EXECUTIVE SUMMARY
America’s abundant oil and gas reserves have been central to its economic prosperity, but the development of these energy resources have significant negative externalities in terms of their impact on the local environment and contribution to global climate change. In 2021, the Biden administration recommitted the United States to the Paris Climate Accord and began exploring pathways to decarbonize the domestic economy to meet international climate goals.1 Electricity generation and residential/commercial heating together account for more than a third of the United States’ greenhouse gas emissions, which means that energy policy must be a central component of the U.S. climate strategy.2 This will require both a divestment from existing oil and gas projects as well as substantial investment in new renewable energy resources.
Today, the United States’ renewable energy portfolio is dominated by hydropower, wind, and biomass, with a rapidly growing contribution from solar.3, 4 Electricity derived from geothermal resources is almost non-existent, providing just 17 billion kWh — less than 0.5% of U.S. electricity generation — annually.5 But this is not for lack of geothermal resources. The United States, and particularly the western United States, is a hotbed of geothermal energy that could meet the electric and thermal energy requirements of the entire country many times over.
In this paper, we identify the technological, economic, and political reasons that the United States has failed to exploit its geothermal resources. We provide actionable policy recommendations to sustainably and economically utilize the vast energy reserves under our feet, namely:
Streamline the federal permitting process for geothermal projects — Federal permitting restrictions on drilling geothermal wells on public land are more burdensome than for otherwise similar oil and gas drilling projects. Extending the same National Environmental Protection Act (NEPA) exclusions that oil and gas projects have to geothermal projects would enable the fledgling industry to quickly scale in the parts of the country with the shallowest heat resources.
Increase the federal budget for large scale geothermal R&D projects, particularly those led by public-private partnerships — Expanding the budget for the Department of Energy’s (DOE) flagship FORGE geothermal site would generate valuable data about experimental drilling techniques and provide the private sector additional opportunities for large-scale field demonstrations to attract additional investment.
Create incentives for geothermal generation in state electricity markets — Adjusting the criteria for Renewable Portfolio Standards (RPSs) in states that are unnecessarily restrictive would help put geothermal energy on an even playing field when compared to wind or solar. Further, adding a requirement that some percentage of RPS goals be met by a clean, baseload power source would acknowledge the special importance of geothermal for firming our energy supply.
Establish federal innovation prizes (or related mechanisms) for the development of key geothermal technologies — Drilling deep into bedrock is difficult and time consuming. And identifying the most fruitful subsurface locations to drill for geothermal energy is expensive. Accelerating breakthroughs in these key technological bottlenecks could dramatically impact the pace of geothermal power generation.
Reskill oil and gas workers for geothermal projects through federal jobs programs and private investment — The U.S. has a lot of machinery and a specialized workforce that is well-equipped for oil and gas drilling. There is a high degree of overlap between the skills and equipment necessary to effectively drill for fossil fuels and for geothermal energy. The U.S. should speed the transition away from fossil fuels to geothermal by aiding in worker retraining efforts and/or equipment retrofitting.
We conclude that these policies would greatly accelerate the development of geothermal projects and lay the foundation for energy abundance in the green economy. The United States is uniquely poised to become a leader in geothermal energy due to its abundant hot rock resources and the deep talent pool in the oil and gas sector. A combination of strong leadership and smart policy can and should make geothermal energy a valuable asset in the United States’ renewable energy portfolio while laying the groundwork for international geothermal expansion.