If we could extract all the geothermal energy that exists underneath the United States to a depth of two miles, it would supply America’s power demands (at the current rate of usage) for the next 30,000 years. Getting at all that energy is not feasible—there are technological and economic impediments—but drawing on just 5 percent of the geothermal wealth would generate enough electricity to meet the needs of 260 million Americans. The Department of Energy’s National Renewable Energy Laboratory (NREL) asserts that reaching that 5 percent level, which would produce 260,000 megawatts of electric power and reduce our dependence on coal by one-third, is doable by 2050.

So what is holding us back? Tapping geothermal energy means facing the harsh realities of thermodynamics: Typically, geothermal electricity is generated when hot water or steam underground is piped to the surface to drive a turbine, usually through heating an intermediate working fluid that actually turns the turbine’s blades. The turbine drives a dynamo that then produces the electricity. Crucially, the temperature of the piped-up water dictates the efficiency of a turbine-based system: the hotter the better, with a minimum of about 200 degrees Fahrenheit needed. But there is a limited number of geothermal hot spots that naturally contain water and that heat it to such high temperatures at accessible depths. Probably the best example of one in the United States is The Geysers. In a valley 72 miles north of San Francisco, steam billows from the earth’s surface. (This prompted the first European visitor to the site, in 1847, to believe he had discovered the gates of hell.) An elaborate array of gleaming metal pipes brings steam up from underground to drive turbines that generate 850 megawatts of electricity.

California, Nevada, Idaho, and Oregon all have enough high-temperature hot spots to potentially meet a significant portion of their electrical demand—as much as 60 percent in the case of Nevada—but rarely are the temperatures as high as at The Geysers, which produces steam of 400 degrees and hotter. Most of the time, developers have to look as far as six miles below ground to locate hot, flowing liquids. Finding suitable drill sites can be a big headache.

Doug Glaspey, chief operating officer of U.S. Geothermal, an Idaho-based company that just finished building a 13-megawatt geothermal electrical plant in southern Idaho, says he wishes he had “X-ray vision, so I could see where the reservoirs are. The highest-risk part of this business, bar none, is searching for reservoirs. Drilling a well costs two to three million dollars per well. If it fails, you got nothing.” Moreover, once companies hit a good hot spot, they still have to set up a power plant or a heating system, which requires big up-front costs and multiple wells. Glaspey estimates that it costs “$3.5 million to $4 million per megawatt” to build a geothermal power station.

In addition, geothermal power plants have energy efficiencies of just 8 to 15 percent, less than half that of coal plants. High up-front expenses plus relatively low efficiency makes the cost of geothermal electricity about double that of coal, which sells for around five cents per kilowatt-hour.

Gerald Nix, recently retired geothermal technologies manager at the NREL, believes that improving exploration and drilling technologies could make geothermal power cheaper than coal, however. Current attempts to refine these technologies fall under the banner of engineered geothermal systems (EGS), which can squeeze heat out of spots where the rock is not porous or permeable enough for water to circulate, or where there is not enough water in the first place. EGS uses techniques such as reopening old fissures in the rock, and then pumping water through the fracture. EGS could contribute at least 100,000 megawatts to the U.S. geothermal power budget by 2050, according to a 2006 report, “The Future of Geothermal Energy,” written by a team led by MIT chemical engineering professor Jefferson Tester. What is desperately needed to advance EGS, Tester says, are large-scale demonstration projects. “It’s not as if we don’t know how to drill holes and fracture rocks,” he says, “but we have to demonstrate EGS on a scale that would be useful for commercial enterprise.”

Uses for geothermal energy go beyond generating electricity:Geothermal sources not hot enough to make electricity efficiently can heat buildings by circulating water through pipes. This country has a swath of such lower-temperature hot spots. Draw a line from North Dakota to Texas, and nearly every state west of that line has sources with temperatures of at least 200 degrees Fahrenheit.

Even without a handy hot spot, the ground can be tapped to reduce our need for fossil fuels. All of the United States’ soil is suitable for a technology known as geothermal heat pumps, which transfer heat from the ground to homes in the winter and reverse direction to provide cooling in the summer. Heat pumps have the potential to provide nearly all U.S. households with heat and hot water. In fact, the amount of thermal energy in the ground available for heating—more than a million megawatts—dwarfs the amount available for electricity generation. Yet, according to the NREL, we use less than 1 percent of that. The reason: a lack of research investment.

The tide seems to be turning in favor of geothermal energy in the U.S.

Geothermal energy research has been a victim of poor funding for years. Consequently, much of our technology dates back to the 1970s, when the oil crisis spurred an interest in geothermal energy. At that time, the U.S. Geological Survey sifted through its vast collection of data to determine the extent of the resource, while big oil and power companies invested in power plants such as the one at The Geysers. When oil prices dipped in the 1990s, the tide went out on all types of renewable energy. At the Department of Energy (DOE), geothermal funding plunged from $100 million in the 1980s to a little more than $20 million in recent years. Competing with oil and gas exploration for geological expertise, and with only minimal backing from the government, U.S. geothermal projects largely became the realm of small companies in the West.

Elsewhere around the globe, aggressive public policy has pushed geothermal success. For example, Iceland’s energy policy has emphasized geothermal power since the 1970s. As a result, 85 percent of Icelandic houses are heated geothermally, and five geothermal plants now provide almost a quarter of the country’s electricity.

With climate concerns, oil prices, and energy security now on everyone’s mind, the tide seems to be turning again in favor of geothermal energy in this country. The 2007 Energy Act authorized the DOE to spend $95 million for geothermal research (although Congress has appropriated only a fraction of that so far). Unfortunately, the Energy Act failed to extend tax credits for renewable energy producers, which are crucial, MIT’s Tester says, given the initial costs of finding geothermal resources and setting up plants.

But the private sector is beginning to push geothermal energy in the United States, too. Last year renewable energy developers paid millions of dollars in land leases for geothermal development in the Northwest. The huge untapped geothermal potential in the United States is also grabbing international attention. Last September the Nordic financial group Glitnir announced that it plans to invest $1 billion in the U.S. geothermal market over the next five years. Even the big oil companies are starting to pay attention. Nix says that representatives from ExxonMobil, Shell, and Chevron have attended recent EGS workshops.

Furthermore, construction companies are noticing that there is money to be made with heat pumps. (Although installing one entails a higher initial cost than a natural gas furnace, a pump will pay for itself in 10 years.) The California Energy Commission estimates the cost of a pump to be about $7,500 for an average-size home. Currently roughly 1 million pumps are installed in the United States, and 50,000 to 60,000 pumps are being added every year.

In total, more than 3,400 megawatts of geothermal power is currently under development in the United States, according to the Geothermal Energy Association. With the right backing, the heat beneath us could help keep the planet from warming up.