Bathers relax in the cloud-blue pools of an Icelandic geothermal operation. Canadian companies have been forced to invest outside of Canada, due to undeveloped regulations regarding its production. Photo:Dan Košťál

While most other industrialized nations with any kind of geothermal power potential have long since opened up properties to geothermal investors, multiple Canadian geothermal industry sources say that Canada is lagging far behind.

Magma Energy Corp. is one of several leading Canadian geothermal corporations. The Vancouver based corporation is listed on the TSX, but if one views their portfolio, something is missing: Canadian assets.

“We as a company did try to do projects in British Columbia, and we are not the only ones. Practically ever other company that has been through Vancouver or is still here has tried to do projects here. But without permits, it’s impossible to legally have a geothermal project,” says Alison Thompson, VP Corporate Relations for Magma.

The Ministry of Energy, Mines and Petroleum Resources has only allowed one permit option since 2004. The ‘Knight Inlett” property was purchased by Sierra Geothermal Power Corp., also a Vancouver-based corporation, in March of 2010. While the Ministry says the bidding was competitive and permits will remain competitive in order to generate public revenue, the winning bid came in at 8,079 hectares for a price of $2.03/ hectare for a total of $16,386.

“There has been absolutely no way to do any projects in the province. The rest of us have raised money on the Toronto Stock Exchange and basically bought into land, projects and operations around the world,” says Thompson.

“Nobody has waited around for the government because they haven’t moved quickly enough for us. They were supposed to have a permit option in June, but it got cancelled. There is supposed to be a permit option here in September, but if they do not do that soon, it will not even be available by October.”

Thompson says their own corporation’s practices of investing overseas is typical of all Canadian geothermal companies lately.

“Everyone is completely disappointed and frustrated, but those of us with a team in place and finances have taken that money and spent it elsewhere.”

The Canadian Geothermal Energy Association is the main industry association lobbying for B.C. to open up and let geothermal investors build a green energy industry. Their goals are not modest: 5,000 MW by 2015 is their tagline. Predictably, all major Canadian geothermal companies and corporations are members, but the emerging industry has attracted membership from oil giants such as Chevron, Suncor and Enbridge as well. Press releases on their website all tell a similar tale of Canadian permit frustration and overseas investment.

In the United States, over 3,000 MW of electricity is already being produced by 77 geothermal power plants, mainly in Nevada and California. U.S. properties form a large portion of both Magma and Sierra geothermal’s portfolio. They also own properties in Chile and Iceland.

As for interest in the Canoe Reach geothermal source south of Valemount, Thompson says no company would declare interest in a site before a competitive bidding process has been initiated, but she confirmed that the potential of Canoe Reach is known within the industry.

“As you know, it is on a highway. It is on a transmition line. It has known geothermal potential. It is just a matter of having policies in place that would allow geothermal investment,” she says. “The government has made a number of promises over the last several years about what permits are coming available and on what time frame. My comment both from Magma, and as a member of CanGEA is that nothing is going to happen until it is enacted.”

Liz Bicknell, a spokesperson for the Ministry, says prior to late 2007 the amount of interest in geothermal permits in British Columbia was limited. Bicknell says the Ministry is working towards making additional geothermal permits available through the legislated process and will balance interests while ensuring responsible exploration and development.

Photo: Dan Košťál

According to Ministry figures, 200 requests for permits were received between late 2007 and 2008.

“Once companies were informed of how the geothermal permitting system was legislated in the province, the majority of those requests were retracted,” Bicknell says. She says geothermal permits are issued through a competitive bid process similar to how petroleum and natural gas tenure is issued and not through a “staking claim” process like is used through the mineral tenure process. She says legislation and regulation amendments are being reviewed with regards to geothermal exploration and development.

“Geothermal electricity production is recognized by the government as one of the many renewable energy opportunities and we will respond to industry interests as they materialize,” Bicknell says. “Government will continue to work with industry to identify areas of interest for geothermal permits.”

The ministry would not comment on whether or not BC Hydro will be directed by the minister to expand into geothermal production. BC Hydro was unavailable for comment at the time of print.

Magma’s Thompson says she is skeptical about the government’s resolve.

“One site, no matter how good it is, does not make an industry. There are literally thousands of leases available in the US. There are hundreds available in most other countries. Chile thinks they can get 170 permits done by the end of next year. Any movement is encouraging, but I think that the public needs to get a reality check that the government is not doing enough to open up this industry.”

“Water boils at 100 degrees. Geothermal does not need incentives. It has been around for over 100 years. It is low base firm-cost power. We just need B.C. to open up.”