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Use of Geothermal Resources: Economic Considerations 257

35

30

25
kWh per $ 20

15

10

5
0
0 1000 2000 3000 4000 5000 6000 7000
Cumulative R&D investment (2005 $, millions)
FIGUre 13.6 The amount of energy obtained per dollar compared with the cumulative amount of invest-
ment in R&D for geothermal energy since 1980. The graph is scaled to a beginning year of 1974, since R&D
investment predates the available data. As a result, the S-curve does not begin at the origin. The arrowed line
indicates the best fit to the data points. The dashed curves are hypothetical trends. (Data points from Schilling,
M. A. and Esmundo, M., Energy Policy, 37, 1767–81, 2009.)

deVelopInG a GeoThermal proJecT

Geothermal projects that require drilling of wells, whether for power production or other applications,
follow a development timeline that usually consists of six steps. The only exception to this are installa-
tions of ground source heat pump systems, which usually are developed in the same manner as water
well projects and are discussed in detail in Chapter 11. The sequence of steps is generally as follows:

• Obtain rights to use the resource and the permits that allow exploration
• Conduct an exploration and resource assessment program
• Drill exploration wells to refine resource assessment
• Drill production wells and complete a feasibility study
• Undertake construction of facility
• Begin operation

Each of these steps is discussed in the sections that follow.

riGhTs To develop a resource and permiTTinG
Obtaining the rights to explore or develop a resource usually requires establishing a contract with the
owner of the subsurface resource. Due to federal and local regulations and laws, it is not always the
case that the owner-of-record of a parcel of land also owns the resources that are in the subsurface
below that property. Careful research is often required to discover who the legal owner of a resource
may be. Even if the owner-of-record is not the owner of the land under which the resource exists, it is
prudent to discuss the exploration activities with the landowner and obtain their consent to explore.
This is particularly true in areas where sites of cultural value exist. If a potential resource area