Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Politics

We Can’t Drill These Holes Fast Enough

The U.S. just made permitting easier for geothermal, but industry and lawmakers say we should be going farther.

A geothermal power station.
Heatmap Illustration/Getty Images

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.

Green

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Electric Vehicles

Congress Could Break Tesla’s Revenue Model

Between the budget reconciliation process and an impending vote to end California’s electric vehicle standards, a lot of the EV maker’s revenue stands to go poof.

Elon Musk and the Capitol.
Heatmap Illustration/Getty Images

It’s shaping up to be a very bad week for Tesla. The House Committee on Energy and Commerce’s draft budget proposal released Sunday night axes two of the primary avenues by which the electric vehicle giant earns regulatory credits. Congress also appears poised to vote to revoke California’s authority to implement its Zero-Emission Vehicle program by the end of the month, another key source of credits for the automaker. The sale of all regulatory credits combined earned the company a total of $595 million in the first quarter on a net income of just $409 million — that is, they represented its entire margin of profitability. On the whole, credits represented 38% of Tesla’s net income last year.

To add insult to injury, the House Ways and Means committee on Monday proposed eliminating the Inflation Reduction Act’s $7,500 consumer EV tax credit, the used EVs tax credit, and the commercial EVs tax credit by year’s end. The move comes as part of the House’s larger budget-making process. And while it will likely be months before a new budget is finalized, with Trump seeking to extend his 2017 tax cuts and Congress limited in its spending ability, much of the IRA is on the chopping block. That is bad news for clean energy companies across the spectrum, from clean hydrogen producers to wind energy companies and battery manufacturers. But as recently as a few months ago, Tesla CEO Elon Musk was sounding cavalier.

Keep reading...Show less
Climate

AM Briefing: Biggest Blows Yet to the IRA

On gutting energy grants, the Inflation Reduction Act’s last legs, and dishwashers

GOP Budgets Propose Biggest Blows Yet to the IRA
Heatmap Illustration/Getty Images

Current conditions: Eighty of Minnesota’s 87 counties had red flag warnings on Monday, with conditions expected to remain dry and hot through Tuesday15 states in the South and Midwest will experience “extreme” humidity this weekIt will be 99 degrees Fahrenheit today in Emerson, Manitoba. The municipality hit 100 last weekend — the earliest in the year Canada has ever recorded triple digits.

THE TOP FIVE

1. The Energy and Commerce Committee’s budget would kill clean energy grants ...

Republicans on the House Committee on Energy and Commerce released their draft budget proposal on Sunday night, and my colleague Matthew Zeitlin dove into its widespread cuts to the Inflation Reduction Act and other clean energy and environment programs. Among the rescissions — clawbacks of unspent money in existing programs — and other proposals, Matthew highlights:

Keep reading...Show less
Yellow
Podcast

Shift Key Special Edition: The Fight Over the Inflation Reduction Act Has Arrived

Rob and Jesse digest the Ways and Means budget bill live on air, alongside former Treasury advisor Luke Bassett.

The Capitol.
Heatmap Illustration/Getty Images

The fight over the Inflation Reduction Act has arrived. After months of discussion, the Republican majority in the House is now beginning to write, review, and argue about its plans to transform the climate law’s energy tax provisions.

We wanted to record a show about how to follow that battle. But then — halfway through recording that episode — the Republican-controlled House Ways and Means Committee dropped the first draft of its proposal to gut the IRA, and we had to review it on-air.

Keep reading...Show less
Yellow