Texas
Texas is Moving Geothermal Forward
Texas pioneered the modern oil and gas industry and those same technologies are driving advancements in geothermal. With a strong policy foundation already built including a dedicated regulator, bipartisan legislation, and projects already online, it’s positioned to lead the next drilling revolution for heat.
Why Texas
Why Texas Matters for Geothermal
Texas pairs a major geothermal resource base with the country’s most complete enacted ownership and regulatory framework for next-generation geothermal and the largest oil and gas work force in the country.
Building off the landmark Future of Geothermal in Texas report prepared by Project InnerSpace and a dozen Texas academic institutions, Texas has begun developing policies to scale geothermal.
Project InnerSpace, TxGEA, and InnerSpace action have all played a key role in advancing this work including: SB785 assigned the geothermal resource to the surface owner, SB786 consolidated closed-loop injection-well jurisdiction under the Railroad Commission, and SB1210 created a pathway to convert orphaned oil-and-gas wells for geothermal production.
Geothermal also qualifies for the Texas Energy Fund’s completion bonus, while HB4370 lets cities and special districts bond-finance thermal energy networks as public improvements.
Proof of concept is underway too: the Railroad Commission issued its first permit under the transferred authority to Sage Geosystems in February 2025, with the company crediting the agency’s drilling experience for moving in weeks rather than months or years.
Featured State Report
January 2023
The Future of Geothermal in Texas
Published January 2023 by researchers at five Texas universities — UT Austin, Southern Methodist University, Rice, Texas A&M, and the University of Houston — along with the University Lands Office and the International Energy Agency, this is the report that started InnerSpace’s entire state-by-state series. The 15-chapter study found that oil and gas technology transfer could deliver 20–43% in cost savings for geothermal development.
Recent Policy Wins
2026
RRC Develops Deep Geothermal Injection Well Regulations
Following finalization of shallow closed-loop geothermal rules, the Railroad Commission works on regulations for deep Class V geothermal reinjection wells, expected to be ready in early 2026.
Three Geothermal Bills Signed Into Law
The 2025 legislative session delivers SB 879 (regulatory relief for closed-loop systems), SB 1762 (clarifying geothermal’s eligibility for Texas Energy Fund incentives as dispatchable generation), and HB 4370 (allowing geothermal thermal energy networks to be financed as public improvement projects).
2025
RRC Issues First Deep Geo-Pressured Geothermal Permit
The Railroad Commission issues its first permit for a deep geo-pressured geothermal well to Sage Geosystems in Atascosa County, marking the first such permit since regulatory authority transferred from TCEQ.
2024
Sage Geosystems Announces EarthStore Location
Sage enters a land use agreement with San Miguel Electric Cooperative for a 3 MW Geopressured Geothermal System energy storage facility in Christine, Texas — the first geothermal energy storage project on the ERCOT grid.
2023
Senate Bills 785 and 786 Establish Regulatory Framework
The 88th Texas Legislature transfers regulatory authority for closed-loop geothermal injection wells to the Railroad Commission and establishes clear property rights for geothermal resources
2023
“The Future of Geothermal in Texas” Published
Five Texas universities, the University Lands Office, and the IEA publish the landmark report that would become the model for InnerSpace’s entire state-by-state series.