Geothermal Technology is Cleaning Up Fossil Fuels at the Source with Johanna Ostrum

Transcript

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There is some stigma associated with, Oh, you guys are using those polluting oil and gas wells to generate renewable energy, and we're very much focused on this transition space of where we've got to use what we have today, make it cleaner and then move towards that decarbonized energy space.

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And I think we're all we're all playing our part in it, and I'm excited about the future of gradient. Are you

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speeding the energy transition here at the Clean Power Hour, our host, Tim Montague, bring you the best in solar, batteries and clean technologies every week. Want to go deeper into decarbonization.

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We do too. We're here to help you understand and command the commercial, residential and utility, solar, wind and storage industries. So let's get to it together. We can speed the energy transition.

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Today on the Clean Power Hour, we're taking another deep dive into geothermal energy. It is a vast, almost limitless supply of energy that the Earth has in its crust and core. My guest today is Johanna Ostrum. She is the COO of a company in Colorado called gradient geothermal. Welcome to the show, Johanna, thanks

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for having me.

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Tim. I'm excited to do a deeper dive into geothermal energy with you.

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It's a good expression, and you know, most of my listeners are solar and battery professionals, but we like to be informed about what's going on in geothermal, because it is such a huge potential source of clean energy. But before we get into geothermal, Johanna, tell us a little bit about yourself and how you came to work in the clean energy space. Yeah,

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I had a bit of an unconventional start, I would say, into the the renewable space. I spent 15 years, or the early part of my career in the oil and gas space. So always been focused on energy. With a geological engineering degree from Montana Tech fell into oil and gas right out of school, and it was not a place I thought I would land, but it was really fascinating. The amount of technology and the speed at which they learn in the oil and gas space was quite exciting and kept me interested for many years. But the oil and gas space is historically volatile, and in 2020 the company that I had been working for filed for bankruptcy right before the price of oil dropped to negative. So it was a great opportunity for me to think about what I wanted to do with my career and my skills.

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And I'd always found geothermal energy a fascinating resource.

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Again, I'm a self professed subsurface energy nerd, so where there's opportunities to harvest energy, I'm very interested. So yeah, fell into it meeting with a friend, an old colleague, Benjamin Burke, who's now the CEO of gradient, and he had this idea of harvesting heat from oil and gas wells. So you don't have to drill geothermal wells. You can use existing wells drilled all across the world for harvesting energy. And so that came about with the original startup, transitional energy, and now we've merged with gradient geothermal

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cool. And I know that there are other applications to your technology, but let's just talk about oil and gas wells. What is the potential of harvesting energy from existing oil and gas wells in the United States?

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Potential is huge. We estimate about 500,000 well bores in the United States could be used to generate geothermal energy, and these are shallower than you'll find a lot of geothermal wells drilled today and a little bit cooler, but because there's so many of them, you can put them together to generate, you know, up to a lot of gigawatts. I forget the number exactly, but we're working at the kilowatt scale.

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From each Well, each field can be multiple megawatts, and then in conglomerate, we can get up to the gigawatt scale. So we like to use the analogy of rooftop solar for residential where you have a lot of different solar panels in a community that could be if you know, kilowatts in scale, but when you look at a subdivision, it could be megawatts. So it's the same idea of distributed renewable energy.

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You said there were 500,000 wells that could be harvested for energy, is that, right? Yeah, that's just in the United States, okay? And on average, how much energy could you harvest from a well?

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Yeah, there's a wide range of possibilities. We our first pilot project was in an oil field in Nevada, and we generated about 30 to 40 kilowatts from three to four wells. But it really depends on the temperature and flow rate of some of those wells. Some of them can be megawatt in scale, large producers with a lot of fluid. So it varies depending on the depth to which they're drilled and the amount of fluid you can. Produced from those wells. Okay,

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that sounds good.

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And so what is the target market right now, and what is it that you're powering, so to speak, with the energy that you're harvesting from these wells?

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Yeah, we're looking at active oil and gas basins, active, meaning there's wells currently being drilled.

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So that gets a lot rid of a lot of the risk of opening up older well bores where you're not quite sure if they have integrity or if they're safe to operate. So we like to work with existing wells actively producing in in basins that are have a lot of activity going on.

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For instance, we have a project in North Dakota up in the Bakken with cord energy, and they are producing and drilling, you know, several 100 wells a year, and adding to their portfolio.

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And we're able to attach our equipment to their new wells and generate electricity for them, as well as provide cooling, because frequently this heat that comes from oil and gas wells is so hot it's a safety risk for operators on site, so they use industrial fluid chillers to cool that that heat off. And what we're telling these operators is, hey, this is actually an energy resource that you're just throwing away. Let's harvest that energy resource and provide power for you. So we like new producing wells with a lot of fluid,

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okay? And explain to us exactly what is your technology, and walk us through an installation. What exactly are you doing at a oil and gas well?

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Yeah, so we design, manufacture and install small, modular geothermal units.

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So we use a technology called Organic Rankine cycle technology. It's a lot like what you'd find in your air conditioner at home or in your car, where there's a refrigerant inside that air conditioner, and in our case, the refrigerant has a lower boiling point than water, so it boils at about 150 degrees Fahrenheit. So as you heat up that refrigerant through a heat exchanger, you're able to turn that fluid into a vapor, and that vapor expands and spins a turbine. So that spinning of the turbine generates electricity, and then we cool that back down with ambient air temperature back into a liquid, and around and around it goes.

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So it's all based on the phase changes of a refrigerant to spin a turbine. So it's all closed loop inside a relatively small box that we set on site, and we connect that via a heat exchanger, which is just a way to transfer the heat from that produced water, oil and gas into this refrigerant to make it boil. So it's a pretty neat technology, been around for a long, long time, used in other industrial processes. But what we're doing is we're bringing it to the oil field to harvest that geothermal heat.

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So there's hot, hot water coming out of the wells that you're then using the heat exchanger to harvest the energy from, or what is the what is the heat harvested from?

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Yeah, so oil and gas operators drill big horizontal wells, and they're really trying to get oil and gas out of the ground. But along with that oil and gas usually comes a significant amount of water. Some of that water was used through hydraulic fracturing, and some of it was just already in the rock itself, living along with the oil and the gas in the subsurface. So as these wells are produced, you usually get three phases that come out of the well. That's oil, gas and water of different you know, percentages, depending on where you're at in the world, in the Bakken, it's mainly oil and water that's produced with just a little bit of gas. But we're also working on a project in the Haynesville shale in Texas, which is mainly very hot gas with just a little bit of water. So that's where rip comes. Is how to harvest that heat from these varying types of conditions, really, all to transfer it to that organic Rankine cycle engine to generate that electricity.

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And that expression organic, in organic Rankine, what is that referring to? Generally, the type

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of refrigerant that's used in the the cycle usually use organic fluids, you know, some sort of they can be petroleum based products.

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There's no different types of refrigerants that aren't petroleum based that generally.

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Honeywell is the provider of those. But that's generally what it's referring to. Okay,

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so you're going to existing wells you're bolting on your your what do you call these units? Yeah,

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great question.

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So we've, we've titled our system the HXC sled heat exchanger sled, and that is what we heat exchange that heat and organic Rec and cycle technology to generate electricity. We call it. HXC sled,

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and what is the physical footprint of the units?

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Yeah, they're pretty small. They're about anywhere from 75 Well, 50 to 75 feet long and about seven feet wide and seven feet tall. So they're a long, skinny piece of equipment that we set on location. They can, we can, if we're space constrained, we can change our footprint of our system to be more blocky. It really depends on what works for the operator.

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So it's like two shipping containers, basically

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exactly. Yeah, cool.

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And what is the status of the company, and what kind of uptake Are you getting in the market, yeah. So we were

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founded in 2020 that original company, transitional energy, we've gotten success with some grants from the US Department of Energy, as well as from the state of Colorado, because we're based in Colorado, that really allowed us to execute our initial pilot project, which was at a oil field in Blackburn, Nevada, just south of Elko, and that pilot project proved that one the technology worked, which we weren't too concerned about that, but it's one thing, knowing it works and actually executing it in the field. We learned a lot through that pilot project that ran for about a year and a half, and now we're in commercial operations. So as I mentioned, we're working with cord energy in North Dakota.

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We're looking to add more clients up there, and we have some other upcoming projects in Texas as well as we're looking at some international projects.

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But we are, you know, we're a startup, so we're in seed round fundraise right now, but we've also been using grant dollars to help get our technology out in the market.

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And so once the once the technology goes mainstream, so to speak, if I'm a oil and gas producer, I'm I'm going to consider your technology as a way to reduce my overall operational costs is that the basic premise, yes,

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we really like to be a one for one swap out for existing equipment they're using, whether that's a generator or whether that's a fluid chiller, because ultimately, you can't have a product that's more expensive than the status quo to be successful. So we're working on deploying equipment with operators and really providing very smart way to have lower greenhouse gas emissions equipment, because natural gas or diesel generators have significant emissions and fluid chillers themselves, they generally run off either high line power or these generators, and so we are a more efficient and less greenhouse gas emitting piece of equipment for them,

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The Clean Power Hour is brought to you by CPS America, maker of North America's number one three phase string inverter with over eight gigawatts shipped in the US. The CPS product lineup includes string inverters ranging from 25 kW to 350 kW, their flagship inverter, the CPS, 350 KW is designed to work with solar plants ranging from two megawatts to two gigawatts. CPS is the world's most bankable inverter brand and is America's number one choice for solar plants now offering solutions for commercial utility, ESS and balance of system requirements go to Chintpowersystems.com or call 855-584-7168, to find out more. And what is the what is the dream in terms of the impact on operational costs, like the value proposition in a perfect world. Yeah,

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our dream is really that oil and gas companies and oil and gas wells are truly capturing this energy resource that they're drilled to. So we'd like to see equipment set on oil every oil and gas site really harvesting that thermal energy that comes up with the oil and gas and water. And you know, that's an early time production opportunity. But we also see a second life for oil and gas wells where they're no longer producing oil and gas because the resource has died out, but they have been drilled to these reservoirs that have hot water in them. So there's, there can be a second life for oil and gas wells that's completely decarbonized. You're not producing oil and gas, you're just producing water, and they're already sitting there.

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There's no additional land disturbance, there's no additional permitting. They can just be used, as you know, green power generators for the greater for the community nearby,

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yeah, and I guess that's a nice segue to, you know, other potential markets. I mean, eventually we will stop burning fossil fuels on mass.

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We're still some decades away from that. But what do you see as. The future potential of your technology in terms of the energy transition writ large.

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Yeah, transition is the right word. We see oil and gas wells as being a transition themselves away from hydrocarbons, because you can use those wells that were, you know, millions of dollars was spent to drill them, to put equipment to hook them up to the grilled grid. There's a lot of infrastructure dollars that go in to drilling and oil and gas well, and they can have a second life as geothermal power producers, as well as we're looking at opportunities to use the heat after power generation to heat communities nearby through thermal energy networks, or for industrial processes like crop drying or agribusiness, there's this whole value stream to heat that really has been ignored, and there's just a massive opportunity with these wells, because a lot of communities are built in and around oil and gas fields, and those communities could be using that heat to reduce, you know, their costs of heating their homes or and or cooling in the in the summertime. So there's this big opportunity to use these wells and gradient geothermal is pursuing not just the power Gen but also looking at thermal energy network opportunities of of heat. We're working on a project in Colorado with Chevron and sound geothermal to look at wells in the town of Pierce, Colorado that were drilled in the 1950s that are currently shut in, but they can be used for a thermal energy network within the town.

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So we're doing a study there and looking at the opportunities and the costs of connecting the town, large buildings within the town, into a thermal energy network that's really sourced from these idle oil and gas wells.

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Very cool. You mentioned something about this.

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You can think of these oil and gas wells as an extension of the grid and but here, like in Illinois, in Southern Illinois, we have oil country and lots of coal, of course, but you see these derricks that are just out there in the middle of a cornfield, oftentimes, and they're pumping away. But, and I always wonder, like, what kind of infrastructure does it take for that Derrick to function? It has to have power to the derrick, right? It has to have electricity, doesn't it? Yes, yes, it does, yeah. So it needs electricity, and then it needs some place to store the the oil that it's pumping out. And so you do see these little storage tanks that are, you know, nearby a field of derricks. So, so, so theoretically, though, it would, it would facilitate the greening of that industry, right? We want to reduce our carbon footprint as much as possible, even if it's the fossil fuel industry reducing their carbon footprint.

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And then you're saying that there are ways that we can convert this well infrastructure to powering other aspects of society, right?

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Absolutely. And you touched on a really important point, which is, as we look at bringing on large power renewable power producing facilities, you have this issue with the long delays in getting them connected to the grid, there's interconnection bottlenecks and big issues with that. And just as you mentioned, those pump jacks that operate in fields and in across across the US, almost always they're connected to the grid already.

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So there's no wait, no need to wait for long interconnection timelines or permitting issues that have plagued the geothermal industry because the wells are already drilled. They're already connected to the grid. They already have facilities there to capture that that heat resource.

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So it's a it's a ready now solution for renewable energy, and particularly geothermal energy, which has really struggled with long delays and permitting and drilling and interconnection. So

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if you go to a Well that's no longer producing oil and gas, and you want to turn it on, so to speak, as a geothermal well, tell us a little bit about that energy balance, because you're having to put some energy in to, like, circulate the hot water that's down there in the crust, right?

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Yeah,

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you nailed it.

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Tim, so the project that we're working on in Pierce, Colorado, because the wells are are shut in, there's going to be some work that needs to be done to get the fluid moving, and that is a parasitic electrical expense. So you have pumps that need to pull the fluid up from, you know, depth of 5000 feet or so, harvest the heat and then re inject that fluid. So there is some. Calculations that need to be done on the efficiency of projects. And that's why, you know, in the in the US, there's over a million wells that have been drilled, our number that we think that could economically and feasibly produce Geothermal energy is about half that, and that's because of issues just like that. You need to figure out reservoirs that have access to a lot of water that can move that water has permeability and porosity to move that water through the reservoir, up to the surface, and has the ability to be re injected. And not all formations can do that. And so that's why our number is about half of what we think that's out there that could feasibly produce that. But yeah, our project in Pierce is looking at turning on these wells. What's the cost of that? How efficient is the project going to be? And I think when you layer on these benefits, there's power generation that can help move the pumps and get the fluid moving, and then there's this heat that you can be used for community nearby. And then the whole thing is about greenhouse gas savings. Because, as you're saying, as we look at a decarbonized energy future, we need to think about all the ways that we can decarbonize both the built environment and the grid.

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And that's why we get excited about this opportunity to both generate power and, you know, heat and cool homes nearby.

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You know, in the in the solar industry, we think about a payback period for carbon, the the carbon footprint of the technology, which for solar panels, an average statistic I see is about two years right, because it takes a lot of energy to to construct the solar panels. But in your industry, do you think in these terms of payback, or how do you Yeah, I'm just curious about this parasitic energy. How big is it? How big is that footprint?

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Great question, and payback is important for for any industry, and it really depends on the type of installation we're looking at.

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So as we look at operators, and for instance, our project in North Dakota with cord energy, where the wells are already producing, we are just connecting in with a facility that's already built, our payback time is, you know, very comparable with with what you just mentioned. But as we look at these projects where we have to start up wells that haven't produced for a while, we have to build some infrastructure. You know, the payback period is probably extended quite a bit, and that is why we're using grant dollars to execute a feasibility study on this Pierce field to really determine what does it look like, both for the operator of the system, which is, you know, the geothermal power and thermal producer, as well as for our customers, which are going to be buildings within the town and Chevron of the power that we're going to be generating from their wells. And it's, you know, it's a complex economic picture to figure out, and nobody's executed anything quite like this. So we're making our own way on this. But we see, I mean, there's, I know, there's a resource, and there's a lot of value to that resource. We just got to figure out how, you know, to best maximize that value.

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And what is it? I guess, that inspired this segment of the geothermal industry. And if you could re reiterate where you are in the temperature spectrum, because there's kind of low, medium and high temperature geothermal. But yeah, I'm curious about the root of the problem, so to speak, and and why you guys are going hard after this.

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We are considered low temperature geothermal, so we operate anywhere from, let's say, 150 degrees Fahrenheit, up to 300 degrees Fahrenheit. Those are, that's the range, and that's considered low, low to potentially medium. On the high end geothermal, there is super hot rock, geothermal that's looking at 500 600 700 degrees as they drill, you know, a couple miles into the into the earth. Those have very high expenses, upfront expenses and risk attached with them. But the resource is quite impressive. If you can get to it, we are approaching geothermal, and a lot of it's because of our background, and I say our, it's been Ben Burke and I, the CEO, founded this company with this idea of, there is a geothermal resource that's ready now, and we know this because we worked in the oil and gas industry. I worked for several operators that use these industrial fluid tillers, and I just thought it was ridiculous. Why are we wasting this heat? So it's very much a ready now solution that that can be really distributed, opportunity to generate renewable energy in an existing industry that wants to decarbonize. So we see this big opportunity now, especially with decreased costs of organic Rankine cycle engines. This concept is not new. It's been done before it was done. There was some test projects done.

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During the Obama era, where there was funding for for projects similar to ours. But the problem with those is that they took a long time and they weren't economic partially because the government was involved, no offense. But you know, nothing moves very quickly. With the US Department of Energy, and secondarily, the price and efficiency of orcs was both costly and inefficient. And in the past 1015, years, the cost has come down, the efficiency has come up, much like solar panels, right? You got to start installing and putting solar panels and testing things, and then over time, you get more and more efficient solar panels to where we are today, which is, you know, light years away from 20 years ago. So geothermal is very much going through the same evolution of costly, inefficient systems that have gotten, you know, much more cost effective and efficient over time. So we're excited about where this piece of the geothermal industry is going.

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You know, it's different than what you're probably seeing a lot of New York Times articles and things about, you know, large companies like fervo Energy drilling wells in Utah.

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You know, we're, we cheerlead on the entire geothermal industry.

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We're excited about where the whole thing is going, but we're also excited, particularly about what we're doing with repurposing and CO producing geothermal energy from oil and gas wells.

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Well, what else should our listeners know about gradient? I really appreciate this deep dive on on this basically waste heat and greening the fossil industries.

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But what else should we know?

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You know your listeners come probably from a different angle of thinking about renewable energy. I just want to kind of bring awareness to the fact that geothermal energy has been around for a while, but just a small portion of the renewable energy space that I see big opportunities for geothermal becoming a major player in in the energy space, and I'm excited about the startups and the technology that's being tested, and particularly about, of course, repurposing oil and gas wells.

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There is some stigma associated with Oh, you guys are using those polluting oil and gas wells to generate renewable energy. And we're very much focused on this transition space of where we've got to use what we have today, make it cleaner and then move towards that decarbonized energy space. And I think we're all we're all playing our part in it, and I'm excited about the future of gradient.

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Very good. Well, check out all of our content at Cleanpowerhour.com Please give us a rating and a review on Apple or Spotify. Tell a friend about the show, and by all means, connect with me on LinkedIn. I love hearing from my listeners. You can also contact me through the website, Cleanpowerhour.com, Johanna Ostrum, how can our listeners find you?

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Um, I'm also on LinkedIn. I'm very good at responding to messages most of the time, except for the holidays. But yeah, reach out ask any questions. I love just nerding out about geothermal energy and can talk more about what we do at gradient.

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With that, I'll say, let's grow solar and storage. Thank you so much.

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Johanna, thank

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you. Applause.

Geothermal Technology is Cleaning Up Fossil Fuels at the Source with Johanna Ostrum | EP254

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