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Geothermal Drinks Gas's Milkshake

A new study says geothermal could smash growth forecasts with the
backing of a powerful ally: the oil and gas industry. Can they really
make friends?

Welcome to BASED, a new Prospect newsletter.

Younger staff members at the magazine are launching this newsletter to
track positive, surprising, weird, and beautiful developments in
politics, policy, and pop culture.

Over the past three decades, Generation X, millennials, and now Gen Z
have been thrashed by the bitter disappointments of globalization, by a
financial crisis that wiped out working-class wealth, by the doldrums of
the jobless recovery
<[link removed]>,
and most recently by the COVID-19 pandemic and ensuing social crisis.

Young people are overwhelmingly responsible for generating new
progressive ideas, and millennials have popularized the leading
proposals of the last few decades: plans to aggressively regulate Wall
Street, cancel consumer debt, provide Medicare for All, and pass a Green
New Deal. Facing a crisis of legitimacy, political elites have borrowed
from and adopted diluted versions of many of these ideas, most
strikingly with the recent Inflation Reduction Act and its vision for
domestic green industrial policy.

Over the same period, the base of the Democratic party has shifted.
Working-class voters left the party in droves as union density fell off.
While youth voter turnout surged in 2020, talk of a voter "Youthquake
<[link removed]>" has been
overstated. Young people remain disillusioned with the offerings of an
aging ruling elite. At the Prospect, we're interested in how
progressives build a new political base. We'll explore that question
in this newsletter, which we've named after a term referring to ideas
that are bold, earnest, and irreverent.

According to a dictionary of online slang, "based" means "the
opposite of 'cringe.'
<[link removed]>" In a
political environment where people often censor their views to avoid
offending their peers, "based" means gleefully flouting what the
haters might think. At a time when liberal values have attained
(tenuous) cultural hegemony, "based" can imply membership in a
right-wing counterculture. It is often applied to alt-right celebrities
like Peter Thiel and Tucker Carlson. But we shouldn't cede being
self-assured, stylish, and critical of dominant narratives to the
political right.

This newsletter will feature policies and trends that represent a
forward-looking agenda. We're interested in plans that could be
sources of agreement and collaboration among unlikely groups, and help
to forge a new working-class base. We hope to have an active
conversation with our audience. Send ideas and feedback to
[email protected] <mailto:[email protected]>.

Ok, here goes ...

Hot Rocks

Long-dormant geothermal energy is having a moment in the sun. Recent
technological advancements have transformed the potential of hot rocks
as a renewable-energy resource, and now, a stream of federal and state
incentives have put geothermal on the cusp of breakout success.

Hot rocks near the Earth's surface contain immense quantities of
energy. In some places, that subsurface heat breaks through in geysers,
hot springs, and steam vents near volcanic activity. Humans long ago
identified the potential of this energy as a resource. Way back in 1892,
Boise, Idaho, created the United States' first district heating system
<[link removed]>,
piping hot water into buildings from nearby hot springs. Today, the bulk
of U.S. geothermal is concentrated in California and Nevada, which have
relatively shallow geothermal resources
<[link removed]>.

Until the past decade, it was expensive and technically challenging to
dig deeper. But those obstacles have been rapidly cleared, setting off a
volley of deep geothermal exploration projects. The up-front cost is
high, but district systems pay dividends in lower long-term bills for
heating and cooling.

So far, elite colleges, which have the capital and autonomy to embark on
these projects, have hogged much of the attention. Last summer, Cornell
University drilled a two-mile-deep borehole
<[link removed]> at a gravel parking lot, where it
will explore the possibility of warming the school by tapping heat from
the rocks that smolder all winter below the snowy campus. Duke
University and UC Berkeley are exploring similar plans.

But towns without the anchor or the endowment of a research university
have also successfully made use of the hot rocks they sit on. West
Union, a small, moderately conservative town in northeast Iowa, is a
real-world model for district geothermal.

After a feasibility study, West Union decided a decade ago to embark on
a district geothermal system. They drilled directly on the courthouse
lawn <[link removed]>, boring 132 wells, 300 feet deep in
the main square. The developers then extended piping to building lots
downtown, giving some 60 businesses access to the system, which was
completed in 2013.

A technical report found that participating businesses saw utility bill
cost savings, even when switching from natural gas, which has been at
record-low prices for much of the system's existence. "Myself, I
think it's a great deal. The people that have it seem to really like
it," Mayor Cam Granger told the Prospect in an interview. "It's
not a home run, but it's close."

Granger, who took office after the system was installed, said he has
become a major backer of geothermal. Although he isn't sure he
believes in human-caused climate change, Granger said, he loves how the
zero-emissions system has helped businesses save money, bringing down
costs dramatically on peak energy-use days during Iowa's freezing
winters and sweltering summers.

The Environmental Protection Agency calls geothermal the single most
energy-efficient heating system. Its lack of waste has allowed buildings
in West Union to capture more of the benefits of their energy
consumption, even installing new air-conditioning systems without
raising electric bills.

The Fayette County courthouse in West Union, which houses the geothermal
pumps, previously relied on inefficient window-mounted air conditioners
for cooling. There was no air-conditioning in the attic, where the
county's historical records were stored. Now, the courthouse has
ditched the window AC units and installed central AC, which cools the
attic. They have even added a ventilation system for air quality, all
with lower utility bills due to geothermal.

West Union's switch to geothermal has also attracted plenty of
grumbling. "Certain people love their gas furnaces, and that's
it," Granger said. "A lot of the older generation in town didn't
see it being necessary. I understand that." But eyeing the recent rise
in gas prices, Granger feels confident that it was a smart investment.
Now, the challenge is getting more businesses to hook up to the system.

Jeff Geerts, a special projects manager at the Iowa Economic Development
Authority, which helped fund the system as part of a community
revitalization pilot grant
<[link removed]>,
told the Prospect he was struck by how much direct engagement it took to
persuade businesses to start using the system.

It wasn't until the state worked with USDA's Rural Energy For
America Program and a private engineering firm to develop
property-specific scenarios that business owners began switching. Around
a dozen businesses now use the district system, Geerts said, and he
anticipates steady growth, with buildings plugging in when their current
fossil fuel systems break and need replacement.

Participation could be sped up by President Biden's Inflation
Reduction Act, which massively expanded both residential and commercial
tax credits for geothermal. (As geo-watcher Tim Latimer points out,
however, the law excluded geothermal from the Advanced Manufacturing Tax
Credit <[link removed]>,
which will help power wind, solar, and battery production.)

States are also getting in on the action. New York just passed the
Utility Thermal Energy Network and Jobs Act
<[link removed]>, which
supporters say will not only help build geothermal but will provide jobs
for utility workers who may see their work in fossil fuels dry up.

Even with the incentives in place, Geerts's problem-persuading
individual property owners to take the leap-still looms. But the IRA
is also likely to galvanize a small army of community lenders and
developers
<[link removed]>
bent on deploying clean energy, potentially coordinated by a national
climate bank. The quality of those deals, and the trustworthiness of the
new firms hawking green tech
<[link removed]>
in low-income communities, is a wide-open question.

[link removed]

Let's Be Friends

But geothermal might be about to smash conventional growth forecasts,
with the backing of a powerful ally: the oil and gas industry.

Along with the fact that Exxon pioneered lithium-ion battery research
<[link removed]> in the
1970s, it is one of the sweeter ironies of the environmental movement
that oil and gas companies prepared geothermal technology for economic
viability at scale.

Over the course of the last decade's shale boom, oil field drilling
companies led a revolution in directional drilling and hydraulic
fracturing ("fracking") techniques. They perfected long, spindly
pipes and fine-tuned self-adjusting diamond-cutter drill bits
<[link removed]>.

Those technologies, which can endure high temperatures and shoot water
through rock, have already solved engineering challenges for geothermal.
Rather than relying on places where there is a naturally occurring
confluence of water, heat, and porous rock, geothermal developers now
have the ability to drill into solid rock, inject water at high
pressure, and collect the heated water.

Geothermal isn't just a freak offshoot of the fossil fuel industry,
however. They could be ongoing allies. Oil and gas companies, from oil
field services firms to investor-owned utilities, are considering the
advantages of a geothermal boom. Utilities could potentially retool gas
pipelines
<[link removed]>
as clean geothermal networks, and the oil field services industry could
see reason to sell its proprietary technology to geothermal developers.

Dry oil fields could be repurposed as geothermal wells, and those oil
fields, like many geothermal sites, are rich in prized minerals like
lithium and manganese. That could help solve the up-front cost problem,
as companies seeking those minerals will offer advance market
guarantees.

Through know-how and existing technology transfer alone, shale-oil
drilling technology could reduce geothermal costs by 20 to 43 percent,
according to a new study
<[link removed]> published by the
University of Texas at Austin. That study finds that current projections
of geothermal growth <[link removed]>,
which linger in the single
<[link removed]>
or low double digits, undershoot dramatically.

"Much like the rise of unconventionals in oil and gas, whose meteoric
ascent largely took the world by surprise, geothermal is poised for
similar, exponential growth, should technology development and transfer
follow the footsteps of the shale boom," the authors predict. Even at
current prices, the study finds, geothermal is poised to grow
substantially as a share of Texas's energy mix.

A maximalist geothermal target for Texas would be to replace all fossil
fuel-generated electricity, and all heat generated by gas and fuel
oil, with geothermal. That "aggressive but technically feasible"
plan would require drilling 60,000 geothermal wells, the study finds,
roughly equivalent to four years of oil and gas well drilling.

While that geothermal scenario may be price-competitive, why would oil
and gas firms participate in an industry that could so dramatically
undermine their market share?

The Texas scientists have an elegant solution. In a world that remains
hungry for Permian oil and gas, they argue, the Lone Star State should
go green at home so that it can sell its fossil fuels on the world
market: "An aggressive geothermal drilling program at home such as
this may serve to free up Texan natural gas for export."

~ LEE HARRIS, STAFF WRITER

Follow Lee Harris on Twitter <[link removed]>

[link removed]

HOUSEKEEPING NOTE: This is the first edition of "BASED," a
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