Geothermal start-up AltaRock has announced a deal with Weyerhaeuser Company to develop geothermal projects in northern California, Oregon and Washington. Weyerhaeuser controls geothermal rights to nearly 667,000 acres in the area and will grant an exclusive option to AltaRock to assess the geothermal potential of that land. If AltaRock finds promising land for geothermal projects, the deal gives AltaRock the right to convert up to 40 percent of the acreage rights to geothermal development leases for the next two years.

A representative from Weyerhaeuser said that the partnership will support the company's strategy of finding innovative ways to use the full potential of its land holdings. Those land holdings include approximately 363,000 acres in western Washington, 378,500 acres in western and south-central Oregon and 25,400 acres in northern California. Weyerhaeuser's primary business is paper-making, with an emphasis on sustainable options.

Don O'Shei, the CEO of AltaRock, commented in a press release: "We're pleased to be working with Weyerhaeuser. AltaRock is confident in its ability to put this land to an environmentally friendly use that benefits both companies and the region. These geothermal rights will provide us with a pipeline of development projects to showcase our innovative technology, and generate jobs and clean, renewable energy."

AltaRock develops engineered geothermal systems. These systems have the potential to allow for the use of geothermal energy in areas that do not have conventional geothermal resources, such as the hundreds of thousands acres of timberland that Weyerhaeuser maintains. A 2007 study led by the Massachusetts Institute of Technology suggested that with improvements to existing technology, engineered geothermal systems could supply up to 10 percent of the U.S.'s electricity needs within 50 years. That supply would be priced competitively.

AltaRock's partnership comes on the heels of a successful second round of fundraising. In mid-August, the start-up announced it had closed its second round of financing after raising $26.25 million, intended to fund the development and implementation of technology that will lower the costs of engineered geothermal systems. The funding came from a variety of sources, including Google.org, Advanced Technology Ventures and Vulcan Capital. First-round investors Khosla Ventures and Kleiner Perkins Caufield & Byers also joined in the second round. AltaRock has already filed applications for a whole list of patents, and has obtained exclusive licenses for quite a bit of geothermal-related intellectual property. Considering that the company isn't banking on some sort of break through technology, instead developing more efficient approaches to existing technology, it's easy to see why venture capitalists fully expect good returns from AltaRock.

Image — AltaRock