Unlocking the potential of superhot rocks

Stay informed with free updates

Simply sign up to the Renewable energy myFT Digest — delivered directly to your inbox.

Good morning and welcome back to Energy Source, coming to you from Houston.

We’re nearing the end of the jam-packed CERAWeek conference, where oil and gas executives have been brazenly honest about their bullish outlook for fossil fuel demand.

The mood stands in stark contrast with the alarms being raised outside of the Hilton Americas Hotel. The World Meteorological Organization sounded a “red alert” on Tuesday for the heat records smashed last year, while a US agency found oceans set heat records for more than 365 straight days. A report released by Carbon Tracker yesterday found the largest oil and gas companies were “way off track” from their Paris climate targets.

“The fantasy is that the oil and gas industry think that by putting more emissions in the world, it gets better,” Mark Hutchinson, chief executive of Fortescue Future Industries, told Energy Source yesterday, referring to Saudi Aramco’s remarks earlier this week calling the phase out of oil and gas a “fantasy”.

Today’s newsletter dives into a hot topic at this week’s conference: the promise of geothermal energy. It’s a zero-carbon energy source that the oil and gas industry is well suited for, and new data by the Clean Air Task Force seen first by Energy Source shows where investors can tap into the hottest rocks for energy.

And one final note, the FT has a special report out today on the nuclear renaissance with stories ranging from AI’s bet on nuclear and the holy grail of fusion reactors. Take a look at the series here.

Thanks for reading.

Amanda

The ‘decade of geothermal’

A nascent energy source is the talk of the town among oil and gas executives at the CERAWeek conference in Houston this year.

Geothermal energy, which harnesses heat from the earth’s crust, has been widely discussed among top energy leaders for its potential to deliver enormous amounts of renewable power 24 hours of the day, unlike solar and wind.

“If we can capture the ‘heat beneath our feet,’ it can be the clean, reliable baseload scalable power for everybody from industry to households,” US energy secretary Jennifer Granholm told executives on Monday.

While geothermal energy has been around for more than a century, its contribution to renewable deployment has been minimal and limited by geography. The latest intrigue is around what’s known as “superhot rock energy”, a next-generation form of geothermal energy that is sourced by injecting water deep into the earth’s crust, heating it, and returning it to the surface as steam. Experts think superhot rock energy has the potential to unlock thousands of terawatts of power.

A new analysis from Clean Air Task Force and the University of Twente — released today and shared exclusively with Energy Source — models where investors and leaders should look to invest in superhot rocks. It’s the first of its kind to analyse heat layers in the earth’s subsurface and show how deep companies have to drill to reach prime rock temperatures (above 373.5 degrees Celsius). Explore the map and your country’s superhot rock potential here.

China, Russia and the US are the top three countries with the greatest energy potential for superhot rocks, amounting to nearly 180,000TWh of power, according to the analysis. The US offers the greatest potential at the closest distance to the earth’s surface, led by states such as Nevada and California. The analysis found just 1 per cent of superhot rocks’ power potential in the US could produce more than 4TW of power, equivalent to 21bn barrels of oil.

“These maps, they are intended to whet the appetite of both government and companies with adequate resources to be able to start down that R&D pathway,” said Terra Rogers, director of superhot rock energy at CATF, calling the 2020s the “decade of geothermal”.

Superhot rock energy is an attractive transition opportunity for oil and gas companies, which have the technology, workforce and capital needed to commercialise the nascent sector. In the US, lands leased for oil and gas can also be used for geothermal drilling without having to apply for new permits.

“It’s hard to imagine a group more well-positioned to push this up the commercialisation curve,” Rogers said.

While drilling technologies exist to capture most of this superhot rock potential mapped by CATF, only a handful of wells have been developed across the world. The biggest challenges facing superhot rock energy and other novel geothermal approaches are lack of investment because of high upfront costs and the business risks associated with investing in an early-stage technology.

“We need investment and we need people to get into this space,” Lauren Boyd, director of the geothermal technologies office at the US Department of Energy, told a room filled to the brim with members of the oil and gas industry on Tuesday.

The energy department released a new report this week that called on governments, early-stage developers, strategic investors and oil and gas companies to provide the early upfront capital for first-demonstration projects. The department estimates next-generation geothermal technologies in the US need $20bn-$25bn in investment by the end of the decade to reach commercial lift-off and help the country reach its net zero targets.

“Who is actually going to lead this? That’s the question,” said Irlan Amir, director of geothermal at SLB New Energy. “We need to work together to showcase that this next generation geothermal is real and it’s technically viable and it’s commercially viable as well.”

Data visualisation by Steven Bernard in London

Job moves

• Statkraft has appointed Birgitte Ringstad Vartdal as chief executive of the Nordic energy producer, succeeding Christian Rynning-Tønnesen.

• Duke Energy announced the appointment of Harry Sideris to president of the utility. Steve Young, executive vice-president and chief commercial officer, is retiring.

• Shell appointed Greg Joiner as executive vice-president of its Shell Energy unit, overseeing renewable generation, gas and power markets, Reuters reported. The appointment follows the recent departure of Steve Hill.

• Piedmont Lithium has appointed Dawne Hickton to the board of directors of the lithium supplier. Hickton currently serves as chief executive of Cumberland Additive, a metal additive manufacturer.

• Resources for the Future has elected William Pizer as its next president and chief executive. Pizer previously worked as vice-president for research and policy engagement at RFF and succeeds Richard Newell.

Power Points

Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu and Tom Wilson, with support from the FT’s global team of reporters. Reach us at [email protected] and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.