The Exchanges

Q Okay. Heat, water, and permeability. So, in the locations that do have that, so take, take Nevada, for example, where we, we get the most geothermal, at least within the U.S., um, What do you do? I mean, you drill a well, like what is the infrastructure required in a conventional geothermal project?

A Well, um, there's actually sort of two kinds, but speaking broadly, first of all, you drill a well to extract the water and or steam from the subsurface. You run it through, um, a power plant could either be a steam turbine or a binary turbine. I'll come back to that in a minute. Um, If you're just taking a steamer water out of the ground, you run it through the turbine, just like a conventional power plant, and then after it's come out of the turbine, you put it back in the ground again. So the water circulates through the power plant back into the ground. In the case of Nevada, where they use binary plants a lot, the, ah, the water temperature is not especially high, and therefore the thermodynamics are not very good for the turbine efficiency. And therefore, instead of running a steam turbine, they run a binary turbine in which they put the water through heat exchangers and use a binary working fluid for the turbine itself. That actually has, um, the advantage of being able to use a lower temperature resource, and it also means that because the water never leaves, the geothermal water never leaves the heat exchanger, there's basically no emissions at all from the subsurface out into the atmosphere of the environment. The water stays in the pipe, goes back in the ground. It never sees the light of day.

AI assessment note: “first of all, you drill a well to extract the water and or steam”

Q So obviously in any of these contexts, no matter how we're doing geothermal, we're drilling, Um, and I, I think in addition to these different paradigms for geothermal, there, there also seems to be a fair amount of innovation in, on the drilling side itself. Can you talk a little bit about what we're seeing in terms of drilling technology innovation being applied to geothermal?

A Yes, you're, you're quite right. So drilling is actually one of the biggest advances we've seen over the last couple of years, um, and some of that has been borrowed or carried over from the advances from oil and gas, that the so-called, uh, factory drilling or, or batch drilling that they do for, um, shale gas is now being applied to geothermal. And that has brought down the cost considerably, and that of course helps all of these technologies. Um, so further again in their EGS project in Utah is doing batch drilling where they're actually drilling, you know, eight wells at a time. Uh, well, not quite eight at a time. They, they're drilling the, the first segments eight at a time, and then the second segment's eight after. And that has brought their drilling times down by a factor of two or three. And that, of course, reduces the cost tremendously. There's also been the borrowing of technologies in terms of PTC, poly, crystalline, diamond, um, bits, which have been used not for the first time in geothermal, but they haven't conventionally been used very much in geothermal before, and that's allowed them to also gain long bit runs, which means they don't have to trip out so often. That saves money. And also to get the wells drilled faster, which also of course saves them a lot of money. So Unconventional drilling practice for the normal geothermal industry has actually basicall…

AI assessment note: “so-called, uh, factory drilling or, or batch drilling that they do for, um, shale gas”

Q Yeah, can you describe in a bit more detail what makes a given location geologically favorable or unfavorable for geothermal, and then again, sort of like, What, what is our conventional mechanism to exploit the heat of the earth?

A Sure. So, um, the, the, the resources that have been developed in the countries I mentioned, you know, Kenya, California, and many others, Iceland, New Zealand, Japan, Indonesia, Philippines, they're all in volcanically active, uh, margins of the world, so-called ring of fire around the Pacific. Um, and, uh, East African rift zone. Places like that. So, there are places where there is recent, ah, volcanism that brings high temperature close to the surface where it's more accessible. Um, but also importantly, there are places because of the, the recent volcanism and the kind of rocks that are found there, ah, they are fractured and very permeable. And so, the three things that you need for your thermal resource are heat, water, and permeability. So, it's hot everywhere to, if you can drill deep enough, uh, and almost the entire planet is saturated with water, you know, at depth. But the places that don't have permeability are those where we can't easily access geothermal in the conventional sense.

AI assessment note: “the three things that you need for your thermal resource are heat, water, and permeability.”

Q And talk a little bit about the technical challenge of doing that. Like, why, why aren't we already doing it?

A Well, um, part of it is the reasons that we started with, which, you know, not everywhere is geologically advantageous to find those kind of temperatures, but it's also quite challenging from the point of view of the actual practice of drilling and completing the well. So, You know, oil and gas wells, conventional geothermal wells, ah, you know, a high temperature oil well would be 200 degrees. That'd be very high. High temperature geothermal well, 300 degrees. We're now talking about five, 600 degrees, and that requires a whole lot more, you know, technical capability in the drilling, in the materials, in the cementing and completion, and the handling of the fluids. So, Supercritical water actually is able to contain tremendous amounts of dissolved materials, so therefore you can have not just very, very hot water, but hot water which can be very acid, and therefore you're, you're not only producing a fluid that you can convert energy from, but it's very corrosive, it's very difficult to handle, it's a, it becomes a materials problem. So I'm, I'm reminded of the videos they showed of the supercritical well, uh, that they produced in Iceland called IDDP-II. Um, it basically produced black steam, and the reason it produced black steam is that it was producing the steel casing together with the steam. It was just corroding the casing and producing it at the surface.

AI assessment note: “it's also quite challenging from the point of view of the actual practice of drilling”

Q And in principle, if you go like 10 kilometers down, you've basically got sufficient heat anywhere, essentially, right? That's the, the, the dream of this version of geothermal is drill deep enough, and it opens up the entire World.

A I, I would probably characterize the first two EGS and closed loop more in that category. You drill deep enough. You can get temp sufficient temperature anywhere that the, the, what the, what's referred to as super deep, super hot. They're more after not sort of anywhere, but super high temperature in good places. They're trying to capitalize on the thermodynamics of high temperatures. And the basic point here is that if you compare a conventional geothermal power plant, or even EGS or closed loop, they're at modest temperatures. We're talking about 200 degrees centigrade, 250, you know, 300 for a good one. If you compare that to a coal-fired plant or a nuclear plant, they have temperatures which are hugely greater than that. They're eight, 900 degrees centigrade. And that brings them into a thermodynamic space, which is much more efficient. So they get much more energy out of their generators, turbines and generators at those high temperatures. So the idea of super deep, super hot is to get up towards those temperatures in geothermal also, and therefore you get a much more efficient conversion to electricity. So it's not so much the geothermal anywhere, but Better geothermal in the places where it's already good.

AI assessment note: “So it's not so much the geothermal anywhere, but Better geothermal in the places”

Q So you described one of what I think of as the two historical challenges for geothermal, which is just geologic suitability, which has been kind of limited. The other one has been cost. Can you talk a little bit about what historically have been the major cost drivers for geothermal?

A Yes. So, um, geothermal is, is actually not outrageously expensive. You know, places Uh, there are certain places, including here in California, where geothermal is one of the cheapest forms of electricity. Um, the, the biggest cost driver for geothermal development is uncertainty. And because it's a resource, a geological resource, the fact that you don't know exactly how big it is and how long it's going to last, that translates into uncertainty in the sizing of the plant. And the duration of its performance, et cetera. And that, of course, in the end cost you money to try and gather information to be surer of the resource, and it also cost you money in terms of uncertainty for the financial industry. You know, if you're a bank and you have a chance to, to, you know, lend money to a solar farm where you know exactly how big it's going to be, or a geothermal plant where you're not exactly sure You're going to charge the geothermal plant more for their, for their funding.

AI assessment note: “the biggest cost driver for geothermal development is uncertainty.”

Q And so, where are we today in the development of this new EGS, I guess? What, what has been proven in the field? What remains to be proven?

A Well, um, I think the only thing that remains to be proven is to do it at scale. So, as you may know, there are, there's a company, Fervo Energy, which has been developing what we might call new EGS, um, in Nevada and Utah, and they have intentionally, um, because Two thirds of the companies made up of people from oil and gas. They have taken the concepts from oil and gas, specifically horizontal Well drilling, which was not a thing in geothermal before, and, and plug and perf, uh, stimulation, which also was not a thing in previous EGS projects. So they have gone and drilled a well pair in Nevada, completed the well with casing from top to bottom. Again, that's, that's not what the way the wells are completed in geothermal normally, and then they've done multi-stage fracturing Between the wells, which is common practice for shale or shale gas. So that, they have kind of proved out that technology in Nevada, ah, and put a well pair in operation already, but now they're also doing a, a large scale, ah, operation in Utah, and I'm not exactly sure what their ultimate size will be or their plans, but they're, Their near-term plan is 90 megawatts, which is, you know, probably 20 times bigger than any of the former EGS projects, the old EGS projects that people have done.

AI assessment note: “I think the only thing that remains to be proven is to do it at scale.”

Q So let's talk about the promise here. Um, I guess, give me a sense of, okay, so, so this solves for permeability. You still need the heat relatively close to the surface, and you still need the water, but you don't need permeability, or at least as much permeability. Um, how wide an aperture does that open up geographically relative to conventional geothermal?

A Yeah, that's a good question. So actually that's one of the focal areas of our research here at Stanford. We've been looking at, you know, specifically the continental United States to look at what is accessible with current drilling technology at current drilling costs to provide EGS electricity at a cost which is competitive to, you know, other sources. You know, the, the average cost of electricity in the US is somewhere around 80 dollars a megawatt hour, um, and conventional geothermal is basically at that cost today. So what, what we want to achieve is EGS at that same price. So we've estimated that about half of the United States, uh, is accessible for EGS at 80 dollars a megawatt hour.

AI assessment note: “we've estimated that about half of the United States, uh, is accessible”

Q And talk to me about depth. How deep are traditional geothermal wells? How deep would you need to go to get this kind of, uh, economic benefit? Talk a little bit about the role of supercritical, like What, what, you know, what would this actually have to look like?

A Yeah, so, conventional geothermal wells actually vary quite a lot in depth. Again, it depends on the resource thereafter, but, um, it, it's not unusual. You could think of, um, seven, 8000 feet as being perhaps normal or average. I'm not exactly sure what you would, I mean, it's a big range. So seven, 8000 feet, that's two kilometers. EGS, you're talking about four to five kilometers, maybe, um, And super deep or super hot, we're probably talking about those same kind of depths. Four kilometers in a conventional kind of continental crust doesn't get you to super critical temperatures, but if you're drilling in kind of conventional places where they've drilled geothermal, you know, in the last 50 years, if you drill deeper into those places, then you get to super deep, super hot. So they drilled a couple of super critical wells in Iceland already. They drilled one in Japan, or perhaps more, um, and they've attempted to do it in Ladarello in, in Italy too.

AI assessment note: “You could think of, um, seven, 8000 feet as being perhaps normal or average.”

Q How directly applicable do you think of the world of oil and gas fracking is to the world of EGS? Like, is it a one for one? You basically need to do the same thing, or are there key differences?

A There, there are some important differences. So there, there's obviously, there's always been a high degree of, um, compatibility, if you like, between Technology for oil and gas and technology for geothermal. But there's also some important differences. It's not like you just take your, your, your, your contract from an oil and gas contractor and go do it in geothermal. There are some important, ah, distinctions between the two. Um, one of them is, which also affects the fracturing, is the kind of rocks that you're dealing with. So oil and gas are fracturing sedimentary rocks. Which tend to be, um, more pliable, plastic, and geothermal is fracturing volcanic rocks, which are brittle and hard, and it's, it's a somewhat different process, and it's a somewhat different result as a consequence. In some ways it's harder, in some ways it's easier. Music

AI assessment note: “There, there are some important differences. So there, there's obviously, there's always been a high degree”

Q And what's the promise? Like, what would that enable?

A Well, it's, it's very much like EGS. The idea is that you want to sweep heat out of the rock. Um, it's also much, as I described for EGS, a question of how much it's going to cost you. So, at the moment, it's rather more expensive to drill holes than it is to drill a small number of holes and fracture between them. And therefore, um, studies at NREL and others have shown that it's actually quite difficult To get the cost of closed loop down to, uh, the kind of numbers that you need to compete with other sources. One of the challenges is that, um, unlike fracturing, where you actually can drive a fracture for a long distance, so the, the EGS system Recovers the heat from the rock in a convective manner. You're actually sweeping water past large surface areas of fractures and getting your heat that way out of large volumes of rock. In the case of a drilled hole, the surface area of the hole is quite small, and therefore you depend a lot on conduction of energy, thermal energy through the rock. And rocks actually are not very good thermal conductors. Rocks are kind of insulators actually, and therefore the effect is that you are cooling down a volume around the rock, you get that heat, but you don't get any more than that because it's hard for the heat to make its way through the rock to the well. So that means you have to drill a lot of holes. So the system, they're drawing a clo…

AI assessment note: “The idea is that you want to sweep heat out of the rock.”

Q Good morning. Let's talk geothermal. Um, before we get into all the newfangled, next-gen geothermal concepts, can you just describe, from a technology standpoint, how does traditional geothermal power work? What actually happens? What's the mechanism? And, like, what have been the historical challenges with it?

A Sure. So people have been using the heat of the earth for thousands of years, but what we're interested in, of course, I think in this talking about this today is, you know, modern applications of electricity and heating buildings and things like that, which people have been doing electricity generation now for more than a hundred years. But most of the modern sort of geothermal projects started in the late 19 fifties. And there are certain parts of the world now using conventional geothermal in very significant ways. California is actually one of them. Six percent of our electricity comes from geothermal. 10% of electricity in Nevada comes from geothermal, conventional geothermal. And there are countries in the world, ah, Kenya notably takes 50% of its national electricity from geothermal. And several others taking a quarter or a third of their electricity. So it's a very significant resource in, in some places which are geologically advantageous, um, but unfortunately, there aren't all that many of them, so it's a very important resource in places where it's accessible, um, but there are many other places where, where we don't find it.

AI assessment note: “it's a very significant resource in, in some places which are geologically advantageous”