Explosive Interest in Geothermal
“In 2019, everyone tried to convince me not to do geothermal, and now everyone is looking at geothermal,” says Philip Ball, a geologist and Chief of Geothermal Innovation at Clean Air Task Force. Ball pivoted to the Geothermal Industry after spending more than 20 years exploring for hydrocarbons in deepwater basins. While investigating the cost competitiveness of different geothermal technologies for an MBA thesis project, Ball became interested in utilizing his geoscience skills for geothermal exploration. He realized that the same skills used to understand hydrocarbon potential in rifted margins could be applied to geothermal exploration.
Most of the geologists interviewed for this feature article share a similar story. For example, Tina Riley, Geothermal Development Coordinator for the City of Boise, pivoted to the Geothermal Industry after 20 years as a geologist and Exploration Manager at ExxonMobil. The capabilities she developed in negotiating oil and gas exploration contracts, along with her foundational geology skills, are well-suited for the burgeoning Geothermal Industry that is gaining momentum across the country.
Recently graduated geologists have also pivoted to the Geothermal Industry. After gaining initial work experience in hydrocarbon exploration, Gabby Ramirez joined Ormat in 2021. Ramirez is now a Project Geologist responsible for the exploration, development, and production of conventional geothermal resources. Ramirez says that the seismic interpretation skills she developed while exploring for resources in West Africa have been unexpectedly important for work in Geothermal exploration. Although most conventional geothermal reservoirs are hard-rock igneous systems, Ormat is developing clastic reservoirs in the Imperial Valley of California.
In addition to having transferrable skills, geologists are pivoting for other reasons, too. Ball, Riley, and Ramirez all say that their pivot to Geothermal was influenced by an interest in decarbonization. Additionally, Geothermal jobs are more distributed across the country, which appeals to those geologists looking to leave Houston. “Conventional geothermal tends to happen at plate boundaries in really gorgeous locations,” says Ramirez. Finally, the Geothermal Industry may be more stable than Oil and Gas. Because of the tie to baseload power generation, geothermal is not commodity-price driven and thus is not subject to the cyclic nature of industry booms and busts.
Customer demand for geothermal power is growing. Riley says her current role was specifically created to address the growing interest in geothermal power among businesses and residential customers. She is seeing customer demand for expansion beyond traditional geothermal hotspots in the West. While some cities like Boise have been using geothermal power for heating since the 1980s, “We can be doing this in a lot more cities,” says Riley.
Aligned with the growing number of geologists pivoting to Geothermal and customers asking for Geothermal, the Industry has seen an influx of geothermal start-up companies since 2020. Recent startups in Houston include Criterion Energy Partners, Sage Geosystems, Fervo Energy, EarthBridge Energy and others. These companies are taking advantage of Houston’s robust innovation ecosystem (see articles in the October Bulletin), as well as proximity to drilling and other service companies, as well as prospective investors.
Funding is not Keeping Pace with Interest
Despite the strong interest in Geothermal, funding is not keeping pace. “Lack of success, or perceived lack of success” is one of the critical barriers to geothermal funding, says Malcolm Ross, self-proclaimed geothermal evangelist, industry advocate and innovator. Geothermal demonstrations take years to prove success and are not well-aligned with investor funding cycles. Companies such as Fervo Energy and Eavor Technologies (see below), as well as the Department of Energy’s (DOE) FORGE project, are making significant advances in demonstrating the potential of new geothermal technologies, but it could be a couple of years before these projects produce results that reduce investment risk.
Ross advocates on the state and federal level for geothermal funding. He says that the DOE’s Geothermal Technology Office is under-funded relative to the resources available to renewables. Government investments on the order of at least $500 Million are necessary to propel the industry along the experience curve needed to achieve cost parity with alternatives. Additionally, companies need early development loans, but many are not eligible for DOE Loan Office programs, which set the minimum loan amount much higher than early development projects require.
Baseload Capital has taken a unique approach to progressing geothermal projects. Bridget Silva, Head of Commercial Strategy for Americas at Baseload, says that in addition to evaluating and investing in the exploration of greenfield geothermal, the company seeks to create short-term value through improving the resiliency and performance of existing, always-on baseload power. For example, Baseload is currently investing to optimize the efficiency and effectiveness of two existing power plants, while exploring to develop several other plants. Silva says that the company plans to grow and develop partnerships to bring synergies on an Industry-wide scale. “We have a lot of friends who want us to win,” says Silva.
Another innovative funding model is being piloted by Project InnerSpace. They are an independent organization working to facilitate the rapid global deployment of geothermal energy and are trying to solve the funding problem through philanthropy. The first phase of their project was kicked off in the Fall of 2022 and is designed to develop an interactive global resource map to identify high-geothermal-impact locations. The second phase aims to fund startups with high-impact potential. The goal is to reduce project risk so that private investment capital will follow.
What is Holding Geothermal Back?
Drilling and completions costs and drilling risks are the most significant concerns for potential investors, says Tony Pink, Vice President of Subsurface Energy Technology at NOV. Drilling is one of the most significant costs in a geothermal development, where a well can cost as high as $20-$40M, might take 70-80 days to drill, and could be a “dry” hole. Driving efficiency in drilling costs can have a substantial impact on project economics. Pink lists five key drilling-related barriers that NOV and other companies are working to solve.
First, slow rates of penetration through hard rocks result in high-cost wells. While industry was drilling 30 ft per hour several years ago, recent projects have experienced rates of 125-130 ft per hour, says Pink. Second, downhole tools are unreliable or inoperable at ideal temperatures for geothermal at or above ~350 F (~180C). Pinks says that NOV has helped solve this problem by designing a double-wall pipe string to insulate tools from the rock, similar to the concept employed by a popular cooler brand. Third, low-temperature drilling fluid can damage the high-temperature rock by cooling the vicinity of the wellbore. Even a couple weeks of delay in returning to normal heat levels at the wellbore can result in a sub-economic well. Fourth, cement and casing are weakened at geothermal temperatures. While this may not be a problem for crystalline basement, it may be a problem for poorly consolidated or highly fractured rocks. Finally, hot and salty fluids are generally corrosive to wellbore construction materials. Pink says that NOV has pioneered much of the new drilling technology for geothermal, but engineering problems persist.
Future of Geothermal: Research and Innovation
The conventional Geothermal Industry, i.e., producing hot fluids for heat or electricity production, is still young, and much work remains on better understanding conventional geothermal systems. The University of Nevada at Reno (UNR) is leading research on conventional fault-controlled convection geothermal system. Nicole Wagoner, who started her geology career in Oil and Gas, pivoted to a Geothermal PhD program at UNR in 2020. Wagoner says that her research utilizes play fairway analysis adapted from Oil and Gas to determine statistical relationships of what leads to success in geothermal systems. Wagoner explains that while much of the geothermal ecosystem is focused on non-traditional styles of geothermal production, there is significant unexplored potential in traditional conventional systems.
Ramirez echoes the sentiment that abundant conventional geothermal resources remain to be discovered. Most of the resources with surface expressions have been discovered and are in development. “We need to get more clever,” says Ramirez, “and look for geothermal systems with innovative geophysical methods, such as magnetotellurics, gravity, and magnetics.” Ramirez also explains a need for research into optimal development models to sustain production in operating fields.
What is old is new again, for geopressured geothermal, a style of geothermal energy production that relies on producing moderately hot fluids from overpressured Gulf of Mexico reservoirs such as the Wilcox and Frio formations. Geopressured geothermal production was studied in 1989-1991 through DOE-funded grants at Pleasant Bayou (Texas Fact Sheet). The method involves producing methane-enriched brine to the surface, selling or producing energy from the methane and using the brine for additional geothermal electricity generation or heat. The idea was not pursued due to the rebound of oil and gas prices in the 1990s but is again gaining interest today. Two long-time HGS, Steve Getz and Bob Wiener, formed Geothermal Resources LLC to develop geopressured geothermal sites along the Gulf Coast and conventional geothermal plays in Nevada. In 2022, Houston-based start-up Criterion Energy acquired a 10,000-acre lease to explore geopressured geothermal (Criterion Energy).
Several other startups in the Houston area are also exploring and intending to utilize geothermal resources in innovative ways. Mei-Mei Pickering is the co-founder of Viridly, a geothermal startup that participated in the 2022 cohort of the Rice Clean Energy Alliance. Viridly aims to use conventional geothermal resources with innovative surface geology to heat greenhouses. Derek Adams (see Pivot Profile in this Bulletin) co-founder of EarthBridge Energy is seeking to use Earth’s insulating properties for long-term energy storage. Geothermal Evangelist Malcolm Ross is working to promote the idea that salt domes, such as Spindletop, could be excellent sources of geothermal energy while simultaneously allowing for H2 or CO2 storage.
Sage Geosystems™, Fervo Energy and Eavor Technologies are three startups that stand out from competitors. They have raised funding and are pursuing innovative geothermal drilling technologies that allow unconventional geothermal production across a wide range of geothermal heat sources. Mike Eros, Chief Geoscientist at Sage Geosystems, says his company developed industry partnerships and raised philanthropy seed-round funding. Sage aims to pilot the application of traditional Oil and Gas drilling technology to “hot, dry rock” in a method called Enhanced Geothermal Systems (ESG). The method involves pumping cold water into deep, stimulated rock fractures in low-permeability formations. The water is heated through conduction and convection and then produced back to the surface to be used in electricity generation. Sage has also piloted storing and recovering electricity as pressured water (mechanical energy) in fractures at their Texas demonstration site (Sage Canary Media).
Emma McConville, Development Geoscience Lead at Fervo, says that the company has been successful in gaining investors by taking a phased approach. Fervo initially demonstrated the viability of their technology by recompleting non-productive geothermal wells drilled by other operators. The technology demonstration convinced investors to fund a pilot project that recently realized significant improvements in drilling speed on three ESG-completed wells. Following drilling results, Fervo recently announced plans for 400-megawatt power generation facility in Utah (Fervo Energy Canary Media).
Eavor is piloting a slightly different completion technology called Advanced Geothermal Systems (AGS) or “closed loop” systems in which multiple laterals are drilled. The toes of the laterals are connected and a working fluid is circulated through the laterals, similar to a radiator concept. The hot fluid is returned to the surface and can be used for electricity generation or residential heating. The process works through heat convention and can be used in lower-heat geothermal environments. Eavor was recently awarded a Department of Defense contract to power the U.S. Air Force base in San Antonio, Texas (Eavor globenewswire.com).
Build it and the Jobs will Follow
Despite the enthusiasm among the Geothermal community, there are currently very few geologist jobs in Geothermal. For example, although Ormat is one of the largest geothermal energy producers, Ramirez is one of less than a dozen geologists exploring and developing worldwide resources. Riley says there are currently no geologist roles with the City of Boise to manage their geothermal production. As Chief Geoscientist, Eros is currently the only full-time geologist at Sage. Wagoner, who plans to graduate with a Ph.D. in a few years, believes jobs will follow more funding and more demonstrated geothermal successes.
McConville notes that Fervo has recently increased the size of their geothermal team to five geologists. They also offer two summer geology internships. She sees a strong future ahead for geothermal geologists. To scale-up the Geothermal Industry “it will take a huge number of wells and a fast timeline,” which will require technical support, says McConville. When jobs open, geologists will be ready. “Geothermal is small; but vibrating with energy. Everyone is ready to see geothermal soar,” says Ramirez.
