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  • Writer's pictureThe Heat Beat

A Social License for Geothermal & the Case of the Missing Lobbyists: An Interview with Marit Brommer

In discussions with thought and industry leaders about geothermal over the past months, two themes have consistently come up. The first is the (glaring) historical disparity in levels of support, subsidies, incentives and funding between geothermal and other renewables like solar and wind. Why does that exist, and how do we fix it? The second adds (potentially significant) complexity to the hopeful future of oil and gas companies pivoting toward geothermal development and strategic investment, and into the future of green drilling. Will oil and gas companies enjoy the same goodwill that the geothermal industry currently enjoys if they begin to develop geothermal projects? Or will their actions be dismissed as ‘greenwashing’ and their projects opposed by those who may have supported the same project but for the involvement of the oil and gas industry?

To explore, I talked with Marit Brommer, Executive Director of the International Geothermal Association. Marit spent a decade working in the oil and gas industry prior to her dive into geothermal, first in operational offshore drilling at Total, and later leading global R&D projects at Shell. This interview has been edited for length and clarity.

JB: Everyone has heard of the oil and gas lobby. Even wind and solar now each have powerful and influential lobbies around the world. These lobbies have been successful at getting policies and subsidies in place that helped their concepts scale quickly. This has not happened for geothermal energy. Why?

MB: Very good question and it directly hits to the core of the challenge the global geothermal sector is facing. The geothermal industry is fragmented and is, generally speaking, project-focused. Building strong coalitions across the sector, creating ‘win-win’ situations in the entire value chain and strongly engaging in policy and subsidy conversations is not seen as a collective priority. This is illustrated by the approach of many of the small players in the sector, who are focused on the regional market (local to local), but don´t necessarily participate in the more global and pressing needs, including lobbying and influence in governing bodies.

JB: So what’s the solution to geothermal energy’s lack of presence in governing bodies around the world?

MB: Form a coalition of the willing, set strategic initiatives that help scale, agree on a set of incentives and regulatory actions that would remove obstacles that impact the industry at large, and actively participate in influential lobbies around the world. It is essential that geothermal become as embedded in strategy roadmaps for a net-zero future as are other renewables, and the only way to achieve this is for the industry to purposefully organize and pursue those objectives. Unfortunately, most often in governing bodies, the loudest and most present voice in the room gets the attention, and geothermal just has not found that voice yet. This has to change very quickly if geothermal is going to become more than a niche industry.

JB: What types of entities should be in this coalition of the willing in your mind?

MB: The oil and gas industry, environmental groups, think tanks, governments, startups and entrepreneurs. And of course the geothermal industry.

JB: Having experience in both the geothermal and oil and gas industries, what would you say the geothermal industry can offer the oil and gas industry in terms of institutional knowledge as oil and gas companies begin to engage in geothermal?

MB: There is a lot of know-how in the geothermal sector on operating resources that are a bit outside of the wheelhouse of the oil and gas industry. Oil and gas operations attempt to avoid what geothermal operations seek – heat. And with heat often comes increased pressure, corrosivity, and much more difficult drilling conditions. The geothermal industry offers oil and gas companies a roadmap of lessons learned so companies are not reinventing the wheel when they seek to engage in geothermal projects.

The geothermal industry also has a good bit of experience seeking funding from public bodies, including the EU and US governments, the World Bank, regional banks and private lenders to finance projects. If oil and gas companies intend to make a shift into geothermal development, they would benefit from understanding the roadmap that the geothermal industry has built, by necessity, in these areas.

Finally, and perhaps most importantly, the geothermal industry is excellent at building support in communities, and most often enjoys the enthusiastic support of the communities in which it operates. That is not a true statement for the hydrocarbon sector, and is often quite the opposite. This 'social license to operate' that geothermal enjoys is absolutely key, and there is so much valuable insight to be gained should the oil and gas industry wish to begin engaging in this space.

JB: What do you mean by ‘social license to operate’?

MB: Operating assets require loads of formal licenses (permits, legal, regulatory). The social license is an informal license - a term of art really - that pertains to the permission all stakeholders who are somehow affected by the operations of a company. The social license is built on trust, respect, and confidence in the company´s values – hard to win, and very easy to lose. Geothermal, by and large, enjoys a broad social license to operate.

JB: Do you think that realistically, if oil and gas companies were to engage in geothermal energy development and production, they would benefit from this same social license?

MB: I think that oil and gas companies should approach this with great care, and that communication and transparency is key. When oil and gas companies decide to engage as operators and service companies in geothermal exploration, drilling and production in cities and communities, they will certainly seek to lean in on the green image of geothermal and would benefit from the very effective geothermal engagement campaigns our sector has developed and deployed in various settings and cultures. However, I think that only goes so far, and the oil and gas industry would risk losing the benefit of the license if they fail at the type of community engagement, transparency, communication and dialog that the geothermal industry employs to build support for its efforts. The oil and gas industry has a track record of getting what it wants, typically whether a community likes it or not. That type of behavior would put the social license at risk. There is also the risk that even if the industry engages in sufficient transparency and community dialog, there will be vocal opponents to projects for the very fact that the oil and gas industry is involved at all. This dynamic, likely to be made worse by the polarized state of politics today, will be a difficult one to navigate as we head into the next five or ten years, with increasing oil and gas industry engagement in this space.

JB: Speaking of the future, what does the geothermal landscape look like in 5, 10 and 20 years? Who will be the players, and where will the resource be most impactful?

MB: I am convinced that this is THE DECADE for geothermal. The coming ten years will be pivotal, because let's face it, if we do not make things happen now at this climate inflection point in history we will likely remain a small industry.

In the coming five years, I would like to see a coalition of energy partners who will collaborate to push geothermal forward, tapping into the capabilities and competences of the enabling subsurface service industry - drilling, equipment, and exploration. It would be excellent to see energy operators creating value and stability in their portfolios with geothermal energy, servicing people and related industries with power, heat and even secondarily derived products such as lithium and rare earth metals, green hydrogen, and who knows - even bitcoins!

In the coming ten years, I would love to see all geothermal offerings across the board fully integrated into communities and cities. Geothermal heat pumps and direct use systems embedded into building codes and automatically integrated into building designs. Regional baseload geothermal electricity plants servicing the grid. Geothermally derived heating and cooling being utilized in greenhouses to increase local food production. The revenue that will be generated in the coming decade can be reinvested to further the 'crazy dreams' for the future – like exploiting active magma chambers for energy, use offshore geothermal assets for power production, and producing geothermal energy on Mars!

JB: Bitcoins – how? But I get your point. Geothermal is a broad solution to a variety of challenges, from efficiency to energy production and everything in between. What’s your instinct tell you about which piece of the geothermal value proposition will take center stage in the near term? Where are you seeing the most traction?

MB: Quick answer to bitcoins (if I may...) geothermal offers stable baseload power supply to data centers where the prime purpose is to mine bitcoins (blockchain technology). But I get your point as well...eye on the ball...

I believe that the geothermal heat proposition (direct use) will get most traction in Europe, whilst in US/Canada, the Latin Americas and Caribbean and East Africa the focus is on power first and direct use as a second step.

JB: Putting on your oil and gas hat for a moment, what in your view are the primary obstacles to robust engagement in geothermal energy development from the oil and gas industry?

MB: I can see two big barriers. One is the 'size' obstacle and the other one is the 'process' obstacle.

Size matters in oil and gas. It is all about scale and moving away from small projects to sizeable portfolios in the oil and gas industry. Your interview with Vik Rao was right on point in this regard. As soon as the portfolio thinking gets established, more capital can be allocated as risk will be spread in the portfolio, value optimization starts and 'world-class investments' can be matured.

And process. The hydrocarbon industry follows the publication of licensing rounds very carefully. This is a publication of open and current rounds published regularly by governments. In geothermal, this does not exist. Licenses are applied for when there is a project developer, a customer, and in some cases only when there is a potential Power Purchase Agreement in sight. The geothermal process that is now in place puts all the subsurface costs and risks on the project developer. I am convinced that some sort of national license round for geothermal energy exploration and production could be of great service to both the geothermal and oil and gas industries. It would certainly help the oil and gas sector engage in this space more readily.

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