Diversifying our energy mix is crucial to reducing our emissions and getting us closer to the climate goals outlined in the Paris Agreement and other legislation. By moving away from more carbon-intensive fossil fuels and toward more sustainable sources of renewable energy, we’re able to limit pollution while still meeting our growing needs for power and electricity. With renewable energy continuing to gain traction and more developers expanding into this sector as they work to reduce carbon intensity, we’re launching a blog series focusing on different renewable energy sources and best practices to consider before and during development.
What is geothermal energy?
Geothermal energy is energy that is naturally generated by the heat of the earth. This energy exists in a range of forms like pressurized steam, hot water, or warm earth, and it can be found on, near, or far below the earth’s surface. For example, the temperature in the ground just below the surface consistently averages 50-60 degrees Fahrenheit, and that heat can be extracted as geothermal energy. Meanwhile, hot water or steam reservoirs are located much deeper in the earth and require drilling—much like for oil or gas wells—to extract that heat energy. When geothermal energy is harnessed, it can be used to heat water or buildings, such as with heat pumps or hot water heaters, or to produce steam that moves turbines to ultimately generate electricity.
Over the years, numerous US policies, like the Geothermal Steam Act and the Advanced Geothermal Research and Development Act, have been introduced to support the development of geothermal energy. Still, it remains less common than other forms of renewable energy, currently accounting for just 0.4% of net electricity generation in the US. However, in recent years, interest in geothermal energy has grown, particularly in western states where most geothermal reservoirs exist, as it offers a viable path to broad-scale decarbonization and emission reduction.
What are some of the benefits of geothermal energy?
Geothermal energy offers numerous benefits over most other forms of energy—even over some other forms of renewable energy. First and foremost, geothermal energy, like all renewable energy, is continuously available and constantly replenished. The earth will continue to produce heat for billions of years, enabling us to access that energy and use it for heating and electricity 24/7/365. And because geothermal energy is so highly available, it’s able to bridge the gaps that can occur when other sources of energy, like wind or solar, naturally produce less electricity due to changing weather patterns.
Second, using geothermal energy means much lower emission rates. Typically, geothermal power plants are closed-loop systems, which means little to no greenhouse gases are released and a substantial reduction when compared to emissions from other sources of energy. Even older plants powered by geothermal energy produce only one-sixth of the carbon dioxide of a natural gas power plant.
And finally, geothermal energy is immediately accessible all across the US. There’s no need to import fuel, negotiate contracts across borders, or factor international disputes into energy prices or availability. With geothermal energy, we gain a domestic source of clean, renewable energy that can be relied on for centuries.
What do geothermal energy projects entail?
As with other subsurface resources, developing geothermal resources requires title work and lease negotiation in conjunction with geological and drilling expertise.
Subsurface evaluation of geothermal potential is required to identify a target area. Once an area of interest is defined, the land team will research ownership and existing land use to identify acreage positions for geothermal wells. The land team will negotiate geothermal leases with the owners of the surface and subsurface to secure the well site and access to the site.
It is important to understand how geothermal rights are defined in the jurisdiction of interest. Geothermal operating rights vary from state to state. Some states grant geothermal rights to the mineral owner while others require both the surface and the mineral owner. In some states it is currently unclear who owns the geothermal rights. Based on the ownership, agreements will be drafted to acquire the rights of the proper owners to the geothermal rights. In states where the ownership of geothermal rights has yet to be decided it is important to include in the agreements with landowners language to incorporate new laws or statues that would effect ownership.
Most geothermal wells are located in 11 western states and Alaska, each of which has its own regulations, permitting requirements, and reporting needs. Navigating these hurdles can require niche expertise, but there is substantial payoff in a geothermal well that will produce clean energy for decades.
While a lesser-known form of renewable energy now, we expect that the drive to explore, discover, develop, and manage geothermal resources will grow substantially in the future. Electricity generation from geothermal energy has already grown 3.5% annually, and a 2019 study projected that harnessing geothermal energy could result in an emissions reduction equivalent of taking 26 million cars off US roads every year to 2050. As more developers take advantage of the convenience and environmental benefits of geothermal energy, those numbers will increase—as will the number of geothermal wells.
About CINCO
Cinco supports companies across the US with land and title issues related to oil and gas, renewable energy development, legal matters, insurance underwriting and more.
This is part of our introductory series on renewable energy, covering geothermal, solar, wind, and battery storage.
For more information about geothermal wells or for answers to questions on the land acquisition and development process, reach out to us.
