Barriers to Increased Use of Geothermal Energy in the U.S.

Common potential barriers to geothermal district heating system (GDHS) development found in the literature include: a lack of awareness of geothermal energy system benefits among local authorities, the complexity and risk associated with GDHS projects, and the lack local knowledge necessary to manage these complex and risky projects.  Dickson and Fanelli describe the challenge aptly, “the elements that have to be considered in any cost estimate, whether assigned to plant or operating costs, and the price of the 'products' of geothermal energy, are all more numerous and more complicated than in other forms of energy (Dickson and Fanelli 2004, 48). Customers are reluctant to connect to GDHS because they know little about it.  People resist change.  Education is an important tool to overcome this.  Education and outreach are goals of the GeoPowering the West Program of the U.S. Department of Energy

2004 Surface Heat Flow Map from the Southern Methedist Universtiy Geothermal Lab.

In the United States natural gas is the primary substitute fuel for space heating.  Thus interest in GDHS rise and fall with natural gas prices.  Thorsteinsson reports a great range in payback times and installation costs of 3 to 33 years and $500 - $2,800/kW_t installed capacity respectively (Thorsteinsson 2008, 110).   This can be cost competitive with other major heating technologies in some regions (Thorsteinsson 2008, 119).  He estimates that an investment of $5 billion could increase the national capacity to 10,000 MW_t, which would be a 100 fold increase.  Another barrier is increased drilling costs, which rose in recent years because of high prices for steel.  High energy prices stimulated oil and gas exploration creating high demand and high prices for drilling rigs.  However, over time prices should come down as more drillers are drawn to the market.  If Enhanced Geothermal Systems (EGS) become economically feasible it would make district heating theoretically feasible anywhere in the country. This would expand the market beyond regions with naturally occurring geothermal resources, which are primarily located in the Western states.

The United States Geological Survey (USGS) estimates that the U.S. has the resource potential for 60,000 megawatts of thermal energy (MW_t).  Currently, GDHS makes up about one sixth of total direct use. Extrapolating this ratio to the full potential would amount to approximately 10,000 MW_t of district heating (Thorsteinsson 2008, 32).  Expanding GDHS from100 MW_t, the approximate current U.S. capacity, to 10,000 MWt would provide heat to approximately two million people and reduce the nation’s CO2 emissions from space and hot water heating by about 1%.  A successful establishment of EGS, enabling expansion to 100,000 MWt, would reduce the emissions from space and water heating by about 9% nationally (Thorsteinsson 2008, 114).  The GDHS industry is perceived as mature by federal regulators and therefore federal geothermal policy does not provide support for direct uses such as GDHS.  Barring a significant change in federal policy, government funding for GDHS will have to come directly from the states.

A geothermal lease is needed in order to exploit a geothermal resource.  Leases are between the developer and either the federal or state government.  About half of the nation’s geothermal resources are on federal land.  Historically the Bureau of Land Management (BLM) has been ill equipped to process federal geothermal leases.  Because of a lack of dedicated staff and funding for processing federal geothermal leases, and due to concerns over liability, a major backlog developed at the BLM.  In California in 2006 no leases had been issued over the past twenty years (Thorsteinsson 2008, 101).  The Energy Policy Act of 2005 included measures to streamline the federal leasing process, which hopefully will relieve the bottleneck in the coming years.  Statutes for state leases vary by state. 

Another barrier is the lack of statutory authority granted to towns and cities.  Generally towns and cities must be granted authority by the state before they can develop geothermal district heating systems (Thorsteinsson 2008, 103).  Regulations regarding public utilities apply to geothermal district heating systems in many states and can create administrative barriers for small GDHS projects.  There is also a need for more detailed data on geothermal resources.  Between 1978 and 2006 there was no geothermal evaluation program at the United States Geological Survey, whose 1978 survey constitutes some of the best data available to developers. Unfortunately, the new assessment completed in 2008 focused on moderate and high-temperature resources for power production and did not include a new evaluation for low temperature direct uses. 

Geothermal heat pumps face fewer barriers than district heating systems and power plants.  High up-front capital costs are a primary barrier to wider use of geothermal heat pumps.  A lack of trained installers is also a significant barrier in some parts of the country and further raises installation costs.  Each site has to be evaluated to determine the suitability of a geothermal heat pump project.  Installation‐specific design and engineering of the ground loop are usually required.  This is not the case with conventional heating systems.  Space requirements for ground coupling can be problematic in densely built areas.  Depending on the jurisdiction, and particularly in the urban setting, special permits may be needed before completing a project.