Texas-focused geothermal trade group launches with big energy backers

© Reuters.

By Liz Hampton

(Reuters) - A trade group seeking to promote geothermal energy in Texas will launch on Thursday with backing from large oil and utility firms seeking to transform their businesses.

The Texas Geothermal Energy Alliance (TxGEA) was organized as many fossil fuel giants and startup companies look to transition to low-carbon energy from oil and gas. The group includes Halliburton (NYSE:HAL), Repsol (OTC:REPYY), Chevron Corp (NYSE:CVX), Baker Hughes, CenterPoint Energy (NYSE:CNP) and GeothermEx, a Schlumberger (NYSE:SLB) company.

The former chairman of the state's public utility and energy regulatory boards, Barry Smitherman, spearheaded the group's formation. Texas is the largest oil- and gas-producing state.

"Decision makers and thought leaders are interested in a resource that is clean, renewable and dispatchable - that is what has piqued everyone's interest," said Smitherman. He added that the group's short-term focus will be education and advocacy.

Geothermal technology employs much of the same drilling technologies used in the oil and gas sector, although the wells are designed differently. One member, Nabors Industries (NYSE:NBR), a drilling firm, is already eying geothermal as a business opportunity.

Smitherman said service companies see this as another way to use their technology, workforce and skill set.

There are many geothermal projects currently under way in the United States, which could usher in greater scale for an industry that does not yet easily compete with cheaper oil and gas.

Geothermal accounts for less than 1% of global utility-scale electricity generation because it is geologically limited, according to TxGEA member Sage Geosystems.

The United States has about 3.5 gigawatts of geothermal capacity currently installed.