Local View: Is geothermal a pot of gold for Nevada?

By Herb Inhaber

Sen. Harry Reid is fond of saying that "Nevada is the Saudi Arabia of geothermal." However, most of the people who might be interested in that statement are geothermal developers. What does Reid's statement really mean, and what implications are there for Nevada?

First, a few words about geothermal. It operates on the same principles as a volcano, only on a small scale. There is tremendous heat under the earth's crust. Some readers may have seen pictures of South African diamond miners, sweating profusely thousands of feet down. A volcano releases that heat in a burst. Geothermal energy usually comes in the form of hot water or heat, trapped a few hundred or thousand feet below the surface. It is what you might call a small-scale volcano, except it doesn't erupt suddenly.

If we could get that heat or steam out economically, we could generate electricity or heat homes. And it turns out that the senator is right--there is a tremendous amount of geothermal energy below Nevada. Whether it contains as much energy as Saudi Arabia's oil is a matter of conjecture.

Geothermal is often classified as renewable, which is somewhat of a misnomer. Reid called it that when he attached a subsidy rider for renewables to a recent Senate tax bill. He would give renewables--including geothermal--a 1.8-cent tax credit on each kilowatt-hour produced. Since the average cost per kWh is about 8 cents nationally, this is a subsidy of about 20 percent.

Is geothermal renewable? Not quite in the same sense as solar. In principle, after we have used up all the heat from a geothermal well, it's over. We have to move on to the next one, much as an oil well is depleted.

However, some geothermal wells seem to last a long time. The ones in Lardarello, Italy--the first ones ever harnessed--seem to be going strong after a century. So if the tapping is done slowly enough, at least some geothermal wells could last for decades.

Leaving questions of semantics aside, if Nevada is the Saudi Arabia of geothermal, why aren't we all living in vast palaces like the princes in that country? The answer goes to the difference between theory and reality. For example, I read a fancy brochure written more than two decades ago by the National Wildlife Federation saying that using geothermal would solve all the nation's--not merely Nevada's--energy problems. Reid is not the first to wax rhapsodic over this energy source.

So, why has little happened on the geothermal front for more than two decades? Reid has identified one problem--the endless paperwork required to get energy from areas controlled by the Bureau of Land Management, which owns most of Nevada. His bill rider would attempt to correct some of these paper tangles.

But there is a more significant problem. Geothermal supplies heat, not electricity. Electricity can be transported hundreds of miles without too much loss. Heat can't.

Some readers may have visited large cities such as New York, where certain areas have generating plants supplying heat to surrounding buildings. The heat travels only a few blocks at most, not miles. If geothermal were discovered under Manhattan, it could replace these plants. (However, the environmental impact statement might fill a rebuilt World Trade Center).

So geothermal works where there are a lot of people living or working close together. Nevada is famous for many things, but a large population is not one of them. The geothermal resources are, in general, a long way from cities.

There is another way to harness this valuable energy source. Once you have very hot water, by heating it further you can run turbines to make electricity. So, if we have a geothermal well producing hot water, by using coal, natural gas or, dare I say it, nuclear power, we can convert the water to steam and produce electricity. The electricity can be sent hundreds of miles in all directions.

But the addition of other energy sources provides more complications and extra cost. Whether the extra cost will price the electricity out of the market will depend on the size of the geothermal resources and other factors. So far, investors are not rushing to build geothermal plants. If they were, there would be no need for Reid's bill.

Reid's rider is still entangled in Congress, so we won't know for months if it passes. But until his or other incentives can get companies to invest in this vast energy source, it will remain a dream.

Herb Inhaber is an energy and environmental consultant in Las Vegas who has published eight books, four encyclopedia articles and more than 100 scientific papers on energy, risk and related subjects.