Shale Drilling Techniques Could Spark Geothermal Surge, IEA Says

The International Energy Agency (IEA) has recently highlighted the potential of geothermal energy to meet a significant portion of global electricity demand, thanks to advancements in shale drilling techniques. This article explores the implications of this finding and the investment opportunities it presents.

Geothermal energy, largely untapped until now, could provide around-the-clock clean power in almost all countries around the world. The IEA report, The Future of Geothermal Energy, finds that geothermal energy could meet 15% of global electricity demand growth between now and 2050 if project costs continue to decline. This would mean the deployment of as much as 800 gigawatts of geothermal capacity worldwide, delivering annual output equivalent to the current electricity demand of the United States and India combined.



Enhanced Geothermal Systems (EGS) could significantly benefit from advancements in shale drilling techniques. EGS involves injecting deep, hot rock formations to create steam, which then drives a turbine to generate electricity. Shale drilling techniques, such as horizontal drilling and hydraulic fracturing, can help access these formations more efficiently and cost-effectively. By applying these techniques, EGS projects could become more feasible and widespread, potentially meeting 15% of global electricity demand growth by 2050, according to the IEA. This would require a significant reduction in project costs, which could fall by 80% to around $50 per megawatt hour (MWh) by 2035, making geothermal the cheapest source of dispatchable low-emissions electricity.



Horizontal drilling and hydraulic fracturing, pioneered in the shale oil and gas industry, could revolutionize geothermal energy extraction. These techniques enable access to previously inaccessible geothermal resources, significantly expanding the global potential of geothermal energy. By drilling horizontally and fracturing rock formations, companies can tap into hotter, deeper geothermal reservoirs, increasing the efficiency and output of geothermal power plants. This could lead to a surge in geothermal energy production, helping meet the world's growing electricity demand while reducing greenhouse gas emissions.

The IEA report highlights the vast potential of geothermal energy, which could meet 15% of global electricity demand growth by 2050 if project costs decline. New drilling techniques from the oil and gas industry can unlock this potential, making geothermal more competitive with solar PV and wind paired with storage. The report estimates that total investment in geothermal could reach $1 trillion by 2035, presenting significant investment opportunities. Companies like The GEO Group, Inc. (NYSE:GEO), which specializes in secure housing and support services, could benefit from this surge in geothermal energy adoption.

In conclusion, the IEA's findings suggest that shale drilling techniques could lead to a geothermal surge, offering significant investment opportunities in the sector. As geothermal energy becomes more cost-effective and accessible, it could play a crucial role in meeting the world's growing electricity demand while reducing greenhouse gas emissions. Investors should keep an eye on this promising sector and consider the potential benefits of supporting companies that adopt these new drilling techniques.

Disclaimer: Action AlertsPLUS, managed by the article's co-writer, holds no positions in any mentioned securities.