AUSTIN (KXAN) – Moving to Austin’s Whisper Valley neighborhood in East Travis County checked off two firsts for Andrea and Phillip Melendrez: they bought their first home, and they experienced their first house with geothermal energy.
“I actually had no idea what it was,” said Andrea, sitting inside their kitchen. “It was advertised, and I had to go on and Google it.”
The couple’s home, in the development that bills itself as a “planned community of the future,” uses a geothermal heat pump system. It pipes liquid 350 feet underground, using the temperature of the earth to efficiently cool the house in the summer and heat it in winter.
“It cools down a lot quicker,” Andrea noted about her geothermal-powered AC.
Geothermal is an age-old renewable energy source that now, thanks to modern technology, could see widespread proliferation in Texas, and at a much larger scale than the Melendrez’s household system.
Geothermal experts in Texas are pushing to tap this energy like never before in the United States, with power plants capable of energizing thousands of homes, data centers and military bases. These plants use pipes drilled deep into the Earth, using that heat to produce energy.
In terms of power production, geothermal accounted for 0.4% of the country’s utility-scale energy supply in 2023. Similarly, it barely has a toehold in Texas’ grid. But that could soon change. In a rare consolidation of interests, geothermal has the backing of the state and federal government’s top leadership, both sides of the political aisle, the oil and gas industry and environmentalists.
A couple projects in the pipeline could prove its viability – one being constructed by the City of Austin and another federally-backed project in South Texas.
Meanwhile, at the Capitol, lawmakers are establishing a regulatory framework for geothermal to pave the way for permitting and development.
Texas is uniquely positioned to lead on geothermal for a couple reasons, said Jeremy Mazur, the director of infrastructure and natural resources policy at Texas 2036, a nonprofit, a nonpartisan public policy and research organization.
“First, we actually have the formations underneath our soil that can provide geothermal energy,” he told KXAN. Second, “we have this strong, robust oil and gas industry that has the drilling technology that we need in order to develop geothermal energy resources.”
Mazur acknowledged geothermal is facing hardly any headwind, unlike some other renewable energy sources in the state.
Alignment of interests
On his first day back in office, President Donald Trump declared a national emergency regarding energy production. The U.S. needs “reliable, diversified and affordable” domestically produced power, according to the declaration that defines those preferred sources of homegrown energy as oil and gas, petroleum, uranium, flowing water, critical minerals and geothermal.
Absent from the list are solar and wind power, which provide a significant percentage of Texas’ power, according to the Electric Reliability Council of Texas, or ERCOT.
Three months later, Trump signed an executive order for “protecting American energy from state overreach” seeking to stop state-imposed limits on certain energy production, including geothermal. Then, on Earth Day, Trump singled out geothermal as a way to lead “in both energy production and environmental innovation.”
Federal support extends into the U.S. Department of Energy. Secretary of Energy Chris Wright, a former fracking executive, notes on his government webpage his interest in applying shale drilling methods toward “next-generation geothermal.” During his confirmation hearing in January, he called it a “tremendous potential energy source.”
Part of the animus toward wind and solar relates to the substantial amount of land used for those above-ground renewables and the potential environmental impact of installing large solar and wind farms, Mazur said. Mazur’s organization, Texas 2036, supports an all-of-the-above energy production approach in Texas, including wind and solar, to meet Texas’ skyrocketing demand.
KXAN has reported extensively on the battle over state regulation of wind and solar power at the Capitol. Wind and solar energy advocates argue Texas needs every bit of energy it can get, with the state’s energy demand expected to roughly double in the next five years, according to ERCOT.
Renewable energy experts told KXAN the industry provides ample, low-cost power that helps stabilize Texas’ grid and enrich property owners, school districts and local governments in rural Texas.
One selling point for geothermal is its firm, or “on-demand,” power source, according to Jade Gillespie, the executive director of the Texas Geothermal Energy Alliance. That means geothermal is constantly available, regardless of atmospheric conditions. Wind and solar are considered intermittent because they can’t continuously produce power.
“It’s the heat beneath our feet,” she said. “It’s the magma that powers the core of the Earth and so it’s always there. It just depends on: How do we get to it?”
As a trade organization, Gillespie and the Alliance promote geothermal energy and lobby for beneficial legislation at the Capitol. Laws passed in 2023 placed regulation of geothermal under the Texas Railroad Commission, she said. The RRC regulates oil and gas production, not railroads.
Geothermal at the Capitol
Gillespie’s organization is working on bills this year that would define what a geo-pressure battery storage system is and also potentially provide Chapter 313 tax abatements, she said. Those abatements limit the taxable value of property for school property taxes, according to the Comptroller’s Office.
Mazur said he’s watching House Bill 3240, a measure by State Rep. Bobby Guerra, D-Mission. Guerra’s bill would establish a “Texas Geothermal Energy Production Policy Council to study this issue and provide pertinent policy recommendations,” according to a House analysis.
If passed, the Geothermal Council would be placed under the Railroad Commission of Texas. It would be led by the Railroad Commissioner and the director of Bureau of Economic Geology at UT Austin – or their designees. There would be up to 11 members appointed by the RRC to represent different interests, including up to five from the geothermal energy industry, according to an analysis of the bill.
It also tasks the council with studying how tax breaks could encourage future geothermal energy projects along with developing recommendations for the oversight and regulation of production, pipeline transportation and energy storage.
“It’s about moving Texas forward. It’s about moving the United States forward in energy production that, quite frankly, doesn’t have a lot of pollution to it,” Guerra told the House Energy Resources Committee at a March 31 hearing on his bill.
“Geothermal energy is clean, renewable and available independent of the weather conditions,” he told his colleagues.
One of the state’s largest environmental protection organizations also spoke in favor of the bill at the hearing.
“Geothermal is a really important resource. It could be very important to the state. It’s a renewable resource that is also dispatchable, so kind of best of both worlds,” said Cyrus Reed, with the Lone Star Chapter of the Sierra Club. “We are supportive of geothermal. It doesn’t have some of the problems that traditional fossil fuel has in terms of emissions, so that’s good.”
Breaking ground on geothermal projects
Two projects underway in Texas could help prove geothermal’s viability.
The U.S. Air Force awarded a $1.9 million grant to Houston-based Sage Geosystems to develop and test a geothermal plant capable of generating enough energy for one of its bases. The plant’s “geopressured geothermal system” uses “cutting-edge fracking technology to extract thermal energy from miles below the Earth’s surface,” according to the Air Force. If successful, Sage could build a full-scale plant at Ellington Field Joint Air Reserve Base in Houston.
Meanwhile, the City of Austin is moving forward with its own plant. Austin is partnering with Exceed Energy Inc. to build a “first-of-its-kind” geothermal facility near Nacogdoches in East Texas that will produce 5 megawatts. That’s enough to power at least 1,250 homes, according to the Electric Reliability Council of Texas. The city said the facility could be online as soon as this year and described geothermal as a “valuable tool” to “strengthen the grid and keep costs down.”
“With new technology and exciting opportunities to scale up energy production, the geothermal effort has the potential to change the energy landscape in Texas and create a more reliable pathway to a cleaner, greener grid,” wrote Mike Enger, Austin Energy’s Vice President for Energy Markets and Resource Planning, in an email.
Oil and gas industry at the helm of geothermal
The Texas Oil and Gas Association said its member companies are “currently exploring geothermal.”
“While this is not an area that we are currently focused on as an Association,” TXOGA President Todd Staples said in a statement, “the oil and natural gas industry welcomes the addition of abundant, reliable energy resources that help to meet our state and nation’s growing energy demands.”
A look at the companies building those geothermal plants underscores the industry’s interconnection with oil and gas.
Exceed Energy is an international drilling and well management company, according to its website. Sage Geosystems is led by Cindy Taff, a 35-year veteran of the oil and gas industry who was the vice president of Shell’s global unconventional wells operations.
“We are leveraging our decades of commercializing wells to make pressure geothermal a reality,” Sage says on its website.
Taff is also the policy committee chair of the Texas Geothermal Energy Alliance. The Alliance’s president and chairman is Barry Smitherman, the former statewide elected chief of the Texas Railroad Commission.
Texas’ oil and gas expertise puts the state at the forefront of geothermal, Mazur said.
“Since developing geothermal energy involves the same drilling and exploration technology that’s oftentimes used with oil and gas, it makes sense for this native workforce, in this native industry, to set Texas on the path of being one of the nation’s geothermal energy leaders,” he said.
That sentiment was echoed by Drew Nelson with the non-profit Project InnerSpace, who is pushing for geothermal expansion in Texas.
“You look at all of the major geothermal startups and they have former oil and gas people that are playing key roles in those companies because they have the know-how, they have the technology,” Nelson said.
“Oh, it’s bright,” he added, when asked about the future of geothermal in Texas. “Or, if you pardon the pun, it’s hot.”
Given the apparent bipartisan political support – as well as endorsements from oil and gas and environmentalists – KXAN asked Gillespie, what are the drawbacks?
Gillespie acknowledged the cost per megawatt is the current downside. Given that higher cost, she said her group supports pending legislation that would change the rules for participation in the Texas Energy Fund so that geothermal facilities could access funds. The TEF provides low-interest loans and was created to bolster fossil fuel production.
“I’m not surprised that the costs are relatively high right now,” Mazur said. “But, once you start overcoming that development and deployment hump, you can probably see your costs go down over time.”
Back at Whisper Valley, two new homeowners are settling into their new life – with no plans to look back.
“I feel like it’s been a game-changer,” Andrea said.
Source: https://www.kxan.com/investigations/geothermal-expansion-in-texas-a-potential-game-changer/
