The Rise of Geothermal Energy
Geothermal has historically struggled to make a name for itself in the clean energy space. However, in recent years, various companies and projects have emerged that are dedicated to exploring the possibilities that geothermal energy presents.
Geothermal energy is heat within the earth, and when harvested, it is a renewable energy source since the earth's core constantly produces heat. It has been considered a desirable source of energy because it is virtually unlimited. The issue, however, is the major obstacles that harnessing this form of energy, such as fracking, entails. Those familiar with these processes worry about excessive water usage or earthquakes caused by aggressive drilling, the high costs of production and risks associated with the projects, and the nearly insurmountable obstacles within the permitting process.
Traditional geothermal plants have existed for decades and work by trapping natural hot water reservoirs underground to power turbines that generate electricity 24 hours a day. In terms of the US energy mix, geothermal currently accounts for only 0.4% of overall energy production. This could change substantially, however, with the investments the U.S. Department of Energy (DOE) and other federal entities are making in exploring geothermal, potentially bringing it to the forefront of the clean energy space.
Investments from the U.S. Department of Energy
Major geothermal energy projects launched so far by DOE include the Energy Efficiency and Renewable Energy (EERE) Office's Enhanced Geothermal Shot. This initiative is designed to bring enhanced geothermal systems to Americans on a large scale. It is a part of the DOE's Energy Earthshots Initiative to tackle key technical challenges to reaching America's climate goals. The Enhanced Geothermal Shot is a department-wide effort to dramatically reduce the cost of EGS by 90% to $45 per megawatt-hour by 2035. See the full factsheet on the Enhanced Geothermal Shot here.
On the investment front; the DOE has given Utah Forge $220 million to fund an underground laboratory focused on developing, testing, and accelerating breakthroughs in the geothermal energy space and working to advance the uptake of geothermal resources. Additionally, the DOE has also awarded $8.4 million to establish new geothermal energy and heat production from abandoned oil wells. This partnership is between DOE and existing well owners and operators to use their existing wells to access untapped geothermal potential. The selected projects include:
Geothermix, LLC (Austin, TX)
ICE Thermal Harvesting (Houston, TX)
Transitional Energy (Aurora, CO)
University of Oklahoma (Normal, OK)
This program is an offshoot of the Wells Opportunity initiative, funded by the Geothermal Technologies Office, launched in 2020. Aside from the DOE, the Infrastructure Investments and Jobs Act provided $84 million for advanced geothermal research. [EG1]
Although these projects are a significant step in the right direction, those interested in geothermal have not shied away from the difficulties it presents. While traditional drilling methods are used, they are not efficient at getting to what experts call "superhot" temperatures, which would have the power to replace thousands of coal-fired power plans.
Other Players in the Geothermal Energy Market
Fervo, a company working on geothermal energy, uses fracking techniques to crack open rocks and inject water into the fissures to create geothermal reservoirs. Eavor, a Canadian company, is building underground radiators with drilling methods pioneered in Alberta. Joining DOE in significant investment into geothermal energy, Devon Energy has invested $10 million into Fervo and BP, and Chevron has invested in Canada's Eavor. Additionally, Nabors, a drilling service provider, has invested in GA Drilling, Quaise, and Sage. Between continued Federal and private investments, the path forward for geothermal has never been clearer.
Legislative Action
Congress has been slow to act but is interested in the issue of geothermal renewable energy. In 2019, Alaskan Senator Lisa Murkowski said in an Energy and Natural Resources hearing that although overlooked, geothermal space has serious potential. In January of this year, the Congressional Research Service issued a report on Oil and Gas Technology and Geothermal Energy Development, focusing on slowing US reliance on coal and transitioning to other forms of clean energy. However, with energy independence and permitting reform being top of mind for lawmakers, it is possible that conversations around geothermal will make their way to Congress more often in the near future.