How Texas oil workers, technology are helping build a new renewable boom

This story was produced in partnership with the Pulitzer Center. It is part four in a four-part series. Read part one here, part two here and part three here.

On any other day, David Rodriguez’s truck would have been helping extract oil, and as he sucked mud from a well beneath a towering drilling rig, any passersby might have assumed he was doing just that.

“Compared to oil and gas, it’s the same thing, man,” Rodriguez shouted over the motor.

But he was working to produce something entirely different. Rather than pulling oil out of the earth, the hole he was helping drill would be used to store clean, transient power from south Texas wind and solar farms.

Rodriguez, who was helping drill the hole for geothermal energy company Sage Geosystems, is one of a growing number of workers across Texas employing some of the same skills and technology used to extract fossil fuels for the production of renewable energy.

Those efforts come at the height of the largest oil and gas boom in American history, which centers on an expansive oil-producing region extending across western Texas and eastern New Mexico known as the Permian Basin and has been driven by the increasing use of novel technologies like fracking and horizontal drilling.

That boom has seen oil and gas output consistently hit record levels in recent years. At the same time, however, due to the pace of drilling and the declining need for workers amid the rise of high-tech forms of extraction, the expansion in production has come with a sharp and protracted decline in both the number of rigs and rig workers.

“We drilled ourselves out of a job,” consultant Mark Pinson said, eyeing the bobbing pump jacks that were still pulling oil from the Eagle Ford shale.

The Texas rock formation was once at the heart of the oil and gas boom. But beneath its bones lies another resource central to the new movement in the region's energy industry: heat that Texas companies like Sage and Fervo Energy hope to tap for clean power.

The field centered on that geothermal energy has long been a niche one in the renewables sector because of its reliance on a very particular set of underground conditions: accessible, superheated pools of underground water, like those found beneath pockets of California, the Pacific’s Ring of Fire and the nation of Iceland.

Over the past decade, however, hundreds of millions in investor capital have flowed into largely Texas-based firms seeking to develop methods that could be used to generate geothermal power virtually anywhere in the country.

One big pitch for the industry is security for the grid as a whole. Investing and bipartisan political support for geothermal in Texas has picked up after the state’s deadly 2021 blackouts showed the need for secure power sources not subject to extreme weather or alleged market manipulation by oil and gas companies. In the 2023 Texas legislative session, geothermal proponents’ ability to cast themselves as a bulwark against the risks of extreme weather helped the industry win nearly unanimous support for its policy agenda in a session where renewables were under nearly continuous assault. More recently, the Department of Defense has been a major backer of the technology, which it describes as a means of giving bases access to a source of power that neither the weather nor adversaries can shut off.

A more subtle case for the industry focuses on job security for the oil and gas industry. Proponents — largely oil industry veterans — see geothermal as a long-term life raft for oil and gas workers increasingly idled as layoffs beset the industry. Though oil may not be “a dying industry, it's definitely not a growth industry,” former Chesapeake Energy Director Fernando Aguilera told The Hill. “The opportunities for development are not the same that they used to be 10 years ago.”

President Trump and the Texas GOP have pledged to boost the country's already record oil and gas production with support for additional drilling. But that backing doesn’t guarantee the oil industry’s enthusiasm to expand drilling — especially when increasing supply could threaten profits. “We like oil at $70,” Permian oilman Kirk Edwards said, warning that oversupply and the drop in fuel prices that Trump has promised would kill industry profits.

The political support for drilling appears poised to help bolster the burgeoning geothermal industry, however, as does soaring demand for electricity in Texas driven by population growth, data centers and crypto mines. Geothermal is one of the few renewables that Trump supported in his executive order declaring a national energy emergency, and in March Energy Secretary Chris Wright threw his support behind a geothermal boom.

So did Rep. August Pfluger (R-Texas), whose district includes much of the Permian. Introducing Wright at a geothermal event, Pfluger portrayed geothermal as the logical continuation of the fracking boom. For the Permian, he said, “it’s going to be the same people, the same firms, the same technology that is going to help scale geothermal.”

Pfluger was referring to the host of new technologies that have made it possible over the past decade for firms to extract oil and gas reliably and efficiently: fiber optics, monitoring driven by artificial intelligence (AI), fracking and horizontal drilling. These technologies have also played a key role in the recent resurgence of geothermal through "enhanced geothermal" startups like Fervo, Sage, Eavor, Bedrock and XGS.

Such startups use oil and gas-based technologies to create the precise underground conditions needed to tap the heat beneath the region's surface — either for electricity, industrial power or heating and cooling.

That heat has long served as an obstacle to oil extraction, particularly in the hot rock of the Eagle Ford, where Sage was drilling. But Fervo founder Tim Latimer, a former engineer for mining company BHP, realized while working on oil production in the region in the early 2010s that it was also a source of untapped power. The realization prompted him to quit oil, go to business school and launch the Houston-based geothermal company, which had secured nearly $700 million in funding as of December.

Fervo and the companies that followed it are working to expand the reach of geothermal to the entire country.

Traditional geothermal or “hydrothermal” companies have sought naturally circulating hot water systems, which they have exploited using drills similar to those for excavating water wells. This works well for regions that have such resources, like California, Iceland or South Korea, but easily accessible superheated water is rare.

Enhanced geothermal startups, meanwhile, have broken new ground in the ways they're using technology to create what amount to their own underground geyser systems.

The enhanced geothermal industry has secured some support from major oil and gas firms, including large independents like Chesapeake and and some majors like Chevron — who see in the technology a potential bulwark against the wild swings of oil and gas prices.

Collaborations between fossil fuels and geothermal came as part of a broader high-tech turn in the industry that saw oil and gas companies increasingly wire their oil wells with fiber optic cables that allowed surface crews to visualize the underground world in unprecedented detail.

That turn would ultimately squeeze out oil and gas workers as wells became more efficient and needed fewer people — a process that accelerated as oil companies merged, creating fewer clients for drilling companies, which also consolidated in a cascade of lost jobs. Aguilera, the former Chesapeake director, suddenly found himself having to call hundreds of workers to lay them off.

For the new wave of geothermal startups, however, it opened up the possibility of using fracking, fiber optics and increasingly precise forms of underground drilling to create artificial, highly efficient underground energy systems to generate power on the surface.

That possibility represents an opportunity in the eyes of the new generation of geothermal entrepreneurs, most of whom have backgrounds in oil and gas, not just to build out America’s clean infrastructure, but to revitalize drilling itself. Aguilera now runs field operations for Bedrock Energy, a company that drills geothermal wells to heat or cool commercial buildings. Unlike in oil and gas, where there were too many staff and rigs for the available work, “we have the opposite problem in geothermal. We have more jobs that we can take on,” he said.

Geothermal offers a chance “to do the shale revolution all over again,” Sage CEO and former Shell Vice President Cindy Taff told The Hill. Her company is looking to use the drilling technology not only to produce geothermal power, but also to store energy. Sage’s south Texas project aims to frack a cavity 8,000 feet underground, then pump in water when wind and solar power are plentiful. Later, when that supply declines or energy demand spikes, Sage would release the trapped pressure to spin a turbine — like a set of lungs, Taff said, breathing in and out underground.

In this way, the project would store power from excess wind or solar — pumped in the form of hot or cold water — in the earth to be released on demand like a giant underground battery. That would add a new on-demand tool to the grid alongside hydropower dams, lithium ion or thermal batteries, and nuclear and gas plants.

Some clients find this storage idea more exciting than geothermal itself. The prospect of on-demand clean power is particularly attractive to data centers, which have extensive commitments to zero-carbon energy. Fervo sold 125 megawatts to Nevada’s grid as part of a deal with Google, then 320 megawatts to Southern California Edison. Sage signed 150 megawatts for an on-site power deal with Meta. More deals are pending, including one by Sage that could bring geothermal onto Texas’s grid for the first time.

Another Houston-based geothermal company, Quaise Energy, plans to use a microwave beam to vaporize hot, dry rock. If that method works, it could open much of the country to deeper geothermal drilling and be used to tap heat even beneath dense Northeastern cities, where usable heat had long been thought to be too far underground to capture in an economically viable way.

The International Energy Agency has estimated global geothermal resources could produce enough energy to cover 140 times the current electricity demand, using 80 percent of the same jobs found in the existing oil and gas workforce.

And once enough companies are drilling, they can begin to cross-pollinate, said Ghazal Izadi, the chief operating officer at geothermal company XGS Energy, which recruits heavily from oil field service companies like Baker Hughes and Schlumberger. During the shale boom, for example, Izadi said that drillers “shared experience between 3000 operators — sharing every day about the length of the well, how long it takes, what they fracked, well spacing, frack spacing, how many problems they had, how much fluid they used.” Over a decade, that synergy let shale exploration companies cut the time needed to drill, case and frack a well by a factor of 12, she said.

To some of geothermal's proponents, the technology represents a chance to transform the energy industry and eliminate its toxic byproducts — moving away from the type of production long dominant in the Permian Basin, where oil and gas manufacture takes place on an industrial scale across entire landscapes, producing poisonous gas and towers of fire, and toward something more like that seen in Iceland, where waste heat from geothermal electric plants powers fish farms, hot tubs and greenhouses.

Large-scale geothermal would trade the Permian Basin's “'Mordor vibe’ for a cooler, shinier, more tidy vibe,” said Jamie Beard, founder of geothermal advocacy group Project InnerSpace. The Permian, she argued, is “a huge mess out there, like driving through hell — thousands of flares, fire everywhere, pump jacks and all that. None of that is present in geothermal production because you’re not producing oil and gas.”

Shifting away from oil and gas production could also reduce exposure to volatile, DNA-wrecking organic compounds — like benzene and toluene — that are often present in the fossil fuels.

Those dangers are lower for geothermal: The fracking fluid used by Sage, for example, is a nontoxic barite solution, as opposed to the thousands of novel and often toxic chemicals used in oil and gas.

Geothermal isn’t risk free. A rushed drilling job in India’s Himalayas, for instance, caused a blowout that dumped hot water and clay into local water supplies.

The greater concern hanging over the geothermal industry, however, is that the data centers it hopes will be at the center of a growing market for its energy will instead stick to gas.

The risk, Beard said, is that geothermal could lose that AI-driven energy market to fossil fuels unless it proves itself right now.

So far, the industry is choosing gas. Current data centers demand 24/7 power, which geothermal promises but only fossil fuels can currently supply. Gas demand has flatlined in recent years, but that dynamic is projected to drive it up by another 6 billion cubic feet per day by decade’s end, per S&P Global.

Much of this growth is poised to occur in Texas, where in mid-February a new central Texas data center announced plans to connect to a new gas pipeline that would generate 1.2 gigawatts of power — enough to power about a million homes.

Though geothermal might be able to meet that demand in a few years, Beard worries it is at a significant disadvantage now, when decisions are being made that will shape the future of the American grid for decades.

“If it has to be built fast, it’s going to be natural gas,” she said. She argued that creates an urgent imperative for geothermal to find ways to colocate with gas development — in effect rerunning the mid-2010s Eagle Ford playbook in which geothermal technology helped extract hot gas and bought itself a long-term seat at the table. "If geothermal doesn't prove itself in this massive build-out to address data center demand, I worry that geothermal may never get off the ground," Beard said.

But supply chain bottlenecks mean that new gas plants must often wait years for parts — which XGS’s Izadi argued gives geothermal “a good opportunity to win the race. We need to win it."

To do that, she said, geothermal would have to develop at a far greater pace. The industry had moved past the need for more research and test wells, she said. “Geothermal is not moving with one or two wells or three wells per year” — each company, ultimately, needs to reach a point where it is drilling hundreds or thousands of wells per year.

To move forward, she said, “We just need to drill.”

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