Why geothermal is the new fracking

DEPENDING on your point of view, hydraulic fracturing—or “fracking”—is either the future of clean, natural gas or an environmental apocalypse.

Fracking liberates gas trapped underground by drilling sideways from vertical well-shafts into horizontal layers of shale rock. Millions of gallons of a cocktail of water, sand and chemicals are injected into the horizontal wells at high pressure, fracturing the shale, releasing the gas—and causing violent protests in Europe and parts of America.

Geothermal energy, by contrast, has yet to stir much controversy. Most geothermal plants are located where water has seeped down into the Earth’s crust, been heated and forced back up through permeable rock. Drill a well to between 3,000 and 12,000 feet, and the searing water and steam can be released to drive generators.

Geothermal is a minnow among power sources. America has the world’s highest installed capacity of geothermal generating plants—3.4 gigawatts’ worth at last count (see first chart)—but they generate only 0.4% of its electricity (see second chart). New “enhanced geothermal systems” (EGS), however, look set to make geothermal a bigger contributor—and potentially as controversial as shale.

The industry may dislike the comparison, but EGS is geothermal fracking. Millions of gallons of water and chemicals are injected into mostly vertical wells at relatively high pressure, and the combination of cold-meets-hot, pressure and chemistry shears the deep, hot rock. This creates new “fracture networks” through which water can be pumped, heated and sent back to the surface to generate power. Conventional geothermal wells cost at least $5m to develop, and about half fail. The new technique can reduce the failure rate and extend the size and life of existing geothermal fields. In time, think EGS fans, it will allow geothermal fields to be established wherever there is suitable hot rock.

Doug Hollett, who oversees geothermal policy at the US Department of Energy, is one such fan. He points to a project the department worked on with Ormat, a leading geothermal firm, in Desert Peak, Nevada, where EGS boosted the productivity of an existing field by 38%; it also became the first EGS project to supply America’s power grid. Mr Hollett calculates that EGS adds capacity to existing fields at a cost of 2-5 cents per kilowatt-hour; for low-cost natural gas the equivalent is 6-7 cents. The department reckons that with EGS techniques, geothermal could eventually meet 10% of America’s electricity needs.

Investors are intrigued but wary. AltaRock Energy, a Seattle-based company partly financed by Khosla Ventures, a venture-capital firm, has built a demonstration project in Oregon which it claims can extract six to ten times as much power from a field as older EGS techniques.

The sticking-point, says Susan Petty, AltaRock’s founder, is commercialisation. Geothermal is a steady source of energy (unlike windpower), has very high capacity-utilisation rates, zero fuel costs and near-zero greenhouse-gas emissions. The trouble is that successful existing geothermal plants do not need EGS, and for many failed wells it is uneconomic to introduce it. So with the help of an as-yet unnamed partner, AltaRock plans to buy up existing fields that it thinks it could make profitable using its version of EGS. That way it will avoid the costs of new infrastructure while demonstrating its technology’s viability.

The energy department reckons that EGS techniques could be commercially viable as soon as next year, at which point more private investors and perhaps utilities might pile in. It is not alone in its optimism: Germany, France and Britain have state research programmes for EGS.

All this has environmentalists gearing up for another fight. EGS can trigger earthquakes. Most are minuscule but an early project on a seismic fault in Basel, Switzerland was scrapped after several not-so-small quakes. It is also possible that water used for EGS may leak, contaminating surface waters or soil. America has rules to ensure EGS’s safety, and every project is surrounded by seismometers.

Whether this will prevent protests or prohibitions is open to hot debate.

The Economist. Aug 16th 2014