As we head into a world of decarbonisation and electrification, geothermal is ideal base load heat and power for the Net Zero challenge. Many Governments are yet to voice strong support for geothermal whilst suitable regulation is often non-existent. However, the Western Hemisphere is richly endowed with suitable geology, skilled engineers, and energy infrastructure. A change in attitude combined with technological breakthroughs can see geothermal transform energy politics.

Three resource opportunities in the Western Hemisphere

1. The Ring of Fire running north-south creates ideal subsurface conditions with elevated heat flow due to Pacific tectonic plates colliding and being subducted beneath the Americas. High heat-flows are indicated by hundreds of volcanoes, hydrothermal vents, geysers & hot springs. These stretch from Chile northward through Bolivia, Ecuador, Peru, Colombia, most of central America continuing north through Mexico, the western USA and into Canada. It is a gigantic resource base of hot rocks with high temperature fluids (75-315oC) is often suitable for power generation and accessible at relatively shallow depths (often <2kms). Although installed capacity today is only ~5GW, with the US and Mexico leading the way, its near term potential is ~300GW across the hemisphere.
2. The repurposing of oil & gas wells to extract heat has potential in millions of onshore wells. The technology is evolving rapidly; both the US and Canada are leading the race to retrofit oil & gas wells, typically with bottom-hole temperatures 40-150oC. Extending the life of wells and postponing abandonment costs adds to the attractiveness. In the US and the Canada, the well stock is enormous; half a million wells produce <2boe/d each and millions of others are temporarily plugged, incompletely abandoned, or orphaned. Estimates suggest ~50% of wells could be retrofitted. Onshore oil & gas wells in Argentina, Brazil, Colombia, Ecuador, Mexico, and Venezuela offer many hundreds of thousands of other candidates.
3. Shallow low grade (low enthalpy) heat is available everywhere. Its use in heating and cooling is growing rapidly, often replacing systems that burn oil or natural gas. Low enthalpy heat is typically accessed by circulating fluids through coils & loops placed underground or drilling shallow wells (<300m) and combining these with heat pumps typically operating at 5-40oC. There are hundreds of millions of opportunities and local applications everywhere across the region including heating & cooling homes, offices, warehouses, indoor stadiums, airports, and agricultural glasshouses. Water in abandoned coal mines and no longer used water boreholes can also offer access to low grade heat; again there many hundreds of thousands of opportunities.

Geothermal can reset energy politics

Exploitation of these vast geothermal resources can reset the global politics of energy, replacing finite resources and imports with domestically produced, renewable, low carbon heat and power. The lowering of carbon emissions by switching from hydrocarbons to geothermal for power generation in the Western Hemisphere would have a transformative effect. A ‘ballpark estimate’ indicates a reduction of 2,000 million tonnes CO2 per year, spread across the hemisphere!

Geothermal power from high temperature fluids in hot rocks is often characterised as high upfront costs, with reliance on government grants and research funding. To be cost competitive, baseload power projects are typically targeting US$ 30-60/MWh and <50 kg CO2/MWh. Well costs have historically been high, for example, drilling deep into igneous rocks to intersect hot fluids in fracture systems. This has often been compounded by drilling few wells and not benefitting from learning curves. The global annual deep well count is ~200 wells/year, and drilling spend US$ ~1bn. This is forecast to reach ~700 wells/year and US$ ~3.5bn by 2030. This can double the wells for power generation to >10,000, and double capacity to >36GW but this is nowhere near what is possible.

Retrofitting oil & gas wells offers a new paradigm. Imagine the changes across the Western Hemisphere if, say, 2 million oil & gas wells were retrofitted each with 1MW capacity, in total 2,000GW effectively doubling all currently installed capacity. Tests have already shown that 5-15MW/well is achievable in certain conditions. A critical component is to understand the amount and likely pace of heat transmission and extraction, and the potential for converting heat to electricity. Achieving 10MW/well would move us well beyond the challenges of electrifying everything.

Technology will lower costs

Basic solutions have existed since the early 1900s, but the last few years have witnessed extraordinary innovation both downhole and on the surface. The solutions are diverse, covering a wide temperature range (5-350oC), multiple reservoir types (fractured, unfractured, igneous, sedimentary), different fluid types (producing, injecting, circulating), and different loop configurations (single, multiple, closed loop, open loop, shallow, deep). In addition, there is pioneering work in universities on deep plasma drilling and the use of CO2 as a working circulating fluid.

New ways to add value are needed beyond technology that improves operational efficiency and lowers costs. Mineral-rich geothermal fluids, known for centuries in the mining industry, are a possibility. Focus has recently turned to processing fluids for lithium, with heat a by-product. With lithium essential for electric vehicle batteries, lithium prices soared 500% in 2021. Extraction processes are advancing rapidly with new investment from vehicle manufacturers. The hunt for supplies of geothermal lithium, which also offers energy security, is growing dramatically; a leader is California where pressurised brines reach 300oC. Other novel ways to add value by applying technology are emerging. New projects are being developed to use geothermal to manufacture green hydrogen by electrolysis. Meanwhile, in El Salvador, 1.5MW of spare geothermal capacity is now being used for bitcoin mining.

Massive task to change entrenched mindsets

The oil & gas industry has itself been slow to recognise that every well it drills has geothermal potential. Heat produced during operations is often dispersed, rarely conserved and little used. At the same time, skills and technology transfer from the industry can be a game changer in drilling, project execution, novel well designs, capturing heat, subsurface understanding, and training.

It is often said that the geothermal decade is underway. However, it is an industry that struggles to get its messages across. With so many applications and vast untapped resources, geothermal should be a foundation of the energy transition, but it is yet to breakthrough. Much will be achieved if governments positively and vociferously back geothermal. Clean energy policies and carbon pricing have a role to play. Many countries still lack a geothermal regulator to ensure heat and fluid extraction is adequately licensed. Sensible regulation to enable a change of use for oil & gas wells is desperately needed.

Geothermal can evolve into a major low carbon industry, offering clean base-load heat and power, helping meet decarbonisation targets of a Net Zero economy. Its versatility makes it ideal when paired with less stable renewables – wind, solar, tidal. A shift in the appreciation of the geothermal resource base when combined with green finance is starting to emerge. It can also become a major new tax base, capable of creating millions of local skilled jobs across the hemisphere, with a significant economic multiplier effect too. 

Geothermal in the Western Hemisphere has the scale to change global energy politics forever. One only needs to look back to the early years of shale gas 20 years ago, or offshore deep-water exploitation 40 years, and how they went on to change the world of energy through technology and operational innovation. Of the three main geothermal opportunities, each has a massive role to play. To advance geothermal, the industry must deliver on technology solutions, reducing costs, extracting added value, and getting its messages across. It is here that the Western Hemisphere oil & gas sector can transform the contribution of geothermal energy and change energy politics forever. Perhaps technology breakthroughs in retrofitting millions of oil & gas wells is where the most rapid transformation is likely and energy politics will start to be rewritten; it is going to be an exciting decade!

Chris Sladen runs an advisory service offering insights to inform, shape a decision, policy & regulation, and guide the next steps for energy ventures, acquisitions & divestments, energy transition and climate strategies. Chris has a unique global experience having worked in over 40 countries. This is underpinned by extensive knowledge of petroleum systems and where best to find oil and gas, notably in the Gulf of Mexico & nearby areas, Europe and NE & SE Asia, as well as the development of midstream, downstream & renewables investments in many emerging economies. Chris has extensive experience acquired on the Boards of companies, subsidiaries, business chambers & organisations. Chris has a career of over 40 years in the energy sector, living in Mexico (2001-2018), Russia, Vietnam, Mongolia, China & UK. His contributions to the energy and education sectors have been recognised by the UK Government with both an MBE and CBE, and also the Aztec Eagle from the Mexican Government – the first foreigner in the energy sector to achieve this award. Chris has published extensively over five decades. Chris’ articles for Energy Matters reflect his experience and enthusiasm and are not paid for in any way.