Despite America’s leadership in geothermal the industry remains in the “and” category. As in, “solar, wind, tidal, biofuels AND geothermal.”
It’s an afterthought. (Picture from Evergreen State University.)
Why are geothermal companies having to organize politically to gain crumbs from the capital table?
The answer is pretty obvious, but no one seems willing to state it plainly.
The oil industry is holding back.
A recent Time Magazine article on renewables and oil investment makes it pretty plain. Total’s bought into solar, Shell and BP into biofuels. Chile’s state oil-and-gas company sold-out its geothermal interests to a specialty firm. One of the bigger geothermal players, Raser Technologies, has just gone into bankruptcy.
What’s holding up geothermal energy is an issue the oil business knows a lot about – drilling risks. As Brian Harenza of of Hannon Armstrong, a geothermal financier, told Oilprice.com “There are a lot of providers of capital who are interested in start-up and operation, but no one wants to finance the drilling risk.” Hannon Armstrong has united with an Icelandic bank to invest in geothermal, but they’re having a tough time because they don’t want to take on drilling risks.
What’s missing? Oil industry expertise is what’s missing. (Where’s Sarah Palin when you need her? Drill, baby drill.)
Japan, for instance, should be the Saudi Arabia of geothermal, especially as hopes for a nuclear future fade in the Fukushima fall-out. Yet a recent New York Times piece on Japan was filled with excuses as to why this hasn’t happened – hot water can run cold, you might bring up smelly hydrogen dioxide, drilling can cause earthquakes, and ryokans don’t want competition for their resource.
But it’s not a question of geothermal or solar, geothermal or wind. It’s a question of geothermal and wind and solar and tidal projects or oil and gas and coal, which are guaranteed to keep getting more expensive and, in time, run out.
The Time story, which didn’t take much note of geothermal, nevertheless ends this way. “If Big Oil can really start treating renewable energy the way it does potential drilling sites—as the source for future revenue—maybe it will earn an early end to the latest round of demonization.”
Instead of pressing Big Oil to put pennies into biofuels or solar start-ups, it’s time to make their tax breaks contingent on serious investment in something we know is more abundant than even oil – that’s the heat of the rocks beneath our feet.