The version of record of this op-ed was published in The Globe and Mail on March 18, 2026.
By Peter Massie (Director, Geothermal Energy Office, Cascade Institute) and Emily Smejkal (Research Fellow, Ultradeep Geothermal, Cascade Institute)
In the last month, oil prices have surged about 50 per cent on global markets.
For a net energy exporter like Canada, such volatility can be a windfall. For a while, Alberta’s projected $9.37-billion deficit for the 2026-27 fiscal year may become a surplus. But for everyday Canadians, oil’s volatility may seem more like a hurricane.
One way to hedge against this volatility is to produce more electricity, since prices are regional rather than global. Next-generation geothermal is a way to do it.
The technology involves drilling deep into the ground to tap the heat coming from the nuclear reactor at Earth’s core; it brings that heat to the surface, where steam spins a turbine. It’s a clean, potentially inexhaustible energy source that could generate 24/7 baseload power. As the technology improves, deep geothermal could be deployed almost anywhere, speeding the transition from fossil fuels globally.
But in Canada this wouldn’t mean replacing oil and gas with geothermal. It would mean using more electricity at home so the country can export more of its petroleum energy – at global prices.
That’s why the U.S. Department of Energy’s announcement on Feb. 25 of more than US$171-million of funding for geothermal power is so important. It’s a wake-up call that the U.S. is leaving Canada in the dust when it comes to this critical energy innovation. The U.S. is positioning itself at the forefront of a market estimated by the International Energy Agency to be worth $3-trillion by mid-century. And while the U.S. makes geothermal ready for commercial deployment, Canada debates whether it’s ready at all.
Canada doesn’t even have an operating, standalone geothermal power plant. But the Geologic Survey of Canada estimates there’s enough energy to meet our electricity demand one million times over. Modelling by the Cascade Institute and Navius Research indicates that if costs can be cut through innovation, it could be a major source of power across Western Canada, where our best resources are located, by 2050.
So Canada should be leading the world, not following. We have abundant underground heat and the technical know-how, developed over decades of oil-and-gas innovation. But what we don’t have, so far, is a coherent, national geothermal strategy. Many of our most talented drillers are heading south, where they have clear opportunities to build the future’s secure energy source.
The DOE’s investment didn’t come from nowhere. It was strategized in the GeoVision Roadmap, a national plan to identify and seize opportunities for large-scale projects.
The latest U.S. funding will help deliver those objectives. The first investments will support deep exploratory drilling projects in untested areas. A second stream supports next-generation geothermal field tests for early-stage technologies and startups that require large amounts of capital to scale. The DOE funding also requires industry partners to contribute 20 per cent to ensure they have skin in the game. But the broader intent is clear: the department is taking on the bulk of the risk to drive innovation and spark a burgeoning industry.
In contrast, Canada’s approach to geothermal has been largely passive. The federal government has supported a handful of small-scale pilot projects including some successful ones, such as Eavor’s technology demonstration in Alberta, which set the stage for a commercial project in Germany. But, overall, funding has been ad hoc. Canada has no geothermal strategy, no targets, and no dedicated geothermal funding program.
Even worse, Canada’s so-called technology-neutral Clean Technology Investment Tax Credit excludes drilling expenses, which make up 40 per cent or more of total geothermal project costs. On top of this, permitting and regulations are fragmented across provinces, or don’t exist at all.
Still, there’s some progress. In 2020, Alberta passed the Geothermal Resource Development Act to facilitate investment, and last year it announced the Alberta Drilling Accelerator will invest up to $50-million in innovative technologies. Both are promising first steps, but the province can’t go it alone. Ottawa and Edmonton should come together on a geothermal strategy. The rest of Western Canada would be wise to join it.
In this context, the Canadian Deep Geothermal Coalition, a group of industry, Indigenous leaders, researchers, and policymakers which formed in September in an effort to advance geothermal energy in the country, is calling for a national roadmap, similar to the American GeoVision plan.
Energy innovations don’t happen through passive funding. They’re built through smart policymaking that harnesses unique national strengths and by taking smart risks that capitalize on collective expertise.
