INDIANAPOLIS BUSINESS JOURNAL * MAY 11-17, 1998* 69A

Environmental concerns, technology converge for local energy provider
S M A L L BUSINESS Profile

BY KATIE CLUBERTSON
 
More than 10,000 years ago, American Indians were tapping hot springs for warmth and energy. The use of geothermal energy has advanced substantially since then, but the premise remains the same: The earth provides an endless supply of reliable energy.

Today, mounting environmental concerns and increasingly sophisticated technology are converging, building a growing market for companies like Indianapolis based Hardin Geotechnologies, LLC.

The firm was founded two years ago by Jim Hardin and daughter Lilli Hardin. The company uses its patented technology to link heat pumps, which provide both heating and air-conditioning, directly with the local water utility’s supply, sidestepping many of the high costs associated with other forms of ground-source energy.

The company has lined up its first customer- the school system in Comanche, Oklahoma. In reaching the potentially unlimited market for geothermal energy, the challenge has been in bringing down installation costs.

"Geothermal energy has traditionally been expensive to install, but it is renewable and it’s economical once it’s installed," said Jim Hardin.
"So we, like a lot of others, have been working on ways to develop very low entry costs for geothermal energy so you can plug into geothermal (energy) at your home just like you now plug into electricity and gas."

Using geothermal energy for heating or cooling requires tapping water below the earth’s surface, where temperatures are moderate and constant.
"In effect, you’re using the earth as a massive heat sink," said Hardin, a former industrial and plant engineer.

It’s much more efficient to cool or heat a home to 70 degrees from an energy source that is 55 degrees. conventional methods like electricity must use air from the outside that is much colder or warmer in winter or summer. But connecting every user to a ground source is logistically difficult and expensive. It’s traditionally been done by drilling several holes in the ground and circulating the water through plastic tubing.
That’s where Hardin Geotechnologies comes in. The company’s principal technology, called a Geothermal Utility Return Line, provides a direct hookup to the lines of the local water utility.

A GURL line is installed alongside existing water utility supply pipes. As the water is routed along the alternate line, its thermal energy is extracted, and the water is returned to the main utility line for treatment and recirculated into the main water supply.
Customers pay the water utility for the energy used and Hardin Geotechnologies collects a royalty from the utility.
Once the system is installed, the savings add up, according to Lilli Hardin. "You can have total savings-maintenance and utility costs- of 30 to 60 percent. That’s substantial for a large industrial user," she said.

Geothermal heat pumps also offer environmental benefits.

"The U.S. Environmental Protection Agency calls geothermal energy the best way to heat or cool your home in terms of the environment," said Karl Gawell, executive director of the Geothermal Energy Association in Washington, D.C.
Hardin Geotechnologies’ other patented system, called Well-to-Well, relies on well water.
To supply air-conditioning in the summer, Well-to-Well pumps water through a heat exchanger, which transfers heat from the building to the water. The water then is pumped back into another well. In winter, the water is pumped back through the system, and heat is drawn from the water to warm the building.

The market is huge for both systems, the Hardin's say. Virtually anyone who has heating or cooling needs is a candidate.
In Comanche, Hardin Geotechnologies is installing a GURL system for the local school system.
"They’ll probably have the lowest utility costs and operating maintenance costs of any school system in the state of Oklahoma," Jim Hardin Said.

School officials did not return telephone calls.

Though heat pumps have had rudimentary application for centuries, geothermal heat pumps are just beginning to gain ground as a viable alternative energy source.

"We believe the heat pump is really beginning to take off. We’re at the edge of strong commercialization," Gawell said.
A big push has come from the U.S. government, which is struggling to live up to its end of the bargain in global warming pacts.
"There’s enormous pressure to utilize renewable energy, to reduce global warming," Jim Hardin Said. "This is probably the only technology that offers the opportunity to meet those requirements."

The government is not the only one eager to see use of geothermal energy proliferate. electric utilities, though they stand to lose business to water utilities, can ultimately benefit because electric energy is required to run Hardin’s systems.
for that reason, Illinova Energy is funding the installation of the GURL system in Oklahoma.
That kind of backing has helped reduce costs for the Hardin's. They invested $60,000 of their own money a few years ago to develop the technology and have required minimal capital since.

Operations are conducted out of Lilli Hardin’s home. She handles marketing while her father oversees the technological side of the business. An administrative assistant is Hardin Geotechnologies’ only other employee.

Once the company begins to see returns from its Oklahoma project later this year, it expects revenue to climb substantially, from $22,250 in 1997 to $2.5 million this year. The company hopes to secure other contracts this year in Oklahoma and Tennessee.
If all goes according to plan, the Hardin's will take their company public within a year.
As the industry consolidates, several heating and cooling companies with geothermal applications have gone public recently, investment bankers said.

"There’s been a lot of activity," said Randy Paine, first vice president of McDonald & Company Securities Inc. "Those have mostly been consolidation stories. A number of those (companies) do work in the geothermal area.

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