The New Energy Frontier: Quaise Energy’s Superhot Geothermal Gambit in Oregon By Alphaxioms Editorial Team | September 4, 2026 In the high desert of Central Oregon, a project with implications far beyond Deschutes County is taking shape. Quaise Energy, now backed by a total of $280 million in funding, is advancing Project Obsidian, which it describes as the world’s first commercial superhot geothermal power plant . The company says the first phase is designed to deliver 50 MW by 2030, with a pathway toward 250 MW and ultimately more than 1 GW . Before the first megawatt reaches the grid, however, the project faces a local policy test: whether Deschutes County should grant a five-year property tax abatement under Oregon’s Rural Renewable Energy Development Zone Program. That decision is more than a routine incentive request. It is a referendum on how rural counties choose to support next-generation energy infrastructure and whether older incentive frameworks can accommodate a technolog...
The New Energy Frontier: Quaise Energy’s Superhot Geothermal Gambit in Oregon
By Alphaxioms Editorial Team | September 4, 2026
In the high desert of Central Oregon, a project with implications far beyond Deschutes County is taking shape. Quaise Energy, now backed by a total of $280 million in funding, is advancing Project Obsidian, which it describes as the world’s first commercial superhot geothermal power plant . The company says the first phase is designed to deliver 50 MW by 2030, with a pathway toward 250 MW and ultimately more than 1 GW .
Before the first megawatt reaches the grid, however, the project faces a local policy test: whether Deschutes County should grant a five-year property tax abatement under Oregon’s Rural Renewable Energy Development Zone Program. That decision is more than a routine incentive request. It is a referendum on how rural counties choose to support next-generation energy infrastructure and whether older incentive frameworks can accommodate a technology that aims to reach Earth’s hottest accessible rock .
A new geothermal frontier
Conventional geothermal projects usually rely on reservoirs that are hot enough for power generation but still limited by drilling economics and materials science. Quaise’s approach is different because it is designed to go far deeper and hotter than standard geothermal development, using millimeter-wave drilling instead of a rotating drill bit [3]. The company’s concept is to access rock at temperatures above 300 C, where geothermal energy density rises sharply and power output per well can be much higher than in conventional systems .
The technical appeal is straightforward. If a geothermal system can reach superhot rock, it can extract more energy from the same surface footprint and potentially reduce the levelized cost of electricity over time. That is why Quaise has positioned Project Obsidian not just as a single plant, but as a demonstration that geothermal can scale into a mainstream baseload resource . The company’s CEO, Carlos Araque, has framed the mission as building toward gigawatt-scale geothermal deployment .
How the drilling works
Quaise’s drilling system emerged from research rooted in MIT fusion science, and it replaces mechanical cutting with millimeter-wave energy transmitted downhole . Instead of relying on bit wear, torque, and high-temperature electronics, the system uses a surface-based gyrotron to ablate rock by thermal action . That design matters because conventional drill technology becomes increasingly fragile as temperature and depth increase.
The company’s progress has moved from theory toward field validation. Quaise reported successful drilling in granite and says it is moving deeper at its Texas test site, showing that noncontact drilling can work in hard rock conditions [4][3]. For geothermal developers, that is the critical breakthrough: if the drilling method can keep advancing, the practical depth ceiling for geothermal could expand dramatically.
Why Oregon matters
Project Obsidian is being developed on federally leased geothermal land in Oregon’s Deschutes National Forest, near Newberry Volcano, one of the most studied geothermal regions in the United States . The site is attractive because it offers a strong geothermal gradient, which means temperatures rise rapidly with depth and shorten the distance between the surface and usable heat [3]. Quaise has said the first phase can tap superhot conditions at roughly five kilometers below the surface .
The project is structured in stages. Phase I targets 50 MW, Phase II would expand to 250 MW, and Phase III is intended to move beyond 1 GW as the technology and reservoir system mature . Quaise has also described two initial well systems aimed at reservoirs with average temperatures of 315 C and 365 C, which underscores how aggressively the company is pursuing high-enthalpy geothermal resources . Those numbers are not incremental improvements; they represent a different category of geothermal development.
The tax abatement question
Image: Quaise Energy is requesting Board consideration of an extended five-year tax abatement
through the RRED Zone Program
The tax request before Deschutes County is tied to Oregon’s Rural Renewable Energy Development Zone Program, which is designed to encourage renewable investments in eligible rural areas. The program can provide a property tax abatement for three to five years, depending on the level of local approval and the conditions attached to the deal . For a project of this size, the incentive is not a side note; it can materially alter the early economics of the buildout.
According to the project figures cited in local analysis, the taxable value of Project Obsidian is projected at about $173.1 million, with annual taxes otherwise expected to exceed $2.2 million at a tax rate of 1.27826 percent. Over five years, that would amount to more than $11 million in foregone revenue without an abatement. Under the proposed structure, the company would owe no general property tax in the first three years and would instead pay a school support fee in years four and five . That reduces the five-year obligation to roughly $663,800, based on the figures presented .
What the program requires
For a standard three-year exemption, the zone rules require job creation, maintenance of employment levels, a first-source agreement with the local workforce office, and compliance with other conditions set by the sponsor . For a four- or five-year abatement, the bar is higher. The sponsor must enter a written agreement with the business, the company must pay a school support fee in the fourth and fifth years, and new employees must receive average compensation at or above 150 percent of the county average wage .
The program also gives the sponsor room to add local conditions, such as workforce training support, childcare access, local hiring preferences, reporting commitments, or use of local contractors . In other words, the tax incentive is not simply a giveaway. It is a negotiated public-private arrangement meant to tie tax relief to broader local benefits.
The financing backdrop
Quaise’s capital position has changed quickly in 2026. The company first announced a $134 million first close of its Series B in early July, and later completed a final close that brought the round to $180 million in equity financing . With earlier funding included, the company says its total funding now stands at $280 million . The final close also included a $35 million investment from Nabors Industries, one of the world’s largest land drilling contractors .
That financing matters because it signals growing investor confidence in superhot geothermal as a commercial category rather than just a science project. It also suggests Quaise is pairing its drilling strategy with industrial-scale drilling expertise, which is important for a project that needs to move from prototype to utility-grade infrastructure. In practical terms, the capital raised gives Project Obsidian more credibility with policymakers, land managers, and power buyers .
The broader significance of the Deschutes County decision extends beyond a single tax package. The U.S. Department of Energy has been pushing for a major expansion of geothermal generation, and enhanced geothermal systems are increasingly viewed as one of the few clean energy sources that can provide round-the-clock power . Quaise’s technology attempts to remove one of the biggest barriers to that future: the inability to drill reliably into extreme heat.
If the company succeeds, the implications could reach far beyond Oregon. Superhot geothermal could become viable in regions where conventional geothermal resources are poor or inaccessible, opening new markets for firm clean power . That would make local policy choices like Deschutes County’s more consequential, because they would not just shape one project but potentially set expectations for how communities support the next generation of energy infrastructure.
The road ahead
The immediate next step is procedural, not technological. Deschutes County must decide whether to support the five-year abatement request, and if it does, the county and Quaise would need to finalize the written terms of the agreement and complete the necessary filings with state authorities [2]. The project’s phased structure and the possibility of overlapping exemption periods may complicate administration, but those are governance issues rather than existential obstacles [2].
For the county, the trade-off is clear. It would forgo millions in near-term property tax revenue in exchange for a project that could bring high-wage jobs, advanced industrial activity, and long-term clean power to the region. For Quaise, the incentive can help bridge the gap between a capital-intensive first-of-its-kind project and a future in which superhot geothermal is a standard part of the energy mix . The result is a familiar but high-stakes question in energy policy: how much public support should be offered to help a breakthrough technology get across the finish line?
What is happening in Central Oregon is more than a local development story. It is a real-time test of whether public policy, private capital, and frontier drilling technology can align around a new model of geothermal power . If Project Obsidian works, Oregon may be remembered as the place where superhot geothermal moved from ambition to industry.
Alphaxioms is an independent publication covering the intersection of technology, energy, and policy.
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