The Peter Zeihan Podcast Series - Generating Geothermal Energy Using Shale Technology || Peter Zeihan

Episode Date: December 7, 2023

The Google-backed company, Fervo Energy, has launched two geothermal projects that use preexisting shale technology and infrastructure to generate electricity. Could this be a partial solution to the looming electricity shortage? Full Newsletter: https://mailchi.mp/zeihan/generating-geothermal-energy-using-shale-technology

Hey everybody, Peter Zine here coming to you from the Denver International Airport, where I am waiting for my flight. It's my last business trip of the year, so it's kind of exciting. Anyway, it's early December, and the news is that in late November, a new project for geothermal launched near Vegas, and by launch, I mean, began operations and not just starting drilling. It's Fervo Energy, it's backed by Google. We don't have any data on what their cost point is,

because it's Google and it's a pilot project. But Google has been sufficiently excited about it to go ahead and launch another project in Utah. The one that's in Vegas is only about three and a half megawatts enough for about 2,600 homes, so very, very small scale by really any power plant standard. But the next one's going to be 400 megawatts, which puts it up there with some of the larger power plants in the world,

assuming that it was the spec. Geothermal is awesome where it works because you can tap, heat within the crust to generate steam and use the steam to generate electricity. It's green. It doesn't have any chemical issues. And one of the best things about geothermal is you can use it either for surge or for baseload. You just decide when you're going to use it, which makes it a lot more reliable and dispatchable than, say, solar or wind would be because, you know, the Earth is pretty much always hot. That's part one. Part two, what makes this interesting is that it's not a

typical geothermal project. So normally with geothermal, you're tapping something like a geyser or hot water or a hot spot that's relatively close to the surface, usually within just a few hundred feet. But this is the first project that's been attempted and so far successfully that uses shale tech to go after a different sort of geology. So rather than letting the earth put something that's up close to the surface, that only happens in a few places. It's almost exclusively in the Rockies.

And as you guys know, the Rockies are not exactly densely populated. So geothermal with the old style is only providing about 0.4% of overall American electricity supply. But with the shale tech, you can drill down, in this case 7,000 feet into a hot spot that is nowhere near the surface. And that means, assuming this works and works at scale, that means we can do this everywhere where there's shale where there's not geologic activity. You're not going to do this in the San Andreas Fault, obviously. Let me do a better job of explaining that. The two things that make shale technology really appropriate for geothermal and why it works in general is, number one,

you've got really good acoustical detection by using some version of sonar, and you can bounce sound waves off of different types of formations at different levels within the formation and map them out from the inside out. That's how they know exactly where to go to the petroleum-rich strata when they're doing oil and gas production. second drilling has advanced in courtesy of shale so you go down and then laterally in order to access whatever the specific layer is and you can don't have go on a straight line so it's like you can go up into like the fingers of a curved hand so you apply this to geothermal and really what you're

looking are for imperial zones that are really really hot and you can pick that up with the acousticals so by taking these technologies you can go to the best densest hottest material possible in order to then run your liquid into it, which then captures the heat, which can then be used to generate electricity. That is potentially a game changer. One of the big problems the United States is going to be facing over the course of the next decade is a massive, massive shortage in electricity. Even if we don't do the green transition, even if all we do is reshor a lot of manufacturing to deal with a post-China world, you're talking about conservatively expanding the power supply by 40%, 50% would make me feel a lot better. That includes processing for things like

aluminum and lithium and the rest. That's a lot of power. We haven't had that kind of power in decades. The green transition would add problems on top of that. And so if we can take something like geothermal and existing technologies that are now off the shelf and apply them at scale in all 50 states, now you're talking about a very different sort of math because these things can in theory come online pretty quickly. As of those of you who follow the shale sector know, it only takes six to 12 weeks to bring a shell project online, and most of that is involved in the drilling and the fracking.

Oh, that's exactly the technology we would be applying to geothermal. So obviously, it's not a complete plug-in-play. Electricity is different from generating oil or gas. But the technology and the ways of the confusion are very promising. We're just waiting from Google to find out what the numbers are to know if this is economically viable or not. And that's the whole point of the Utah project. Okay, that's it.

Take care.