The President of El Salvador is getting a lot of attention this week. Starting with the idea of Bitcoin being accepted as legal tender, putting it on par in that country with the United States Dollar, was big news.
He then ratcheted things up by announcing that Bitcoin mining would be welcomed in the country. This was a welcomed sign since China is shutting miners down which is, according to some, putting the network at risk. Additional mining facilities in El Salvador could really help the distribution of hashrate.
Then came the heavy news with the announcement that mining would take place on a volcano. This is something that needs to garner a lot of attention because it is an area that was overlooked for the past 30 years.
Right now, you have tons of Bitcoiners searching to find out what geo-thermal energy is. This is something that could really upend the energy industry, both fossil fuel and renewable.
For years, I contended that thermal energy was the solution. This was a "craze" a few decades back when these types of plants were opened. Nevertheless, like many things, it was ahead of its time. The technology was not quite there.
This is not the case today. Over the last few years, we saw renewed interest in this form of energy generation. Plants are being proposed with funding starting to roll in. The key is to put this at the forefront of the conversation so the money is attracted. This will help to move it up the list.
Why is this likely to be a large part of the solution. The answer lies in the simplicity. Drill down a number of miles and we have more energy than we can use. We all know the power that comes out of a volcano when it blows, imagine being able to capture that.
Of course, thermal energy is not really utilizing volcanos. It is, however, tapping into the power that resides below our feet, closer than a drive across town.
Geothermal requires drilling. This is something that advanced a great deal in the last few decades. In fact, the same companies that are demonized today could well be the leading energy producers again tomorrow.
The oil companies know how to drill. This is their business. It is their job to survey the geology and find out what is beneath it. With this ability, they can easily switch to a different mode. In the end, the activity is the same but the outcome is vastly different.
Vik Rao, former chief technology officer at Halliburton, the oil field service giant, recently told the geothermal blog Heat Beat, “geothermal is no longer a niche play. It’s scalable, potentially in a highly material way. Scalability gets the attention of the [oil services] industry.”
If you want a good primer on this technology, read the article from where that quote was taken.
A good way to think about geothermal is that it is nuclear power, without the nukes. There is no Uranium used to generate the motion of the turbines. Just like nuclear, these are nothing more than steam plants.
Many feel there is the equivalent of the sun at our core. The temperature of the Earth's deepest core does rival the surface of the sun. This is an incredible amount of energy that can be accessed. Of course, there is no need to go all the way to the core of the Earth to get energy. This is why geothermal is getting another look by many.
Another factor in the renewed interested is the aforementioned drilling. Since those costs have come down, the expected construction price is significantly less than what was proposed decades ago.
Obviously, this is a big deal for the country of El Salvador. As this post by @nealmcspadden lays out, a single mining operation could boost the countries GDP by .5%. That is a significant amount for a country that is ranked 77 out of 133 in the Global Competitiveness Report.
However, it could become much bigger than that.
If LaGeo, El Salvador’s state-owned electrical company, were to help turn the country’s unused geothermal energy towards mining Bitcoin, El Salvador could quickly become one of the larger locations for mining the cryptocurrency, globally. Many Bitcoiners were quick to point this out in comment to the President’s tweet:
Source
That is just the wasted energy. There is a lot more there to tap into.
In the end, as much as this is exciting for cryptocurrency, the bigger story could well be the discussion that is going to take place in the energy sector.
Watch what the oil companies do regarding this arena. Do not be surprised if many of them start setting aside funds to get involved. It is ideally suited for them to transition into the energy leaders of tomorrow.