Geothermal technology advances are in the works with some of them coming as an offshoot of oil/gas drilling advancements, and this renewable resource sector is on the verge of a big job creation spurt as a result, according to a report released Friday by the Geothermal Energy Association (GEA) at the start of its annual trade expo in Sacramento, CA.
The GEA report, “Green Jobs through Geothermal Energy,” said federal stimulus funding, tax incentives and strong state renewable portfolio standards (RPS) are fueling growth in geothermal power and corresponding job creation. Geothermal operators also indicated that they have been the beneficiaries of some of the drilling technology advancements that have helped fuel the U.S. shale gas boom in recent years.
“The concept of what is being done with the shale gas is something that could have a positive impact on the geothermal industry,” said Jared Potter, CEO of Potter Drilling Inc., a geothermal technology firm founded by his father who helped develop some of the initial techniques used in the industry. “You’re trying to target specific areas of the reservoir where hot water is located, and directional drilling is a way to do that. Directional drilling in geothermal now is sparsely used, but it is an area where it could have an impact, particularly on the economics of developing these reservoirs.”
Potter said that some of the advances in the oil/gas sector could help make more of the geothermal wells more useful — as an injection or producing well — and the overall cost can be reduced for developing geothermal reservoirs, which are much more capital intensive than other types of drilling. “All of the stuff [oil/gas drillers] are doing is not directly applicable to geothermal in terms of the temperatures and types of rocks, but we can use some aspects of it,” he said.
Jeremy Magrath, Ram Power Inc.’s project manager for business development, said the technology advanced by oil/gas drilling is being used by his firm. “We drill directional wells, and we do targeting. There are things that we can do now that weren’t available several years ago. Rigs have gotten bigger and we can now achieve greater depths directionally with bigger holes. There definitely has been technology that has transferred over.”
GEA Executive Director Karl Gawell said many of the 160 companies represented at the association’s expo this year also operate in the oil and gas business. “It’s not a perfect fit because often you have to make added investment in taking the technology further so we learned how it applies in the different types of geology that geothermal deals in. That’s the added investment we need.”
In its report, the GEA touts the momentum from stimulus grants and the stretching RPS goals being set in the states where there is the most geothermal development, but it also acknowledges that “the benefits of the stimulus funding to the geothermal industry have yet to be fully realized.”
“About 95% of the projects receiving American Reinvestment and Recovery Act [ARRA] funding are either less than 50% complete or have yet to break ground,” Gawell said.
“Recovery Act funding is going to make a huge difference over the next year to push projects to completion and create more jobs,” said Gawell, adding that he thinks the majority of the ARRA investment will not really start to be felt in a positive way until next year. He said it is “critical” that the energy industry continue to support the ongoing policies in that regard.
Gawell said his association anticipates that next year will be “a high point for geothermal activity in the United States under the stimulus legislation. He estimates there will be 500-700 MW of new geothermal projects in the final construction phase during 2011.
Magrath said his firm anticipates investing more than $1 billion in its 300 MW of projects in The Geysers in Northern California and the Imperial Valley in Southern California.
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