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Thursday, February 28, 2008
US Geothermal - Geothermal Energy Investment
Image: courtesy of U.S. Geothermal (www.usgeothermal.com)

Geothermal Energy Investment

One of the companies presenting at the Clean Equity Monaco Conference last week in Monaco (February 20-21, 2008) was US Geothermal, a geothermal energy power company that trades on the OTCBB in the United States (Symbol: UGTH) and on the TSX, Toronto Stock Exchange (Symbol: GTH). At Clean Equity, US Geothermal presented their company, discussed geothermal energy and covered the most recent developments concerning their Raft River 13 MW Power Plant in Idaho, and their development project called Neal Hot Springs in eastern Oregon.

US Geothermal's Raft River Plant reached commercial power output on January 3, 2008. The generated electricity is being sold to Idaho Power through a 10 MW PURPA (Public Utility Regulatory Policies Act) contract. US Geothermal has stated that the Raft River Plant, when built up with additional power units, may be capable of producing as much as 110 MW of power (based upon GeothermEx Consultants exploration data).

US Geothermal's other capital investment project is Neal Hot Springs, which is a geothermal development resource that Chevron discovered in oil drilling exploration in the 1970's. US Geothermal plans to conduct a production test well to further explore the viability of the Neal Hot Spring's site. Currently they estimate a potential for a 26MW power plant on the site.

Today in the U.S. there is currently 2830 MW of geothermal power being produced and the United States is the largest producer of geothermal energy. For geothermal plants that come on line in 2008, the U.S. government guarantees a $19/MWh production tax credit for the first ten years of production. It is expected that this credit will be extended to 2011 by the U.S. Congress during this year.

Geothermal Power Plants utilise very hot brine water, heated by molten rock, that comes from ancient water reservoirs deep in the earth's interior. Specifically for US Geothermal's Raft River Project, the reservoir water emerges at the surface at 140 Celsius and using heat exchangers, US Geothermal transfers this heat energy to a circulating isolated pentane liquid system that boils at 20 Celsius and then conveys energy to steam turbines and creates electricity.

The potential for geothermal energy production throughout the world is huge and once a viable geothermal reservoir is found, the payback is long-term and far exceeds most oil wells. There is an exploration cost associated with drilling for geothermal reservoirs much like the drilling costs associated with oil exploration. A properly managed geothermal reservoir should produce for hundreds of years, or longer.

From an environmental perspective, safeguards need to be installed to ensure the protection of the original reservoir water (brine). Power plant designs need to 100% safeguard the ancient deep earth water reservoirs from contamination. Geothermal power is sustainable energy and over the long-term very profitable zero emissions energy. It is a key source of power for the future and needs both incentives and regulatory support.

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