The federal Infrastructure Investment and Jobs Act and Inflation Reduction Act both focused millions of dollars on net-zero energy. The goal? Make 65% of power generation and storage carbon-free by 2035. The solar and wind industries swiftly utilized these funds toward achieving these goals. However, with 61% of energy production still done by carbon-emitting processes, our pace toward that goal falls short. On our current track, we’ll miss this vital goal to slow global warming.
Why? Our drilling industry has yet to commit to doing our part toward the 2035 goal, let alone the goal of 100% carbon-free generation and storage by 2050. Many in this industry believe getting involved supports a future without drilling by preventing pipelines and oil and gas operations. In fact, we cannot hit these goals without drilling, and our industry could benefit from checking our driller egos and acknowledging it.
What keeps your company from getting involved? What barriers do you face diversifying a drilling company to support net-zero goals? It is time to demystify things and understand the importance of the drilling industry stepping up to do our part. Let’s look as some common ideas in our industry surrounding net-zero, green energy and all those carbon cutting goals we hear about.
Supporting Net-Zero Means an End to Drilling
Since the industrial revolution, drilling has proven critical to energy exploration and infrastructure implementation. That won’t change. In fact, net-zero goals support and rely on drilling jobs. Think of it as the next necessary evolution of the drilling industry.
Today coring rigs explore for and confirm the presence of rare earth metals required to advance net-zero goals. Rotary and blasthole rigs drill pilings for solar farms across the U.S. Large oil and gas companies prioritize a percentage of their fleets to drill deep hot rock geothermal wells for energy production. They even use fracking to stimulate thermal zones to generate steam. All of this is great. However, one of the most executable and efficient ways to cut carbon emissions — work many people reading this can do — is drilling shallow ground-source geothermal wells.
So, far from an “end” to drilling, net-zero goals rely on drillers, rigs and loops in boreholes. We can’t hit the 2050 goal — and attempt to save our planet — without installing as many ground-source geothermal heat pumps as possible.
Net-Zero Goals and Incentives will Disappear under the Next President
For over 40 years, the ground-source heat pump industry has fought to maintain tax incentives that offset the cost of these systems. These incentives have come and gone multiple times, allowing natural gas to be a consistent, lower-cost option.
On The Driller Newscast, episode 58, Joe Parsons of Climate Control Group talks about the ebbs and flows of these geothermal incentives. Parsons is senior marketing sustainability manager for the company, which designs and manufactures a range of HVAC products and systems, including the Climate Master brand for geothermal installations. In that interview, Parsons makes three essential points:
- The latest round of federal incentives lasts for the next 10 years.
- These types of incentives have affected the viability of ground-source heat pumps as an option over the years.
- Ground-source heat pumps as an option have to stand independently with or without tax rebates.
Joe is right. Ten years is a long time, long enough to develop more durable business models and pricing structures that depend less on tax incentives. Ironically, demand driven by state incentives may help get us there. Many states have plans to utilize geothermal and geothermal networks to meet their net-zero goals. These plans phase out fossil fuel-driven energy production, and create state incentives and funding to make that happen. These plans often include efficiency targets, pushing these states to look for ways to cut demand on their electric grids. Heating and cooling demand makes up nearly 50% of all energy requirements in the U.S.
The bottom line: When the federal incentives sunset in a decade, it shouldn’t matter, and net-zero goals are the reason.
The Billable Cost per Foot is too Low to Drill Geothermal
I cannot agree more.
As a drilling industry, we need to do a better job advocating for the importance of reputable drilling companies with reliable equipment. At the same time, the ground-source geothermal industry must genuinely understand the cost of maintaining a fleet of rigs and people. Tax incentives have created the mirage of $8-per-foot geothermal installations — making it seem like such a rate is achievable and sustainable. While geothermal incentives have come and gone over the last 40 years, during that same time, a good water well drilling company steadily increased what they charge to provide water. Beyond that, drilling a water well starts a customer relationship that includes future maintenance of that water well. The geothermal industry counters the low footage rate with the lure of large-scale projects that allow a drilling company to drill multiple holes daily. It is like the old saying: “Your wage may be low, but you can work all the hours you want.”
We can do a better job educating ourselves about the costs and risks associated with a drilling operation — and price accordingly. The price per foot is not just a logistic problem, as many accounts purporting to be drillers like to say. We base it on experience, knowledge, and proper procedures for safe, efficient and profitable operation. Importantly, we base it on the costs of people, time and fuel, which continue to increase.
In reality, large-scale geothermal fields make up just one component of net-zero solutions. The majority of geothermal boreholes required range from residential to medium-sized commercial. Demand for drilling is there, and Capitalism 101 tells us that demand drives prices up. We must justify our cost to the end user, but our partner engineers and HVAC contractors must also meet us at our actual worth. The demand for geothermal boreholes is excellent right now. A good drilling company can find the right partners to ensure profit and sustainability for all involved.
Drilling has always been at the forefront of providing civilization with the technology and power to progress. Today, we need more water well drilling companies diversifying into ground-source geothermal. We also need new drilling companies to focus on geothermal. Far from putting drillers out of business, these ambitious carbon-free goals require every rig and driller available to save our planet.
Next month, I focus on new solutions and funds from the Energy Department and Agriculture Department designed to develop new drillers and build more rigs.
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