Oil companies: Exploring clean energy – geothermal energy in the forefront – economic article

Oil and gas companies are turning to geothermal energy, believing that the same technologies that enabled the extraction of shale gas can now be used to produce clean energy. Many of these companies use the same technology they used in hydraulic fracturing to search for heat underground.

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As the Wall Street Journal points out, the new geothermal industry is the result of a surprising convergence of interests between the oil and gas, technology, and green energy industries. The heat found by underground drillers could be used to generate a steady, round-the-clock supply of carbon-free electricity, which is what technology companies are seeking for energy-intensive data centres.

Locating pockets of geothermal heat is relatively easy in places with a lot of geothermal activity, such as regions of the United States, Indonesia, and New Zealand. When heat is deeper in the ground, it is harder and more expensive to find. For this reason, geothermal energy in the United States represents only 1% of total production.

But technological advances in drilling, modeling and sensor technology are expected to change that number: The US Department of Energy estimates that geothermal energy could power more than 65 million homes by 2050.

Rapid development

The industry began to change about five years ago, when companies like Google began efforts to power their operations with 24-hour renewable energy and found that wind and solar, which do not guarantee uninterrupted power supplies, could not meet this need.

“There was huge momentum in the market around looking for something new,” said Tim Latimer, CEO of Vervo, a company that specializes in geothermal projects. “This is what allowed us to put geothermal energy on the map for the first time in a long time.”

Fervo Energy uses horizontal drilling, state-of-the-art sensors and modeling to convert heat from deep underground into electricity.

Geothermal energy is commonly used for heating and cooling. It depends on the constant temperature underground, which is located a short distance below the surface of the earth. This reduces the amount of heating and cooling required on hot and cold days.

Using horizontal drilling and releasing water underground through rock fractures in a process similar to hydraulic fracturing, Vervo has found that many other parts of the world can produce geothermal energy.

After water is heated deep underground, it returns to the surface, where it transfers heat to another liquid with a lower boiling point. This produces steam that drives turbines to generate electricity. However, geothermal energy is currently much more expensive than wind, solar and natural gas, putting pressure on the industry to reduce costs.

Investments from energy giants

Companies like BP, Chevron, and Shell are among the energy giants investing in geothermal energy. After all, it is estimated that many inactive oil extraction sites are suitable for geothermal energy production.

The reasons why energy companies are the first to turn to geothermal energy are simple: oil companies understand the geology of the Earth's interior, have experience in building infrastructure projects and have sufficient liquidity. This is why, for example, Chevron is joining other companies and seeking to develop geothermal pilot projects in Japan, Indonesia and the United States.

After all, demand remains active: Google is looking for more sites that could be powered by geothermal energy. In general, companies are willing to pay more for geothermal energy because it can serve as a hedge against wind and solar energy.

There's also no shortage of government grants: According to the Wall Street Journal, the US Department of Energy recently awarded $60 million to three projects by companies like Chevron and Vervo.