Geothermal Drinks Gas’s Milkshake

Welcome to BASED, a new Prospect newsletter.

Younger staff members at the magazine are launching this newsletter to track positive, surprising, weird, and beautiful developments in politics, policy, and pop culture.

Over the past three decades, Generation X, millennials, and now Gen Z have been thrashed by the bitter disappointments of globalization, by a financial crisis that wiped out working-class wealth, by the doldrums of the jobless recovery, and most recently by the COVID-19 pandemic and ensuing social crisis.

Young people are overwhelmingly responsible for generating new progressive ideas, and millennials have popularized the leading proposals of the last few decades: plans to aggressively regulate Wall Street, cancel consumer debt, provide Medicare for All, and pass a Green New Deal. Facing a crisis of legitimacy, political elites have borrowed from and adopted diluted versions of many of these ideas, most strikingly with the recent Inflation Reduction Act and its vision for domestic green industrial policy.

Over the same period, the base of the Democratic party has shifted. Working-class voters left the party in droves as union density fell off. While youth voter turnout surged in 2020, talk of a voter “Youthquake” has been overstated. Young people remain disillusioned with the offerings of an aging ruling elite. At the Prospect, we’re interested in how progressives build a new political base. We’ll explore that question in this newsletter, which we’ve named after a term referring to ideas that are bold, earnest, and irreverent.

According to a dictionary of online slang, “based” means “the opposite of ‘cringe.’” In a political environment where people often censor their views to avoid offending their peers, “based” means gleefully flouting what the haters might think. At a time when liberal values have attained (tenuous) cultural hegemony, “based” can imply membership in a right-wing counterculture. It is often applied to alt-right celebrities like Peter Thiel and Tucker Carlson. But we shouldn’t cede being self-assured, stylish, and critical of dominant narratives to the political right.

This newsletter will feature policies and trends that represent a forward-looking agenda. We’re interested in plans that could be sources of agreement and collaboration among unlikely groups, and help to forge a new working-class base. We hope to have an active conversation with our audience. Send ideas and feedback to based@prospect.org.

Ok, here goes …

Long-dormant geothermal energy is having a moment in the sun. Recent technological advancements have transformed the potential of hot rocks as a renewable-energy resource, and now, a stream of federal and state incentives have put geothermal on the cusp of breakout success.

Hot rocks near the Earth’s surface contain immense quantities of energy. In some places, that subsurface heat breaks through in geysers, hot springs, and steam vents near volcanic activity. Humans long ago identified the potential of this energy as a resource. Way back in 1892, Boise, Idaho, created the United States’ first district heating system, piping hot water into buildings from nearby hot springs. Today, the bulk of U.S. geothermal is concentrated in California and Nevada, which have relatively shallow geothermal resources.

Until the past decade, it was expensive and technically challenging to dig deeper. But those obstacles have been rapidly cleared, setting off a volley of deep geothermal exploration projects. The up-front cost is high, but district systems pay dividends in lower long-term bills for heating and cooling.

So far, elite colleges, which have the capital and autonomy to embark on these projects, have hogged much of the attention. Last summer, Cornell University drilled a two-mile-deep borehole at a gravel parking lot, where it will explore the possibility of warming the school by tapping heat from the rocks that smolder all winter below the snowy campus. Duke University and UC Berkeley are exploring similar plans.

But towns without the anchor or the endowment of a research university have also successfully made use of the hot rocks they sit on. West Union, a small, moderately conservative town in northeast Iowa, is a real-world model for district geothermal.

After a feasibility study, West Union decided a decade ago to embark on a district geothermal system. They drilled directly on the courthouse lawn, boring 132 wells, 300 feet deep in the main square. The developers then extended piping to building lots downtown, giving some 60 businesses access to the system, which was completed in 2013.

A technical report found that participating businesses saw utility bill cost savings, even when switching from natural gas, which has been at record-low prices for much of the system’s existence. “Myself, I think it’s a great deal. The people that have it seem to really like it,” Mayor Cam Granger told the Prospect in an interview. “It’s not a home run, but it’s close.”

Granger, who took office after the system was installed, said he has become a major backer of geothermal. Although he isn’t sure he believes in human-caused climate change, Granger said, he loves how the zero-emissions system has helped businesses save money, bringing down costs dramatically on peak energy-use days during Iowa’s freezing winters and sweltering summers.

The Environmental Protection Agency calls geothermal the single most energy-efficient heating system. Its lack of waste has allowed buildings in West Union to capture more of the benefits of their energy consumption, even installing new air-conditioning systems without raising electric bills.

The Fayette County courthouse in West Union, which houses the geothermal pumps, previously relied on inefficient window-mounted air conditioners for cooling. There was no air-conditioning in the attic, where the county’s historical records were stored. Now, the courthouse has ditched the window AC units and installed central AC, which cools the attic. They have even added a ventilation system for air quality, all with lower utility bills due to geothermal.

West Union’s switch to geothermal has also attracted plenty of grumbling. “Certain people love their gas furnaces, and that’s it,” Granger said. “A lot of the older generation in town didn’t see it being necessary. I understand that.” But eyeing the recent rise in gas prices, Granger feels confident that it was a smart investment. Now, the challenge is getting more businesses to hook up to the system.

Jeff Geerts, a special projects manager at the Iowa Economic Development Authority, which helped fund the system as part of a community revitalization pilot grant, told the Prospect he was struck by how much direct engagement it took to persuade businesses to start using the system.

It wasn’t until the state worked with USDA’s Rural Energy For America Program and a private engineering firm to develop property-specific scenarios that business owners began switching. Around a dozen businesses now use the district system, Geerts said, and he anticipates steady growth, with buildings plugging in when their current fossil fuel systems break and need replacement.

Participation could be sped up by President Biden’s Inflation Reduction Act, which massively expanded both residential and commercial tax credits for geothermal. (As geo-watcher Tim Latimer points out, however, the law excluded geothermal from the Advanced Manufacturing Tax Credit, which will help power wind, solar, and battery production.)

States are also getting in on the action. New York just passed the Utility Thermal Energy Network and Jobs Act, which supporters say will not only help build geothermal but will provide jobs for utility workers who may see their work in fossil fuels dry up.

Even with the incentives in place, Geerts’s problem—persuading individual property owners to take the leap—still looms. But the IRA is also likely to galvanize a small army of community lenders and developers bent on deploying clean energy, potentially coordinated by a national climate bank. The quality of those deals, and the trustworthiness of the new firms hawking green tech in low-income communities, is a wide-open question.

But geothermal might be about to smash conventional growth forecasts, with the backing of a powerful ally: the oil and gas industry.

Along with the fact that Exxon pioneered lithium-ion battery research in the 1970s, it is one of the sweeter ironies of the environmental movement that oil and gas companies prepared geothermal technology for economic viability at scale.

Over the course of the last decade’s shale boom, oil field drilling companies led a revolution in directional drilling and hydraulic fracturing (“fracking”) techniques. They perfected long, spindly pipes and fine-tuned self-adjusting diamond-cutter drill bits.

Those technologies, which can endure high temperatures and shoot water through rock, have already solved engineering challenges for geothermal. Rather than relying on places where there is a naturally occurring confluence of water, heat, and porous rock, geothermal developers now have the ability to drill into solid rock, inject water at high pressure, and collect the heated water.

Geothermal isn’t just a freak offshoot of the fossil fuel industry, however. They could be ongoing allies. Oil and gas companies, from oil field services firms to investor-owned utilities, are considering the advantages of a geothermal boom. Utilities could potentially retool gas pipelines as clean geothermal networks, and the oil field services industry could see reason to sell its proprietary technology to geothermal developers.

Dry oil fields could be repurposed as geothermal wells, and those oil fields, like many geothermal sites, are rich in prized minerals like lithium and manganese. That could help solve the up-front cost problem, as companies seeking those minerals will offer advance market guarantees.

Through know-how and existing technology transfer alone, shale-oil drilling technology could reduce geothermal costs by 20 to 43 percent, according to a new study published by the University of Texas at Austin. That study finds that current projections of geothermal growth, which linger in the single or low double digits, undershoot dramatically.

“Much like the rise of unconventionals in oil and gas, whose meteoric ascent largely took the world by surprise, geothermal is poised for similar, exponential growth, should technology development and transfer follow the footsteps of the shale boom,” the authors predict. Even at current prices, the study finds, geothermal is poised to grow substantially as a share of Texas’s energy mix.

A maximalist geothermal target for Texas would be to replace all fossil fuel–generated electricity, and all heat generated by gas and fuel oil, with geothermal. That “aggressive but technically feasible” plan would require drilling 60,000 geothermal wells, the study finds, roughly equivalent to four years of oil and gas well drilling.

While that geothermal scenario may be price-competitive, why would oil and gas firms participate in an industry that could so dramatically undermine their market share?

The Texas scientists have an elegant solution. In a world that remains hungry for Permian oil and gas, they argue, the Lone Star State should go green at home so that it can sell its fossil fuels on the world market: “An aggressive geothermal drilling program at home such as this may serve to free up Texan natural gas for export.”