Geothermal Wins the Tax Credit War

When Congress passed the One Big Beautiful Bill Act through reconciliation last July, the clean energy provisions drew most of the headlines: wind and solar credits slashed, electric vehicle subsidies eliminated, residential solar killed after 2025. What received less attention was what survived.

Geothermal projects that begin construction by the end of 2033 qualify for the full investment tax credit — up to 30 percent of project costs. The credit phases down starting in 2034 and expires in 2036. Storage, nuclear, and hydropower received the same treatment. Wind and solar, by contrast, must begin construction within twelve months of enactment or be placed in service by the end of 2027.

Norton Rose Fulbright called this "an underreported story." The Council on Foreign Relations noted that geothermal and nuclear "will keep many of their existing incentives." IEEE Spectrum ran the headline directly: "Geothermal Energy Survives Trump's Big Beautiful Bill."

The practical effect: geothermal has a seven-year runway of federal support. Wind and solar have roughly one year. For a state sitting on roughly 20,000 pre-drilled boreholes and a century of drilling expertise, this is not a policy detail. It is a structural advantage.

The Secretary Who Built His Career on This

Energy Secretary Chris Wright is the first DOE appointee with direct geothermal experience. Before his confirmation — bipartisan, 59-38 — Wright served as CEO of Liberty Energy, a leading fracking services company that invested $10 million in Fervo Energy, the geothermal startup now building the world's largest enhanced geothermal plant in Utah.

At the MAGMA geothermal industry conference in Washington, Wright was unambiguous: "The technology that squeezed oil and gas from shale was tailor-made for geothermal." He closed with a call to action: "We've got to put capital to work. Let's turn underground heat into a resource."

In February, the DOE announced up to $171.5 million in funding for geothermal field tests and exploration drilling — the largest single tranche of funding for enhanced geothermal in the history of the sector. Wright named geothermal alongside nuclear as a priority in Trump's National Energy Emergency executive order. The industry's pitch to the administration has been straightforward: geothermal uses the same rigs, the same workforce, and the same investors as oil and gas. It produces baseload power around the clock without emissions. And it does not require importing anything.

The result is bipartisan support that no other clean energy technology currently enjoys. Geothermal was explicitly spared in the reconciliation fight. Republican Representative Randy Weber of Texas told the MAGMA conference that geothermal is "something we can count on year in, year out." The Sierra Club is advocating for Oklahoma's HB 3173. When the oil industry and environmental groups agree, the political window is open.

On April 21, Wright defended the administration's fiscal year 2027 DOE budget before the Senate Energy Committee. The request includes a new $3.5 billion baseload power initiative funding upgrades to coal, natural gas, nuclear, hydro, and geothermal facilities. The Wind and Solar Offices are eliminated entirely. Whatever one thinks of the broader energy policy, the directional signal is unmistakable: the federal energy establishment is consolidating around dispatchable power sources, and geothermal is in the room. Wind and solar are not.

The Industry Is Not Waiting

While Oklahoma's bill sits in committee, the geothermal industry is moving. Fervo Energy is building a 500-megawatt enhanced geothermal plant in Utah — using horizontal drilling techniques borrowed from fracking to create underground heat exchangers — the world's largest, with the first 100 megawatts scheduled to deliver power to the grid in October 2026. In March, Fervo closed $421 million in non-recourse project financing from nine major banks including Barclays, HSBC, JP Morgan, and Bank of America — the kind of financing that signals Wall Street now considers enhanced geothermal a bankable infrastructure asset, not a speculative bet. The project is fully contracted through power purchase agreements with Southern California Edison, Shell Energy, and community choice aggregators. In New Mexico, XGS Energy announced plans for 150 megawatts of geothermal capacity for Meta by 2030. Sage Geosystems signed a similar deal with Meta for 150 megawatts east of the Rockies.

Devon Energy and Baker Hughes have both moved into geothermal development. The workforce migration is already happening: drilling crews idled by an increasingly efficient oil sector are being redeployed to geothermal projects in other states.

The question for Oklahoma is not whether geothermal will happen. It is whether it happens here.

Roughly 20,000 Wells and Five Weeks

There are wells within blocks of the state capitol — the Oklahoma City Oil Field extended right through the grounds. They are not all in the western Oklahoma oil patch. They are in the middle of Oklahoma City, and across the state, abandoned wells are leaking methane, depressing property values, and waiting. The Oklahoma Corporation Commission estimates roughly 20,000 abandoned and orphaned wells statewide. The actual number is almost certainly higher — the OCC acknowledges that many wells drilled in the early twentieth century were never documented, and locations for those that were are often wildly inaccurate.

Holly George, the OCC's chief financial officer, told lawmakers it would take 235 years to plug all of them at the current rate. The OCC's own estimate puts the cost of plugging just the known orphaned wells at more than $574 million. The state holds $45 million in bonds — a gap of more than twelve to one. And that figure covers only the roughly 20,000 wells on the OCC's lists. Oklahoma has more than 260,000 total unplugged wells statewide; ProPublica and Oklahoma Voice estimate the full cleanup bill at approximately $7.3 billion.

Plugging a well costs an average of $28,000 to $70,000 depending on depth and condition, according to OCC data and legislative testimony. That money produces nothing — it eliminates a liability and restores a site. HB 3173 offers different math: instead of spending public money to plug wells that produce nothing, let private capital convert them into something that generates energy and revenue. The cost of plugging is a bill. The cost of conversion is an investment.

HB 3173, the Well Repurposing Act, passed the House 85-6 on March 16. The bill allows companies to purchase abandoned oil and gas wells and convert them for geothermal energy production or energy storage. It directs the Corporation Commission to establish rules governing conversion. It requires agreements with surface landowners — a provision added at the Oklahoma Farm Bureau's request. It was modeled on a New Mexico law signed last year.

Senator Darcy Jech carries the bill in the Senate. The deadline for Senate committees to hear House bills was April 23. As of that date, no hearing had been scheduled. Under Senate rules, a two-thirds vote can exempt a bill from deadline requirements — but that would require the kind of political will that the bill's 85-6 House vote suggests exists, if anyone chooses to use it.

The session ends in late May. The geothermal tax credits survive through 2033. The political alignment — Energy Secretary, bipartisan House vote, Sierra Club and Farm Bureau both supporting — will not last forever. Political windows close. This one is open now.

From Issue 8: The Demand Signal

Last issue, we documented the national data center backlash: $64 billion in projects blocked or delayed, 142 activist groups across 24 states, Maine's first statewide moratorium. The opposition is not anti-technology. It is anti-extraction — communities refusing to bear the costs of centralized infrastructure that primarily benefits out-of-state corporations.

Geothermal answers the question the backlash is asking. The energy is local and baseload — no transmission lines, no grid strain, no intermittency. The infrastructure already exists — the wells are already drilled, the roads are already built, the operators of record are already identified. The community keeps the benefit — local service companies do the work, the energy stays in the community.

Oklahoma's HB 2992, which passed the House 92-2 and cleared the Senate Energy Committee 9-0, protects ratepayers from data center energy costs. HB 3173 goes further: it creates the infrastructure for communities to produce the energy themselves. Together, they represent two halves of the same answer — protect against extraction, then build the alternative.