Centuries before prospectors flooded Ouray, Colo. in search of silver and gold, Ute Indians discovered the town’s true treasure: natural hot springs. Today, people flock to Ouray for those same “sacred healing waters.” And on an immaculate day in October, so did I, as part of a jeep caravan that toured the tidy town’s geothermal sites in connection with the Delta-Montrose Electric Association’s Renewable Energy Forum and Expo in nearby Montrose, Colo. My group consisted of investment bankers, Icelandic geothermal engineers, geologists, geothermal developers and hot springs resort owners who had come to learn about geothermal energy, especially in Colorado.

Geothermal energy is heat that originates deep within the earth, which may surface naturally as geysers, seeps or hot springs. The energy is extracted for use from hot water, steam or hot rocks. While soaking and heating are the most common uses, geothermal power plants have taken root in Western states, especially in Nevada and California, site of the country’s first geothermal power plant. And though the United States produces more geothermal electricity than any other nation, the total accounts for only 0.5 percent of the country’s annual energy use. Nonetheless, researchers and environmentalists think that geothermal energy could dramatically reduce the nation’s consumption of fossil fuels, leading to fewer carbon emissions and less dependency on foreign oil.

As we pulled into town on a charter bus, 30 feet of upholstered bucket seats, tinted windows and exhaust-infused corridor didn’t detract from Ouray’s alpine beauty, cradled by the snow-capped San Juan Mountains. The southwestern Colorado town’s economy hinges on its hot springs; Ouray owns rights to 18, ranging in temperature from 64 to 140 degrees Fahrenheit, and several local lodges have private hot springs with on-site soaking spots – prime destinations for enthusiasts nationwide.

After a briefing on Ouray’s geothermal history, we loaded into open-air jeeps, overshadowed by layers of rose-colored rock walls that soar 4,000 feet to form a grand amphitheater above the town’s quaint turn-of-the-century buildings. The first stop was the Uncompahgre Gorge – home of a world-famous ice-climbing park. Snaking along the cliff edge, we peered below at the rising steam that marks hot springs’ entry into Canyon Creek. One of these springs gives life to Ouray’s geothermal crown jewel, the mineral hot springs pool. Since 1927, the 96 to 106 degree pool waters have helped keep the local economy afloat by drawing about 14,000 visitors a year. Hot springs also heat the pool’s gym, restrooms and its bathhouse water, as well as several city buildings.

As the price of oil skyrockets, environmentalists and industry alike are optimistic about geothermal energy’s potential. In southwest Colorado, high temperatures found deep beneath the surface hold promise for electricity generation, though energy at those depths is currently out of reach. But as money is invested in deep-drilling research and development, large-scale commercial geothermal electricity could be possible in the region and across the West within 15 years. By 2050, geothermal production could meet 10 percent of the country’s energy needs, according to a 2006 MIT study. But as Ouray’s 800 residents already know, geothermal development isn’t always a peaceful soak in the hot tub.

In the mid-1980s, a proposal for a geothermal district heating system divided the town. Exploratory wells were drilled with the hope that the system could cut heating costs in half. Over 80 percent of the respondents to a survey favored the project. However, local businesses dependent on geothermal waters filed suit in district court, claiming that the town’s exploratory wells diminished their private hot springs.

“The key to the scenario was that there was no baseline monitoring study prior to putting in the wells,” says Pam Larsen, geologist and town mayor. “Since nobody really knew how much water was used, neither side’s claim could be supported by factual documentation.” In 2004, the state of Colorado enacted the “Geothermal Rules.” One clause says that prior to submitting an application for a well, developers must notify all water right owners within a half-mile of the proposed well site.

Nearly two decades later, the dispute has been settled and the town has learned valuable lessons. “What potential impact will geothermal development have? In Ouray, hot springs are the lifeblood of the community,” says Wayne Goin, hydrogeologist. “There’s a need to slow the process down, do a baseline study and talk to all parties involved, because when things happen fast, there are a lot of problems that happen fast.” Ouray hasn’t ruled out a district heating system in the future, though currently only one home uses geothermal heat. Pagosa Springs boasts the only geothermal-heating district in Colorado, which provides heat to 17 buildings and melts sidewalk snow.

At the last stop of the jeep tour, we finally got to experience the “sacred healing waters” firsthand. Bypassing an outdoor hot springs pool, I ventured inside the Wiesbaden Hot Springs Spa and Lodge as the tour group slithered into the bowels of the building toward its main attraction: the vapor cave.

In the first chamber, a spring cascades over natural rock walls and leads soakers into the main room and its 18-inch deep pool. Water droplets glissade down the rock walls and drip from the ceiling as steam hovers above the 108-degree water. Thankfully, the enclosed cavern didn’t smell like rotten eggs. Alone in the cave, I imagined Ute Indians lounging in a hot spring down some dark canyon, at ease and energized, overcast by shadowy cliffs.

Back with the group, I privately hoped the charter bus would break down. Perhaps I was reluctant to trade Ouray’s majestic mountain air for my desk at the office, the photogenic rock amphitheater for my semi-cubed-in computer. Or maybe it was the bus’s stale exhaust fumes that made me long for my next visit to the vapor cave. What I do know is clearly illustrated in Ouray’s history books: Sacred or not, geothermal energy is a powerful resource. It alters more than mind and body; in the not-so-distant future, it could change the energy industry in the West.