How geothermal gets built

Summary

Catalyst with Shayle Kann: How Geothermal Gets Built

Host: Shayle Kann
Guest: Carl Hoylen, CEO and Co-Founder of Zanskar
Release Date: May 29, 2025
Produced by: Latitude Media

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Introduction

In this episode of Catalyst, hosted by investor Shayle Kann, the focus shifts to the often-overlooked realm of geothermal energy. As the world grapples with the urgent need to decarbonize, geothermal energy emerges as a promising clean, firm baseload power source. Shayle engages with Carl Hoylen, CEO and co-founder of Zanskar, to explore the intricacies of geothermal development, its historical trajectory, current challenges, and future potential.

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A Historical Overview of Geothermal Power in the United States

Carl Hoylen begins by tracing the origins of geothermal energy usage in the United States. "Humans have been using geothermal energy for many purposes for a long time," Hoylen notes (04:32). The geothermal power industry took significant strides in the 1960s with the development of The Geysers in Northern California, marking the beginning of large-scale geothermal electricity generation. This early phase saw rapid expansion, with gigawatts of capacity established by the 1980s. However, the momentum stalled in the subsequent decades due to various challenges, leading to minimal growth from the 1990s until recent years.

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Challenges and the Stagnation of Geothermal Development

Shayle draws a parallel between the geothermal and nuclear industries, both of which experienced early expansion followed by prolonged periods of stagnation. The primary issue, according to Hoylen, was the high exploration and dry hole risk. Early geothermal projects often targeted regions with visible surface manifestations like geysers, which proved to be exceptional cases. "Most of the good resources do not show at the surface, and many of the things that show at the surface are not actually good resources," Hoylen explains (09:33). This discrepancy led to numerous dry wells—sites where drilling did not yield the expected geothermal resources—thereby scaring off investors and halting further exploration.

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Exploring and Developing Geothermal Resources

Despite these setbacks, the resurgence of interest in geothermal energy is driven by its potential to provide clean, reliable power. The exploration and development process involves several key steps:

1. Temperature Gradient Holes: The initial exploration phase involves drilling shallow wells to measure the temperature gradient, indicating the presence of geothermal heat (12:45). This step is relatively low-cost, typically ranging from tens of thousands to a few hundred thousand dollars.

2. Confirming Permeability and Porosity: If the temperature readings are promising, the next phase involves drilling deeper wells to assess the permeability and porosity of the rock, essential for fluid circulation (18:02). These wells are more expensive, costing between $1 to $4 million, and are critical for determining the viability of the resource.

3. Flow Testing and Resource Management: Successful drilling leads to flow tests to evaluate the sustainability of the resource. "You're much further along the route of de-risking," Hoylen states (20:46). This phase helps in understanding the decline rates and maintaining reservoir pressure through optimized well placement and reservoir modeling.

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De-risking and Confirming Sustainable Resources

De-risking a geothermal project involves ensuring that the extracted heat can be sustained over time without rapid decline. Hoylen emphasizes the importance of efficient reservoir management: "If your injection well is too far away, it might not ever return… if it’s too close, you could be extracting heat too quickly," (21:19). Advanced reservoir modeling and the use of chemical tracers aid in predicting and managing these dynamics, making projects more bankable and attractive to investors.

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Topside Infrastructure and Power Generation

Once the geothermal resource is confirmed, the next step is building the topside infrastructure to convert heat into electricity. Hoylen describes modern geothermal systems, especially in the western United States, as often utilizing binary systems: "Most modern systems are going through a heat exchanger we call this binary," (25:41). These systems use working fluids like isobutane or isopentane to efficiently transfer heat from the geothermal source to turbines, which then generate electricity. This setup is analogous to other thermal power plants but optimized for the lower temperature fluids typical of geothermal resources.

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Timelines for Geothermal Project Development

Historically, geothermal projects have been notorious for their lengthy development timelines, often exceeding a decade from exploration to commissioning. However, Hoylen is optimistic about reducing these timelines: "In certain locations, we can actually move pretty quickly," he mentions (26:28). For instance, Zanskar successfully expedited the development of the Lightning Dock geothermal field in New Mexico, bringing a project online in under 12 months from acquisition (28:36). This acceleration is attributed to streamlined permitting processes and leveraging existing data and models to make informed decisions rapidly.

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Geographic Expansion and Resource Potential

The potential for geothermal energy in the United States is vast, particularly in tectonically active regions. "When you look at the full stack of kind of near term EGS and conventional, we really are talking about hundreds of gigawatts to terawatts of resource potential," Hoylen asserts (30:07). While the western third of the United States remains the primary focus due to higher geothermal gradients, advancements in Enhanced Geothermal Systems (EGS) and drilling technologies could unlock resources in more unconventional locations over the coming decades. This geographic expansion is crucial for scaling geothermal energy to meet national clean energy goals.

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Conclusion

Shayle Khan wraps up the discussion by highlighting the significant role geothermal energy can play in the clean energy transition. With its ability to provide consistent, firm baseload power, geothermal stands out among renewable energy sources. Carl Hoylen's insights reveal a landscape where historical challenges are being addressed through technological advancements and innovative exploration methods, paving the way for a geothermal renaissance. As the demand for reliable and sustainable energy solutions grows, geothermal energy is poised to make a substantial contribution to the global energy mix.

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Notable Quotes:

• Carl Hoylen: "When you look at the full stack of kind of near term EGS and conventional, we really are talking about hundreds of gigawatts to terawatts of resource potential..." (01:04)
• Shayle Khan: "What is the timeframe of exploration and development for geothermal historically and how much opportunity is there to compress it?" (25:41)
• Carl Hoylen: "You're much further along the route of de-risking." (20:46)
• Carl Hoylen: "There are tens of gigawatts and by some estimates 100 gigawatts or more of that which can have a meaningful dent right away without any first of a kind technology risk." (30:07)

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This episode underscores the untapped potential of geothermal energy and the innovative strides being made to overcome historical hurdles. For those interested in the future of clean energy, geothermal offers a compelling avenue with significant environmental and economic benefits.

Transcript

[Mark]

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[Latitude Media]

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[Shayl Khan]

I'm Shayl Khan and this is Catalyst.

[Carl Hoylen]

When you look at the full stack of kind of near term egs and conventional, we really are talking about hundreds of gigawatts to terawatts of resource potential. As much potential to give as, say, the entire Gulf of Mexico from an oil point of view.

[Shayl Khan]

Coming up the heat beneath our feet.

[Mark]

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[Shayl Khan]

I'm Shel Khan. I invest in early stage climate technologies at Energy Impact Partners. Welcome. So is geothermal having a moment? Here's the case 4. It's clean firm baseload power, which is a hot commodity right now. Hyperscalers have all expressed interest. Some of them have signed PPAs. Fervo Energy notably has PPAs both with utilities and with Google for hundreds of megawatts of new development. And the Trump administration, particularly the Secretary of Energy, Chris Wright, came into office with very positive rhetoric about geothermal in contrast to other forms of renewables. The case against is the big beautiful bill that just passed the House last week, which throws the geothermal baby out with the wind and solar bathwater, basically. So all of that enthusiasm is not currently reflected in legend legislation at least, though let's see what happens in the Senate. Anyway, I think regardless, the case for is a lot stronger than the case against here, to be honest. And so I wanted to bring on Carl Hoylen to talk a little bit more about geothermal at a high level. Carl is the CEO and co founder of Zanskar, which is a startup that's leveraging AI to enhance geothermal exploration and ultimately production. But beyond that, Carl is basically an encyclopedia of geothermal, as you will soon see. And I have taken great advantage of that myself. So it's your turn. Here's Carl. Carl, welcome.

[Carl Hoylen]

Hi, Shel. It's great to be here.

[Shayl Khan]

All right, I want to start with you giving me a history lesson as you have given me before, but walk me through the history of geothermal power in the United States in brief.

[Carl Hoylen]

Fantastic. So humans have been using geothermal energy for many purposes for a long time. But really, you see the origins of this power industry emerge in the United states in the 1960s, with the initial development being in the Geysers field in Northern California. And this really ushers in this, like, early mover experimentation phase. You start ushering in this new phase of early geothermal developments, and they're really exploring for the first time the ability to use this resource to generate electricity. And it's fairly basic at the time. Just take the steam that's coming out of the ground, drive it through a steam turbine to generate electricity. And usually they were evaporating it at that point, but we see it most of the United States growth actually happens in those first one to two decades. And for a while, it looks like geothermal is just going to take off. It's scaling faster than any other renewable at the time. And through the 1980s, we had gigawatts of capacity in the United States. But then things kind of come to a halt. And you go through this period, through the 90s and 2000s, where you really see almost no growth. And then another tip up in the late 2000s, early 2010s and then it's been flat almost until just recently.

[Shayl Khan]

And even that tip up in the late 2000s and early 2010s, I mean, how much did we build during that period?

[Carl Hoylen]

We added hundreds of megawatts, but they were really in some ways offsetting some of the losses that we saw in some of the early steam fields. And so in terms of total installed capacity, it's meaningful, but it's relatively minor and not as much as we were hoping.

[Shayl Khan]

I think a lot of people know this to be true of nuclear. Like we built a lot of it decades ago and then we stopped building new stuff in the U.S. i think a lot of people don't appreciate that the same thing is true of geothermal. And actually, interestingly, on like a roughly similar timeline, which I find kind of intriguing, not exactly the same, but similar kind of story. So what happened? Like, why did it stall out?

[Carl Hoylen]

Well, I think there were a couple of things that happened in the early days. The early technologies could really only work with very high temperature steam. And so they were looking for exceptional locations in the Earth's crust where this was 200 Celsius and often higher. And it turns out those were relatively rare. And the further down in temperature you go, the more abundant they become. But the other part of it was that we had so many failures in trying to drill into these resources where there was a hot spring or geyser at the surface, they thought this was a no brainer. And when they come in and start drilling those deeper wells, they would not find the resource they were expecting. And so this is what we call exploration risk or dry hole risk in geothermal. And it led the industry to start having enough failures to scare capital investors to say, whoa, should we really be throwing more money after this? And this kicks off really a race, a lot of it funded by the Department of Energy to solve the problem in one of two ways. We were either going to get better at finding these systems, so better exploration methods and data types, or we were going to avoid the exploration problem altogether by just engineering in place the things that we needed to make that system work. And so you see the beginnings of both the unconventional enhanced geothermal industry starting at that time, as well as the beginnings of some of the modern exploration methods.

[Shayl Khan]

Before we talk about the Process of exploration and development and so on. From a technical standpoint, what is happening there? What is going on? When you have steam at the surface, what looks like it should be a perfect resource, and then you drill down and it's a dry hole. What's actually going on under. In the subsurface?

[Carl Hoylen]

Yeah, so at kind of the geology or geothermal 101 level everywhere on the planet, as you go deeper, it gets hotter usually, or at least in general. And in most places that's, let's say 25 Celsius per km. So you'd have to go four or five kilometers or so to get to where you'd have steam temperatures. But in certain locations, that temperature is actually elevated either because of magmatic or volcanic processes that may have brought heat closer to the surface. Or in many places in the western United States, even in the absence of volcanism or magnetism, you can have fractures or permeable zones within the earth that will allow it to start convecting hot water from greater depth to closer to the surface. And hot springs are usually that kind of manifestation where there's hot water circulating, often in a convective nature to bring that water to where you see it. What we've since learned in the decades since is that where you see hot springs at the surface, those are kind of the outliers. That's the tip of the iceberg. Most of these convective cells of hot water underground are not coming to the surface. And we now know that the majority of them are actually what we call blind. There's no hot spring, no volcano, and you wouldn't have even known they existed had you not in most cases drilled into them accidentally.

[Shayl Khan]

And so with the geysers projects, for example, which by the way, are still producing power, Some of them. Right. Like it's amazing, it's a great resource. We just kind of got lucky in that case. Or is that just such a good resource that you know what I mean? I guess what you're saying is that most of the good resources do not show at the surface. And many of the things that show at the surface are not actually good resources. Is it just that that first time around in the geysers, it just happened to be the overlap?

[Carl Hoylen]

I think that's exactly right. And so the first pass, and this is true for almost all natural resource industries, the first pass is the low hanging fruit, the really obvious stuff at the surface. There's copper, there's gold, there's steam, there's oil seeping out. Let's drill There. And the geysers was just one of those world class resources. And there may be more of those around the globe yet to be developed. But, but at least here in the United States, it's unlikely that there's another gigawatt scale conventional geothermal resource to be discovered of that type. But there you're right, there were geysers at the surface fumaroles. In fact, the early explorers, a lot of them came from oil and gas. You had Chevron, Unocal, Phillips Hunt and others that entered into the space in the late 70s and early 80s and they actually spent hundreds of millions of dollars going out and drilling test holes, looking for more geysers like fields. And the geysers was such a unique field in terms of its size and scale, they thought, oh, we just have to drill every few miles and we'll see something like that if it's out there. And it turns out they didn't find anything like that in all of their searching. But in the process they did find some of these other geothermal systems, some of which are now being turned into EGS fields and some of which are being developed for conventional. I think they just underappreciated how narrow and small they could look at the surface and yet still have meaningful power potential at depth.

[Shayl Khan]

Can you just give a little bit more detail on the difference between a conventional or a hydrothermal field and an EGS field? What are you, what are you looking for in each?

[Carl Hoylen]

Yeah, in a conventional geothermal field you need to find the temperature so it needs to be hot enough to boil water or working fluid. You need to have porosity or permeability in the rock so that that fluid can circulate through extract heat. You'll bring it out at the surface, then you'll re inject it so it can circulate again. And you need water so that working fluid that's going to sweep that heat through the system. And in a conventional field, all of those exist naturally. That's what we call a hydrothermal system. EGS was based on that early recognition that we drilled a lot of holes or wells that were hot but didn't necessarily have the water or the porosity and permeability to be able to circulate the water. And EGS was this hope that we could stimulate or engineer the rocks to have that permeability and maybe even add the water in some cases. And so this in many ways I think is analogous to what you see in oil and gas. The division between conventional oil and gas and unconventional is the ability to Just drill a well and have what you need versus needing to modify the subsurface in some way.

[Shayl Khan]

Okay, so the failing, the reason that the market stalled out was we weren't great at exploration at the time. It turns out we sort of lucked into some great resources in geysers and then couldn't replicate that success. And in the process of failing over and over again to replicate that success, it became harder and harder to finance new exploration. And then everybody kind of just fell out of love with geothermal. Now obviously we have this resurgence and as you said, it's coming in sort of two different categories. One is the can we do better at finding the existing hydrothermal resources? And then the other is can we engineer them via egs? Let's talk about conventional hydrothermal development. Can you kind of walk me through what that, like the actual steps in the exploration and then development process? I mean, you said they drilled a bunch of test wells. What is a test well? What does it cost? Like what you know.

[Carl Hoylen]

Right, yeah. So the first thing you're usually looking to confirm is temperature. You want to see that there's a resource here with enough heat in place to make a meaningful resource. And the standard tool of the industry is what's called the temperature gradient hole. And so you're literally going out and drilling a hole into the ground. Sometimes it's 100ft, might be hundreds of feet or a thousand feet, and you're going to come back and measure the temperature gradient in there and based on those gradients, estimate how much heat is in place and what might be at greater depth.

[Shayl Khan]

One question I've always had about this, ultimately if you're finding a resource, you're going to be drilling deeper than 100ft or a thousand feet. So it must be true that the temperature gradient that you find even pretty near the surface is highly correlated. It's like the temperature gradient is, is a spectrum that is consistent. And so you can infer from 100 foot depth, well, what the temperature gradient, what the temperature expected would be at a kilometer or something like that. Is that right?

[Carl Hoylen]

I think directionally it's right in that heat has a harder time hiding than other types of resources, say like oil that might be underground. And so it is diffusing through the rock. But there are geologic processes that can obscure that or make it difficult to see. You might have a lot of cold water sweeping through from, you know, the climate or rainfall in an area that obscures the surface of it. And so there's large parts of Idaho, for example, where There are deep geothermal resources that you don't see at all in the first few hundred or even thousands of feet because of that obscuring. But in drier areas, yes, you're right, you'll often see pretty distinct anomalous caps above these systems.

[Shayl Khan]

Okay, so you drill this temperature gradient hole and that's presumably pretty cheap to do. You're not drilling that deep and depth is the main cost of drilling. And you're not drilling, you're not putting casing or anything like that. Right? You're basically just drilling a hole with a sensor measuring temperature gradient. So I assume that that is a lowest cost part of exploration, at least a physical lowest cost in terms of.

[Carl Hoylen]

The drilling to really confirm a resource. Before that, you will have deployed even lower cost shallow and geophysical methods to help you identify the areas that are worth drilling. But at this point, if you're drilling temperature gradient holes, you you're deploying tens of thousands, maybe hundreds of thousands of dollars to test a certain target area.

[Mark]

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[Latitude Media]

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[Shayl Khan]

Okay, so you, you drill your first well, which is your temperature gradient hole. You, how easy is it? Is it binary? I assume it's not binary. But how much art versus science is there in the interpretation of that data? Is it easy to determine, go, no go, or do you have to do something sophisticated?

[Carl Hoylen]

In the early days there was a lot of uncertainty. There really just weren't enough success cases or even failure cases to help them understand what some of these data types meant. And so they often use very high thresholds. If it's not boiling, I'm not interested. But increasingly over time our experience has taught us, like you said before, that even kind of a semi anomalous or readings at a shallow level might indicate that it's worth drilling deeper. And so it's often an estimation of given what I know now, is it worth investing additional capital to drill into that resource at greater depth to gain greater confirmation? And so you can start with some probability distribution of possible outcomes. And the deeper you go and the more capital you invest in the project, the tighter that distribution of outcomes becomes and the higher your confidence is in what kind of resource you're working with.

[Shayl Khan]

Okay, so let's say you drill your temperature gradient hole, you confirm you see what you're looking to see, and at least your interpretation is positive there. What's the next step?

[Carl Hoylen]

At that point you're going to need to put together, if you haven't already, a pretty detailed conceptual model or understanding of what might be driving this system is a volcanic system, is it a sedimentary system, is it a fault hosted system? And that's going to give you a better predictive ability to go deeper into the resource, at least with classical methods here. And you're ultimately going to then want to say, okay, if I've proven temperature, now I need to prove permeability or the ability to flow water through the wells that I would drill here. And so you're going to step up in size and complexity of your drilling program and drill slim wells or small. You think of those mini production wells that are going to be able to allow you to pull water out of.

[Shayl Khan]

The system, at which point you're flowing like you leave that well open for a while and flow it? Presumably, is this when you're also able to start to determine what a decline curve would look like? Or is this too early for that?

[Carl Hoylen]

Depends on how well you engineer or how large that well is. But the initial step is just showing that you can flow it at commercial scale. And then what you really want to do is be able to flow it long enough to run a flow test and indicate that over time it's not declining too fast and that you'll be able to manage this resource sustainably.

[Shayl Khan]

And like, rough order of magnitude, what is the cost of one of these wells and depth?

[Carl Hoylen]

Yeah, in this case, you're going to be going to a few thousand feet, maybe as much as 5 or 6,000ft, and your cost is going to be in the million plus range. So call it 1 to 2 million, maybe 3 or 4, depending on the more complex wells to prove that out.

[Shayl Khan]

So this is where you, I presume historically, when it became more difficult to finance, the cost of capital got higher and higher. This is the step where real money starts to show up.

[Carl Hoylen]

I would assume that's right. At this point, though, you also have a little more confidence because of your earlier drilling and exploration. So your conversion rate is also a little bit higher. And so, yes, you're putting more capital to work, but you're a little more confident it's going to be worth it. Those earlier stages, it is less capital, but you have to pursue more projects in parallel which all sum up to also meaningful amounts of capital.

[Shayl Khan]

But when we talk about dry hole risk and what happened historically and so on, is this the stage where the dry hole shows up? Basically? I mean, you might have gotten your temperature gradient, but then you drill down and you can't flow anything.

[Carl Hoylen]

Yeah, you would start seeing it here. And actually in the early days, they would often skip that intermediate, what I was calling a slim well or more miniature well, and they would go straight to production well, we've got great temperatures. Let's drill into this. And they might drill the 5, 10, $15 million well, only to realize that there was no permeability or porosity in the rock. And we call that a dry well. So hot but dry, no water coming through it.

[Shayl Khan]

Okay, so next step. So you, you drill this well, you're able to flow, you confirm permeability and porosity, you've confirmed temperature. Are you de risked at this point? Do you know what you've got?

[Carl Hoylen]

You're much further along the route of de risking. But until you can also drill the injection well, which is going to be the way that you reinsert that water back into the system and let it circulate through the rock or through the ground network, you're not actually going to know that full decline rate to be able to build a robust reservoir. Model or estimate of the long term potential of that resource.

[Shayl Khan]

Can you describe what? I know I brought up decline rate, but I realized we didn't describe what causes it, what causes the decline. You could imagine a scenario where, look, it's hot underground, you just keep recirculating water and it should work infinitely. Why doesn't it?

[Carl Hoylen]

Yeah. So you are pulling heat out of the system, Right. You're taking that to the surface, you're extracting it either through your turbines or through heat exchangers. And when you re inject it, the water is going to be a little bit colder or quite a bit colder. And because of that it needs to extract more heat from the rock before it returns to the production well. And you can think of these two wells. If your injection well is too far away, it actually might not ever return. And you can start to draw down the pressure in the reservoir. If it's too close where it maintains good pressure in that reservoir, it might return too quickly. And you could think of that as them not having enough time to recharge in temperature. And part of the challenge was finding that optimal distance where it has enough time to fully recharge while also maintaining pressure in your system.

[Shayl Khan]

Right. And then kind of moving ahead in the development process. I imagine that the other challenge related to that is, okay, so you, let's say you're successful, you drill your, your production well and your injection well and it's working. Actually. Give me context here. How much power might you generate out of a single pair?

[Carl Hoylen]

Let's see. So we recently actually drilled a new production well down at an operating power plant in New Mexico. And that single well, it's a larger diameter well going to about 8,000ft depth and it can produce about 15 megawatts net. So enough to power about 15,000 homes day and night.

[Shayl Khan]

That's sizable. I mean, 50 megawatts is sizable, but. But ideally, probably you want projects that are, that are multiples of that size or an order of magnitude bigger.

[Carl Hoylen]

That's right.

[Shayl Khan]

In an ideal world. So in order to do that, now you're drilling another pair. And I presume if you're drilling another pair into that same reservoir, you're obviously extracting even more of the heat. And so I assume there is a fair amount of magic in the question of how, how close together can you put well pairs, first of all, and second of all, basically, how much can you extract from a given resource without accelerating the decline?

[Carl Hoylen]

Yeah, and this is an area of research and really just resource understanding that matured a lot over the past few decades, as the industry was dealing with their existing resources and looking to expand or preserve them. And this is really where reservoir modeling becomes key. So there's certain data types, like your flow and pressure information, but also we can put chemical tracers into the wells that will help identify how long it takes for them the water to return from injection to production. And based on these, we can build pretty robust models that are bankable in terms of the feasibility that they provide. And this is where you can start to estimate, if I had two or three or four wells here, how much will that impact my decline versus just doing one or two in the same location?

[Shayl Khan]

Okay, so this is the end. I mean, you, you, you drill the well pair, it works. You drill your, however many additional well pairs you're going to drill, now you've got a resource. What are you putting topside? We haven't talked about that yet. You get the heat out, but obviously heat is not the end of the story. Could be the end of the story, I suppose. Has anybody done just geothermal, like ground geothermal for. I guess ground source heat pumps are this, but.

[Carl Hoylen]

Yeah, and the most shallow ground source heat pumps. But in terms of direct use geothermal, there are a number of locations around the world that do use it in a direct way. In Europe, they're looking to repower many district heating systems by just bringing in hot water from underground. And even in the United States, the city of Boise, the city of Klamath Falls, they've been running district heating systems with geothermal where they're just directly taking that heat. At Zanskar, at our company, we're actually working with large mining companies now to also provide heat for industrial applications. And so I think there's a lot of exciting applications there even before you convert to electricity.

[Shayl Khan]

Okay, but let's assume you do want to produce power, which is what most of the projects end up doing. What is the top side infrastructure that you require?

[Carl Hoylen]

The top side, in many ways, looks like many other thermal plants. You're taking heat, you're generating steam, and that steam is going to drive a turbine, which then drives a generator and puts electricity onto the grid. In geothermal, especially in the western United States, oftentimes we're working with such a low temperature starting fluid that it's more efficient to put that heat into a working fluid, something that boils at a lower temperature. So think of isobutane or ISO pentane, and for that we actually use heat exchangers. So most modern systems are going through a heat exchanger we call this binary. And then that working fluid on the other side goes through the turbine system and you re inject your fluid back into the ground and that working fluid just cycles through the system.

[Shayl Khan]

Okay, so I think we've reached the end of the development process. Curious about the timeline both historically and maybe today. You know, we're in an interesting moment now where there's plenty of demand for new power, period, new sources of generation, period. And then in some circles, particular demand for clean firm, which is what geothermal is. But everything is slow right now. Like it's, it's hard to get anything fast. The fastest thing you can get maybe is renewables, but even that is gummed up by supply chain challenges and all sorts of tax credit issues and so on. But like, you know, gas turbines are backordered for five years and nuclear takes nuclear timeframes. What is the timeframe of exploration and development for geothermal historically and how much opportunity is there to compress it?

[Carl Hoylen]

Historically it was also a fairly long lead time type development. Historical projects took usually over five years and oftentimes as much as 10 years from start to cod. And major part of that is the slow decision making, as I mentioned, the sort of incremental de risking of a resource. We collect data, go back to the drawing board, decide if we're going to move forward. But another part of it was the permitting timelines is that a geothermal development project would have to go through five NEPA reviews if on federal lands and the ability to accelerate a lot of that permitting is another area where we're seeing a lot of progress in the industry. Geothermal was recently given a categorical exclusion for the exploration activities of confirming and verifying a resource. And there's potentially still permitting reform ahead for the construction stage of the project. If you just take it down to the bare bones of you need about one to two years to explore and confirm the resource and about one and a half to two years to construct that power facility and tie it into the grid. So the ideal scenario would be three to four years is realistic. And we're now seeing that as a possibility in certain locations, in certain states where the regulatory frameworks are clear enough. And an example, not necessarily of a greenfield build, but of at least being able to come in and do meaningful work in a short period of time is work that we did recently in New Mexico. So we acquired in May of last year the Lightning Dock geothermal field, which is a field that had in many ways, I think been seen to have underperformed and was no longer believed that it had much upside left in it. We, based on data sets that we had and the models that we had, really came to a conviction that there was a lot more there to give. And so shortly after acquisition, we permitted, engineered, designed and constructed a new production well to a zone that was four times deeper than the prior production zone. We built new pipelines, the electrical, installed the new line shaft pumps, and we were able to tie that into the grid in less than 12 months from acquisition. So in certain locations we can actually move pretty quickly. And in our greenfield projects, we have several that are in areas where we believe four years is a realistic timeline to bring those projects online.

[Shayl Khan]

So you mentioned locations. I mean, that's the last thing that I want to talk about, I guess, with you, which is talk to me a little bit about the history. I mean, we talked about geysers and geysers in California, but actually most of the geothermal that has been developed historically is not in California so much as Nevada and places like that. What's your view on how much geographic expansion should we be expecting for this next wave of geothermal development? How wide is the geographic aperture that people are looking at?

[Carl Hoylen]

Yeah, I think in terms of right now, the technologies that work today and that are on the precipice of commercial scale up in just the next few years, which is really conventional hydrothermal and egs, we really think you're still going to be limited to tectonically active areas or areas with higher heat flow. And that's about a third of most continental land masses. So think the western third of the United States and many other tectonically active areas around the globe. And the main reason for that is because even with EGS or with conventional, you're still drilling as a primary cost driver. And if you can find that heat closer to the surface, it's going to have meaningful impact on economics. As drilling costs come down or as demand for clean firm power continues to increase, we see the economics shifting to where you could start to justify new build geothermal using some of these new methods and even more unconventional locations. We think that timeline could be on the order of decades though.

[Shayl Khan]

Can you give me an order of magnitude of, of how much power we might. Let's say we stay in the western third of the United States. What is the, what's the total resource size that we expect?

[Carl Hoylen]

When you look at the full stack of kind of near term egs and conventional, we really are talking about hundreds of gigawatts to terawatts of resource potential that to me is super exciting in terms of the United States unique resource potential because you can think of this as a resource that has as much potential to give as say the entire Gulf of Mexico. From an oil point of view, this is a real national treasure. And even just focusing on the conventional geothermal resources that I mentioned before, which is where a lot of our near term work has gone, there are tens of gigawatts and by some estimates 100 gigawatts or more of that which can have a meaningful dent right away without any first of a kind technology risk. And so in terms of adding low cost firm renewable energy in the next five to 10 years, we really think there's a chance to add more with geothermal than any other competitive form.

[Shayl Khan]

All right, Carl, always appreciate you schooling me on geothermal. Thank you so much for joining.

[Carl Hoylen]

Thank you Shale. Great to be here.

[Mark]

Catalyst is brought to you by Energy Hub Energy Hub helps utilities build next generation virtual power plants that unlock reliable flexibility at every level of the grid. The Energy Hub platform takes the guesswork out of balancing energy supply and demand. It uses machine learning to control customer owned distributed energy resources like EVs, home batteries and smart thermostats to precisely shape load profiles for grid flexibility and reliability. As the industry leader, Energy Hub helps more than 80 utilities manage 1.7 million devices, more than any other edge derms on the market. Click the link in the Show Notes to learn more or go to energyhub.com.

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[Shayl Khan]

Carl Hoyland is the co founder and CEO of Zanskar. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. Prelude backs visionaries accelerating climate innovation that will reshape the global economy for the betterment of people and planet. Learn [e-mail] this episode was produced by Daniel Waldorf mixing in. Theme song by Sean Marquand Stephen Lacy is our executive editor. I'm Shel Khan, and this is Catalyst.