next stage of the drilling program,” Smith began, “so, that’s what we’ve done. There are limitations in any analysis. This isn’t a business plan. There are alternative scenarios that we looked into, alternative financial scenarios for capital capture, stuff like that.”

Smith then explained the next step would be to drill a 2,500-foot-deep, 6-inch-wide hole at the site of the first thermal gradient well (TG-1) near the intersection of Light Plant Road and U.S. 84. It would cost more money to make the hole this wide, as opposed to making it only 4 inches wide, but it would allow the well to serve two purposes — both as an exploratory well and as a production well.

He then spent the next half hour explaining the risks versus the benefits of a variety of outcomes.

The worst-case scenario would be to drill the hole to that depth only to find out there is no water at that depth. Smith said the chances of this occurring are “below measurable.” Another risk would be if there is no heat down there. Again, there isn’t much chance of this happening, according to Smith.

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This story was posted on October 15, 2015.