Please note that the transcript provided below is AI-generated and intended for reference. It may contain missing words, misspellings, or other small errors. To request a correction or clarification, please contact info@theclimatecenter.org.
Barry Vesser, The Climate Center (00:13:42):
Thank you all. I appreciate your hanging in on what has been a very content rich day. And we’re going to talk about something that is a really fascinating topic, advanced geothermal and some of the policy and legislation that is happening right now. I’m going to start out just introducing the moderator to get us going. My name is Barry Vesser. I work with The Climate Center and I’m very happy that you are all here and hoping you can stay for the reception afterwards, which will be right outside the door as we exit.
(00:14:48):
So I’m going to introduce Charlene Wardlow standing behind me. And Charlene has a rich experience with geothermal energy, about 40 years. She worked for the Geologic Energy Management Division where she served as the northern District deputy and geothermal project manager. She has a BS in Geology and an MS in petroleum engineering from New Mexico Institute of Mining and Technology. After three years in the oil fuels in Huntington Beach, she spent the next 20 plus years at the Geysers in various roles. The geysers in Sonoma County. Yay. Largest geothermal facility in the world. Just saying. And whoops. Let’s see, I can get my screen dimmed on me there. And she oversaw, saw Calpine Corporation’s Glass Mountain Project in Siskiyou County for nine years. She worked for the Ormat Technologies, Inc. Focused on developing geothermal projects in the imperial and mono counties in California. Her primary focus was permitting new geothermal facilities, environmental compliance, and existing projects, government and regulatory affairs, including community and public relations. So you can see she has a very rich experience. Please welcome Charlene. Thank you.
Charlene Wardlow, CalGEM (retired) (00:16:24):
Well, I did retire a little over a year ago, but after 40 years of believing in geothermal energy and that believing it’s the best renewable energy resource, I still have to stay involved mostly from an educational perspective. So I’m grateful you’re here today. I have primarily worked in what we would call the traditional geothermal energy resources. And I will say the Geysers is also in Lake County. If you have a free day, there’s an awesome visitor center in Middletown at the southern end of Lake County. And it would definitely be worth your time to go up and visit it. Just go to geysers.com and you can make a reservation. But today we’re going to hear about new technologies, the new generation of geothermal. There’s a lot of interest now in this hot resource and some benefits of other technologies besides the traditional steam resource and hydrothermal resources that we have traditionally developed. So with that, our panel members today are Miles Horton, who is with Sonoma Clean Power. And I just lost my notes on something.
(00:17:42):
So Miles is the legislative policy and community engagement manager for Sonoma Clean Power based in Sonoma County. Unfortunately, Assembly member Diane Papin, who was supposed to be with us today, who represents the 21st district, which is San Mateo County, was unable to be with us. Sarah Harper, who is the policy and regulatory affairs associate for FGO Energy, a new company doing some exciting work in new technology. And Matt Crimmins, who’s a legislative consultant for the International Union of Operating Engineers. And they all bring a different perspective to the geothermal energy puzzle. So I’m going to give you just a little bit of an overview of what geothermal energy is because I would say a lot of people don’t understand geothermal from the earth, and it’s really just based on the makeup of the earth. But traditionally, we’ve looked for areas that have surface manifestations, geysers, hot springs, mud pots, fumaroles, and along plate boundaries.
(00:18:47):
So in California we obviously have a very active geologic area. We have the San Andreas fault, we have volcanoes including active volcanoes like Mount Lassen, mammoth Mountain, and all of those have geothermal areas. But the new technology is going out and looking at areas where there is hot rock around that could be utilized without these traditional resources. The Western US is known primarily for the heat, for existing geothermal resources, although there is heat everywhere just on how deep you have to drill. And we can even use temperatures down at 50 degrees Fahrenheit. For example, ground source heat pumps, which are terrific resource for buildings. They just use the natural heat from the earth and work like a refrigerator, supplying heat in the winter and cool in the summer. And then as you go up the temperatures, we have district heating, Klamath Falls, Oregon has a terrific district heating system. Their sidewalks are heated with geothermal. The Boise state capital is geothermally heated. If you go to Calistoga, those spas are naturally geothermal systems. And then of course, as you go up in temperature, then we come into the regime where you can generate electricity.
(00:20:12):
Geothermal development has taken a long time to develop, usually at least five, maybe 10 years. And then if there’s litigation even longer, you have to do the exploration. You have to lease or acquire land, you have to do the exploration, look for the resource, you have to develop the resource, then build the power plant, develop the transmission line. So it’s a very long extensive project to do those. But once it’s developed, you have your fuel supply for the life of the project. In California, we have almost 3000 megawatts of electricity generation from geothermal. We are the largest producer in the United States, although I will say Nevada is chasing us quickly. The resources start up in the northern part of the state. In Siskiyou County. The United States Geological Survey identified resources they believed had geothermal potential back in the 1970s during the Arab oil embargo. And some of these resources have been developed.
(00:21:15):
The geysers, as we mentioned, there’s the Casa Diablo project in Mona County just near Mammoth Lakes, town of Mammoth Lakes, the COSO project, which is actually on the naval weapons station near Ridgecrest and Ino County. And then we have Imperial County down at the southern part of the state where there’s a lot of exciting development going on there. And the important thing about geothermal is even as compared to other renewables, it has the lowest environmental footprint, cradle to grave. And that’s important to keep in perspective in terms of land use. And you can see on this chart in terms of emissions, which I know is a big focus today. But when you see a plume from a cooling tower, it’s evaporating water. It doesn’t have emissions in it. And so that’s an important thing to consider because sometimes a fossil fired plant or a nuclear plant also has a cooling tower on it.
(00:22:20):
In terms of CO2 emissions, you can see comparisons of different types of geothermal projects depending on the type of cooling that they use as compared to in this case, other fossil resources. Geothermal energy has been producing electricity specifically in Italy since about 1906 at lar. Of course, the geysers started in September of 1960. It’s reliable baseload, but can also be flexible as is the project in pah, Hawaii. There’s applications for residential, and we’ll hear from Matt about jobs. We’ll hear from Miles and Sarah about revenues and the economic benefits to the communities they operate in. The new opportunities, and we won’t talk today about critical minerals, but there’s a lot of interest in the geothermal brines down in Imperial County at the Salton Sea field. And particularly for lithium, the costs are extensive. A well at the geysers can cost somewhere between five to $10 million. There are permitting timelines primarily in California, the California Environmental Quality Act. You need a power purchase agreement to sell the electricity, and then potentially our research and development for new technologies. And with that, I would like to turn it over to Miles with this awesome picture from Iceland. Iceland actually uses geothermal energy for their heating and a big part of their electrical generation. So thank you with Miles. I’ll turn it over to you, or I guess, yeah,
Miles Horton, Sonoma Clean Power (00:24:02):
Thanks so much, Charlene. Appreciate. Does this sound normal? No, too loud? Oh yeah, I do this one. Is this better? Yes. Okay, good. But I’ll scream into it so it’s even louder. Yeah, thanks so much again to Charlene for The Climate Center for the chance to be here. Thank you. So I am, as Charlene mentioned, miles Wharton with Sonoma Clean Power. We are a community choice aggregator, a local publicly owned power provider serving Sonoma and Mendocino counties. And one thing we’re really proud of is we’re serving our customers today about 90% renewable energy, which is the head of the curve in California. California as a whole is less than 60% today. And what we’re running into, and I think what increasingly the rest of the state is going to be running into is it’s really those times when there’s minimal sun, minimal wind, and batteries are empty or depleted, that’s when we’re still relying on natural gas.
(00:25:04):
So this is a long, dark, cloudy, still weak in the middle of the winter or periods in the middle of the night or the early morning when we’ve already depleted our batteries. It’s not windy and obviously there’s no solar. And so several years ago, our team on the sort of frontier of this challenge, our team took a look at, okay, what do we need to do to get to a hundred percent clean energy around the clock, which is the state’s policy that we strongly support and do it in a way that’s actually cost effective for our customers and reflective of our values as a community.
(00:25:38):
Kind of concurrently with this before I get into it, we also identified that we were really starting to pay for two electric grids. We’re paying for the solar, wind, battery, other renewable grid that again, we’re using 90% of the time, but we’re paying for that natural gas and nuclear grid to kind of stand by again a hundred percent of the time, even though we’re only using it 10% of the time. And again, you see this statewide, even as our share of renewables has gone up, we haven’t actually retired any natural gas plants in recent years. We may turn down the dial, we may use less fuel, but all the costs of keeping that plant up and running maintenance, you name it, that’s still at a hundred percent because we can’t close it. We can just turn down that dial. And so that was sort of the universe of things we were looking at in terms of how do we solve all these challenges all at once?
(00:26:29):
How do we get to a hundred percent clean energy and also minimize or lower the cost to the rate payer by having a more holistic integrated system. So we identified, and I think a lot of other people are going to identify next generation geothermal technologies as the right solution for us to solve these challenges. And so we launched our geo zone effort where we’re working with several different geothermal developers to basically come build new next generation geothermal power in our service territory in Sonoma and Mendocino counties. And the basic compact is if they come build in our area and they give us the jobs and the local economic benefit. And they also, once this is up and running, if it’s ultimately successful, they give us the right of first refusal on any power or deal that they bring to the market. Then we help them with the local stakeholder outreach and we also help them find off-takers as needed. That’s our geo zone effort. I think it’s something we’re really excited about.
(00:27:33):
California just has so much potential. If there’s one thing you take away from my remarks of this event, I’ll just say it now. I think there’s a perception that geothermal is kind of this niche thing or this, we saw the map, this sort of thing that’s particular to kind of the geyser’s area or whatever with these new technologies, geothermal could happen in most places around the state. And ultimately most places around the world, it’s really exciting. You don’t need those really unique rock formations like you have at the geysers. With these new technologies. Anywhere solid hot rock comes close to the Earth’s surface, you should ultimately be able to operate. Now places like Sonoma County have a hotter rock closer to the surface today, so they’re more promising for this initial phase. But again, ultimately this could really be the linchpin, could be and will be the linchpin of getting to a hundred percent clean energy around the clock for California and for the world.
(00:28:27):
And the state is starting to recognize this. So the Public Utilities Commission has handed down an order for a gigawatt of new geothermal energy. Now the Department of Water Resources central procurement entity is looking at potentially another gigawatt. And we think that’s just the beginning, right? So this is something that’s really going to be the linchpin of, again, achieving California’s climate goals. We’re really excited about it. And actually the good news is California has probably the best geology in the country for this kind of thing. Both the conventional and the new technologies. We have, like I mentioned, the best demand. I mean with our climate policies, with these procurement orders, the demand is there, it’s very high. And then Matt will get into this, but we have the best workforce because of our oil and gas workforce, and it’s really the same skillset. So what’s holding us back, it’s really the regulatory environment, is the challenge.
(00:29:18):
Developers, they’re not speaking for the developers here or anything but broadly defined. Developers do not want to develop geothermal in California because of perceived challenges with the permitting, with the timelines, with the risk qua, you name it. So I had the chance actually just a couple weeks ago, to go to Utah with two of our Sonoma County supervisors to all this VO energy development that was really exciting, really promising being built to serve the California market, but in Utah. And I think this one supervisor and I kind of gave each other a look, we were talking to the economic development director for Beaver County, Utah, and she was like, oh, it’s amazing. This money is just pouring in. We’re creating so many jobs, it’s so great. It’s like, yeah, okay, where’s that coming from? Right? So we are sponsoring several bills in conjunction with, you wouldn’t believe it, but VO Energy and the International Union of Operating Engineers, authored by Assemblymember Diane Papan and Chris Rogers as well, to really try and level the playing field.
(00:30:19):
We’re never going to have the regulatory environment of Utah, but what we can do is pass AB 527, which would exempt exploration projects meeting a very high bar of environmental stewardship from environmental review. And that’s similar to a federal policy that President Biden initiated. We can pass AB 5 31 by Rogers that would allow more geothermal projects to use this kind of one-stop shop approval process at the Energy Commission to get approved so you don’t have to go to the county and the Air District and the X, Y, and Z. And then jumping back AB 526 also by Papan, which would really across seven or eight key focus areas, look at how do we revamp the state’s regulatory regime to reflect some of these new technologies and kind of what the need is. So we’re really excited about those. And thanks again to The Climate Center for the opportunity to be here.
Sarah Harper, Fervo Energy (00:31:27):
Looks like it’s my turn. Hello. It’s just reflecting on what Miles said. I came into the geothermal sector specifically with the desire to help decarbonize the energy sector. And just reiterating that point that geothermal really is a pathway if you walk away from this geothermal, is a pathway to phase off gas plants, which are currently being extended well past their retirement date in California. So I’m going to talk a little bit about our technology and how it’s enabling the growth of the geothermal energy sector, what the implications are, environmental, labor, social of geothermal, and hopefully have you all walk away as excited about next generation geothermal technology as I am.
(00:32:17):
What is our technology? What is enhanced geothermal systems? You might ask why is it changing the geothermal industry? So essentially what enhanced geothermal systems is, is it’s applying advances in horizontal drilling and fracturing technology and a number of other fiber optic technologies from the oil and gas industry and applying it with some tweaks to the geothermal industry. And basically what it’s doing is it’s eliminating some of the natural factors that the current conventional geothermal energy system has relied on. So there’s sort of like a magic trifecta that conventional geothermal energy producers need. First they need hot rock, and then second, they need an aquifer that’s close to the surface in that hot rock. And then third, they need natural fracture networks or permeability within that reservoir so that you can get the flow rates needed to produce the steam that spins the turbine and creates electricity.
(00:33:24):
So those are what we would call the three of those would be very Iceland conditions. So Iceland is very blessed with a lot of those three conditions in the us. What you’ve seen is the majority of installed geothermal capacity happened in the 20th century. So if you look at a chart of geothermal energy installed capacity, it kind of really ramps up in the 20th century and then kind of teeters off into the 21st century. And a large part of that is because largely popped geothermal, conventional geothermal plants on top of these wonderful Iceland condition areas. So what enhanced geothermal does is it removes one of those needs, which is the permeability element, and that is sort of enabling what Miles was talking about for us to expand geothermal into many more regions. We can go to the next slide.
(00:34:21):
So the consequences of this are twofold. First, like I said, we can develop in more regions. Really the only thing holding us back from developing in more and more regions is just the cost of drilling, which we’re driving down. And then second is that we can also majorly upsize our projects without a lot of surface disturbance. So a conventional geothermal project is going to be around 30 megawatts for EGS. At a minimum, our projects are permitted at one gigawatt, our project Cape Station and Utah is permitted for two gigawatts and we’re contracted for 500 megawatts. So this scale and also amount of electricity, that upsizing factor provides an open path for decarbonization. Next, I want to talk a little bit also about the value of EGS and geothermal in particular. First of all, it’s a very highly valuable generation resource, which means it’s capable of generating power.
(00:35:31):
So it’s a 24/7 resource. It doesn’t depend on factors like wind or sun. The earth is always hot and it would take a very billions and billions of years to deplete the heat of the earth. It’s also a very low land use impact resource. And I have another slide on that. It’s also as opposed to some older geothermal plants, it’s completely emission free and also zero carbon. We use a type of power plant called organic Rankin Cycle power plants or binary power plant. And what that does is it makes it so that big plume of steam that you saw doesn’t exist, that steam interfaces with a heat exchanger and then that is condensed back and goes in a circle in the ground in a closed loop. So what happens there is we chose to use that type of power plant because we develop in very water constrained areas and we want no evaporative losses, we don’t want, that’s lost generation capacity.
(00:36:35):
And then also there’s no potential for air emissions coming from that plume because it’s all condensed and kept underground. And just to zoom in to go into the next slide, specifically on our land use, EGS outperforms, even conventional and a number of other renewable energy resources in terms of its land or its power density. So our projects right now, we have around one to 1.5 acres per megawatt. So if miles can attest to this, if you come to our site, you’ll see it’s sort of in this beautiful renewable energy corridor where you have solar and wind and a lot of great things happening. Our plant is kind of like a small little blip on the grand landscape. So it really is like anticlimactic thing. And to show you what this looks like in 3D, a lot of the reason why we are able to do this in small land use is because a lot of that development is happening underground.
(00:37:41):
So we’re drilling down around at this point, around 8,500 feet to depth, and then we turn our drill bit and drill 5,000 feet horizontally. And then within that, as you can see in the diagram, we pump the water down in pipes and then once it reaches sort of that depth, we frack the subsurface to create that permeability flow our water through it, and it’s able to create the surface area and heat necessary to bring up hot water at the rate required to create economic electricity. And because we’re also sort of operating within this closed loop cycle, and I should say this reservoir down here is a nonpermeable. So again, we’re creating our own permeability. We don’t want natural fractures, that’s water loss to us. And also because of the depth that we’re going to. And you can see this little Empire State building up here at 1,250 feet drinking water reservoirs, at least at Project Cape.
(00:38:54):
I’m sure there’s differences between different communities, but it’s usually within the 1000 foot range that drinking water. So we’re drilling really, really deep down into the earth and at Project Cape, the quality of water down there is actually non-potable. So we’re able to apply and inject non potable water into that reservoir with no water losses, which also means that when we apply for water rights in very water constrained areas, we’re not competing with agriculture, we’re not competing with drinking water. We can use that waste product in this system. Also, I should say while right now we’re developing electricity using this technology, there’s also a lot of direct heat applications. So a big part of the emissions of industry is just heating up water. So if you already have the hot water, that takes away a lot of that just boiling water need. Yeah. Okay. And I am going to wrap up with just saying that we’re rapidly decreasing costs now. We’ve decreased our cost by 70%. And if you go to the next slide, this has put us in line with NRA L’S advanced scenario for EGS, near field binary cycle plants. And just to give you an update on Project Cape, last week we brought up the amount of contracted megawatts to 500 megawatts, and that will wrap up my presentation. Thank you so much.
Matt Cremins, CA-NV Conference of Operating Engine (00:40:37):
All right. I’m going to try this mic again. It’s still pretty loud, huh? That works. Okay, thank you. Hope everyone’s doing well. My name is Matt Cremins. I am the Western Region Political Director for the International Union of Operating Engineers, and I also serve as the legislative director for the operators right here in the state of California. A lot has been mentioned here today already about the need and the benefits of geothermal energy here in the state of California. I was hoping to touch a little bit on the workforce that accompanies these projects and they need to ensure strong labor standards accompany these projects, which in return will help ensure that a local, highly trained workforce is being used to construct and maintain our geothermal energy here in the state of California. By way of brief background on the type of members that the operating engineers represent, we represent primarily heavy equipment operators in the construction industry, crane operators, we represent mechanics in the construction industry who maintain equipment.
(00:41:32):
We represent land surveyors, we represent construction inspectors, and we also represent what are known as stationary engineers who are onsite building maintenance staff that operate and maintain large industrial facilities like power plants. So that is the membership that we are working for on a day-to-day basis. One of the core things that bind all of our different types of employees that we represent is that they have all essentially graduated from a state approved apprenticeship program. And what this does, and importantly, I should note on that, our apprenticeship programs are jointly funded by both labor and management at no cost to the trainee. And it has developed a good collaborative relationship with our employers over the years. And I think that’s one of our biggest strengths is our collaborative relationship that we do have with our employers. So if you are utilizing one of our signatory contractors for a geothermal energy project, for example, you should be able to walk away with some certainty that your project is going to be completed on time, it’s going to be completed without labor dispute.
(00:42:35):
And much of that is attributable to our great relationship that we do have with our employers. The fact that our members are also graduates of apprenticeship programs I think is also one of our biggest strengths, as it means that all of our employees who are working on these projects have received the highest level of training in the state related to the type of work they’re performing. And this expertise ensures that if you are using our membership for your construction project, you are ensuring that you’re getting the most bang for your buck for your project and that you are using workers who are in many cases local, who know how to work in a safe manner and who are going to get these projects done in an efficient way. And looking at the emerging geothermal energy market here in the state of California, we do see a lot of opportunities as far as local workforce development and as it relates to geothermal, specifically from the digging of deep wells to the constructing of these power plants that will need to harness the energy to maintaining them.
(00:43:31):
Our membership skillset goes hand in hand with this type of work. And I think it’s important to note that our membership, along with many others in the building trades, we are not naive to the current trajectory of oil and gas here in the state. While we don’t think that we do have the ability as a state today to just flip a switch and get rid of oil and gas, we do see the writing on the wall as it relates to the oil and gas industry in the state. We are not shying away from that. We are trying to simply ensure from our end that our workforce is not left behind as we transition to new forms of energy. A lot of folks over the years have liked to utilize the phrase just transition when talking about our membership. And if I’m going to be honest in the eyes of our membership, it’s almost seen as a, for lack of a better term, almost an insulting thing.
(00:44:18):
It’s almost like a pat on the head. We know you guys are going to lose your jobs and we’d like to see you go somewhere. But in many cases it’s not accompanied with policies that actually ensure that. So given the building trades model of joint labor and apprenticeship, I’m here to tell you today that we think the solution for a just transition is ensuring strong labor standards on things like geothermal energy on other forms of clean energy projects. And this is because unlike other industries where training is somewhat narrowly focused, our model of apprenticeship training gives us the ability to retrain and upskill workers from the type of work they’re doing to perform like or similar types of work or completely different work. So for example, we could have folks working in refineries that we retrain to go work on highway projects or we retrain to go work on a housing development project, or we can retrain them to go work on geothermal energy projects.
(00:45:11):
And the beauty of that in our model with our management is that that employee gets to take their same wage rate, their same health benefits, their same pension contributions, and they get to take that with them over to this new form of energy that they have now transitioned to. So in many ways, I really do think that the building trades model is the gold standard of a just transition. We are nimble, we can change the way we train, we can change what we train on. And on top of ensuring labor standards on this type of work specifically, labor standards also provide substantial, substantial benefits to communities. They promote better pay for workers locally. They promote an influx of taxpayer dollars by workers making better wages, they promote apprenticeship opportunities for aspiring construction workers, which means that if you have apprentices working on these projects, you are developing a long-term workforce that can be in these facilities for years to come.
(00:46:05):
And if I was going to close with one thing here, and it may come off as a little self-serving, but I got to say it. If you are looking to streamline energy projects, if you are looking to promote a new form of energy over in the legislature, I promise you and ensure you it is not going to hurt your bill to have labor standards in that bill. If anything, it’s going to help your standing with the legislature, it’s going to show them that you care about their constituents and the work that they perform. And really, I think it goes hand in hand with what we are trying to accomplish in the energy space. So if I could just close by noting that Sonoma Clean Power in particular is really knocking it out of the park with the set of bills introduced this year. They didn’t even make me work for it. I didn’t have to ask for labor standards. So it’s an easy one to support, but really appreciate the opportunity to be here and I’m happy to answer any questions. Thank you very much.
Charlene Wardlow, CalGEM (retired) (00:47:01):
So I have some specific questions for our panel and then we’ll open it up to the audience for questions if there’s still things that we haven’t responded to. So I’m going to start with Miles. How does Sonoma Clean Power see expanded geothermal development, helping with ratepayer affordability issues?
Miles Horton, Sonoma Clean Power (00:47:18):
Thanks so much. Yeah, glad you asked. So I think there can sometimes be a little bit of a kind of facile analysis that geothermal power is sort of too expensive or is this sort of unaffordable option. And I think it goes back to what we were talking about earlier, right? On its face, you say, well, geothermal power costs, I’m making this up, right? $120 megawatt hour solar, wind, something like that. That may be way less. But when you look at, and we buy a lot of those resources, right? We are very supportive of solar, we are very supportive of wind. So this is not a ding at those. But when you look at the sort of total cost of, again, solar plus the batteries plus the, I think what we’ve realized is plus the natural gas plants standing by in our current system to kind of reinforce those, that’s actually pretty expensive.
(00:48:10):
And geothermal starts to look pretty good by comparison. So I think that’s one element of it is we think it’s actually for what it is, it’s fairly cost effective. And as Harbor mentioned, the cost of drilling and the cost of these new technologies are coming down very rapidly over the last few years. So we’re excited to see what that looks like. I think the other facet here, and like Matt, I think everyone has alluded to this as a community choice aggregator. Our whole model is really focused on reinvesting in our community. And so how do we make sure we’re not creating this permanent export of wealth to places like Nevada and Utah that have a more permissive regulatory environment? And I just want to be really clear, that’s what’s happening today, right? There’s a real geothermal boom going on in these other states to supply the California market, but to Matt’s point, that’s not building the middle class in our service territory. That’s not taking our customers money and reinvesting it locally. And so I think we’re really focused on that angle of affordability or cost too of once we are asking people to pay these high electric rates, where’s that money going and how are we using it to create a better community right here in California?
Charlene Wardlow, CalGEM (retired) (00:49:20):
So to that point, Miles, what’s Sonoma Clean Power doing to address community concerns of the expanded geothermal development in the Tri-County area?
Miles Horton, Sonoma Clean Power (00:49:31):
Yeah, great question. Thanks. We’ve been really, and I got to give my colleague Claudia Sifu, who’s in the audience here, a ton of credit. We’ve been really out ahead of before, we haven’t even put a shovel in the ground on our geo zone effort. And we’ve already had numerous town hall events, different community outreach. I think communicating with people and making sure that we’re getting out ahead of any questions or concerns first. I do think we have the advantage of having the geysers field already there. So there’s a lot of familiarity with geothermal generally, and a lot of the benefits to the community. One big concern that comes up with geothermal is that it can cause earthquakes. And so there are extensive safety protocols in place to make sure that as you’re sending water through the earth, it’s potentially intersecting with natural fractures, lubricating those fractures.
(00:50:24):
There’s extensive safety protocols you can put in place to mitigate and hopefully completely avoid that risk. But I think to what I was just saying about having the geysers there, giving us an advantage, it’s funny, I won’t name this person, but we were talking to a local elected official about this earthquake issue recently. And she goes, oh yeah, my husband causes those all the time. I mean, she just kidding, but he works up at the geysers. So I think there’s a lot of familiarity and that really has given us an advantage. And then I do think, again, just back to what Matt was saying, we’re so appreciative of our partnership with the Building trades unions, carpenters others, and just being able to work with the unions and really show folks that hey, this is again the geysers calpine. This has been the foundation of a kind of middle class lifestyle for a lot of people in Sonoma and Mendocino Lake counties for a long time. And now we have the chance to do that again and really kind of build that economy for the next generation. So I think that’s been very positive too.
Charlene Wardlow, CalGEM (retired) (00:51:27):
So yeah, I might just say in Lake County, the Geysers, which has obviously been there a long time, it’s like the largest taxpayer for the county and the best employment opportunity in Lake County, I think, except unless you work for the county or a city. I think the other largest employer that I’m aware of in Lake County is Walmart. And so good paying jobs are what the geysers has offered and a good living environment. I mean, if you haven’t been there, Clear Lake as the largest natural lake in California, because Lake Tahoe is split with the state of Nevada. So it’s been a great benefit to Lake County and Sonoma not as much, so much other industry there. So that’s an important factor for bringing economic development to these rural areas. So Miles, since the assembly member couldn’t be here today, could you just give us an update? So there’s three bills, assembly bill, 526, 527, and 531. Could you just touch briefly on what those each are and then the status of each of those bills? So if people want to follow the bills or attend a hearing or Elise, see where they’re going or support them, they know where to go.
Miles Horton, Sonoma Clean Power (00:52:41):
Definitely. Thanks. So we took a look at, again, going back to I think the previous comments, we have the best workforce, we have the best geology, we have the demand here in California, so why isn’t this happening here? And it really in the way that we want, and it really comes down to that regulatory environment. And so working closely with the developers labor, others, we developed a package of bills that if they were to be enacted, I think we’re really excited about the potential to paved the way for greatly expanded geothermal development in the state.
(00:53:21):
And I’ve thought of a new way of talking about them. So I’m going to go out of order. I wish I’d gone back and reintroduced, we’d reintroduced ’em in the right order, but we didn’t. So AB 527 by Papan relates to the exploration phase. So this is the first phase of geothermal development, and this is before you build anything, before you generate power, you’ve got to drill one or multiple test or exploration wells to really map out the subsurface environment in detail. And Harper’s probably going to cringe, but I think a lot of it’s, can we drill through this rock? Is it hot here or does it actually look like it’s hotter 50 yards that way? And that’s where we should build the power plan. You just can’t get that kind of detail until you get down in there. So that exploration phase is considered its own project for purposes of environmental review.
(00:54:08):
It’s interesting. President Biden back last fall initiated a new categorical exclusion from environmental review for that exploration phase. The reason was they went back and looked over 30 years with the Bureau of Land Management, and what they found was really these things, when they’re done right, they don’t have any substantial negative impact on the environment. It’s a very light touch. You have a well pad, you’re drilling a hole, but it’s really minimal impact. And so this federal policy says, Hey, if you meet certain environmental standards, it can’t be larger than a certain size. It can’t be on a sensitive habitat for an endangered species, stuff like that. If you meet certain standards, you are exempt from environmental review. So that’s what we’re trying to do here in California too. Again, if you meet a really high bar, if you pay the workers on the project, the prevailing wage, you don’t have to go through SE QA, the environmental review twice.
(00:54:56):
You can just do it at the level of the whole project. So that’s kind of the perfect segue into AB 531 by assembly member Chris Rogers that relates to that second phase, the drilling more wells, building out the power plant, the kind of bigger build out. So there is an existing process at the Energy Commission called the opt-in where as it sounds like it’s totally optional, a renewable energy developer can choose to have the Energy Commission Act as this one-stop shop citing permitting authority instead of having to go to all the different approval agencies for approval. So there’s a minimum of 50 megawatts. The challenge there is most new geothermal outside the Salton Sea is more like 20 or 30 or 40 megawatts. But you think about it, and again, we love solar 50 megawatts of solar that may have a capacity factor of 30%, like 15 megawatts of geothermal, even like a small geothermal is actually producing the same amount of energy running around the clock.
(00:55:51):
And so we want to let these smaller geothermal plants use the opt-in process and you have to use a skilled and trained workforce, the highest labor standard on those. And then last but not least, AB 5 26 also by Papin is based on a bill that was really successful for offshore wind, actually, I know that’s having its own challenges, but this bill was very successful at its intended purpose, which just said across six or seven different areas, all these state agencies have to get on the same page about how to pave the way for offshore wind to come into California. So we’re trying to do the same thing with new in-state geothermal, both more conventional geothermal, but especially these next generation technologies. Again, let’s look at transmission planning. How do we plan transmission to kind of pave the way for geothermal to come in permitting processes?
(00:56:39):
How do we harmonize different permitting processes, geothermal rental and royalty payments? The current structure is totally screwed up. How do we standardize, kind of modernize that? So we’re really excited about all these bills. AB 5 26 and 5 31 actually just passed out of the Assembly Natural Resources Committee on consent yesterday. So excellent news and don’t have any opposition. I think the biggest challenge will be in the fiscal committee. So please call your assembly member and tell them you support this bill seriously. And then AB 5 27 has received some opposition from some environmental groups that are skeptical of exemptions from environmental review, but we have some great environmental groups and support too. And we are working with the groups that are opposed to try and bang out a deal. I mean, I think we’re very open to saying, Hey, you got to meet the highest standard to get this exemption, but let’s be clear what that is and let people do it. Let’s not have to reinvent the wheel each time. So I think we’re close to a deal. I said this to our board of directors last week and then it all fell through, but I think now I’m going to say it again and now I’m going to probably jinx it again. So fingers crossed.
Charlene Wardlow, CalGEM (retired) (00:57:46):
Great, thank you very much miles for that. So I’m going to move on to Harper. So Fervor’s Fervor’s current project in Utah has a power purchase agreement with Southern California Edison, which is the investor owned utility for most of Southern California. What are F’S plans for California specifically since that project in Utah is sending the electricity here?
Sarah Harper, Fervo Energy (00:58:12):
So a little bit of history behind Fervo. We proved out our technology at a plant in Nevada in 2023 in the spring of 2023. And from that confirmation that our technology actually worked, we’re able to raise the capital for Project Cape, which is an amazing location for a couple of reasons, but mostly within shouting distance. There is a Department of Energy drilling facility where they have been testing all different types of drilling technologies and because of their work, we were largely able to de-risk some of the knowledge about the subsurface so that we could attract that capital and then scale up our project significantly. So the first electrons from that project are coming online next year with full phase development in 2028, which will be the full 500 megawatts and beyond since it’s permitted for two gigawatts. So just putting this in perspective, we are a new scaling technology and we’re kind of hitting the lowest hanging fruit.
(00:59:24):
We do have another project that has just gotten a PA deal with Google in Nevada. That’s project. And that’s sort of an example of, we were talking about policies earlier and someone mentioned tariffs in another talk, but that’s an example of the clean transition tariff, which is a deal between US envy energy and Google, and helps take away some of the stress on regular rate payers to pay for data center load, which shouldn’t happen. To go back to your question on California, we have lease positions across the west, including in California, but right now we are working in Utah and Nevada largely because their regulatory environment is more friendly. I was towards development, and especially when you’re scaling technology, some of these time delays can be very costly. So I’ll give an example. I was speaking with someone from Ormat the other day and she said they had developed a project in Mammoth Lakes in California and then in Nevada, sort of similar project, similar stuff.
(01:00:37):
She said it took 14 years to develop and permit the project in California and four years to develop and permit in Nevada. So I hate to use this, but time is money. Every single day on site we’re spending $100,000 to pay the labor. So small delays, even a month delay can be a project killer. And so when we’re attracting the financing to do these projects with all of the unknowns related to California’s unique regulatory environment, which is different since we have CEQA here, attracting the capital and the financing to even propose a project in California as of right now isn’t an option. But with these bills, we’re really hoping to open up a pathway in California to be able to act on our lease positions. And I would also say, if you take anything away from this, it’s understanding too that California is not operating in a vacuum.
(01:01:40):
It’s happening in a western wide energy market. And there’s a number of other states who are coming to developers like us saying, how can we get you to develop in our state? And we’re trying to expand as quickly as possible, but we’re also trying to expand sustainably. One of our main values is do what we say we’re going to do. We don’t want to over promise and under deliver. So that’s another factor which gives us a lot of on-road here to promote bills that might lower some of the barriers to development in California, but also educate and share what our technology is. Because if you’ve never of it before, you’re like, what wracking, oh my, what does that mean? And that education element for us is very important, especially with California communities.
Charlene Wardlow, CalGEM (retired) (01:02:30):
Thank you. I might say I worked on the project and Monoa County for 10 years of my career and 30 megawatts. It was interestingly from a permitting perspective, from comparison, the surface is in your national forest, the fluid mineral is managed by the Bureau of Land Management, but even on federal land in California, you have to comply with not only the National Environmental Policy Act get approvals from those agencies, but also the California Environmental Quality Act. And there were over 400 mitigation measures for that project. So it went through extensive environmental impact report, environmental impact statement, record of decisions from both the BLM Forest Service and then approval. The actually Great Basin Air Quality Management District was the lead agency for squa. So in Nevada and often mostly projects in Utah are on BLM land. They are complying with NEPA. So just a different perspective on the permitting in California and wine people are selling or map employer in Nevada is selling 150 megawatts of generation of geothermal from Nevada to Los Angeles Department of Water and Power because they could get it permitted and get it billed. So why are those projects not here? So I want to turn it over to Matt quickly. I know we’re approaching five o’clock. So Matt, how has labor been involved in the various phases of existing geothermal projects in California?
Matt Cremins, CA-NV Conference of Operating Engine (01:03:57):
Thank you for the question, and I can be brief. I know we have been involved obviously in the construction of a lot of these projects already, whether it be the land survey work that identifies the land that’s suitable for this type of stuff, whether it be the moving of dirt on these projects, the construction of facilities, we have already participated in that and know we do it right now. We have also participated in the siding and permitting of these types of projects. And I think that’s one area where we could be helpful and effective leveraging our local political relationships in order to help get these things across the finish line. So yeah, that’s how we’ve participated and looking forward to doing more of it. So thank you.
Charlene Wardlow, CalGEM (retired) (01:04:34):
Alright, so with that we have five minutes. I’d like to turn it over to the audience for any questions. So the gentlemen, well, second row, you had your hand up first,
Speaker 1 (01:04:57):
AB 1373 and the inclusion of geothermal in 1373.
Miles Horton, Sonoma Clean Power (01:05:37):
Yeah, that’s a great question. Thanks. And to be honest, this is just me Miles talking. This is not the official. Yeah, so I’m going to go rogue here. I think our assessment would be that the demand for geothermal is and is going to be so colossal that it’s sort of supplemental, right? I think it’s valuable for us. And by the way, I’ll just make a quick plug that CCAs like Sonoma Clean Power are driving over 90% of procurement of new clean resources in California and areas that are subject to the PUC jurisdiction. So we’re doing a lot, but I think the demand for these kind of clean firm resources and especially geothermal is just so colossal that thankfully it really is supplemental. We need to get this economy going. We need to do what we did with solar and batteries and all the rest with clean firm now if we’re really going to limit the rate payer cost and actually get to a hundred percent clean energy. So thanks for the question.
Charlene Wardlow, CalGEM (retired) (01:06:33):
Okay. The woman back there, second in with your hand with a beige jacket, you want to stand up so people could hear your question please? Just going back. I was,
Sarah Harper, Fervo Energy (01:07:23):
Yeah, I’ll take part of that. First of all of those considerations, the environmental, social, everything we think about upfront in our process when we buy land, we are seeing if there are endangered species on it. We don’t want to invest in a piece of land that we’re not going to be able to develop. So those sort of considerations are really upfront for us. And then there’s also, it’s kind of the magic of being a smaller company that’s growing out of a lot of folks have worked for other developers, and we have a lot of folks who care a lot about the climate, is that we are able to build in so many of our values so early in the process that for instance, community engagement was one of the biggest factors for us around Cape Station. So we’ve engaged really closely with their economic development office.
(01:08:22):
And then I’ll also say on things like fracking in particular, which I didn’t necessarily get to the considerations for that are quite different. And I think a lot of communities hear, oh, geothermals using fracking, what does that mean? But It turns out that a lot of the social and environmental challenges that come from oil and gas fracking really have to do with the oil and gas part of that equation. So there’s sort of a couple of different elements to that. One, the scale, the frequency, water and seismicity. So when you’re looking at oil and gas fracking, you’re fracking an area, your wells productive for one to two years, you’re pulling gas up. Then you move on, you frack a new area. For geothermal, we’re investing in that reservoir for 30 plus years. We were talking about the plants that have been operating for more than a century.
(01:09:16):
So that’s kind of the scale. The frequency is we’re fracking, designing our wells, and then essentially we want that to be operating for years. We don’t want thermal declines. And if there are small thermal declines, we can go in and do an offshoot. It’s not like we have to abandon a project because we have so much control over the permeability with new engineering techniques. So those sort of elements are important for the environmental factor. And then I’ll get to the water contamination part as well. I think that’s a huge environmental consideration. And when I mentioned non-potable water, we’re injecting into the water. What does that mean? And obviously the oil and gas sector fracking has had challenges related to water contamination so differently from oil and gas because we’re not trying to separate out oil and gas from what you would call the cuttings, which is sort of the sludge that comes up from the ground.
(01:10:11):
We don’t have that same chemical slurry that we have to pump into the earth. We just want the heat from the water and we want that to circle. So an example of that is oil and gas. You have to remove and treat your cuttings because it’s contaminated with chemicals. In geothermal, we don’t have to do that because it’s not contaminated with chemicals. So that’s kind of all the sludge that’s coming out of the ground. We’re not considered contaminated. And then on the seismicity front, that’s a huge thing for our communities, the communication and transparency around seismicity. So most of our seismic monitors are actually owned and operated by universities. Utah University owns and operates a lot of our seismic monitoring stations. One of them is located in the high school. So there’s consistent transparency around when are we fracking, might that cause any sort of seismic event?
(01:11:06):
And around that as well, we intentionally installed fiber in every well. So even when there was an earthquake out here in California, our fiber optic person sent me a message and was like, did you feel that? And I was like, what are you talking about? And he’s like, I saw it come up. That’s how sensitive fiber is. It can feel like seismic events around the world. So that type of technology is helping us not just for seismic monitoring, but for many things. And that communication with the community and transparency with the community on what’s happening underground is really key to our success and our strategy moving forward.
Charlene Wardlow, CalGEM (retired) (01:11:43):
So it is five o’clock and there is a reception. So I’m sure our panel members will stick around for a few minutes if somebody has a specific question. But thank you so much for attending our geothermal session. We hope it really triggered some interest in this exciting hot topic.