What
does the U.S. geothermal industry contribute to the
economy?
What are some specific examples
of ways in which geothermal energy has contributed to
local economies?
Will new geothermal development
contribute to local communities in the future?
Will geothermal energy influence
tourism in my area?
What types of communities
benefit most from geothermal development?
How much money does the geothermal
industry contribute to the U.S. economy?
Are there any “hidden
costs” associated with geothermal energy?
Do you want to know more
about the economics of geothermal energy?
What does the U.S. geothermal
industry contribute to the economy?
Geothermal energy provides low cost, reliable,
environmentally friendly fuel; supplies thousands of
quality jobs; boosts rural economies; increases tax
bases; reduces foreign oil imports; stabilizes prices;
and diversifies the fuel supply. A recent report indicates
that 11,460 full time jobs were supported by the existing
US geothermal industry in 2004. Unlike coal and natural
gas, geothermal incurs no “hidden costs”
such as land degradation, high air emissions, forced
extinction and destruction of animals and plants, and
health impacts to humans.
What are some specific examples
of ways in which geothermal energy has contributed to
local economies?
Geothermal activities supply a full 25% of
the county tax base in the rural town of Imperial County,
California, producing over $12 million in tax revenue.
In a town with a high rate of unemployment, the geothermal
sector provides stable, well-paying jobs to over 285
people. CalEnergy, the largest geothermal company in
the region, is the single largest taxpayer in ImperialCounty.(1)
Direct use applications installed in schools can provide
huge savings to local communities. At four elementary
schools in Lincoln, Nebraska where geothermal heat pumps
have been installed, the heating and cooling savings
total about $144,000 yearly, with total energy cost
savings of 57%.(2)
Money provided from these savings are used to improve
schools and revitalize communities.
Boise, Idaho highlights the variety of benefits that
can be derived from geothermal direct use applications:
the people of Idaho use geothermal resources to operate
at least 15 greenhouse; geothermal aquaculture is popular:
nine fish farms raise tilapia, catfish, alligators,
and other fauna; an injection well for the city’s
geothermal heating system works to reduce discharge
into the Boise river and replenish the geothermal aquifer
the city shares with buildings; Boise’s Capitol
Mall, along with 200 other buildings, is heated by a
geothermal system.(3)
Will new geothermal development
contribute to local communities in the future?
Yes. Renewable Northwest Project reports that
a 100 MW project in Eastern Oregon could create over
a million dollars of additional local income each year,
and would pay $4-6 million in local and state fees,
royalties and taxes, even considering 1990 dollars (that
have not been adjusted for inflation), according to
the Oregon Department of Energy. In contrast, a similarly
sized natural gas project sends $11-24 million out of
the region every year for fuel costs alone.(4)
According to a recent study, the construction of two
new geothermal plants by Calpine Corporation in Siskiyou
County, California will result in a total economic benefit
of almost 114 million dollars over a thirty year period.(5)
This money will generate jobs, improve community living,
and boost educational standards throughout the region.
Will geothermal energy influence
tourism in my area?
Most geothermal power plants do not negatively affect
tourism, and may even positively affect tourism. Take
the example of the power plant at Mammoth Lakes, California,
a sight of skiing and mountain climbing, a land that
one local described as Los Angeles’ playground.
Although people initially opposed the project due to
worries over tourism impact, the project is now highly
regarded among community members and visitors alike.
Many people in the city do not even know the power plant
exists because it was so expertly engineered to blend
into the surrounding environment. The only example where
tourism is affected occurs when students, scientists,
or interested individuals visit the site of the power
plant, thereby bringing business to the local community.
What types of communities
benefit most from geothermal development?
Most producible geothermal resources are located
in rural areas. Rural communities tend to suffer from
economic depression and high unemployment, and often
contain large minority populations. A new plant ready
to be built in California’s Imperial Valley will
bring a significant number of jobs to the Latino community
there. Already, about 44 percent of the geothermal energy
owner’s employees are Latino. Besides providing
a variety of jobs to individuals in these rural areas,
geothermal developers are often the largest taxpayers
in the communities in which they produce geothermal
energy. The taxes generated by geothermal use can benefit
local communities in the United States, with no money
or jobs are shipped overseas.
How much money does the geothermal
industry contribute to the U.S. economy?
For every dollar invested on geothermal energy, the
resulting growth of output to the U.S. economy is $2.50.(6)
This means that a geothermal investment of $280 million
(e.g. a 100 MW(7)
power plant) would result in a growth of output of $700
million for the entire U.S. economy. This growth of
output often benefits rural areas with high unemployment
rates and significant minority communities. If 1000
megawatts of new geothermal power come online within
the next three to five years as projected, the associated
2.8 billion dollar investment will result in a total
economic output of $7 billion nationwide. In addition
many geothermal firms develop geothermal projects overseas,
and these technology export activities support the US
economy and balance of trade.
Are there any “hidden costs”
associated with geothermal energy?
No. Hidden costs, including land degradation, dangerous
air emissions, forced extinction and destruction of
animals and plants, and health impacts to humans, are
virtually nonexistent with geothermal energy production.
In contrast, a 1995 study estimates that costs of power
generation would increase 17 percent for natural gas
and 25 percent for coal if hidden costs such as environmental
impacts were included.(8)
Geothermal incurs none of these hidden costs because
air emissions and other environmental impacts are minimal.
Lake County, California, downwind of The Geysers, the
largest geothermal field under production in the world,
is one of the only counties of California that has met
all federal and state ambient air quality standards
for seventeen years. At The Geysers, air quality has
even improved as a result of geothermal development
because hydrogen sulfide, which would ordinarily be
released naturally into the atmosphere by geothermal
features such as hot springs and fumaroles, instead
now passes through an abatement system that reduces
hydrogen sulfide emissions by 99.9 percent.
Instead of hidden costs, geothermal energy often has
unrecognized benefits.
Do you want to know more about
the economics of geothermal energy?
You can find out more detailed answers to your questions
by viewing GEA's 2005 paper, Factors Affecting the Cost
of Geothermal Power (PDF).
(1) Center for Energy Efficiency and Renewable Energy (CEERT). Geothermal Power. Accessed August 15, 2005, from http://www.ceert.org/ip/geothermal.html.
(2) National Renewable Energy Laboratory (NREL) for U.S. Department of Energy (DOE) (September 1998). Geothermal Heat Pumps. DOE/GO-10098-652. Accessed August 15, 2005, from http://www.eere.energy.gov/consumerinfo/factsheets/geo_heatpumps.html.
(3) U.S. DOE, EERE, Geothermal Technologies Program (August 2004). Direct Use. DOE/GO-102004-1957. Accessed August 31, 2005, from http://www.nrel.gov/docs/fy04osti/36316.pdf.
(4) Sifford, Alex and Kasi Beale (Dec 1991). Economic Impacts of Geothermal Development in Deschutes County, OR. Prepared for the Bonneville Power Administration under Agreement No. DE-BI79-90BP07 129. Oregon Department of Energy, Salem, Oregon.
(5) Gallo, David E. (June 2002). The Economic Impact of Calpine’s Geothermal Development Projects, Siskiyou County, California. Prepared for Calpine Corporation. Center for Economic Development: California State University, Chico. Accessed August 12, 2005, from http://www.csuchico.edu/cedp/pdf/esp.calpine.pdf(6) Meidav T. & Pigott J (April 1994). The Impact of Geothermal Energy Development on Employment, Trans-Pacific Geothermal Corporation, Oakland.
(7) Assuming that average capital investment of a geothermal project corresponds to $2800/kW.
(8) Haberle and Flynn (1995). Comparative Economics and Benefits of Electricity Produced from Geothermal Resources in the State of Nevada. Univ. of Nevada, Las Vegas.
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