Geothermal Energy: Will Federal Support Be Sufficient to Harness Its Vast Potential?

On March 2, 2006, the Environmental and Energy Study Institute and the Geothermal Energy Association held a Congressional briefing examining whether federal and state programs will be sufficient to harness the significant contribution geothermal energy can make to address President Bush’s call for an increased domestic alternative energy supply. On August 8, the President signed the Energy Policy Act of 2005 (EPACT, P.L. 109-58) calling in part for increased funding for renewable energy R&D. In December 2005, a bipartisan coalition of 32 Members of the Senate and 126 Members of the House urged the President to fully fund the energy efficiency and renewable energy (EE/RE) provisions of EPACT and retain core EE/RE programs, including geothermal energy. On February 20, the President reiterated his belief that the nation is “addicted to foreign oil,” renewing his call for increased spending on science R&D and education and greater government incentives for the makers and users of alternative sources of energy. However, on February 6, the President’s FY 07 budget request zeroed out the core Department of Energy (DOE) geothermal program, a $23.1 million cut. Furthermore, EPACT extends the Production Tax Credit (PTC) for geothermal energy for only two years, making it very hard for the geothermal industry to make use of it. Briefing speakers included:

Mike Freese, Legislative Assistant, Office of Senator Craig (R-ID)
Paul Thomsen, Public Policy Administrator, Ormat Technologies
Dr. Walt Snyder, Director, Intermountain West Geothermal Consortium (IWGC) and Director, Geoscience Research Department of Geosciences, Boise State University
Elizabeth Battocletti, Senior Associate, Bob Lawrence & Associates, Inc.
Karl Gawell, Executive Director, Geothermal Energy Association; member, WGA Geothermal Task Force

The briefing examined the full range of geothermal activities taking place across the country. Current and planned power projects was discussed by one of the leading companies developing new geothermal projects in several states and on military lands. The panel explored the role of the Intermountain West Geothermal Consortium established by EPACT with its newly appointed director. A member of the Western Governor’s Association (WGA) Geothermal Task Force reviewed their recent January 2006 report. The report concluded that, within the next ten years, between eight and 15 gigawatts of electric power could be brought on-line to help meet national energy needs. To achieve this, the report made a series of recommendations, including “a strong, continuing geothermal research effort at DOE that addresses the full range of technical problems encountered in achieving full production from the identified resources and undiscovered resources in the West.” The briefing also highlighted state and local efforts supported by DOE’s GeoPowering the West (GPW) initiative, which has active efforts in Alaska, Arizona, California, Hawaii, Idaho, Oregon, Nevada, New Mexico, Texas, Utah, and Washington, and is working in Colorado, Montana, South Dakota and Wyoming.

With continued federal and state support, much more geothermal generation is possible. The U.S. Geological Survey (USGS) estimates a hydrothermal resource base of 95,000-150,000 megawatts (MW), of which 25,000 MW are known resources. Additionally, there are extensive direct-use resources spanning the entire country that are largely underutilized. The WGA Task Force reports that if geothermal power expands by 5,600 MW in 5-10 years, it would mean direct investment of $23.5 billion into the economy and nearly $100 million in annual federal royalty revenue.