Transient electromagnetics, or time-domain methods (TEM or TDEM), refer to a branch of geophysics, among other disciplines, that use an electromagnetic impulse excitation to investigate the subsurface. TEM methods are generally sensitive to the electrical properties of the subsurface in geologic applications, but are also sensitive to magnetic properties in applications like UXO detection and characterization.
Two fundamental electromagnetic principles are required to derive the physics behind TEM surveys: Faraday's law of induction and Lenz's Law. A loop of wire is generally energized by a direct current. At some time (t0) the current is cut off as quickly as possible. Faraday's law dictates that a nearly identical current is induced in the subsurface to preserve the magnetic field produced by the original current (eddy currents). Due to ohmic losses, the induced surface currents dissipate--this causes a change in the magnetic field, which induces subsequent eddy currents. The net result is a downward and outward diffusion of currents in the subsurface.
These currents produce a magnetic field by Faraday's law. At the surface, the change in magnetic field [flux] with time is measured. The way the currents diffuse in the subsurface is related to the conductivity distribution in the ground.
This is a basic view of the physical principles involved. When conductive bodies are present, the diffusion of the transients is changed. In addition, transients are induced in the conductive bodies as well. This is only the most basic overview. The paper by McNeill is freely available from the Geonics website explaining the basics of the method: Geonics technical notes