Simbol Materials was a darling of the clean-tech world, until it suddenly wasn’t. The startup claimed it had developed extraordinary technology to extract lithium, a metal used in electric car batteries, from the geothermal brine by the Salton Sea’s southern shore. Elon Musk was so excited that Tesla Motors offered to buy the startup for $325 million, as The Desert Sun reported earlier this year.
For reasons that are still unclear, the Tesla deal fell through, and Simbol failed to secure other financing. It’s hard to say whether the startup’s proprietary technology didn’t work as advertised, or whether mismanagement doomed the company. Either way, Simbol fired the vast majority of its employees last year and has ceased operations.
Now, another company says it’s on the verge succeeding where Simbol failed.
EnergySource, which runs the 50-megawatt Featherstone geothermal plant, has been testing a new process to extract lithium and other metals from the underground brine it uses to generate electricity, according to Eric Spomer, the company’s president and chief executive. The results have been promising enough that a Texas investment group just bought a 38.5-percent ownership interest in EnergySource. The firm has invested additional money to fund more thorough testing of the extraction process, which Spomer expects to take about six months.
If EnergySource has figured out how to make money extracting lithium, the consequences could be enormous — not only for the electric carmakers, who are hungry for the metal, but for the region’s geothermal industry, which has stalled in recent years. Building a geothermal plant is expensive, and lithium would be a lucrative new revenue stream that would geothermal more attractive to investors.
For the Imperial Valley, new geothermal facilities would mean jobs, a precious commodity in a county where the unemployment rate regularly tops 20 percent. Salton Sea advocates, too, have long urged lawmakers to support more geothermal development, believing it could help fund restoration projects at the ailing body of water, California’s largest lake.
“I am not willing to spike the ball in the end zone until we’ve finished this testing,” Spomer said. “We’re not to the finish line, but we’re making a lot of progress.”
Spomer declined to describe the company’s extraction process in detail. But he said EnergySource’s approach differs substantially from Simbol’s. While Simbol tried to develop totally new technology, Spomer said, EnergySource has instead purchased several existing extraction techniques, all of which have been proven elsewhere, and used its knowledge of the highly corrosive Salton Sea brine to tweak those technologies so they work here. There are five steps to EnergySource’s extraction process, and the company didn’t create any of them from scratch, Spomer said.
“Not one thing we’re doing individually is patentable by us or anybody else. It’s all stuff that’s off the shelf, but it’s uniquely applied to our brine,” he said. ”Our whole goal is to be able to finance it. Being a science experiment is hard to finance.”
Geothermal technology is relatively simple. Developers drill into underground rock formations filled with naturally heated water, then pump the super-heated water through pipes, methodically lowering the pressure on the fluid to create steam. That steam is used to turn turbines and generate electricity. Eventually the brine starts to cool down, and the water and condensed steam are re-injected into the underground reservoir. It’s a renewable process that doesn’t emit planet-warming greenhouse gases.
At the Salton Sea, the fluid is actually brine — 75 percent water and 25 percent minerals, mostly chloride and sodium but also valuable metals like manganese, potassium, zinc and lithium. Those are the metals Simbol claimed it had discovered a cost-effective way to extract. But it was far from the first company that’s tried and failed to get rich off Salton Sea minerals.
Asked what differentiates EnergySource from Simbol, Spomer said the engineers behind Simbol ”were very smart guys, but they just couldn’t get to the finish line.” Simbol had used EnergySource’s brine to test its extraction technology, building a demonstration facility next to the Featherstone geothermal plant. The Simbol facility has been dormant for the last year and a half.
“We had a front-row seat to that whole situation… there was nobody who wanted Simbol to succeed more than we did, and we did everything we could to support them. But they weren’t focused on the end zone,” Spomer said. ”We’re only focused on the end zone. We’re not trying to develop the best possible widget. We’re trying to apply the perfect solution to each process.”
While EnergySource tests its processes, other plans to spur geothermal development by the Salton Sea continue to inch forward.
An Australian company called Controlled Thermal Resources has proposed a 280-megawatt geothermal project, which would be more than five times bigger than any of the existing plants in the area. The idea is to bring down costs through economies of scale. The company hopes to start drilling exploratory wells by February or March, according to Rod Colwell, its chief executive.
That’s a few months behind schedule, but Colwell isn’t worried. He pointed to the Department of Energy’s ”request for information” in August, through which the federal government is exploring the possibility of buying between 100 and 250 megawatts of geothermal from the Salton Sea. The Obama administration’s interest in geothermal will make it easier to get projects built, Colwell said.
“I think the feds have well and truly taken the lead on this,” he said.
The Department of Energy’s geothermal request is one of several federal actions designed to help the Salton Sea, which were announced by the White House when President Barack Obama visited Lake Tahoe in August. The Obama administration also agreed to spend $30 million on lakeside restoration projects that protect human health and the environment, and to support the state’s goal of building 25,000 acres of habitat and dust suppression projects to cover exposed lakebed by 2025.
The Salton Sea is shrinking as farm runoff declines, in what some observers have described as a slow-motion environmental disaster. As dry lakebed is exposed, gusting winds are kicking up dust laced with pesticides and other chemicals, polluting the desert air. Fish are dying en masse as the lake gets too salty to support much life, and migrating birds that travel from Alaska to South America are seeing a critical inland stopover begin to disappear. The Pacific Institute, a water think tank, has estimated Californians could face up to $70 billion in costs as the lake breaks down.
“We’re going to reverse the deterioration of the Salton Sea before it’s too late, and that’s going to help a lot of folks all across the West,” Obama said during his remarks at Lake Tahoe.
Obama’s words might have been too optimistic — reversing the lake’s decline would probably require importing water from the Sea of Cortez or the Pacific Ocean, a popular idea that many experts have nonetheless dismissed as prohibitively expensive. State and federal officials have instead focused on managing the lake’s decline. Their strategy involves using the minimal water that still flows into the Salton Sink to establish a permanent “perimeter lake” around most of the current shoreline, and to build several thousand acres of artificial wetlands along the southern shore.
Those wetlands would suppress some of the toxic dust, provide habitat for fish and birds and create opportunities for human recreation and economic development, even as the center lake continues to shrink, officials say. California’s Salton Sea czar, Bruce Wilcox, is combining several local planning documents into a comprehensive restoration program, which he hopes to finish by December.
Officials see geothermal development as a possible funding source. Six companies responded to the federal request for information, including EnergySource and Controlled Thermal Resources, the Australian firm. Other responses came from CalEnergy, which owns 10 of the 11 geothermal plants by the lake; Ormat, a Nevada company with geothermal facilities in the Imperial Valley; GreenFire Energy; and GeoGenCo, which is close to building a small proof-of-concept plant by the Salton Sea, using new technology that consumes less water than traditional geothermal facilities.
GeoGenco has a contract to sell five megawatts of power from its experimental plant to the Imperial Irrigation District.
Still, it’s unclear how big a role geothermal development can actually play in funding Salton Sea restoration.
There’s plenty of room for new projects: Estimates of untapped geothermal potential at the Salton Sea range from 1,500 to nearly 3,000 megawatts, on top of the 400 megawatts that have already been built. But high up-front costs have brought new development to a standstill. Building a plant generally costs hundreds of millions of dollars, a price tag that can scare away investors.
A 2015 analysis by the National Renewable Energy Laboratory found that building geothermal plants is already so expensive that forcing private companies to pay fees for Salton Sea restoration could make development impossible. The study estimated that geothermal plants could generate between $98 million and $210 million for Salton Sea restoration, in total, by 2030 — if the area’s geothermal resource is developed to capacity. That’s a far cry from the $3.5 billion Wilcox has estimated could be needed to fund the state’s restoration plan.
“We just don’t think that making something more expensive is going to encourage developers to build in that area,” Scott Haase, a senior engineer at the National Renewable Energy Laboratory and co-author of the report, told The Desert Sun last year. “We talked to a number of developers, and it was a non-starter from the beginning.”
Geothermal advocates say that kind of analysis overlooks the technology’s benefits.
California’s renewable energy mandate requires utilities to get 50 percent of their electricity from carbon-free sources by 2030, part of the state’s ambitious plan to fight human-caused climate change. Solar and wind farms have accounted for the vast majority of new clean energy capacity over the last few years, but the sun doesn’t always shine, and the wind doesn’t always blow. Eventually, some experts say, California will need more round-the-clock, climate-friendly electricity to complement intermittent solar and wind. Geothermal could fill that role.
The Walton Family Foundation, which has advocated for Salton Sea restoration, commissioned a study earlier this year comparing the costs of solar and geothermal. Researchers at the National Renewable Energy Laboratory and a clean-energy trade group found that using Salton Sea geothermal to help meet the state’s clean energy mandate could save Californians $735 million dollars per year by 2030. A big chunk of those savings would come from reducing the need to build and operate gas-fired power plants, which are often used to complement on-again, off-again solar plants.
“Conventional wisdom is geothermal is a good resource, but it’s too costly. And that’s generally correct, if you’re only looking at it for the next few years,” Morgan Snyder, a program officer at the Walton Family Foundation, said last week at the California Geothermal Forum in Sacramento, which was hosted by the Department of Energy as part of the White House’s recent Salton Sea blitz.
Still, If California figures out less-expensive ways to meet more of its electricity demand with solar — which it almost certainty will — the short-term costs of building new geothermal plants could outweigh the long-term benefits, the Walton report found. That could mean unnecessarily high energy bills for some Californians.
State lawmakers have considered mandating some geothermal. A 2014 bill that passed that state Senate would have required utilities to buy 500 megawatts of power from new geothermal plants. But the legislation’s co-author — then-Assemblymember V. Manuel Perez, D-Coachella — never brought the bill to the floor of the Assembly, probably because it wouldn’t have passed.
State lawmakers generally prefer to be technology neutral and let the market choose the cheapest renewable energy sources, said Jay Dickenson, chief consultant to the state Senate’s Energy, Utilities and Communications Committee. But legislators have made several exceptions, including programs that encourage the use of rooftop solar, energy storage and biofuels, Dickenson said.
“There are many, many programs in the state that either subsidize or support or require the procurement of different resources,” he said last week at the geothermal forum in Sacramento.
If EnergySource has solved the lithium puzzle, that would make things a lot easier for the geothermal industry.
The company’s extraction process caught the attention of Mills Capital Group, a Texas-based investment firm that has owned a piece of EnergySource since 2009. The private firm recently formed a limited liability company called LINERGY, which bought out another ownership partner’s 38.5-percent stake in EnergySource and is now funding the mineral-extraction testing.
Bart Mills, who runs Mills Capital Group with his uncle Jerry, said he knows other companies have tried and failed to develop a commercial-viable lithium extraction process. But he thinks he’s made a smart investment. Lithium is a key ingredient in the batteries that power electric cars, cell phones and energy storage systems, and industry analysts predict soaring demand for the metal. Most of the world’s lithium is currently produced by a handful of companies in a handful of countries, including Argentina, Australia and Chile, using extraction processes that are often environmentally damaging.
“The reward could be quite large, but so is the risk. There have been some spectacular failures (with lithium). And that’s why we’re trying to proceed cautiously and utilize our resources judiciously,” Mills said. ”And if we determine that there’s a limitation, or a technology roadblock, we’re going to stop, and try not to be one of those spectacular failures.”
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