Geothermal geological risk guarantee

In the early 1980s, towns around Paris drill by the dozen into the Dogger. This limestone aquifer runs under the Ile-de-France region at around 1,500 to 2,000 meters, with water at 55 to 85 °C. Each doublet costs several million, and no one knows before drilling whether the well will deliver the announced flow and temperature. The government then sets up a guarantee fund, with the agency that would later become ADEME; its management goes to SAF Environnement, a subsidiary of the Caisse des dépôts. The so-called short-term guarantee responds to geological risk in the strict sense. If the first well comes in below the thresholds set in the contract, the fund indemnifies part of the drilling cost, for total or partial failure. The long-term guarantee takes over during operation, on decline of the resource and some damage to the well, over a period in the order of fifteen to twenty-five years. The underwriter reasons in probability of success, built from the geological study and neighboring wells, and the contribution follows. The private market almost never takes this risk on its own, for lack of a statistical base. Vendenheim, near Strasbourg, shows the other side. In late 2020, the operator Fonroche's deep geothermal project triggers a series of induced earthquakes, up to a magnitude close to 3.5 on December 4. The prefect halts the project, and thousands of crack claims follow. That loss falls to the operator's liability under the French mining code, and to its liability cover. Not to be confused with the natural catastrophe regime: an earthquake caused by water injection is not natural in origin.