A Sensitivity Study of the Economic Parameters for The Geysers Geothermal Field, California

Abstract

This paper analyzes the sensitivity of the revenue to be derived by a developer at the Geysers to the variations in fifteen most important variables. The "cost" variables considered were drilling cost per well, redrilling cost per well, facilities cost per drilled well, facilities cost per production well, disposal system cost per injection well and operating cost per well. The "rate" variables considered were deliverability decline rate, rate of drilling success, rate of redrilling success, rate of well loss per year due to mechanical causes, plant factor, steam price escalation rate, inflation rate and discount rate. Harmonic decline in well deliverability was assumed, based on the observed production decline and reported theoretical results. The results showed that cumulative revenue is most sensitive to the drilling cost per well among the cost variable, and to the steam price escalation rate among the rate variables.