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Geothermal: The Other Alternative Energy

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With a growing movement to adopt more sustainable energy solutions, investors may be interested in knowing that geothermal fields produce just one-sixth of the carbon dioxide that a clean natural-gas-fueled power plant produces, and this energy production is seen by the Environmental Protection Agency (EPA) as the most efficient, clean, and cost effective for temperature control. Considering the growing movement to become energy independent and lower carbon output, there is no better time to explore the benefits of geothermal power. 

While I'm a huge fan of wind and solar applications, they are intermittent, and energy storage solutions are still a concern. This has me thinking there is room for geothermal to wiggle itself into the renewable conversation without the need to depend entirely on storage solutions.

Why now? It is increasingly getting harder and harder to avoid the topic of climate change, so tapping a constant source of power that will generate little if any greenhouse gases is becoming hard to overlook, especially with so much uncertainty regarding the fate of nuclear power in this country. Therefore, rather than using more coal to offset rising natural gas prices, we should be tapping geothermal power. 

What's the risk to geothermal power? In reality, it's the fear of the unknown and unwarranted concerns that eventually some tapped locations may cool down, and angst associated with tapping these hotspots and releasing toxic fluids (i.e., hydrogen sulfide). Clearly the latter needs to be examined more, but the good news is more efficient drilling technologies may soon alleviate those concerns at a time when the U.S. is trying to further lower its dependence on fossil fuels. That means geothermal power must no longer be viewed as the illegitimate step-child of renewable energy. This point is supported by a smaller footprint to develop geothermal versus solar or wind farms, and geothermal being a 24/7 base-load power source that in many cases has generated heat since prehistoric times. 

Stocks in the space to watch
A move to more swiftly embrace geothermal energy would likely be great for industry giant Ormat Technologies  (NYSE: ORA  ) , which has geothermal projects in Nevada, Hawaii, California, and Kenya and recently received big supply contracts in Indonesia.

Ormat is trying to sell up to a 49% stake in a few of its U.S. power plants, so any action on that front would further reduce overall operating costs. With so much positive momentum in the geothermal space, I'm thinking Ormat, which has a ton of geothermal intellectual property and proven low water usage at power plants, is looking to leverage its 30-year experience in the space and be more of an equipment and service provider to its customers.

More speculative plays include U.S. Geothermal, which will hold its annual meeting on July 14 in Idaho, Alterra Power, a company that could announce a new credit facility in Q314, and Ram Power, a name that recently released less than favorable results for its San Jacinto-Tizate Power Plan. 

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Read/Post Comments (5) | Recommend This Article (4)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 12, 2014, at 11:52 PM, rodgerolsen wrote:

    Geothermal is the one source of alternative energy that makes sense. It's reliable, plentiful and as the law of gravity works, it is unending, pollution free, and cheap. It doesn't care if the sun shines or the wind blows or the oil runs out.

    It does require a substantial initial investment to drill a really deep hole and pump water through it, but once it is setup, it costs about a fifth as much as other energy sources.

    Even more problematic is that it is not sexy enough to attract the green peace flower people. Solar is sexy and uplifting. Geothermal just works.

  • Report this Comment On July 13, 2014, at 3:09 AM, siquijorisland wrote:

    Bloom Box The Alternative Energy that Terrifies Obama

  • Report this Comment On July 13, 2014, at 5:08 AM, siquijorisland wrote:

    the other clean energy sources like nuclear,

    hydro, and bloom box as well a the possibility of cures for cancer, and HIV that are components of these clean energy sources are very important to future generations..

  • Report this Comment On July 13, 2014, at 5:08 AM, siquijorisland wrote:

    the other clean energy sources like nuclear,

    hydro, and bloom box as well a the possibility of cures for cancer, and HIV that are components of these clean energy sources are very important to future generations..

  • Report this Comment On July 13, 2014, at 8:46 AM, JRP3 wrote:

    The Bloom Box is just a fuel cell, and not particularly green.

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John Licata

John Licata is the Founder & Chief Energy Strategist of Blue Phoenix Inc. You can follow John on Twitter @bluephoenixinc

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