U.S. Geothermal's plant near Neal Hot Springs in Eastern Oregon received a $102 million loan. // PHOTO COURTESY OF U.S. GEOTHERMAL
The ongoing construction of a $124 million geothermal plant near Neal Hot Springs was made possible by a $102 million Department of Energy loan this summer, the largest of its kind given to a geothermal project in the country. The DOE investment and other proposed government incentives are making geothermal development in the state more feasible after years of complications from large overhead costs and environmental concerns.
Oregon’s string of extinct and active volcanoes is a monument to the rich pockets of geothermal energy buried hundreds of feet below the earth. However, most of these pockets are “blind resources,” located in undetermined areas that require exploratory drilling to determine if a given area has the right geology as well as high enough water temperature and pressure for profitable energy production — a process that costs millions and has led to dead ends in the past. Even if a suitable pocket is found, the overhead costs are still large. “It’s like buying 30 to 40 years of coal, and a plant,” Portland-based energy consultant Al Waibel says.
Like U.S Geothermal’s plant near Neal Hot Springs, geothermal development at Glass Buttes in Southern Oregon is located near hotspots with a past of exploratory drilling. It is also located near Sage Grouse breeding grounds, prompting the conservation group Oregon Natural Desert Association (ONDA) to unsuccessfully appeal the lease of the Glass Buttes area for geothermal development last year. Despite the sensitive areas, ONDA actively works with geothermal companies to find compromises such as buffer zones between wildlife areas and construction sites. “Not every project should be wiped off the list,” says Liz Nysson of ONDA.
Despite environmental concerns and exploration costs, the potential is there. Canadian company Nevada Geothermal Power (NGP) received a $1.8 million DOE grant in January to explore the Crump geyser near Lakeview and claims it has the potential to produce 30 megawatts of energy, similar to the Neal Hot Springs site. Next year, NGP may have even more incentive to push ahead thanks to the Geothermal Energy Investment Act of 2010, legislation introduced by U.S. Sens. Mike Crapo, R-ID, and Ron Wyden, D-OR, in September. Geothermal producers currently get a tax credit of 10% of power produced. The bill would increase that to 30% through 2016.
With such initiatives under way, prospects for geothermal energy in the state are bright. “Long-term costs are extremely low,” Waibel says, “It’s ‘on’ 24 hours a day.”