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Environmentalists are closely watching a project that's under way in northeastern Indiana. Ball State University is constructing the largest geothermal heating and cooling system of its kind in the country. The university promises the plant will help cut its carbon emissions in half.

We have the story from Daniel Robison of member station WFIU in Bloomington, Indiana.

DANIEL ROBISON: If you dig down just a few dozen feet below the Earth's surface, you'll find the temperature remains between 52 to 55 degrees. Depending on the time of year, geothermal systems work by using the Earth's temperature as a heat source or sink by sending water through miles of pipes and concentrating it to meet the temperature the thermostat calls for.

Using this basic concept, spread out over 660 acres to heat and cool nearly 50 buildings, hasn't been attempted before in this country. But that's the challenge Ball State's facing.

(Soundbite of machinery)

ROBISON: Drills the size of tree trunks are punching through dirt, clay and limestone, creating a polka dot pattern that stretches over land equal to half a dozen football fields. Just one of these 400-foot-deep holes could heat and cool a house. But 4,100 will take care of this entire campus.

Dr. JIM LOWE (Project Engineer, Ball State University): And they still think of it as technology that's strange, but it's not.

ROBISON: That's project engineer Jim Lowe. In a state where more than 95 percent of energy needs are met through coal and natural gas, he says there's still a gee-whiz to geothermal.

Dr. LOWE: This is a major, major change. Instead of thinking about building boilers and continuing to use coal and natural gas, we are shifting that paradigm to one where we are relying upon a renewable energy source here.

ROBISON: When the school originally tried to replace its four Eisenhower-era coal boilers, Ball State President Jo Ann Gora says a $50 million estimate led to sticker shock, and that's before factoring in the cost of coal. So the school started to think outside its smokestack.

Dr. JO ANN GORA (President, Ball State University): We're using a renewable energy that the ground represents. Buildings rest on the ground. The ground is the source of renewable energy. Why don't we use it?

ROBISON: Unlike wind and solar, which don't operate efficiently 24/7, geothermal systems are on all the time. But each one must be installed on-site, meaning it would take thousands of these projects to equal the heating and cooling power of just one coal plant.

Mr. JIM HUDDLESTON (Project Manager, Ball State Geothermal Project): We're not a bunch of tree huggers. I still want to ride my Harley Davidson.

ROBISON: That's Jim Huddleston, who with his Stetson-shaped hard hat, manages the project he says will keep 80,000 tons of carbon emissions from the skies above Muncie. But he says the initial cost of geothermal is steep and that keeps many from digging deep in their own pockets to pay for it.

Mr. HUDDLESTON: Problem is, you and I go to buy a house and I need every penny I have to get that down payment and we don't spend that extra 30 percent.

ROBISON: It could cost Ball State as much as $80 million to build the system. But officials estimate energy savings of up to $2 million a year once the system is up and running. But right now, even with $40 million from the state and five million in federal stimulus funds, Ball State has raised just over half the money it needs.

Despite the financial hurdles, Oregon Institute of Technology Professor John Lund says Ball State will show that large-scale geothermal is a viable resource.

Professor JOHN LUND (Oregon Institute of Technology): It does show that it can be done on a large scale. It'll work anywhere in the country. Because all you need is that temperature anywhere from North Dakota down to Florida and from Maine down to, you know, to Texas.

(Soundbite of machinery)

ROBISON: Meanwhile, across Ball State's campus, Mark Tucker is dumping coal into an enormous boiler, which rages at 1,800 degrees.

Mr. MARK TUCKER: We go through about 130 tons a day between the four boilers.

ROBISON: It could take five to 10 years for Ball State to complete this project, as the school moves forward tapping the Earth for its heating and cooling needs.

For NPR News, I'm Daniel Robison.

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