Method and apparatus for utilizing the earth as a heat source and heat sink for heating and cooling buildings are disclosed. Flexible material such as hollow plastic or metal foil bags which can be buried in deep, narrow trenches are draped over and clamped to heat transfer fluid conduits or conventional heat pipes vastly increasing the heat transfer surface area serving the conduits or heat pipes. The heat pipe bags contain a heat transfer fluid and can contain wicks which are in heat transfer communication with the heat transfer fluid conduits or other heat pipes. The plastic or metal of the heat pipe bag similarly encloses the wick forming a closed, sealed system which can also include the conduit or heat pipe. Such conduit-heat pipe bag combination can be used in combination with conventional heat pumps to both heat and cool buildings.