We Can’t Drill These Holes Fast Enough

The federal government is really excited about geothermal: A Department of Energy report published in March said that geothermal can “become a key contributor to secure, domestic, decarbonized power generation for the U.S.” — particularly the kind of clean, always available power that grids love.

Big companies are really excited about geothermal: A group comprised of Google, Microsoft, and Nucor, the steel company, together put out a request in March for power projects that could generate clean power 24 hours a day, including “next-generation geothermal” (i.e. projects that don’t require finding hot water or steam underground, but instead use drilling to apply fluid to already hot rocks).

But are the nation’s regulators — especially those who oversee public lands in the vast American West and Great Basin, where some of the nation’s hottest and shallowest rocks are located — excited about geothermal?

The answer matters tremendously. The Bureau of Land Management approves leasing for geothermal projects on some 245 million acres of land. This also means that geothermal projects often have to run the full gamut of federal environmental review at each stage of development. Over the decade or so that a geothermal project can take from start to finish, there may be as many six reviews mandated by the National Environmental Policy Act, according to the Institute for Progress, a technology policy think tank.

This week, the BLM alleviated part of that burden, saying Monday that it would apply two existing “categorical exclusions” – i.e. permissions to skip environmental review for certain actions — to geothermal exploration projects. This authority to adopt other agencies’ categorical exclusions (in this case from the Forest Service and the Navy) was included in the 2022 debt limit deal.

And yet, all the industry advocates I talked to expressed measured enthusiasm at best. “I think this is a very good step in the right direction,” Aidan Mackenzie, a fellow at the Institute for Progress, told me. On top of saving companies time, it also saves the government time. Creating a new categorical exclusion “requires notice and comment, which is more challenging for an agency,” Mackenzie said. “Adopting an existing categorical exclusion is a much easier process.”

This move comes as a bipartisan effort to clear away bureaucratic barriers for geothermal companies to operate on public lands appears to be cresting in Congress. Last month, four senators — two Democrats and two Republicans — co-sponsored a bill, the Geothermal Energy Optimization Act that would establish a categorical exclusion for all exploration activities, modeled on the existing one for oil and gas that’s been in place since 2005.

Two prominent geothermal startups, Eavor and Fervo, both welcomed the BLM’s decision while pushing gently but insistently for the full legislative solution.

Jeanine Vany, Eavor’s executive vice president of corporate affairs, told me the BLM’s action would “move the needle slightly in the right direction,” but that a legislative solution — specifically the GEO Act — would be “much more comprehensive and would be longer lasting.”

In an emailed statement, Fervo CEO Tim Latimer said essentially the same thing, calling the BLM's move “a commonsense approach to enabling development.”

“While the actions here cover only a small portion of activities in the geophysical exploration process,” he wrote, ”we are optimistic that both agency and legislative updates in the future that encompass some routine development and drilling activities will continue to unlock the potential of this important 24/7 carbon-free energy resource.”

One of the authors of the GEO Act, New Mexico Senator Martin Heinrich, also emailed to say that “BLM is right to scale up geothermal production,” but that now, “Congress should pass my GEO Act to take us a step further in fully harnessing the power of geothermal.”

At the same time, the BLM is working to carve out its own exclusions specific to the work it does on geothermal permitting. A BLM spokesperson told me the agency is “currently working on two categorical exclusions related to geothermal permitting,” one for exploration and another for “resource confirmation,” the process of drilling to show more definitively that the necessary hot rocks or (hot fluids) are there and can be drilled for heat.

Still, “there’s a strong case for Congress, especially, to do more,” Mackenzie said. The GEO Act, he explained, would “derisk” the exploration process for geothermal. “Right now, there’s a big cost to messing it up," he said. "If you have to do a full [Environmental Assessment], it takes or year or two — you might get sued. If you finally do the exploration and the resource isn’t what you think it would be, you have to go back and wait years to try again.”

Shortening the timeline for geothermal will be key to achieving what the industry, energy buyers, and the federal government all seem to want for next-generation projects, in terms of both cost and production. The Department of Energy has said that it wants to see costs fall by some 90% by the middle of the next decade, and that the sector could grow 20-fold by 2050, to 90 gigawatts of capacity, which would be slightly greater than the capacity of hydropower today.