By James Pethokoukis and Jamie Beard

With the cost declines of solar and wind, climate activists hope renewables can upend the oil and gas industry, powering the world without contributing to climate change. But geothermal advocates say we can use the drilling practices of today’s energy giants to access the immense heat beneath the Earth’s crust. Today, we’ll be discussing whether geothermal could be the clean energy source of the future. To answer that question and more, I’ve brought on Jamie Beard.

Jamie is the founder and executive director of the Geothermal Entrepreneurship Organization at the University of Texas at Austin.

What follows is a lightly edited transcript of our conversation. You can download the episode here, and don’t forget to subscribe to my podcast on iTunes or Stitcher. Tell your friends, leave a review.

Pethokoukis: Now I’ll admit that when I bring geothermal technology up to people — maybe because they’ve watched too many History Channel shows — they’ll say, “Are you talking about drilling into super volcanoes? Because that sounds super dangerous.” I don’t think that’s what you’re talking about. I wonder if we could just start off by describing the suite of technologies we are talking about when you’re talking about geothermal.

A lot of geothermal in the world that exists today is in fact near volcanoes. So people are used to that idea, particularly in places like Iceland, but there’s also a lot of geothermal development in the United States, where geothermal resources are close to the surface and have surface manifestations, like in California. That’s typically called “hydrothermal geothermal,” and it’s been around for well more than 100 years in terms of producing energy and heat for humans to use. But that’s not the only option for geothermal anymore. Hydrothermal resources are limited by their natural occurrence. That’s in limited places in the world.

Over the past couple of decades, we’ve had some pretty significant technological leaps. In particular, in the oil and gas industry, with the shale boom being one, and the directional drilling technologies and fracking technologies that came out of that, but also in offshore exploration and development.

So if you take those technologies and you leverage them and you apply them to geothermal, we can actually enable all kinds of geothermal concepts now, and they go from engineered geothermal systems where you drill and you fracture rock to produce these underground reservoirs. So these are essentially engineered systems where we are mimicking conditions like Iceland, for instance.

We don’t have to just rely on what mother nature has given us.

Exactly, we’re engineering the subsurface to mimic that with the goal of being able to do that anywhere in the world that we need energy. So we’ve got the engineered systems that use fracturing technologies. And then we’ve got these newer concepts, advanced geothermal systems — or closed loop systems, as some call them — where fracturing is not used. Directional drilling technologies are used instead. You’re essentially drilling radiators into rock and harvesting heat that way. And then there are all sorts of hybrids. There are a lot of ways these two types of things are combined to create different systems, as well, so a lot of innovation is happening in this space and there’s a lot new in the past couple of decades that have enabled some step changes forward.

That’s super interesting because I think if we were to ask most people about the big innovation in this country over the past generation, I think almost every single person might say the internet. We tend to forget about oil and gas as far as the shale revolution, and how those technologies are now being used to create something that, frankly, some people have been talking about for decades. If you go back and read what the tech optimists from a half century ago said, they would talk about nuclear fusion and things, but they’d also talk about tapping the very heat of the Earth itself. Now we can kind of do that.

Right. The oil and gas industry even has looked at geothermal over the years a lot. This is not a new thing, but what is new is that it used to be a moonshot, before directional drilling and before fracturing technologies and before high pressure and temperature technologies in oil and gas were developed. And again, all of these are pretty new. They’ve happened in the early 2000s and over the last decade. Before those technologies existed, the idea that we could drill deep enough and somehow engineer rock to harvest geothermal anywhere in the world was sci-fi. It was a moonshot to say the least, and oil and gas consistently kind of punted. So it was like, “Well, that’s just crazy.” When it comes to hydrothermal, it was just too niche for an industry like oil and gas that really only gets interested when there’s scalability, when there’s the ability to do something globally or in a really big way. That’s what’s really exciting about this: These new capabilities are actually enabled by technology leaps that have happened in oil and gas.

What are the particular advantages of this technology over both what we already have and the next generation of nuclear? There’s been a lot in the papers lately about nuclear fusion. We’ve all seen this big drop in prices for solar. What is the compelling case for geothermal?

Oh my gosh. Let’s start. For one, geothermal is baseload. It’s 24/7. You don’t need energy storage for geothermal. That is a big deal. When you talk with utilities struggling right now with increasing intermittence on the grid, and you look at where energy storage is in terms of scalability, for grid scale energy storage, having a clean baseload source of energy in the very near term is an exciting prospect. Geothermal also has a tiny footprint compared to other renewables. If you look at sources of clean energy, like solar and wind, the geothermal footprint, comparatively megawatt to megawatt, is about 1 percent of that of solar and wind. That’s a big deal in a space-constrained world, particularly if you’re wanting to put power plants near population centers, where there are people and you don’t have a lot of land. That’s another really exciting thing. Job creation: Geothermal per megawatt creates three or four times more jobs than other renewables do. I think that’s a really interesting concept. And what I’ve really grabbed on to, and you mentioned nuclear, are next-gen nuclear concepts coming down the pike.

We just did a podcast on Nuclear Fusion.

No doubt, no doubt.

It’s exciting.

It’s exciting, but here’s the deal: It’s really expensive. Just to get it ready, we’re talking about just massive investments of billions of dollars. For geothermal to be ready for prime time — meaning we’re getting teams into the field, getting technologies demonstrated, full-scale, get oil and gas engaged and start scaling this thing — it’s a drop in a bucket comparatively in terms of what’s needed for investments. About maybe a half a billion dollars worth of field deployments might get us to a place for geothermal where we could have a scalable concept ready to go, and we’d be off on another shale boom, but this time for clean energy. I think that’s really an interesting thing to think about. What’s it going to take to get massive scale in terms of the dollars invested? And that’s where geothermal, I think, really bests nuclear. But the thing that I’m really excited about, of course, and this is what my focus is right now, is the fact that we have an existing, globally present industry with millions of highly trained individuals in the workforce that are perfectly suited to take geothermal to scale really fast.

Of course, I’m talking about the oil and gas industry. In leveraging that workforce to do this, we actually avoid a lot of the job losses and disruption that’s forecasted for the industry. 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. That’s what gets me really excited about geothermal: We have such assets on the table here. There’s a Ferrari in the driveway. It’s just a matter of hopping in and pressing the gas.

Are there some technologies that could only be used in certain places while other technologies could be used anywhere? Perhaps even in places where there are currently facilities? There has been so much talk about the decline of the coal region. Since they already have coal plants there, could you just put them there? How do different technologies intersect with geography and where you would locate power plants?

Yeah, that’s an awesome question. I think the low-hanging fruit really is to figure out geothermal gradients within a 100 mile radius of all the world’s population centers and really make it a goal to put geothermal developments near where we need the electricity, so we’re not building massive grid infrastructure projects into the middle of nowhere. That’s a low-hanging fruit for geothermal. There are geothermal concepts, some of them utilize fracking technology, some of them do not. There are going to be places in the world that aren’t going to like the frack-based concepts like EGS, because they have frack bans in place. They have some very significant public relations issues with even the word “fracking.” It doesn’t matter if it’s for oil and gas or geothermal — it’s fracking, and fracking is bad.

A lot of this is an educational challenge. A lot of this is a political challenge. But the reality of it is: Are places that have significant opposition to fracking going to be the first to institute these engineered geothermal systems? No, they won’t be. So there are going to be some places where there’s going to need to be some political and educational strides before geothermal development of certain types will take off. That said, there are others, like advanced geothermal or closed-loop systems, that don’t utilize fractures. They may be more realistic for places in the world that have that type of opposition. You mentioned coal plants. It’s an interesting concept. It’s one that is gaining traction in places where coal plants are located in areas with high geothermal gradients, meaning that you don’t have to drill super far to get really hot temperatures.

We may not be able to redevelop coal plants, megawatt for megawatt or gigawatt for gigawatt. In other words, if we redeveloped a coal plant into a geothermal plant, which would essentially mean that we would drill a series of wells on the site of the coal plant. They’re big. I mean, you’re storing coal there. You’ve got massive fly ash ponds. They’re huge pieces of property. So we would repurpose the property, drill a series of wells there, and essentially use geothermal steam to drive the turbines just as we use steam from burning coal to drive the turbine. So it’s the same, but the question becomes, can you do that megawatt for megawatt? Would the plant still be exactly the same output with a geothermal angle, as it would for coal? And that’s an area of inquiry right now.

It’s really a matter of how economically, and whether we can drill to the depths we need to get the amount of heat we’d need. In some places, it’s more likely than others. It would be more likely in the West of the United States, that it would be a possibility. In Texas, in some places, there are coal plants located on really awesome, shallow geothermal resources. For instance, in the Northeast, where geothermal resources are deeper and therefore the drilling would be much more expensive, the prospect of doing that in the short term is lower. Just like everything, the coal plant conversion is going to be an incremental approach, where you pick the plant that’s sitting on the shallowest, hottest resources we can find and see what happens. Let’s try it first and go from there. I think that’s a really cool concept. It’s one that’s not super close in time in terms of execution, but I think it’s coming. It’s coming within this decade, I think.

When it comes to fracking bans, are the activists worried about making climate change worse? Are they worried about groundwater contamination or earthquakes? What’s their concern?

Yeah. Depending on where you are in the world, or which state in the United States, there’s a different reason. There are some regulations in place that actually do make an exception for geothermal projects. It depends on where you are and what the concern is. In Europe, seismicity is certainly on the public’s mind, and seismicity is something in geothermal that we have to be very careful about.

Are those earthquakes? Is that what that means?

Induced seismicity: man-made earthquakes, essentially. That’s another area, though, where the oil and gas industry could bring just an amazing wealth of knowledge and standardization, because the oil and gas industry has been through this with their learnings in hydraulic fracturing and wastewater injection in Texas and Oklahoma. Typically, in this context, and the oil and gas context, the seismicity that is resulting from fracturing operations or wastewater disposal is actually not enough for humans to notice it. It’s not something that we would feel necessarily, though sometimes it is. The oil and gas industry monitors it nonetheless. It’s something that we need to pay a lot of attention to as geothermal development scales and goes global, because we don’t want to be producing man-made earthquakes with our power plants.

So I think this is an “eyes wide open” moment in terms of translating oil and gas knowledge from fracking into geothermal to make sure that we’re not having events like that. Certainly in Europe, they have had some. That’s why it’s in the public consciousness. They’ve had some man-made earthquakes that were caused by geothermal projects that have caused property damage. It’s not just Europe. It’s also Asia as well. It’s happened in South Korea as well.

What do you tell people who are also concerned about the climate, but they’re worried about earthquakes and other things? There’s no perfect technology. What are you more concerned about? How do you begin to make that case?

I think my personal views on this actually offend many of my climate activist friends, because I don’t like hypocrisy. And I think we need to have eyes wide open when it comes to the supply chains that we’re leaning on for renewable energy investment and development. In particular, when it comes to lithium mining and energy storage, I don’t think that the world understands the impact and what that’s going to mean if we mine much as we need to mine over the next two decades to meet current climate goals, just in terms of energy storage, not to mention rare-Earths that are needed to develop solar and wind.

Eyes wide open on supply chains. When I step back and look at our choices, in terms of clean energy technologies, would I rather risk-mitigate seismicity and do that in a measured, standardized way, than mine a ton of lithium and rare earth? Yeah. I would rather do that because I think it’s a manageable risk that has less impact on the environment. I think it’s really worth thinking about those things as we make investments, and having eyes wide open on what the real impacts are of the various energy sources that we’re investing in.

Speaking of energy, where is the private sector energy coming from? Is it from big established oil players whose names we’ve all heard of? Is it scrappy startups? Who’s doing this right now?

Right now it’s startups that are making a lot of noise. The interesting thing about that is many of the startups that are out there doing projects are led by oil and gas industry veterans: folks that have left industry or had retired from industry, but then got excited about this and jumped in and started companies. So you’ve got former chief scientists of Shell and executives from BP. You name it. Every oil and gas entity is now represented by a veteran that started a geothermal company. I think that’s really cool. That’s something that I think really says something about this movement. Of course those teams have really hit the ground running because they’ve spent their entire lives exploring for, drilling for, and producing subsurface energy. It just happened to be hydrocarbons and not geothermal.

So they know what they’re doing. They get on the ground and they go drill. That’s really great, but it’s not just startups. Now major multinational oil and gas companies are engaging, but they’re all doing it in different ways. Some are more slow than others. Certainly the oil service sector has hit the ground running on this because they have a lot to gain. These are the guys that go out and drill the projects and that have a lot of workforce and assets and technologies that will apply here. Over the past maybe 18 months, several of them have done full-sweep, internal investigations of where their strengths are here, and they’ve hung up geothermal shingles. You go to the Baker Hughes website now, and they’ve got a geothermal program — they’ve hung a geothermal shingle.

I think it’s new and it’s cool. Most oil and gas entities now have titled geothermal people, teams, leaders, management, executives — that’s new. That’s exciting. There are also oil and gas teams, meaning oil and gas entities — one in particular self-funded a field trial and just had a breakthrough outcome. That is not yet public, but soon will be. In a six month turnaround, they designed the tool, got it into the field, self-funded a field trial, and knocked it out of the park, like world-record in terms of hard rock geothermal drilling, in six months. I think that is a beautiful illustration of what happens when oil and gas brains and oil and gas entities start engaging in this problem set. The problems just get solved. It’s pretty awesome. I think we’re going to see a lot more of that over the next couple of years.

But what are they waiting to see? Are they just waiting to see what happens with these startups and they’ll swoop in and they’ll buy all of them? What does “all in” look like, and what are we waiting on for that to happen?

So some of them have taken the approach that they’re going to invest in a couple of startups that they like and see what happens. I think from the big oil perspective — like the operator perspective, Chevron, Shell, Patel, Exxon, etc., BP — these entities do not typically go out and pioneer things like this. They instead make investments and wait to see what happens. An employee from one of the big international oil companies recently at a conference said, “We’re waiting for our geothermal George Mitchell.” As soon as that entity proves a scalable concept in the field, there will be a pile on. I think that is definitely true.

For the listeners, who’s George Mitchell?

George Mitchell is the wildcatter that got out into the field and figured out fracking and kicked off the shale boom. There are a lot of parallels between that kind of wildcatter culture and geothermal. We’re seeing that now with these startups that are oil and gas veterans that are out there trying these new concepts and seeing how to best harvest heat. It really does have a lot of parallels with how the shale boom kicked off. We could very easily get on that exponential growth curve that Shell did, which took the entire world by surprise. Within the next two years, we could very easily get on that curve and have a pile on, just like we did with shale, when the geothermal George Mitchell shows up.

It’s my gut that the geothermal George Mitchell is already in the field, but it’s just a matter of waiting for data at this point. It’s really exciting. Some companies have made some bets in startups and they’re waiting to see what pans out. I would say, in my ideal world, I kind of wish big oil would work from the top down, because geothermal interest has been really grassroots in big operators. I wish there was a more top-down approach where — because they have everything they need to figure this out and do this internally — there was a CEO or two out there that said, “Hey troops, I want to hear from you about how we make this happen. Failure’s not an option. I want to see something deployed in the next 18 months. I want the best ideas, go.” If that happened — a top-down approach in some of the biggest oil companies in the world — it’s my guess that most of your geothermal challenges would be nipped in very short order.

What do you think is a reasonable forecast for the kind of role this could play over the next — I’ll let you give me a number — of years? What kind of role can geothermal play, given the technologies people are working on right now?

I am the outlier in this, pretty much globally. I think at this point I’m willing to go all in because I think it’s worth it. I’ve listened to enough people, particularly in oil and gas, to say that if we did do geothermal at oil and gas scale, it would solve energy and meet world energy demand by 2050. I’ll hard stop on that. Are there people willing to lockstep me on that yet? Nope. Not yet; not publicly. But in a couple of years, will there be? Yep. I’m pretty sure there will. I do agree that we need a mix. Yes, all of that stuff. But geothermal has been this vastly underestimated resource that has a very well-suited industry to scale it quickly. We’re in a really unique position there where things could get really big, really fast.

Does this sector need more government research? Does it need deregulation, if you’re going to be drilling on public land? Have you ever heard those kinds of issues raised? Are they ready to go? They have what they need, the research has been done, we just need to sort of keep developing these technologies in the private sector? Does government need to do anything here that you’ve been made aware of or that people talk about?

Yeah. I think there are two major opportunities. Policy is one, and policy makes my skin crawl because I’m trying to get teams funded and into the field. We need demonstrations. When you start talking about policy and regulatory barriers, funders literally leave the room. They don’t want to hear about it. It’s slow. Forget it. This is not now.

Because most of the low-hanging fruit, at least in the United States, for geothermal development is on federal land, and it’s currently harder to develop a geothermal project on federal land than it is an oil and gas project. So we have some serious issues on federal land for geothermal development. One of them is that geothermal development is subject to NEPA and it does not have a categorical exclusion like oil and gas development does.

That is a direct result of the geothermal industry not having a lobby. It’s just a ridiculous situation in terms of the ability to develop projects on federal land. Let’s fix that. That’s ridiculous. We’ve got to fix that, but a way around that is to aim for private and state land for now. Let’s just build enough momentum here and have enough success that the federal piece will move eventually, but let’s not wait for it. We can be doing things now. That’s why, quite frankly, there’s a lot of ongoing demonstrations and interest in geothermal in Texas, because you’ve got a lot of private and state land there where development can happen quickly. That’s one thing, making some policy adjustments that would really unleash a lot of development that are just frankly silly, but also slow.

What we really need is for the oil and gas industry to start lobbying for geothermal. I’ll just say it. If the oil and gas industry did that, many of these problems would be near instantly solved. That’s one thing. Another thing when it comes to investment: Should the government invest more money in geothermal? Of course. Geothermal has been under-resourced forever. It has never enjoyed the subsidies or appropriations that any other energy source has gotten, specifically in renewables, by orders of magnitude.

Considering the fact that it really doesn’t need very much to get it off the ground. I don’t mean research — I’m not sure we should be dumping a lot of dollars right now into lab based research. It would be helpful to do some, but the high impact stuff right now for geothermal is funding teams into the field. We need demonstrations. We need to stop tweeting about it. We need to stop talking about it. We need to start doing it.

Didn’t we see that with fracking demonstration projects?

Yes, look, George Mitchell didn’t figure fracking out in the lab. You know, that’s not how that happened. It’s not how breakthroughs happen. You get out in the field and you get on a learning curve. Will the first couple of projects be perfectly successful? Probably not. But they’ll be iterated. This is also another way that the oil and gas industry could be immediately engaged, to build teams and deploy them into the field to build projects. I think that’s the area where there could be really high impact in terms of dollars, not necessarily in the lab, but in the field.

If we brought you back 10 years from now, 15 years from now, the title of the podcast could be “Geothermal: The Lost Dream.” What will have gone wrong, if none of this happened? Would it be that you were quashed by regulations? The technology didn’t work? What would have gone wrong?

In my view, I think we have a narrow window to get oil and gas excited about doing this. If we miss that window, and oil and gas decides to pivot into solar and wind and hydrogen and doesn’t really pay much attention to geothermal, geothermal is never going to scale fast enough to be competitive with solar and wind. It will always be behind. So it will be irrelevant, eventually. In my view, the only way to catch up and scale this fast enough is getting the oil and gas industry engaged and excited. If that doesn’t happen soon, it doesn’t matter if it ever happens — it’ll never happen. My urgency is to not only engage with oil and gas about it, but also try to get them into the field doing projects so they can get excited internally about doing it. Not just invest in startups on the side and watch, but actually get into the field and get some learning. I view failure as failure to attract the perfect suitor to scale this industry in time to make it happen.

My guest today has been Jamie Beard. Jamie, thanks for coming on the podcast.

Thanks very much for having me, Jim. It’s been fun.

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