Fervo Energy is not an oil and gas company, but the Houston-based company is borrowing liberally from the industry’s playbook—using horizontal wells and other drilling techniques to find success with enhanced geothermal systems.
“We came to geothermal and we said, ‘We’re going to lower the cost of geothermal,’ because in the past, geothermal operators have gone to drill a fixed number of wells, maybe low double digits to access a traditional geothermal reservoir,” Sarah Jewett, vice president of strategy for Fervo Energy, said at NAPE last week. “What we’re going to do is we’re going to act like a shale operator, and we’re going to enter this basin with the intent of drilling hundreds of wells and build really large projects, just like they did.”
Fervo’s team sees itself on a learning curve, like the shale players who unlocked the Permian Basin, reducing drilling times and lowering costs along the way.
Geothermal energy involves drilling wells into hot reservoirs to capture heat that can be converted into electricity, providing baseload power, or used to heat or cool homes and buildings. The energy source is seen as a route to lower carbon emissions. However, drilling costs—which can account for more than half of the total costs of a geothermal project, according to the Department of Energy—have posed a challenge.
Fervo, founded seven years ago, is a portfolio company of Bill Gates-backed Breakthrough Energy, which counts Devon Energy and SLB among its partners. The company brought its first project onto the grid in 2023, providing electricity in Nevada, where partner Google’s data centers are powered. The company is drilling its first 400-megawatt greenfield development, Cape Station in southwest Utah, and this week released results of a drilling campaign that built on its learnings from oil and gas. About 60% of Fervo’s employees, Jewett said, came from the oil and gas sector.
“There are obviously some really applicable technical learnings. We all brought our experience with supply chains, and with how you lease land and typical things like that, drill bits, all the usual tools and technology,” Jewett said. “But we also have a bunch of different learnings about learning curves. What happens to the cost of your technology when you enter a basin, and how can you actually pull down the cost of that technology through repetitive development over and over again.”
Drilling results
Considering drilling time accounts for more than 75% of total well costs, according to Fervo, the company’s latest drilling campaign targeted high costs that have plagued geothermal drillers in the past. The company attributed the gains to the application of learnings from Project Red to Cape Station—specifically, improvements in horizontal granite drilling.
Results of the Cape Station drilling campaign showed Fervo reduced its drilling time by 70% compared to its Project Red drilling campaign in 2022, using modern oil and gas drilling equipment. Polycrystalline diamond compact drill bits, like those used by shale drillers, were used. Fervo said mud coolers were also utilized to counteract “high subsurface temperatures that have historically derailed geothermal exploration.”
In a six-well drilling program, costs for the first four wells dropped by about 50% to $4.8 million per well from $9.4 million. The campaign, which included one vertical well, reached depths as great as 14,000 ft amid high temperatures.
“Since its inception, Fervo has looked to bring a manufacturing mentality to enhanced geothermal development, building a highly repeatable drilling process that allows for continuous improvement and, as a result, lower costs,” Tim Latimer, Fervo Energy CEO and co-founder, said in a news release. “In just six months, we have proven that our technology solutions have led to a dramatic acceleration in forecasted drilling performance.”
By using a modern drilling bottom-hole assembly design and operation, along with the latest available drilling technologies, Fervo said its eighth horizontal well had drilling rates of 70 ft/hr with run lengths greater than 2,800 ft. Improved average lateral footage per bit and reduction in the number of required bits needed for the laterals were also reasons behind the cost reductions and better drilling times.
Additional improvements could come with the use of barefoot completions—well completions with no casing or liner—and a larger casing design for more potential power, the company said.
Different applications
If U.S. geothermal energy developers can strengthen the resource supply curve and navigate other obstacles, a GeoVision analysis indicates electricity-generating capacity could rise to 60 gigawatts. It could also pave the way for more than 17,000 district heating systems and up to 28 million geothermal heat pumps by 2050. In emissions terms, that’s the equivalent of removing 26 million cars from U.S. roads.
Economics and geological challenges have played a role in limiting the takeoff of geothermal in the past, which has impacted investment in such projects. However, that is changing as companies such as Fervo incorporate oil and gas drilling techniques.
“The geothermal energy industry doesn’t have the greatest track record of being able to deliver on projects once they’ve raised capital,” Jewett said during NAPE before the drilling results were released. “Most people who had invested in geothermal in the past really did not want to touch geothermal with a 10-foot pole. So, we kind of had to set basically pretty aggressive technical milestones and meet those technical milestones, then use those results to go raise another funding round.”
Fervo has now raised venture capital through four rounds of funding as it targets the utilities market amid growing interest from corporations with advanced climate goals. Other markets are also starting to evolve.
“We’ve been in conversations with a number of different large oil and gas companies who say, ‘Hey, can you come drill [geothermal] wells or use wells that … are already drilled to help us produce in-basin power?’
“There’s a lot of different applications for what we’re trying to do,” Jewett said.