Oil and Gas Industry Positioned to Drive Geothermal Boom, IEA Finds

Geothermal, a “largely untapped underground energy source”, could become a cornerstone of decarbonized energy systems with the right support, writes the International Energy Agency in a new report. And the oil and gas industry could be “instrumental” in making that happen.

In its “Future of Geothermal Energy” report released December 12, the IEA highlights the oil and gas sector’s unique ability to support geothermal’s growth—with its experience in handling liquids and gases, its vast financial resources, its research and development expertise, and its history of running large-scale, capital-intensive projects.

Geothermal currently meets about 1% of global electricity demand, but that could rise to 15% by 2050 with continued technology investments that help reduce project costs, writes the IEA. Advancements are already benefitting the sector, and costs could plummet 80% by 2035 to around $50 per megawatt-hour as a result. At that price, geothermal would be the cheapest source of dispatchable renewable energy, outperforming hydro and nuclear power and competing with wind and solar.

The IEA says matching technological advancements with policy support, like inclusion in national energy agendas, could increase global geothermal investments to US$1 trillion by 2035 and $2.5 trillion by 2050. Employment in the sector could scale in step, increasing sixfold to one million geothermal jobs by 2030.

“Importantly, geothermal energy can draw upon the expertise of today’s oil and gas industries by using existing drilling techniques and equipment to go deeper under the Earth’s surface to tap into vast low-emissions energy resources,” the IEA writes in a release. Already, the oil and gas industry operates 15% of  global geothermal capacity and contributes to the sector through services, laboratory studies, and specialized equipment. Many geothermal companies employ former oil and gas workers due to significant overlap in skills, adds the IEA, highlighting competencies like project evaluation, planning and management; drilling and completion; surface facility construction and maintenance; and operations and production monitoring.

Applying oil and gas practices during a geothermal project’s evaluation and planning phases could drive costs down by nearly 15%, and a further 35% reduction could be achieved by exploiting the overlap in surface practices and possible gains in drilling efficiencies, the IEA says.

The agency also suggests that an expanded geothermal sector, which currently creates 145,000 jobs, could offer a secure career path in an energy transition that will affect the 12 million workers in oil and gas employment globally.

But other research suggests these workers may be resistant to the shift. From 18 interviews with oilsands workers in Alberta, researcher Parker Muzzerall found that many were opposed to leaving their jobs amid talk of a just transition. It went beyond the concern about finding a new career—many voiced an appreciation for oil and gas itself, as well as a regional sense of pride in communities that are supported by, and reliant on, the industry.

“While climate advocates may shake their heads—or fists—at these findings, the feelings of my participants make perfect sense when you consider that, for these workers, the energy transition represents not just a threat to their livelihood but a threat to their community and way of life,” Muzzerall writes in The Conversation.

In July, 2021, a survey for Edmonton-based Iron & Earth—a workers’ organization born in the cafeterias of the Alberta oilsands industry—found that more than more than two-thirds of Canadian fossil fuel workers were interested in net-zero jobs, and nearly 90% wanted training and upskilling to prepare for those jobs.

Cover photo: /Ryan Dickie Clarke