HOUSTON — The future of an emerging form of American clean energy could be built on an unexpected foundation: technology and experience from Big Oil.
At least, that’s the hope of representatives of major oil companies, tech startups, scientists and climate groups who met in Houston this week to launch a $10 million series of summits.
Their goal: to use the technology of oil and gas — an industry whose products are the primary force driving the earth’s major natural systems toward collapse — to build a new stalwart of the American power sector.
That emerging force is geothermal energy, which uses heat from deep underground to generate power.
The Energy Department has argued geothermal, which offers a way to produce on-demand, zero-carbon energy without major technological advancement, could power as many as 260 million homes by midcentury.
In April, the agency projected that only $25 billion in public-private investment — less than the cost of a recent nuclear project — spent by decades’ end could begin a rolling snowball of innovation that makes that future a reality.
These advantages — and a wave of federally-funded research that has proven early-stage geothermal technology — have fueled the launch of a bustling Texas startup scene. On Tuesday, Houston-based startup Fervo announced that it had raised $100 million toward a project contracted to put 400 megawatts of geothermal energy on the Nevada grid by later this decade.
And last month, Sage Geosystems, which is also based in the city, signed one deal with Meta to provide underground energy storage to power company data centers and another to put electricity directly into the Texas grid — both efforts to use geothermal-adjacent technology to compete in Texas’s booming battery storage market.
Geothermal resources lie beneath the surface in other areas of the country as well, waiting to be tapped: In June, Project InnerSpace, a leading geothermal advocacy group, released a widely-circulated map showing the vast potential for geothermal energy across the U.S.
The current summits are particularly focused on next-generation geothermal — which uses fracking technology to excavate artificial reservoirs in the hot, dry rock thousands of feet underground.
This is a method that offers significant — if still unproven — advantages in the current energy landscape. Next-generation geothermal can produce electricity when solar and wind are inaccessible, and it lacks the mineral supply chain problems of batteries, the river-reliance and seasonal instability of hydropower and the price swings and pollution of fossil fuels.
It also offers the only current means, aside from nuclear power, of generating on-demand electricity on the specific spot where it’s needed without heating the climate.
Even with its apparent potential, however, the industry also faces roadblocks and bottlenecks that are holding it back from fully taking off. The Geothermal Energy from Oil and Gas Demonstrated Engineering (GEODE) consortium, which launched this week, brings together representatives of the industry, policy and academic worlds to identify those challenges — and determine how to remove them.
The consortium brought together “the best of the energy industry,” said Jamie Beard, founder and director of Project InnerSpace, which is co-running the Department of Energy-funded project.
There were representatives of the first generation of geothermal startups: companies like Sage, Fervo and Bedrock Energy; scientists from national laboratories like Los Alamos and the National Renewable Energy Laboratory; labor leaders from groups like the Texas Climate Jobs Project and the International Brotherhood of Electrical Workers.
And there were also representatives of major oil companies like Oxy, BP, Devon or Chevron — where some executives see geothermal, with its heavy reliance on drilling, as the most obvious renewable for their companies to focus on as they look to expand their energy portfolios beyond fossil fuels.
As things currently stand, the geothermal sector has struggled with the common problems of emerging industries: the difficulty of raising sufficient money for projects that, however promising, have yet to prove themselves.
As GEODE working groups this week concluded, many of the industry’s handicaps relate to this lack of a proven track record, an obstacle that previously confronted wind power in the early 2000s and solar in the 2010s.
With the first commercial geothermal projects still in their infancy, there isn’t enough data to persuade financiers to invest in new projects that would help provide more data. And without a clear demand for geothermal jobs, workforce training programs aren’t turning out the skilled laborers that would allow the sector to expand — which could, in turn, create more jobs.
Other potential problems relate to the sector’s current reliance on water — an issue in Texas and the West, where the nation’s best geothermal resources coincide with diminishing rivers and groundwater.
And geothermal faces cultural and social issues, as well: concerns related to earthquakes and water pollution, popular distrust and dislike of oil and gas companies and fears that a new geothermal drilling revolution will replicate the environmental damage and injustices of the shale boom that began in the mid-2000s.
That boom made the U.S. the world’s leading oil and gas producer. But that outpouring of oil and gas relied on wells and pipelines that often went — and still go — into the ground without the consent of landowners, and at the cost of water pollution, cancer risk and social conflict.
These are the kinds of problems that GEODE is intended to get ahead of. Over a year of meetings across the country, GEODE aims to build a clear sense of the technical, social and financial issues holding the industry back — and the ways that existing knowledge from oil and gas can help address those challenges.
Then — if granted in future appropriations by Congress — the program would make up to $155 million in additional Energy Department-funded grants to companies and research institutions seeking to solve those problems.
Its ultimate goal is to create a series of new first-of-a-kind geothermal technology demonstrations by the end of the decade.
This builds on a productive model of public-private collaboration that has helped get geothermal to a place where big commercial deals are even possible. Fervo’s recent deals, for example, have relied heavily on — and contributed to — research done in southern Utah by the Frontier Observatory for Research in Geothermal Energy (FORGE) program.
Much of the rapid progress the industry has made in recent years has relied on the decades-old tradition of knowledge transfer between oil and gas and geothermal.
The diamond-cutter drill bits currently used to drill for oil and gas, for example, were originally developed by federal researchers in the 1980s for geothermal. In the present day, meanwhile,oil industry’s expertise that could be helpful to geothermal extends from the resolutely technical — methods of horizontal drilling, say — to the more organizational.
Oil and gas companies have learned over the course of decades how to get big, risky projects financed, and how to integrate diverse teams of geologists, engineers and surveyors to drill wells quickly — all of which geothermal developers would have to do to keep costs down and projects attractive to investors.
In an interview with The Hill on Thursday, Fervo CEO Tim Latimer praised the GEODE effort, which his company is participating in.
“There’s a lot of technical resources in the oil and gas industry that can be systematically applied to the geothermal sector,” Latimer told The Hill. “And we’re really excited there’s a consortium there pushing it forward.”
Despite a level of initial “distrust,” Chad Timken of the Society for Petroleum Engineers (SPE), which is co-running GEODE, told The Hill, “as the days have gone on, it’s been, ‘Okay, we’re more similar than not.’”
In a potentially discordant note for the climate movement, Timken raised the possibility that the knowledge transfer could be two-way. “There are some reservoirs that are extremely hot that oil and gas hasn’t messed with because we don’t have the technology to drill that deep,” Timken added.
The summit “is for technology transfer from oil and gas to geothermal,” he said. “But at the same time, it’s like, ‘What can oil and gas take away from geothermal that also helps that industry as well?’”
Dana Otilio, a spokesperson for SPE, said that Timken, despite his coordinating role in GEODE, doesn’t speak for the organization as a whole, and his “in-the-moment, casual and personal” comments were “not based on any SPE position.”
“I can assure you, as an SPE spokesperson, that SPE does not have an ulterior motivation nor any alternative plan for our involvement in GEODE” beyond the transfer of oil and gas knowledge into geothermal energy, Otillio added.
In an interview on Thursday, Latimer of Fervo said he hoped the consortium looked beyond exploration and drilling — areas where recent advances have rapidly cut costs — and also focused on how to produce power from geothermal wells more efficiently and at lower cost.
Fervo wants help in that domain because — as company leadership noted in a presentation last week — those “above ground” costs are now the biggest ones facing the company.
“We need more efficient cooling technologies that don’t involve water, more efficient real-time monitoring, production and injection pumps that are designed for geothermal,” he said.
In addition to technical challenges, the group will have to confront political ones.
“It is a situation where you have two industries who maybe haven’t always gotten along — or two ideologies that don’t seem to really mesh very well,” Timken of SPE said.
Project Innerspace director Beard has argued that geothermal, which is currently the form of geothermal energy with by far the most bipartisan support, risks being torn apart by American political polarization if the sector isn’t proactive in addressing divisions between the renewable and oil and gas worlds.
As such, some of that first $10 million GEODE participants put toward launching the summits went to hire a conflict management group with experience working in conflict zones from postwar Guatemala and Northern Ireland to post-apartheid South Africa.
“We’re coming from different cultures, different levels of trust, different levels of respect,” said Harvard psychologist Josh Greene in an address at the end of the second day.
“I think that if this is going to succeed, it’s going to be because there has been a collaborative culture that embraces the entire group.”
