Technology, as science fiction writers like to warn, has no sense of morality. Create life, and your monster might end up turning on you. Build an artificial intelligence system, and you might provoke a robot apocalypse.
That rule goes for good as well as bad. Microwave ovens are a spinoff from World War II-era military radar technology. Epipen injectors were developed for soldiers to use against nerve gas.
Increasingly, we are seeing similar technology spillovers in the energy transition, with expertise generated in producing bad old fossil fuels being turned to clean renewable purposes.
The offshore wind industry has learned important lessons from the decades spent drilling for offshore oil and gas. In many parts of the world, it has already taken the baton from petroleum as the largest contributor to offshore energy investment.
It is a similar story with fracking. Knowledge gained forcing oil and gas from deep rocks over the past few decades might provide a crucial piece of the puzzle to build zero-carbon grids, by turning geothermal energy from a niche industry into a powerhouse.
At present, geothermal electricity — using hot rocks buried deep in the earth to force fluids to the surface and drive turbines — is a relative rarity. Volcanic areas such as Iceland, Kenya, New Zealand, the Philippines and the western US use it quite extensively, thanks to high temperatures close to the surface that fuel mineral springs like those in Yellowstone National Park and Rotorua in New Zealand.
Elsewhere, the useful rocks are either too deep or too impermeable to be much use. While wind and solar power generation increased by about 2,600 terawatt-hours (Twh) between 2009 and 2021, geothermal added just 28TWh. It is stuck in similar doldrums to the ones fracking was in 20 years ago, before the boom took hold in the US.
The industries have a surprising amount in common. Both drill holes deep in the ground and hope to extract energy by forcing fluids to the surface. Both originated in the middle of the 20th century, but remained small-scale for decades, with technology and economics barring wider deployment. Both suffer decline rates: Oil gets harder to extract as crude is pumped out and underground pressures fall, while geothermal reservoirs can gradually get cooler over time and lose their ability to force steam to the surface.
Some of the most crucial information needed for working out the ideal locations for geothermal reservoirs is locked in the vast database of sedimentary rock basins that the petroleum industry has assembled over the past century.
There are already signs that spillovers are happening. The US government has developed a fluid to fracture impermeable rocks to open up more geothermal reservoirs, a process identical to the one that frackers use in petroleum deposits.
Start-up Eavor Technologies Inc plans to use the horizontal drilling pioneered by the unconventional oil and gas industry to build radiator-like networks of pipes in areas that would otherwise be unsuitable for development.
Shell PLC set up a geothermal division in 2018 that has been exploring the potential of the technology to provide heat for buildings and industry in the Netherlands. Baker Hughes Co, the former oilfield services division of General Electric Co, has developed deep, high-temperature drilling technologies to tap reservoirs that can produce heat more efficiently than conventional ones.
There are even proposals to use the technologies to produce other materials crucial to the energy transition. Current geothermal wells operating near California’s Salton Sea might be able to extract enough lithium from underground brines to meet US demand 10 times over. One of the world’s few operating green hydrogen facilities is powered by a geothermal plant just outside Iceland’s capital, Reykjavik.
The question is whether innovations developed by oil and gas producers will be sufficient to overcome geothermal’s high upfront costs, which do not appear to fall the way they do for wind and solar projects.
Petroleum and mining companies normally enjoy periods of super profits to compensate for the haphazard nature of resource exploration, while utilities churn out unspectacular but reliable margins year after year. Geothermal appears to get the worst of both worlds, its costs at the mercy of unpredictable geology, while its revenues are set by stolid regulated power grids.
Clearing away red tape and local opposition to projects would be essential. It can be harder to get a permit for a geothermal well than a petroleum one in the US. In Japan — on paper, one of the countries with most potential for the technology — owners of onsen hot spring bathhouses frequently block development because of fears the industry could deplete reservoirs of hot rock.
The hurdles are not pure NIMBYism, either. Some of the problems that fracking can cause in terms of minor earthquakes and contamination of groundwater are also risks that geothermal developers have to address.
The potential remains substantial. Geothermal does not stop generating if the sun goes down or the wind stops blowing. That should allow it to capitalize on higher peak pricing as variable renewables take up an increasing share of power grids.
If we are to shift to clean energy over the coming decades, we will need every tool at our disposal. Geothermal should be part of that mix.
David Fickling is a Bloomberg Opinion columnist covering energy and commodities. Previously, he worked for Bloomberg News, the Wall Street Journal and the Financial Times.
This column does not necessarily reflect the opinion of
the editorial board or Bloomberg LP and its owners
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