A self-described “geothermal wildcatter” from Oregon intends to use a waste byproduct of oil and gas production to generate electricity along the Texas coast. Geo Texas Co., a Eugene, Ore.-based startup company led by geothermal pioneer Steve Munson, will pay Texas $386,000 a year for leases up to 30 years on 128,758 acres of state land off the coasts of Brazoria and Matagorda counties, near Galveston, to produce geothermal energy. The company will pay more if it produces energy.

Munson plans to build a 20-MW, $50-million demonstration plant on land within two to three years. Research has uncovered an estimated 20,000 MW of potential power in the offshore area along the Gulf Coast, he says. “This is applied engineering; this is not research,” he insists. He is qualifying contractors and suppliers for the project and must get permits from the state.

Using standard oil and gas drilling rigs, Geo Texas would drill into the sandstone formations in the Gulf of Mexico to access the 250°F-300°F, 3,000-psi water that is mixed with natural gas at least 7,000 ft below the surface. Gas will be coproduced with the power.

The project may directionally drill from the shore to access the reservoirs, avoiding costly offshore infrastructure, such as submarine cables to carry the power to shore, Munson says.

Oil and gas producers have long reinjected the brine byproduct into the reservoirs because, until recently, the technology to produce power from the water was not affordable. But after the energy crisis of the 1970s, the Dept. of Energy conducted almost 20 years of research into the feasibility of geothermal power generation along Texas and Louisiana. DOE even operated a binary-cycle 541-kW powerplant between 1989 and 1990 in the same area where Munson has obtained his leases.

The concept now is “gaining more sexiness because people are trying to be more green,” says Kevin Wallace, a senior project manager specializing in geothermal energy for Hailey, Idaho-based Power Engineers Inc. Several companies now produce modular binary plants, which allow more economical power conversion than custom-built plants, he says.

The American Recovery and Reinvestment Act’s $140 million for geothermal demonstration projects and federal loan guarantees also may help the project’s economics.