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  • Miles below the Earth's surface, there's a source of renewable energy that could sustain all of humanity for the foreseeable future.

  • Just 0.1 percent of Earth's total heat content could meet our energy needs for two million years, according to ARPA-E, the government agency that

  • funds R&D efforts for advanced energy technologies.

  • It's more than we could use in our entire arc of civilization, thousands and thousands of times over.

  • It's called geothermal energy and in some ways it's old news.

  • It's been used to heat buildings since the late 1800s and to provide electricity since the 1900s.

  • But though the U.S.

  • has the most installed geothermal capacity in the world, it still only accounts for about 0.4 percent of our total electricity mix.

  • And we almost never hear about it

  • Because geothermal has been around for over 100 years, it just doesn't have the same kind of cachet that some new energy source

  • has,

  • Though newer geothermal technologies are essentially emissions-free, it's expensive and technically challenging to drill geothermal wells.

  • The hotter and drier the rocks are, the more difficult it is.

  • And now that natural gas, wind and solar are so cheap, there just hasn't been much economic motive to scale geothermal in more difficult

  • geographies. But that's changing.

  • Fast forward a few years and it's a very different world.

  • I think the volatility of the oil and gas sector, as well as this increased focus on climate change and the environment and sustainability,

  • have really caused these companies to wake up and realize that the energy transition is going to totally change how business is done.

  • Now oil and gas majors like Chevron and BP are getting into the game, making investments in the geothermal space.

  • It's a natural fit, as the skills required for drilling oil and gas wells are quite similar to drilling for geothermal, and technical innovations

  • from the shale revolution are making the economics more feasible.

  • Most of the heavy lifting was already done by the oil and gas industry in the last five or 10 years.

  • We're sort of riding on the coattails of their advances in directional drilling and speeding up drilling.

  • We spoke to a number of startups in the geothermal space, gearing up to demonstrate their tech or developing their first commercial projects, all

  • hoping that their approach will help get the world to 100 percent renewable energy.

  • I feel like geothermal is where mobile phones were in the 1990s with these big clunky models that nobody could afford.

  • Whereas now, there's a mobile device in everybody's hand.

  • You can just feel that we're in early innings of something that people are just recognizing what a transformative impact it's going to have on the

  • world.

  • The most obvious sign of geothermal energy is when it breaks the surface, creating hot springs or geysers.

  • The first geothermal power plants that were developed over 100 years ago were put in places that were so hot that the steam was literally coming

  • right out of the ground.

  • Today, there are over 60 geothermal power plants in the U.S.

  • and 29 countries using geothermal power.

  • But technology and costs have limited where we can build geothermal plants.

  • Right now, it's mostly confined to very specific geographies where naturally porous, fractured rock creates a reservoir of hot water, allowing

  • the heat from the Earth's core to rise to the surface.

  • All geothermal essentially works the same way.

  • You drill deep wells down to access this hot part of the Earth and you pump cold water down.

  • It goes through the hot part of the Earth and returns back as hot water or steam.

  • And that's captured at the surface to turn a turbine and create electricity.

  • And so it can work for decades.

  • It works around the clock 24/7.

  • The challenge for geothermal power has always been, how do you get it to work in places where you have to drill deeper or where the geology is less

  • than certain?

  • Basically, unless you can see a geothermal feature like a hot spring or a fumarole, there's no way to be certain that there's a reservoir of hot

  • water below. Another challenge is the high upfront cost, which dwarfs that of a solar or wind farm.

  • But if you can figure out how to finance it and where to build it, geothermal has some major advantages over other renewables.

  • We always talk about electrical power, but of course there's this massive other market that wind and solar don't play in at all, and that's heat.

  • Geothermal can be used to heat buildings much more cost-effectively and directly than solar or wind power, which needs to be converted into

  • electricity first.

  • And you can build geothermal plants close to population centers.

  • We're much higher density.

  • So you can fit us in urban areas, put us on tiny islands.

  • You don't have to blanket entire valleys with solar panels.

  • Perhaps most importantly though, geothermal is a renewable source of baseload power.

  • So it's available 24 hours a day, seven days a week, 365 days out of the year.

  • Whereas solar and wind are dependent on the sun shining and the wind blowing.

  • When you consider that wind and solar need massive amounts of battery storage to attain the same degree of always-on reliability, the economics

  • of geothermal definitely start to look better.

  • Now, many experts think that it's just a matter of incremental technological improvements that will bring the cost of exploration and

  • drilling down, hopefully one day allowing us to build geothermal power plants anywhere in the world.

  • It's been estimated that 98 percent of the world's geothermal resource cannot be adequately harvested with conventional geothermal

  • technology. So our goal is to go for the 98 percent.

  • No matter where you are in the world, if you dig down deep enough, you'll hit hot rocks.

  • Today, geothermal startups are taking advantage of technologies pioneered by the oil and gas industry to help harvest that heat, such as horizontal

  • drilling. While most wells used to be drilled straight down, technical advances in horizontal drilling now allows for much greater access to oil,

  • gas and geothermal resources, which usually occupy a subsurface area that is wider than it is deep.

  • Drilling has also simply gotten faster, as drilling rigs and drill bits have improved.

  • Drilling productivity for oil and gas in the United States has increased by a factor of 10 in the last 10 years.

  • Latimer, who used to work as a drilling engineer in Houston, founded his company Fervo Energy in 2017.

  • Fervo uses a technology known as EGS, or Enhanced Geothermal Systems.

  • While conventional geothermal relies on preexisting reservoirs of steam or hot water, EGS creates a reservoir where one did not previously exist.

  • It's basically a version of what we know as fracking.

  • That is, drilling down and injecting water at high pressure such that the hard rock fractures.

  • This allows water to flow through, creating a reservoir.

  • The water is then heated by the hot rocks and brought back to the surface through the production well, where it's converted to steam that turns a

  • turbine. What sets it apart from oil and gas fracking, of course, is that the final product is renewable energy, not fossil fuels.

  • We can get up to four times more flow rate out of a geothermal well than using traditional technology.

  • That means costs are a lot lower.

  • That means we can develop geothermal in way more places, make it economic and connect to the grid in many more locations.

  • The Department of Energy says that EGS has the potential to generate over 100 gigawatts of electricity in the U.S., over 25 times the current

  • geothermal production and enough to power about 100 million American homes.

  • Right now, Fervo is focusing on commercializing its tech in the western U.S., where both the geology and the renewable policy incentives are

  • conducive to geothermal energy.

  • So we're very excited about those markets, places like California, Nevada and New Mexico that both have the know-how and geology to develop

  • geothermal and have put in the right market structures to allow geothermal as a technology to flourish.

  • Then there are the companies pursuing Advanced Geothermal Systems or AGS.

  • These include GreenFire Energy and Eavor Technologies ,founded in 2015 and 2017, respectively.

  • These technologies don't rely upon a preexisting reservoir, like traditional geothermal or on fracturing the surrounding rock to create a

  • reservoir, like EGS.

  • Instead, it's basically a subsurface heat exchange system.

  • The way it works is two wells are connected by a sealed pipe or in Eavor's case, many lateral sealed pipes.

  • A highly conductive fluid, perhaps water, perhaps something more specialized, is circulated throughout the pipes, picking up heat from the

  • surrounding rocks and carrying it to the surface.

  • Ours is a pure conduction system.

  • There's no water going out of the rock or into the rock, no contamination, no fracking, no seismicity risk

  • Eavor made headlines in February after receiving backing from BP and Chevron in its 40 million dollar funding round.

  • Now it's looking to commercialize, a costly endeavor for them and any company in this space.

  • That first commercial implementation in Bavaria, phase one of that is 200 million euro.

  • If we do all three phases, it's 2.4 billion euros.

  • So only by partnering with companies with sort of global scale like that, are we going to be able to make the impact we want in the time we want.

  • GreenFire though, aims to take care of what it sees as low-hanging fruit first - modifying old, existing wells with new closed-loop technology.

  • Our position is geothermal anywhere is futuristic.

  • Geothermal in great locations is a present opportunity that can be expanded dramatically.

  • And with retrofits, t he capital expenditure is relatively low and the payback is relatively fast because you don't need to drill a well.

  • Scherer hopes this approach will allow GreenFire to prove out its tech as it moves towards building geothermal in places where the rocks are hotter

  • and drier.

  • We think we could double the amount of geothermal within 15 years, for example, with new technologies, including ours.

  • Then there's Sage Geosystems, recently founded in June 2020 by former oil and gas industry veterans , the company plans to use a number of well

  • design solutions tailored to different conditions.

  • We recognize that there's not one single optimum geothermal design solution for all applications and all subsurface

  • environments.

  • One of their initial solutions incorporates elements of both EGS and AGS.

  • It works like this.

  • First, Sage will drill a well and fracture the rock directly below it with a highly conductive and convective liquid, meaning that it transfers heat

  • easily and the hotter matter will rise.

  • Then, a closed-loop system will be built within that well and above the fractured rock.

  • A fluid will circulate throughout the loop and heat up through conduction.

  • This fluid will get especially hot because the fractures below it will be bringing up heat from deep within the Earth.

  • Taff is optimistic that by utilizing various technologies and combining elements of EGS and AGS solutions, the concept of geothermal anywhere isn't

  • that futuristic.

  • With our integrated system approach, we'd like to see geothermal applicable everywhere within the next five years.

  • All of this progress in geothermal is a major opportunity for the oil and gas giants, who are seeking ways to green their portfolios while also

  • holding tight to their core skill set, exploring and extracting energy resources from deep within the Earth.

  • So the oil and gas industry over the last six or eight months has really engaged in this to an extent that they had not

  • historically. And there's a lot of reasons for that.

  • A lot of carbon neutrality commitments coming out of the industry with no clear path about how to do it, t hey just know they wanted to do it.

  • And they've got a clock ticking on that.

  • European oil majors, Shell, BP and Total have pledged to be carbon neutral by 2050.

  • American oil majors like Chevron and ExxonMobil have not yet followed suit, though they're both planning major investments in low-carbon tech.

  • Oil and gas entities are under enormous pressure to hold on to talent.

  • Really young, excited, energetic, skilled workers, they're not looking at the oil and gas industry is where they want to go and work right now.

  • So far, American majors have seemed reluctant to invest in the most popular renewables, solar and wind.

  • They simply don't have the expertise.

  • But geothermal, with its focus on subsurface modeling and advanced drilling, could be an attractive option for highly specialized engineers

  • and blue-collar workers alike, who know how to design and build wells.

  • It's just a perfect opportunity to take the skill base and the capital that's available from the oil and gas world and bring it into geothermal.

  • And whether you look at it from a financial point of view or a technical point of view, it's a very obvious move .

  • That collaboration between the incumbent and the new party or between the big and the small is going to be critical in the energy transition.

  • Chevron and BP's investment in Eavor has kicked off talk about what other funding and partnerships are coming down the pike.

  • And Beard says that we can expect to see more tangible signs of industry interest soon.

  • I think that within five years, many of the fledgling startup companies will have de-risked their concepts enough for oil and gas

  • to seek to acquire them.

  • Now there's going to be many different solutions in the geothermal space.

  • Not one company will have all the answers, and so we might make multiple bets in this area.

  • Of course, the involvement of oil and gas majors, especially in EGS projects that involve fracking, is bound to raise some eyebrows.

  • Experts do note that the fracking and circulation fluids used in geothermal projects are nontoxic, alleviating water contamination concerns.

  • With regards to earthquakes , the seismic risk for geothermal projects is much lower than it is for oil and gas projects.

  • That's because oil and gas drilling creates wastewater that needs to be re-injected back into the Earth for disposal, increasing subsurface

  • pressure and thus earthquake risk.

  • But the geothermal process doesn't involve wastewater.

  • Experts say that keeping seismic risk as low as possible will be vital for the industry's survival.

  • Just because of negative PR th at would happen from a seismicity event, for instance, in the United States near a population center.

  • That would be devastating for geothermal.

  • As much action as there is in the geothermal space right now, there's still big differences among the experts about just how much of our future could

  • be powered by the heat beneath our feet.

  • Geothermal electricity could make up 10 percent of the grid.

  • I always pitched this as being the 20 percent solution that's going to fill in the gaps where the other renewables can't reach.

  • I think it can be greater than 50 percent in the next decade.

  • Sure, 50 percent.

  • It's easy. This is just a matter of scaling it quickly enough.

  • Of course, who ends up being right here largely depends on what policies are pursued and whether government, corporations and private investors

  • alike are willing to invest big money in order to hone the technology and drive down the huge capital costs.

  • What we need is investors who are willing to invest tens of millions of dollars.

  • So finding those unique individuals and those unique companies to invest, particularly if we're talking about hot, dry rock

  • or Enhanced Geothermal Systems, that's what we need.

  • If you look back at the success of solar and wind, the role of the government to be both a first customer, to provide financing and to provide

  • technology solutions for deployment, was critical.

  • We could do the exact same thing today with geothermal,

  • Fervo, GreenFire, Eavor and Sage are all still proving out their tech.

  • And it remains to be seen which approach, if any, will be scalable.

  • But however it shakes out, the oil and gas industry is well-poised to play a big role in ushering geothermal into the future.

  • Geothermal at scale, leveraging the entire oil and gas industry global, literally solves energy.

Miles below the Earth's surface, there's a source of renewable energy that could sustain all of humanity for the foreseeable future.

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This Overlooked Energy Source Could Supply 50% Of Electricity

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    joey joey posted on 2021/05/09
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