"This is geothermal’s time. Now it is up to governments to encourage investment, and up to business to seize this opportunity."
by Sandro Bruni, Inter-American Development Bank
Countries along Latin America’s Pacific Coast and in the Caribbean have significant geothermal resources; however, these have been underexploited. It is estimated that only 4-5% of geothermal energy’s potential has been developed in the region.
The drop in the price of crude oil in the last few months could boost these efforts. It’s a simple question of supply and demand.
The geothermal industry and the oil industry use all the same drilling services, which can amount to as much as 50% of a project’s total budget. When the price per barrel is high, the oil industry reinvests part of its profits in exploring new fields, so the costs of drilling services tend to increase due to high demand. This upward pressure on prices affects geothermal projects as well.
In this case, a setback for the oil industry means an advantage for geothermal. In other words, this is geothermal’s time. Now it is up to governments to encourage investment, and up to business to seize this opportunity.
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