The Geothermal Revolution: A Potential Solution to Climate Change
How Oil Companies Could Adapt Their Infrastructure to Provide Clean Energy
There is an unfathomable, untapped store of energy right beneath our feet. Luckily, the Earth’s crust is excellent insulator, holding back the ungodly heat that lies within our mantle, where temperatures can reach upwards of 9,400 degrees Fahrenheit. What if we could tap into this immense source of energy?
This is the idea that inspired the creation of geothermal energy infrastructure, which harnesses heat energy emanating from inside the Earth. Geothermal technologies, while under-resourced today, have the potential to solve climate change and hold significant advantages over current non-renewable and renewable energy technologies. The remainder of this article explains how geothermal technologies work, the different applications of these technologies, why it could be one of the best sources of clean energy, and how likely it is to be adopted by existing players in the energy industry.
Geothermal Technologies Explained
Geothermal technology harnesses thermal energy from beneath the Earth’s crust. Traditional geothermal energy is obtained by siphoning heat from nearby volcanoes or areas where geothermal resources are close to the surface (such as California), but these techniques are limited in their applicability, as there are many areas of the world where these conditions do not exist. However, many innovative alternatives to traditional geothermal technologies have been developed that make it possible to obtain geothermal energy from almost anywhere in the world.
One such alternative is called EGS, or engineered geothermal systems. In an EGS, several wells are drilled. Then, the rock at the bottom of each well is fractured, creating a reservoir. A fluid is then sent down, percolating through the cracks. The fluid comes up a well on the other end of the reservoir and is extremely hot, making it useful for heating buildings directly or going through a turbine to produce electricity. A simple example is shown in Figure 1, as detailed in Jamie Beard’s excellent TED Talk on this subject.
Another alternative to traditional geothermal technologies is closed-loop systems. Closed-loop systems are similar to EGS in that they involve drilling multiple wells and creating an underground reservoir. However, instead of using fracking to create a reservoir, the reservoir is entirely drilled. EGS typically uses water as a medium to propogate thermal energy, but closed-loop system designs enable the use of optimized working fluids that heat up faster than water and at lower temperatures. One of the most effective of these working fluids uses carbon dioxide, and not only is the use of these fluids less water intensive, but it also reduces climate change. Examples of closed-loop systems can be seen in Figures 2 and 3.
Some geothermal companies have even developed hybrid systems that benefit from the increased surface area and heat from the fracking used by EGS as well as the use of optimized working fluids and low drilling costs associated with closed-loop systems.
Why Geothermal Technologies Could Play a Pivotal Role in Solving Climate Change
Geothermal technologies are rapidly evolving, and due to the recent development of EGS and closed-loop systems, these technologies are becoming implementable across the globe. Not only is geothermal energy 100% renewable, but the processes used to obtain it produces minimal greenhouse gases. More importantly, geothermal technologies can be implemented using much of the same infrastructure currently used to drill for oil.
Currently, most applications of geothermal technology are limited by their geographic closeness to a volcano. This is because volcanoes are among the only accessible locations on the Earth’s crust where the conditions necessary to harness geothermal energy exist: hot rocks, pore spaces in the rocks, and water filling those pore spaces. Luckily, the oil and gas industry has developed innovative technologies that solve this problem, such as drill bits that can steer towards areas under the Earth’s surface that possess the aforementioned conditions and fracking technology that creates new pore spaces underground. While these technologies were originally created to access oil stores, they can easily be adapted to create or tap into areas where geothermal energy can be siphoned.
Many avid environmentalists suggest that geothermal may be the key to making the oil industry sustainable, because pre-existing oil drilling infrastructure can be adapted to obtain geothermal energy relatively easily. But what about the jobs lost due to this transition? Well, the transition towards geothermal would actually result in the creation of an estimated 3-4 times more jobs than other renewables. Part of the reasoning behind this statistic is that because geothermal technology requires much of the same infrastructure and expertise as the oil and gas industry, few if any workers in the oil and gas industry would experience structural unemployment due to a transition to geothermal energy. As Jamie Beard put it, “we don’t have to retrain geophysicists to install solar panels; we can let geophysicists do what geophysicists do best, but for geothermal instead of hydrocarbons.” Hypothetically, geothermal should stand as a politically non-polarizing solution that addresses climate change but also keeps the oil industry alive and oil workers employed.
But how does this flavor of geothermal compare with other renewable energy sources? Estimates rank geothermal as one of the least expensive sources of energy, being as much as 80% less expensive than oil and gas at scale. Additionally, unlike many solar and electric technologies that rely on rare earth minerals to remain functional, geothermal technologies are not dependent on limited, nonrenewable resources. Geothermal technologies can also harness energy regardless of weather conditions, contrary to wind or solar technologies. As such, when applied to energy grids, geothermal systems do not require methods of energy storage, mitigating the intermittency problems associated with wind and solar. As is shown by the Global Energy Network Institute in Figure 5, these attributes make geothermal a significantly more reliable energy source than other renewables.
Geothermal systems are shown to be highly energy efficient, using 25% - 50% less energy than alternatives to power systems used for harnessing energy. Geothermal systems also have a long lifespan, with pipes lasting between 25 and 50 years and pumps lasting for at least 20 years.
Disadvantages to Geothermal Technologies
Despite having a plethora of advantages over current energy technologies, geothermal is by no means perfect. Below are the main disadvantages to geothermal technologies:
Geothermal power plants emit 97% less acid rain-causing compounds and about 99% less carbon dioxide than fossil fuel counterparts of the same size, but nonetheless, they do emit relatively small amounts of greenhouse gases in the form of hydrogen sulfide, carbon dioxide, methane, and ammonia.
The fracking procedures used in EGS use a high amount of drinkable water, and may result in other environmental externalities. All non-traditional geothermal procedures also have the potential to contaminate groundwater.
Much like oil drilling, geothermal drilling can increase the frequency and intensity of earthquakes in certain areas. For example, Europe and South Korea have both experienced man-made earthquakes due to geothermal projects. While the increase in seismicity is almost always not enough to be felt by humans, the potential for man-made earthquakes still exists. Luckily, the oil and gas industry has developed advanced technologies to monitor seismicity to best prevent these kinds of earthquakes from occurring.
Most of the ideal land in the US that could be used to harness geothermal energy is on federal land, and it is far harder to develop a geothermal project on federal land than an oil project. This is because geothermal projects are subject to the National Environmental Policy Act (NEPA) and without a categorical exclusion like oil and gas development has, it is nearly impossible to gain approval for the development of a geothermal project on federal land. Since geothermal energy does not have a lobby to convince the US government to change this policy, most geothermal projects have to be on state or private land for the time being.
Currently, the most significant limitation of geothermal technologies is the need for a geographic closeness to thin crust areas or volcanoes. Unfortunately, technologies such as EGS and closed-loop systems have not yet reached scale and are primarily being developed by startups.
How Likely are Oil and Gas Companies to Embrace Geothermal?
According to Jamie Beard, “most oil and gas companies have geothermal teams and corporate leaders,” but how likely is it that oil companies will fully embrace this promising technology? Just last September, 12 of the world’s largest oil and gas companies pledged to become net zero, but without a specific timeframe. Despite the synergies between some renewables, such as geothermal, and oil companies’ stated emissions goals, the industry has not put its money where its mouth is. In 2020, the entire oil and gas industry invested $12.7 billion into clean energy solutions, a disappointing 0.2% of the industry’s $4.68 trillion in revenue. In 2021, about $100 million in investments went to geothermal startups specifically, with many of these dollars coming from oil and gas companies. Oil and gas companies tend not to show interest in a technology unless it shows considerable scalability, so these relatively low investment amounts may reflect that oil companies are primarily investing in geothermal startups to see what happens while leaving the door open to acquire first-movers who prove a concept scalable and profitable.
No matter how small these amounts might sound compared to the scope of the climate crisis, Jamie Beard estimates that only half a billion dollars worth of field deployments would be enough to garner a scalable geothermal concept. While oil and gas companies championing geothermal technologies would obviously accelerate the evolution and adoption of the technology beyond belief, the geothermal revolution appears to be marching on without this tailwind. For example, a geothermal startup called Sage Geosystems has begun retrofitting abandoned oil wells to siphon geothermal energy in Texas. There are currently over 29 million “orphan wells” across the globe, all of which having the potential to contaminate land, water, and air, while harming ecosystems, wildlife, livestock, and humans. Orphan wells also emit about 2.5 million tons of methane per year, the climate damage equivalent of three weeks of global oil consumption. While these abandoned wells may be perceived as useless by oil companies once oil dries up, they are free infrastructure for innovative geothermal startups like Sage.
Sage Geosystems happens to be primarily comprised of oil and gas veterans who used their knowledge of conventional oil industry technologies to make clean energy through geothermal applications. It is not unusual to find oil and gas veterans applying their pre-existing relationships and technical expertise to the geothermal startup space. Hopefully, these entrepreneurs will successfully leverage their connections to the oil and gas industry in order to form partnerships that will lead to wider adoption of geothermal technologies.
As oil companies start to feel the shrinking pain associated with being outcompeted by renewables, they will eventually be forced to adopt sustainable technologies in order to maintain their scale. Geothermal technologies offer oil and gas companies the once-in-a-lifetime opportunity to maintain their scale, provide lower energy prices to customers, maintain their workforce, and actually reach their net zero emissions goals. It is uncertain whether these corporate giants will recognize the potential of geothermal technologies before it is too late to preserve their size. More importantly, if oil companies can successfully adopt and scale these technologies, they could transition from being the cause of climate change to the solution. The oil industry’s redemption arc can be imagined, but will it be realized? Only time will tell.
Awesome article. Opens the door to lots of interesting opportunities!