Flashback to 2008. The shale oil and gas revolution is beginning, transforming the energy industry for the U.S. and the rest of the world.

Cut to today, geothermal energy could be on a similar course, experts say.

Those driving the transformation are pulling pages from the playbooks of both onshore and offshore oil and gas drilling operations, working to boost flow rates and improve economics while putting geothermal energy within reach everywhere.

It just might be the next big energy boom.

Speaking on a panel this week at the Offshore Technology Conference, Fervo Energy CEO Timothy Latimer referred to a recently released report by the Boston Consulting Group comparing unconventional oil and gas with geothermal.

“They said after our review of all the experts in and outside the industry and people in the financial marketplace, ‘we conclude that geothermal today is exactly where unconventional oil and gas was in 2008,’” Latimer said. “We all know what that revolution did to U.S. oil production and changing the entire energy mix. I think that’s exactly where we are in the sector today, and geothermal is going to have the exact same impact.”

Geothermal energy harnesses heat belowground using wells to drill into reservoirs. The heat extracted can be used to heat or cool homes and buildings via direct use heat, or to generate electricity with higher temperature geothermal resources.

Besides being a renewable energy source, geothermal power plants provide baseload power, meaning they consistently produce electricity — regardless of weather conditions — with modern closed-loop geothermal power plants, according to the U.S. Department of Energy. Geothermal also emits no greenhouse gases.

If developers of U.S. geothermal energy are able to strengthen the resource supply curve and navigate permitting and land access challenges, among other obstacles, a GeoVision analysis indicates electricity-generating capacity could rise to 60 gigawatts. It could also pave the way for more than 17,000 district heating systems and up to 28 million geothermal heat pumps by 2050. In emissions terms, that’s the equivalent of removing 26 million cars from U.S. roads.

Investment appetite

“It’s kind of clear that climate and decarbonization are going to dominate the energy investment landscape for at least the next decade. The key to being on the right side of that trend is investing in sustainable energy production methods, which geothermal energy clearly is,” Macquarie Asset Management Managing Director Neil Gillies said.

Investors are showing interest.

The money and appetite for such projects exists, Gillies said, pointing out 2022 was a record year for clean energy investments with about $10 billion committed.

“We are a pretty reasonable bunch on Wall Street. We like predictable, transparent returns. We like de-risked projects, but we also invest in great assets, great qualities and great teams,” Gillies said.

Historically, geothermal has had a perception of having E&P risk with tight returns, he added. However, innovation is improving drilling costs, boosting production per well and developing other efficiencies.

“Likewise, the commercial value of these assets in the context of the electricity system is finally being appreciated,” Gillies said. “We’re seeing PPA [power purchase agreement] prices push up,” which translates to improved economics.

Geothermal pricing power

Ann Robertson-Tait, president of SLB’s GeothermEx consulting services, said the sector is seeing $105 per megawatt hour and higher.

“We’re seeing new utilities entering the market, like community choice aggregators that have mandates—for example, from the California Public Utilities Commission for a gigawatt of geothermal because the solar penetration in California is very high,” she said. “The grid becomes unstable and so there’s a lot of ancillary … services that geothermal can provide.”

GeothermEx is analyzing the geothermal landscape in the Sultanate of Oman, looking at an oil and gas basin from a geothermal perspective. Work is currently focused on wellbore simulation to determine what’s needed to make wells geothermal producers.

Criterion Energy Partners is focused on sedimentary basins, working to unlock geothermal in the U.S. Gulf Coast region by combining existing technology and processes from oil and gas drilling with its proprietary designs to create energy.

“If we can unlock that and figure out how to make that commercial in a way that drives value… then we’ll be able to scale this opportunity,” Criterion CEO Danny Rehg said.

Backed by investors that include oilfield service company Patterson-UTI, Criterion has formed an industry advisory group with subsurface experts and drilling and completions specialists, among others, to identify ways to lower project costs and speed progress toward commercial geothermal projects.

Like other geothermal players, Fervo Energy—which recently received a $10 million strategic investment from Devon Energy—is collaborating with the oil and gas sector to improve techniques. However, it is not a simple “cut and paste” of well designs, Latimer said.

“We drill horizontal wells. We do multistage hydraulic fracturing of those wells. So, the path for technology collaboration in unconventional oil and gas is very obvious... But our flow rates are much higher than a traditional onshore oil and gas project,” he said, adding they chase naturally fractured and faulted basins.

Drilling a dry hole in geothermal is atypical; it’s more common to drill a well that turns out to be cooler than initially thought, Latimer added.

Fervo spends time with offshore service companies “because they have the right tools to handle casing diameters of the high flow rate wells that we’re targeting,” unlike conventional wells.

Geothermal appears poised to take off—with boosts from investors and oil and gas players.

“To me, the calculus is changing quite rapidly. Having been in this business since the Cretaceous period ...  [seeing] the momentum that it has now, to me it’s very real,” Robertson-Tait said. “Geothermal is going to grow not only for power [but] for heating, which is a huge decarbonization opportunity for all of us.”