When Will The U.S. Tap its Massive Geothermal Energy Potential?
Following the COP26 summit in November, it seems governments are racing to develop their renewable energy sectors. But as they turn their backs on fossil fuels, many appear to be focused almost solely on wind and solar power, largely overlooking alternative options. After years in the making, the U.S. geothermal industry is finally gaining momentum, but will it attract the investment and support it needs to fully develop?
Across the U.S., four geothermal energy projects are going ahead. This month, the US Department of Energy (DoE) announced it will be providing up to $8.4 million to fund four geothermal energy developments. The projects will see the conversion of several abandoned oil and gas wells into geothermal wells.
Geothermix LLC of Austin, Texas will receive funds of $2.5 million to produce geothermal energy from waste heat in the wells. Meanwhile, Houston-based ICE Thermal Harvesting expects to receive $1.7 million of the funds to produce energy from 11 oil and gas wells in San Joaquin Valley, California. And $1.7 million will support the University of Oklahoma’s aim of producing heat from an oilfield in the state.
Colorado-based geothermal company Transitional Energy announced this month that it will receive $2.5 million of the funds to run a pilot project. It plans to invest these funds in the redevelopment of oil wells into geothermal wells, installing geothermal heat engines to produce electricity at the Blackburn Oilfield in Nevada.
The firm hopes to produce 1 MW of renewable power at the site, replacing diesel power and providing electricity to the grid to power the oilfield. This is a case where fossil fuel and renewables are coming together to bridge the gap in energy production during the transition to cleaner energy. While oil operations continue in the U.S., several oil producers are looking for ways to decrease their carbon footprint without giving up on oil completely. This type of project could offer a solution.
Michael O’Neal, President of Grant Canyon Oil & Gas stated, “we are excited to be working with Transitional Energy. They are a group of forward-thinking professionals who understand the need and efficiency of integrating geothermal with hydrocarbons.” He added, “We look forward to implementing this innovative technology to cut our electrical costs, increase the production and extend the life of our assets. Our EOR projects in Nevada move a significant amount of water, so we are delighted to be a part of enhancing the beneficial use of this water. We believe that this project with Transitional will possibly develop into several projects as we move forward and will mesh well with our ESG goals.”
But not everyone sees geothermal projects so favorably. This month, a Nevada judge placed a temporary block on works by Reno-based Ormat Technologies Inc. to develop a geothermal plant in northern Nevada's high desert. Environmental groups brought the lawsuit on Ormat because of the ecological value of the site, stating that the U.S. Bureau of Land Management illegally approved the project.
The planned project includes two 20-megawatt geothermal plants. Ormat has already invested $68 million in the development, which it believes would help Nevada meet its renewable energy goals of 25 percent renewable utility power by 2025. But new renewable energy projects are facing the same hurdles as oil and gas projects, needing to find suitable land for the construction of largescale developments.
New geothermal projects come as a sigh of relief to many firms across the U.S. that have long been pursuing the development of the clean energy source. Geothermal projects source energy from the earth’s core, making the energy source available all year round, compared to less predictable wind and solar power. However, this form of power is largely untapped, with the U.S. DoE believing it has the potential to make up 10 percent of current domestic energy needs.
But largely due to the high expense involved, the geothermal growth rate has been shrinking in recent years. Geothermal advocates say it is necessary for governments around the world to subsidize geothermal projects to get past the set-up hurdles, helping companies to invest in safe developments and funding risk mitigation during pilot projects to learn from and improve for long-term production.
With electricity demand expected to rise globally, it has become evident that we need to tap into new energy sources if we hope to move away from fossil fuels. The International Energy (IEA) Agency released a report that highlighted the steepest ever increase in the demand for electricity in 2021. This led to blackouts and record-high prices, as well as a rise in greenhouse gas emissions around the world. The IEA predicts that this trend could continue for the next three years unless there is a more rapid structural change in electricity production.
While there is a clear need for new energy sources to provide electricity as demand continues to grow, little has been done in recent years to develop America’s geothermal energy industry. We are now seeing positive moves from the government, as the DoE funds several projects across the country, but still, more can be done. If the U.S. hopes to meet its carbon reduction targets over the coming decades it must invest heavily in a variety of renewable energy developments rather than focusing on a limited portfolio principally made up of wind and solar projects.
By Felicity Bradstock for Oilprice.com
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