The same drilling rigs that once pumped oil could soon tap a limitless source of clean energy. A new geothermal startup plans to repurpose oil and gas technologies—horizontal drilling, hydraulic fracturing, and advanced seismic imaging—to access deep heat beneath the Earth's surface. The approach promises to turn geothermal power into a cheap, always-available baseload renewable, potentially accelerating the world's transition away from fossil fuels.
Derived from decades of oilfield innovation, these techniques allow geothermal startups to drill deeper and wider than traditional geothermal plants. Instead of relying on rare, naturally occurring hot springs or permeable rock, enhanced geothermal systems (EGS) can create reservoirs almost anywhere by fracturing hot, dry rock and circulating water through it. The startup, whose name has not been publicly disclosed, joins a growing wave of companies—including Fervo Energy, Eavor Technologies, and Sage Geosystems—that are adapting oil and gas technology to close the cost gap with solar and wind.
Why now? The urgency of climate change has pushed investors and policymakers to seek reliable low-carbon power that doesn't depend on weather. Geothermal provides that baseload capability, running 24/7 with a small land footprint. At the same time, the oil industry's existing supply chain and skilled workforce offer a ready-made launchpad. Horizontal drilling, in particular, has been proven at extreme depths and temperatures, lowering the cost of accessing geothermal resources. The U.S. Department of Energy estimates that EGS could eventually produce more than 100 gigawatts of electricity—enough to power 100 million homes.
A geothermal startup using oil tech must overcome several hurdles. The cost of drilling remains high, though falling fast. The U.S. Department of Energy's Geothermal Technologies Office has set a target of $45 per megawatt-hour by 2030, down from roughly $100 today. Seismic risk, while manageable, has raised local opposition in places like Switzerland and South Korea. Still, the first commercial EGS plants are expected online by 2028, with pilot projects already underway in Nevada, Utah, and Germany.
Industry observers see a convergence: the oil and gas sector's expertise in subsurface engineering can unlock geothermal's vast potential at scale. Analysts at BloombergNEF predict that global geothermal capacity could quadruple by 2050, largely driven by EGS. “We're seeing a technology transfer that could reshape the energy industry,” said an energy analyst familiar with the trend. “The same skills that brought us tight oil and shale gas can now bring us clean heat and power.”
The outlook is forward-looking. If this geothermal startup using oil tech succeeds, it could prove a blueprint for others. Key milestones to watch: completion of a commercial-scale EGS well, signing of power purchase agreements with utilities, and regulatory streamlining for underground injection. In a world racing to decarbonize, geothermal may finally emerge as the steady, always-on renewable that has been waiting for its moment.
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Forbes
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Key Takeaways
- Enhanced geothermal systems (EGS) use horizontal drilling and hydraulic fracturing – techniques perfected by the oil and gas industry – to create artificial geothermal reservoirs, potentially unlocking up to 100 GW of U.S. electricity capacity by 2050 (DOE estimate).
- Geothermal startups collectively raised $1.3 billion in venture capital and government grants in 2025, nearly tripling the previous year's total, led by Fervo Energy ($240 million) and Eavor Technologies ($180 million).
- Horizontal drilling can reduce geothermal well costs by 30–50% compared to vertical-only approaches, according to a 2024 report from the International Renewable Energy Agency (IRENA).
- The levelized cost of electricity from EGS projects in Nevada and Utah has fallen below $80/MWh, down from over $200/MWh a decade ago, and is on track to hit the $45/MWh target set by the U.S. Department of Energy by 2030.
- Pilot EGS projects are active in at least 12 countries, including the United States, Germany, Japan, and Australia, with the first commercial-scale plant expected to begin operations in Utah by 2028.
Frequently Asked Questions
Geothermal startups repurpose techniques like horizontal drilling and hydraulic fracturing from the oil and gas industry to access deep heat. These methods allow them to create artificial reservoirs in hot, dry rock, expanding geothermal energy to many more locations.
Enhanced geothermal system (EGS) is a technology that creates a geothermal reservoir by injecting water into hot, low-permeability rock, then circulating it through fractures to bring heat to the surface. It uses similar subsurface engineering as oil and gas production.
Yes, enhanced geothermal systems produce renewable, low-carbon electricity by tapping the Earth's internal heat. The water is recycled and emissions are minimal, making it a sustainable baseload power source.
Key challenges include high upfront drilling costs, induced seismicity risks, and the need for regulatory frameworks for underground injection. However, costs are falling rapidly as oil tech advances.
Active EGS projects exist in the U.S. (Nevada, Utah), Germany, Japan, Australia, and France. The first commercial-scale plant is expected in Utah by 2028, developed by Fervo Energy.
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