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New Law Could Put Geothermal On Equal Footing With Oil And Gas
Alex Kimani

Nearly two decades ago, President George W.Bush’s administration passed the Energy Policy Act of 2005 that ‘‘…provides categorical exclusions from National Environmental Policy Act reviews for permitting for drilling in public lands where drilling has occurred within the last five years,  or where an approved environmental evaluation was completed within the last five years”.Interestingly, this special privilege only applies to oil and gas fields but not to geothermal energy, despite the latter being a much cleaner energy source.

Change, however, is in the air. On Wednesday, the U.S. House Energy and Commerce Committee passed a bipartisan bill that could effectively put geothermal on an equal footing with oil and gas. Introduced by Democratic Rep. Susie Lee of Nevada and Republican Rep. Michelle Steel of California, the legislation seeks to expedite geothermal development by amending the Energy Policy Act of 2005 so as to allow for a new categorical exclusion for geothermal energy under the National Environmental Policy Act of 1969.

“In California, energy prices continue to skyrocket across the board, but it doesn't have to be this way,” said Steel. According to Steel, the new legislation would help “unleash American energy independence by ensuring a more sustainable, clean, reliable energy source can be more easily developed in the United States”.  Related: Cape of Good Hope Becomes New Route for LNG Carriers

Steel went on to describe how the inclusion of geothermal energy could also “boost the economies of cities and small towns alike by creating more jobs and supporting an already existing energy grid”.With regard to Nevada, Lee noted that the bill would cut through the red tape that has prevented the growth of geothermal energy in a state rich in renewable energy resources, with a high potential for geothermal, adding that the legislation would “lower costs for American families can all coexist.” She called on Republicans and Democrats to work together on common-sense solutions like this.”

A Boon For Geothermal Energy

The bill could have major ramifications for the U.S. geothermal energy sector considering that the vast majority of the country's geothermal projects are on public land and are, therefore, subject to NEPA.

Despite its many obvious benefits, geothermal energy is criminally underutilized in the United States. According to the U.S. Energy Information Administration (EIA), in 2022, only seven states generated geothermal energy to the tune of 17 billion kilowatt-hours, good for a mere 0.4% of total U.S. utility-scale electricity generation. Europe is not much better off, with just 1.5 GW of the continent’s 209 GW electricity capacity being geothermal. Approximately 800 geothermal wells are drilled globally each year, incomparable with more than 100K oil wells.

Geothermal is much cleaner than any fossil fuel despite being associated with toxic heavy metals including arsenic, mercury, and boron as well as sulfur dioxide and silica emissions. EIA says geothermal power plants emit about 99% less CO2 and 97% less acid rain-causing sulfur compounds than fossil fuel power plants with similar power outputs. 

Further, unlike intermittent clean energy sources such as wind and solar, geothermal is a highly reliable baseload energy source capable of generating power 24 hours a day, 365 days a year,

independent of weather conditions and with the flexibility to meet consumer demand.

Luckily, there’s plenty of good news for geothermal enthusiasts.

The U.S. has huge geothermal potential: according to the U.S. Department of Energy (DoE), the continental U.S. is capable of generating 100 GW of geothermal energy, enough to supply 10% of the country’s power needs. 

As is frequently the case with many promising clean energy sources such as hydrogen, high production costs compared with other low-carbon technologies have impeded growth for the sector. But here, again, there’s hope: the International Renewable Energy Agency (IRENA) has reported that between 2021 and 2022, the global weighted average levelized cost of electricity (LCOE) of geothermal energy fell to $56/MWh. Whereas that figure is still considerably higher than $36.60/MWh for utility-scale solar and $40.90/MWh for onshore wind projects, it represents a huge 22% cost reduction in the space of a single year.

Even better for geothermal bulls, a new technology borrowed from shale oil promises to unleash a geothermal boom: Enhanced Geothermal Systems (EGS) aka man-made geothermal energy.

Source: U.S. Department of Energy

Last year, we reported that U.S. tech giant Google and geothermal startup Fervo Energy launched the country’s first EGS power plant. Dubbed Project Red, the 3.5-megawatt plant is currently supplying electricity generated from geothermal energy directly to the Las Vegas–based utility NV Energy, enough to serve 2,600 homes. Skeptics might squawk at that power and point out that it’s minuscule compared to the Gigawatt-range typical of nuclear plants. However, EGS is a technology still in its infancy, and Project Red is, in fact, the most powerful among the world's fleet of 40-plus EGS plants.

But first things first: how does EGS work?

In many areas in the U.S., the underground rock is hot enough but lacks sufficient permeability or fluids present to generate geothermal energy naturally. EGS technology is a perfect candidate in these situations. EGS is pretty similar to shale fracking in that it creates a subsurface fracture system that greatly increases the permeability of rock which is subsequently injected with heat transfer fluid (typically water). The heated water is then pumped back to the surface where it’s used to generate electricity.

The Biden administration is working round the clock to bring down the cost of geothermal energy in the U.S. using EGS. The DoE has launched the Enhanced Geothermal Shot, an ambitious program that aims to invest $165 million in EGSin a bid to dramatically reduce the cost of the technology by 90%, to $45 per megawatt hour by 2035. Further,  the 2021 bipartisan infrastructure law has set aside 84 million for research into EGS projects.

By Alex Kimani for




Alex Kimani is a veteran finance writer, investor, engineer and researcher for 



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