Research Triangle Energy Consortium

“Drill baby drill” is being bandied around, especially post-election, reflecting the views of the president-elect. Thing is, though, baby’s already been drilling up a storm. World oil consumption was at an all-time high in 2023, breaking the 100 million barrel per day (MMbpd) barrier. And the International Energy Association (IEA) projects further demand growth, to about 106 MM bpd by 2028. The IEA also projects the US as the largest contributor to the supply, provided the sanctions on Russia and Iran continue. 

Courtesy the International Energy Association

To execute the stated intent to stimulate US production, all that the new White House needs to do is not mess with the sanctions. For ideological reasons they may be tempted to open the Alaskan National Wildlife Refuge to leases. But none of the majors will come, and not even the larger independents. Easier pickings in shale oil and in wondrous new opportunities such as in Guyana. Is it still a party if nobody comes?

Note in the figure above that the projection by the IEA has roughly the same slope as the pre-pandemic period, with a bit of a dip in the out years ascribed to electric vehicles. And if that were not enough, world coal consumption hit a historic annual high of 8.7 billion tonnes in 2023, despite Britain, which invented the use of coal, closing its last mine this year. The largest increases were in Indonesia, India and China, in that order. Let me underline, both oil and coal hit all-time highs in usage last year. So much for the great energy transition.

So, what gives? China and India, two with the greatest uptick in coal usage, need energy for economic uplift, and for now that means coal for them, since they are net importers of oil and gas. Consider though that the same countries are numbers 1 and 3 in rate of adoption of solar energy. What this means is that solar and wind cannot scale fast enough to keep up with the demand. Making matters worse is the ever-increasing demand created by data centers.

One reason for not keeping up with demand is land mass required. Numbers vary by conditions, especially for wind, but solar energy needs about 5 acres per MW, while wind on flat land typically needs about 30 acres per MW. Compare that to a coal generating plant, which is 0.7 acres per MW (without carbon capture). Wind also tends to be far from populated areas, so transmission lines are needed, and much wind energy is curtailed due to those not being readily constructed. To add to the complication, both solar and wind plants have low capacity factors, under 40%. So, nameplate capacity is not achieved continuously, and augmentation is needed with batteries or other storage means. Finally, governments would like the communities with retired coal plants to benefit from the replacements. This is hard at many levels, not the least being availability of land mass, and because the land area required is many times that which was occupied by the coal plant being replaced. All this holds back scale.

Geothermal Energy.  Two types of firm (high capacity factors) carbon-free energy that fit the bill in terms of land mass, are geothermal energy and small modular reactors. Here we will discuss just the former, which involves drilling wells into hot rock, pumping water in and recovering the hot fluid to drive turbines. Fervo Energy, in my opinion the leading enhanced geothermal (EGS) company (disclosure: I advise Fervo, and anything disclosed here is public information or my conjecture), has been approved for a 2 GW plant in Utah, which has a surface footprint of 633 acres. This calculates to about 0.3 acres per MW. The footprint of Sage Geosystems is also similar. Sage also has an innovative variant which takes advantage of the poroelasticity in rock, and which could provide load following backup storage for intermittency in solar and wind, thus enabling scale in a different way.

Aside from the favorable footprint of Fervo emplacements (incidentally, the underground footprint is significant because each of the over 300 wells is about a mile long), the technology is highly scalable for the following reasons. All unit operations are performed by oilfield personnel with no additional training, and therefore, readily available. Certainly, the technology is underpinned by unique modeling (developed in large part in the Stanford PhD thesis of a founder), but the key is that when oil and gas production eventually diminishes, the same personnel can be used here. In fact, an oil and gas company could have geothermal assets in addition to their oil and gas ones, and simply mix and match personnel as dictated by demand.

The shale oil and gas industry found that when multiple wells were operated on “pads”, cost per well came down significantly. Those learnings would apply directly to EGS. Accordingly, I would expect EGS systems at scale to deliver carbon free power, 24/7/365, at very favorable costs.

Governments and investors ought to take note that EGS variants are possibly the fastest means for economically displacing coal, and eventually oil. In the case of the latter, even that displacement does not eliminate jobs.

As the title revealed, the refrain now changes a bit to: Drill baby drill, drill hot rocks*.

Vikram Rao

* Lookin’ for some hot stuff, baby, in Hot Stuff by Donna Summer, 1979, Casablanca Records

Tagged: climate-change, energy, geothermal-energy, renewable-energy, sustainability