Power from the underground

The West is just beginning to tap its potential for clean, renewable geothermal energy


The thought of Nevada's cities - lighting up the desert landscape with neon lights, all-you-can-eat buffets and noisy slot machines - makes most environmentalists cringe. It's not just aesthetic: These gambling hubs are seen as gluttonous resource gulpers. One of them, however, is gaining praise for its production of renewable energy.

The city of Reno, north of Las Vegas, is a "hotspot" for geothermal power production. Geothermal plants now provide enough electricity to serve all 200,000 residents. And energy analysts say Reno's success barely scratches the surface: Projects slated for the West could nearly double the nation's geothermal generating capacity in the next few years, according to a new survey from the Geothermal Energy Association.

Geothermal sources now generate nearly 3,000 megawatts per year in the U.S. - more than any other nation, but still only 0.4 percent of total energy use, roughly equivalent to two large coal-fired power plants. The investment risk is still too high for a commercial-scale geothermal industry to flourish, according to Jefferson Tester of the Massachusetts Institute of Technology; the projects take years of planning and construction and don't get the large government subsidies that other energy producers do. But adequate federal funding for research and development would smooth out operational kinks, slash the risk and give investors more confidence, he says.

"We know the resources are there, it's just a matter of developing them," says Karl Gawell, executive director of the Geothermal Energy Association. "The solution isn't black-and-white, and we have a long way to go, but we have all the pieces - they just have to be put together."

The West is prime for geothermal development because its underground reservoirs of steam, hot water and hot rocks tend to lie close to the surface, especially in places like the Pacific Northwest's Cascade Mountains and Southern California's Imperial Valley. Half of all geothermal energy production in the nation is in the West, and 90 percent of the identified geothermal resources are on Western public lands.

In its infancy, geothermal electricity production required extremely hot water, over 360 degrees Fahrenheit. New technology, however, allows the use of water as cool as 165 degrees, greatly expanding opportunities for power production. Geothermal energy can also be tapped directly as a heating source. In some places, geothermal heating districts have been established; one such system uses hot water pipes to heat 37 buildings in San Bernardino, Calif.

More than 80 geothermal power projects are in the works across the West, in every state except Montana and Colorado. In Nevada, Idaho, Utah and California, geo-thermal plants already supply power to the grid. By 2050, advances in geothermal technology could supply 100,000 annual megawatts of power, according to a 2006 MIT study - 10 percent of U.S. energy consumption.

And by 2015, the cost of geo-thermal electricity should be competitive with that of coal, which currently provides about half of the country's energy, according to the Department of Energy. Consumers generally pay between 3 and 5 1/2 cents for a kilowatt hour of coal power and between 5 and 8 cents for a kilowatt hour of geothermal power. Not only will geothermal costs come down as technology improves, coal costs will continue to rise, due to the cost of transporting coal and complying with eventual greenhouse gas legislation.

Unlike other renewable energy sources that depend on the vagaries of wind or sun, geothermal plants produce consistent power. "Geothermal plants generate power 24 hours a day, year-round, and don't face hazards like tropical storms that plague other energy industries," says Paul Thomsen of Reno-based geothermal developer Ormat. "And the plants release hardly any carbon emissions."

But no energy source is entirely free of environmental impacts. Although geothermal development is prohibited in national parks and wilderness areas, development on other public lands could alter viewsheds and geothermal features and pollute surface water. A typical natural-gas-fired plant sucks up 361 gallons of freshwater per megawatt hour, compared to less than 5 gallons for geothermal plants - but even that could cause conflicts with other water users in drought-stricken areas. Vents around geothermal operations can release objectionable gases such as ammonia, methane and hydrogen sulfide, which smells like rotten eggs, and some projects have induced small earthquakes. Still proponents say these side effects are minimal when stacked against the environmental costs of traditional energy production.

To help developers unleash geothermal potential on public lands, the Bureau of Land Management and the Forest Service are jointly investigating the environmental impacts of expanding geothermal leasing. (The BLM issues all geothermal leases and permits.) Once the final assessment comes out this fall, the agencies will allow additional leasing on lands with high potential. Currently, there are about 420 geothermal leases on federal land, 55 of which are producing geothermal energy.

Interest in leasing has increased sharply in the last decade; the BLM has issued nearly 300 geothermal leases since 2001, compared to only 25 between 1996 and 2001. Last summer, the agency launched an effort to speed up the leasing process. Of the approximately 100 geothermal lease requests pending as of January 2005, the BLM has pledged to process at least 90 percent of them by August 2010.

But even after a geothermal company leases public land, the process of actually acquiring a permit to develop the resource remains painful. The BLM is so overrun with oil, gas and coalbed methane permit requests that geothermal interests get pushed to the back burner. "The BLM doesn't have adequate resources or personnel to deal with geothermal, so permits get delayed for years," says Gawell. "I literally know people who have died waiting."

Geothermal development has benefited from bipartisan support in the House and Senate, but the Bush administration's commitment has been less than robust. The Energy Act of 2005, touted as renewable-friendly, created the Geothermal Technologies Program in an attempt to boost the industry. The administration requested $26 million for the program the first year and $23 million the next - but for 2007 and 2008, it didn't request a dime, leaving industry experts, environmentalists and policymakers angry and confused. The 2009 budget, though, asks for $30 million.

Questioned by Congress, the Department of Energy justified the 2007 budget cut by saying that geothermal was a "mature technology" that didn't need additional funding. The department also cited an Office of Management and Budget grading system in order to claim that the geothermal program wasn't performing well enough to justify extra dollars. But funding for the clean-coal technology program was upped, even though its performance was rated lower than that of the geothermal program. Meanwhile, federal subsidies for the nuclear and fossil fuel industries still range in the hundreds of millions of dollars.

In 2005, federal production tax credits previously tied to wind and solar power were expanded to include geothermal projects. But the credits are set to expire at the end of this year, even though over 100 geothermal development companies recently sent letters to the White House calling for an extension. By one vote, the Senate recently declined an extension that would have lasted through 2012.

Those tax credits have been the deciding factor as to whether developers can afford to break ground on new geothermal projects, says Lisa Shevenell, director of the Great Basin Center for Geothermal Energy. For 10 years after plant construction, the tax credits pay geothermal developers 2 cents for every kilowatt-hour of electricity generated. That substantially lowers the cost of generating power, leading to lower costs for consumers and lower risks to investors. "Without an extension of the tax credit deadline, most likely, projects will be downsized or put on hold altogether," says Gawell.

But geothermal may get a boost from the Energy Independence and Security Act of 2007, which Bush signed in December. The legislation includes the Advanced Geothermal Energy Research and Development Act, which directs the Department of Energy to authorize up to $95 million annually for research and development. And most of the Western states, with the exception of Wyoming, Utah and Idaho, have established renewable portfolio standards, which require electric utilities to produce a certain percentage of their energy (usually 10 to 15 percent) from renewable sources, including geothermal, by a certain date.

As with any power source, access to transmission facilities is key. In November 2007, the Bush administration proposed 6,000 miles of "energy corridors," rights of way for distributing oil, gas, hydrogen and electricity. Although some environmentalists disapprove of corridors in national parks and monuments, others welcome the plan because it could minimize the time it takes to site and approve projects.

Success stories like Reno prove that, although geothermal is by no means a cure-all for the nation's energy problems, it is definitely part of the solution. "Interest in geothermal has really blossomed," says Shevenell. "And in the next few years, I think that the industry will, too." Tapping energy from underground could make the barren Nevada desert a land of plenty - and someday soon, it could power millions of households in the West.

The author just completed an internship at HCN.

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