“Dry Patch”

Winnemucca, Nevada

December 16, 2022

A long, long time ago .... I was actively involved in the geothermal industry. I learned that such expertise was not all that useful moving up the corporate ladder. I joked that it was a "CLM" -- a term I probably learned from Tom -- a "career limiting move."

I do have some reasonably good stories from that experience. One involved a project named "Rye Patch" -- a "populated place" that I drove by today.

Geothermal power is tough because you need to find a geothermal resource that contains hot water (above 330 F) in sufficient quantity, porosity and depth that you can drill wells to bring it to the surface to run through a power cycle. You also need to be able to re-inject the "geothermal brine" so that it doesn't cool the resource. In other words, geothermal is more of a drilling play that it is a power plant play.

As a lender, you require the project developer to spend its money to drill wells a prove the resource before you lend a dollar to build the above ground power plant.

So some folks found a geothermal resource near Rye Patch, Nevada and proved it out to GE Capital's satisfaction -- GE Capital being that lending giant of Jack Welch's creation.

Only when they hooked it all up, the geothermal resource was a dud. The power plant wouldn't work. The project became known throughout the industry as "Dry Patch."

GE Capital tried to get me to buy the "surplus" equipment. Unfortunately, the power generation equipment was really only useful at the specific conditions they thought they had at Rye Patch.

It did almost turn into a career making opportunity. The folks at GE Capital liked me and approached me about starting a renewable company where I'd pick my team and they'd provide the capital. Unfortunately before we could consummate anything, GE corporate reigned in GE Capital and our deal fell apart.

An example of how close one can come close to a career game changer. Like when I flopped my sixth and final interview with McKinsey early in my career. 😳

Life is funny. As I drove by Rye Patch today, there on the hill sits an operating geothermal power plant. Turns out it came online earlier this year. All 12.5 MW. Huge (sarcastic).

Proves something I said a long time ago -- geothermal opportunities never really die -- they just keep getting sold to the next person who thinks they have the answer. Twenty-five years later, apparently somebody did.