The potential of a geothermal area is dependent primarily on volume and temperature of the reservoir and adequacy of fluid supply. Inadequate fluid supply may be a more common limiting factor than inadequate heat supply. Except in very porous reservoirs, most of the heat is stored in rocks rather than in pore fluids.

Geothermal fields can be classified as hot-spring systems or as deep insulated reservoirs with little surface expression; gradations also exist. Hot-spring systems have high near-surface permeability, at least locally, on faults and fractures, permitting fluids to escape at high rates. Deep reservoirs with little surface expression require the presence of permeable reservoir rocks capped by insulating rocks of low permeability.

Liquid water is generally the dominant fluid, but steam can form by boiling as hot water rises to levels of lower pressure. Dry steam areas probably are rare. About 30 areas in the United States have been explored for geothermal energy, but the existence of dry steam has been proved only at "The Geysers." Extensive utilization of geothermal energy therefore must depend largely on steam "flashed" from hot water with decrease in pressure.

Problems that confront broad utilization of geothermal energy include: (1) discovery of reservoirs with adequate supply of energy and natural fluids; (2) deposition of CaCO₃ or SiO₂, (3) chemical corrosion, (4) objectionable chemicals in some effluents, and (5) inapplicability of existing public laws.

The optimum environment for a geothermal reservoir includes (1) potent source of heat, such as a magma chamber; such heat sources are most likely to occur in regions of late Cenozoic volcanism; (2) reservoirs of adequate volume, permeability, and porosity; and (3) capping of rock of low permeability that inhibits convective loss of both fluids and heat. A deep well-insulated reservoir may have at least 10 times the energy content of an otherwise similar, shallow, uninsulated reservoir.

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