The U.S. Bureau of Land Management has recently leased out more than 5,000 acres of public land for geothermal energy in Malheur County. Leasing of the land is the first step in developing geothermal resources — specifically, the production of electricity from heat within the earth. But how common is geothermal energy in the U.S. and what potential is there for its widespread use in Oregon? Adam Schultz is a geophysics professor at Oregon State University and the president of Enthalpion Energy LLC, a geothermal company. He joins us to answer these questions and more.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. The U.S. Bureau of Land Management recently leased out more than 5,000 acres of public land for geothermal energy in Malheur County. It went for the highest per acre rate in Oregon’s recent history and it came at a fascinating time, right after Congress gutted tax incentives for solar and wind, which have been by far the biggest drivers of new energy projects in the U.S.
So what role could geothermal play in our future energy mix? Adam Schultz joins us to answer that question and more. He’s a professor of geophysics at Oregon State University and the president of the geothermal company Enthalpion Energy. Welcome back to Think Out Loud.
Adam Schultz: Yeah, thanks, Dave. It’s great to have the opportunity to talk about geothermal potential in Oregon.
Miller: I want to start with those recent leases in Malheur County. The auction ended at $82 an acre; a number that means nothing to me, but what did it mean to you?
Schultz: Oh, I was really stunned by that. I was monitoring that auction really carefully. These auctions start at $2 an acre and they become competitive. And really the benchmark, I think, has been in Nevada where geothermal energy is certainly being developed on a large scale right now. And recent auctions there in the last year stunned everyone. They exceeded $200 an acre in a couple of places and that was just unimaginable a few years ago, where you might get a few tens of dollars an acre for a geothermal prospect.
Now keep in mind, to develop a geothermal energy site, you’re typically collecting several thousand acres at a minimum, right? So this adds up and not only do you have to bid on the auction to gain the geothermal lease, you then have to pay an annual lease rate to, normally say, [the] Bureau of Land Management. So just seeing numbers like that totally blew me away.
Miller: Why was this number, this per acre number in Oregon, higher than anything in recent memory?
Schultz: I think there are a number of factors at play here. First of all, this was around the Neal Hot Springs area where there is an existing conventional geothermal power plant. So clearly there is interest in expanding that area for geothermal development because it’s already a proven resource there. So that’s gonna make it a very desirable property.
But also Oregon is becoming – and I hate the pun here – kind of hot. People are beginning to realize, in the industry, that there’s enormous geothermal potential in Oregon. It’s amongst the highest in the U.S. And having proven resources like the Neal Hot Springs certainly fed the robustness of that particular option, but there’s other geothermal research and development now underway, say, in central Oregon. The potential for other locations both south and east of that, covering a good swath of the territory of Oregon, is now becoming known within the geothermal industry.
Miller: You mentioned that there is an existing conventional geothermal power plant in Malheur County. What is conventional geothermal power and how is that different from what’s known as enhanced geothermal systems?
Schultz: That’s a great question. I mean, ultimately, to generate power, unless you’re using solar panels, you have to generate heat to generate steam to turn electric turbines. That’s how you generate power, or you have wind or something that’s gonna spin those turbines. But you’re spinning turbines and generally it takes heat to do that. You could be burning coal, oil or whatever to generate that steam.
But with a conventional geothermal power plant, you’re tapped into an existing hot spring that exists – it may be a surface hot spring, but deep underground. There’s an existing natural hot spring, so a reservoir of hot water. And you can just drill into that, and you can tap into that, and bring it to the surface, and use the steam that’s generated to turn those turbines and generate electricity. So that’s conventional.
EGS, which can mean enhanced or engineered geothermal systems, take that concept, but they extend it to an area where there’s plenty of hot rock, but there’s no hot spring. There’s no natural source of water circulating underground and getting heated. So it’s a system where you are artificially generating that hot water, hot spring system, that hydrothermal system, by introducing water into hot dry rock, opening up the rock to make it permeable and then circulating water through it to generate the steam.
So that’s kind of in the frontier area in geothermal development, because while geothermal power is a relatively small contributor to the U.S. power grid right now, it turns out the U.S. is the world leader in turning natural geothermal hot water into electricity. But it’s still a very small part of the power grid. When you start looking at areas where there’s hot rock that’s accessible, maybe even fairly close to the surface, but it doesn’t have a natural hot spring, that amount of area is vastly huger than areas that already have those natural hot springs.
So if you can create the artificial ones and maintain them, then all of a sudden a huge area of the U.S. is open to geothermal power production that otherwise isn’t available. And it turns out the Western U.S. is really the spot where those hot sources of hot rock are much closer to the surface. In particular, areas like Nevada, parts of Utah, California, Oregon, parts of Washington, Idaho – those really high potential areas.
Miller: Those are also very, in general, arid areas. So if the idea of these enhanced systems, where there’s a lot of current excitement, is that you don’t have to get the hot water, you can use the hot rock and then put water there and make it hot, where do you get the water from?
Schultz: Oh, absolutely, an important question that geothermal developers deal with all the time. You want to have a system that’s not going to waste any water, right? So you’re going to recirculate it after it cools down and it’s done its job turning the turbines. You’re going to circulate it back in and make it as closed the loop as possible, so you don’t have to tap into that much groundwater. So that’s the concept. You have to obtain groundwater, so it’s part of the exploration for geothermal energy. You’re also typically looking at groundwater resources and making sure you’re tapping into, basically, a renewable resource and not overly extracting from it.
The latest frontier in enhanced geothermal systems is called superhot. So superhot EGS is where you’re drilling into rock that’s so hot that the amount of heat energy you can put into the water is so much greater than at lower temperatures, that you actually need much less water to get the same amount of energy to the surface and turn those turbines. You need a much smaller area of well pads to put your wells in. You need fewer wells. And overall, you’re just making a much lower impact to that whole system of groundwater circulation.
So that’s the current area that’s happening in Newberry right now; there’s an active development project for superhot EGS. And Newberry Volcano [is] in Central Oregon outside the National Monument and in the geothermal lease area. That’s generating a great deal of interest in the geothermal industry now, because then you’re getting so much energy for such a small amount of water that it becomes really much more economic, right? It’s simply fewer wells to drill, less water to circulate, more energy.
Miller: Last year, renewables made up about 90% of total new energy production in the U.S., but the vast majority of that was from solar and wind. In a lot of the graphs I looked at, I didn’t even see geothermal on the graphs. Why isn’t geothermal more common, both just overall and in terms of this recent enormous spike in renewable energy production?
Schultz: Well, you know what, ultimately, it all comes down to money, right? It turns out solar panels are really cheap, even wind turbines, and obviously there’s a lot of political heat around wind turbines right now. They’re kind of affordable. And the cost of geothermal energy, when you don’t have these natural hot springs in particular, was very high. There needed to be a lot of development work to make the cost of geothermal energy on the grid competitive with these other sources of energy.
And now that’s happening, but there’s another big consideration here. Most renewable energy resources, other than geothermal, are not what we call base load power. In other words, the wind turbines need wind to spin. The solar panels need sun. So they have seasonal variability, they vary from minute to minute. And it turns out our national power grid was not designed and built for variable power sources. It was designed for stable base load power, the kind of power you get out of burning fossil fuels, sadly, or running a nuclear power plant, for example.
Well, it turns out geothermal is a renewable, low environmental impact power source that actually is base load. So it’s kind of unique in that sense. It can just directly replace some of these carbon-heavy power sources. To the power grid, it looks just like one of them – and that has enormous value.
Miller: You were talking earlier about the engineering breakthroughs, which are tied now, I guess, to price. We can talk about politics in a second, but at this point, what do you see as the most significant impediments to a big increase in geothermal production in Oregon and around the country?
Schultz: Well, I think right now we hit the tipping point in the last year for EGS, enhanced geothermal systems, that’s not superhot. There’s a place in Utah right now … A company called Fervo is actually doing a production enhanced geothermal systems power plant in Beaver County, Utah. It’s commercial, it’s competitive. So that was the tipping point last year and got everyone very excited. Now, we’re in the era where EGS can expand in places like Oregon.
The frontier, I think, isn’t so much in, can we do this enhanced geothermal systems? It’s to make it really economically competitive against all of these other sources and they have the lowest possible requirements for [the] number of wells, for example, amount of water that’s superhot EGS. We’re still in research and development because it’s a materials question. When you drill a well, you’ll case it and if you’re doing an oil well, it’s a steel casing usually. And you have to cement it in place and everyone understands how to do that. When the temperatures get to 500, 600, 700 °F, or higher, when we’re in the superhot temperature range, all of a sudden, does cement work? What kind of well casing do I need that’s gonna survive these superheated fluids that are corrosive?
So we’re at that point now, in projects like the Newberry one, of really learning the ropes on what materials to use, how to keep the systems running for 30, 40 years. Right now, in Oregon, we can move to the EGS world, the enhanced geothermal system world. The technology’s there, I think there are huge resources here that we can tap into. And then we can, over the next decade or so, show that this superhot version of EGS is going to be the real game changer into driving down the cost of geothermal energy even further.
Miller: Just briefly, I do want to turn to politics before we’re done. Last year, red states led by Texas produced way more renewable energy than blue ones did, but Republicans have turned against federal support for solar and wind power. That has not yet happened with geothermal energy. What do you think it would take to prevent geothermal from suffering the same fate, from becoming politicized in the same way?
Schultz: I’ve given up predicting anything about politics, based on anything rational in my life. I’ve just given up on it. So we just have to look at what the current administration’s priorities are. And even though geothermal is renewable, it’s basically using oil and gas technology. We’re drilling for energy. We’re drilling for heat, but it’s just fundamentally the same as drilling for oil or gas. It turns out the head of the Department of Interior had an interest in a geothermal company, as well as in oil and gas companies.
Miller: So the motto “drill baby, drill” still works, in other words.
Schultz: Drill baby, drill. It turns out, don’t tell anyone, this has low environmental impact and it’s actually renewable. So let’s keep that one a secret between you, me and the rest of Oregon. But right now, it’s a favored technology and it’s not getting the stink eye from anyone. So, fingers crossed, we’ll be in this happy place.
Miller: Adam Schultz, thanks very much.
Schultz: It’s been a pleasure. Thank you for the chance to talk to everyone.
Miller: Adam Schultz is a professor of geophysics at Oregon State University and the president of the geothermal company Enthalpion Energy.
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