Originally published at Montara Energy Ventures.
Via Business Week online:
Many are in love with the idea of alternative energy. But there’s yet to be an economical alternative to petroleum that can generate large amounts of energy without damming up rivers, crowding the landscape with windmills, or generating radioactive waste.
That may be about to change, however, as interest grows in an emissions-free energy source that can generate power at prices competitive with traditional fuels. It’s virtually inexhaustible, and it’s right under your feet. It’s the heat emanating from the earth’s molten core, also known as geothermal energy.
Geothermal could have a major effect on the energy future of the U.S., according to a study published in January by the Massachusetts Institute of Technology. Using existing technology, there is the potential to generate geothermal energy in the U.S. equivalent to 2,000 times the country’s total energy consumption in 2005, the study says.
Here’s the key question on geothermal development: If it’s OK to risk $10M on a petrochemical wildcat well, why is it not OK to risk $1M on a wildcat geothermal well? As one of our partners says, nearly all of the producing geothermal fields and plants (including those under development) are as a result of exploration that happened in the 1970’s. Where is the geothermal exploration program? What will it take to engage those with the geotechnical skills to engage in this segment? (We know, money, and lots of it.)
Our view is that as emissions restrictions tighten, carbon taxes become a reality, and peak oil has definitively happened, the talent will engage as geothermal power will be the next frontier. We know from attending the SMU conference that oil companies are starting to wake up, we know one project where Chevron is assembling its own geothermal data set (as one of our partners talked to the primary researcher doing the work.) Can we expect geothermal exploration in the near future?
