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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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)

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.