The same happens in the Earth-Moon system. The Moon causes tides on Earth's oceans, which increase friction between water and land and therefore produce heat. Thermodynamically speaking, that heat comes from the Moon's orbital momentum, as it recedes from Earth and slows in its orbit.
Or slowly feed in energy that is stored and released when something else pushes the system far enough out of equilibrium that a quake happens.
In others, like Io, it's believed to be mostly tidal friction.
I was doing some back-of-the-envelope calculations just now to show how Io experiences much more tidal stress than Mercury due to a stronger change in gradient, when I discovered my assumptions were wrong, but I'm posting the results anyway:
Mercury's orbit has a huge eccentricity, and its distance to the sun varies between 0.47 AU at Aphelion and 0.307 AU at Perihelion. Taking Mercury's size into account, that should work out to a difference in solar gravity between its near and far side of about 0.000004 m/s^2 at Aphelion and 0.000013 m/s^2 at Perihelion! That's actually quite the squeeze!
Now comparing that to Io, which has often been reported as having this wild orbit, upon looking up the actual numbers I saw that Io's orbit around Jupiter is actually nearly circular: 420000km at Periapsis and 423400km at Apoapsis. The moon itself has a radius of 1800km, that means its orbit is so circular its variation falls within the size of the actual moon. Furthermore, plugging in the numbers, Io's gravity gradient between its near and far side remains pretty much stable at 0.000014 m/s^2 no matter where it is, varying only by a factor of about -1.37x10^-08.
So the gradient change itself is not dramatic in Io, but reasonably pronounced in Mercury - didn't expect that. Taking a look at the orbital period of both objects, Io completes about 50 orbits in the same time it takes Mercury to orbit once, but even a factor of 50 isn't enough to blow up Io's tidal action to make up for the observed difference in tidal heating.
My only conclusion at this point is that I either made a careless mistake somewhere (which is likely) or that Io's squeezing action must come almost entirely from its interaction with the other Jupiter moons.
In the end, a heat source is not required for Mercury to experience tectonic activity though. As described in the article, the cooling and shrinking of the planet itself are sufficient to cause disturbances on the surface.
http://www.es.ucsc.edu/~pkoch/EART_206/09-0205/Peale%20et%20...
The key is equation (7), which gives the energy dissipated by a solid body due to its eccentric orbit. It's quadratic in eccentricity, but there are other key factors that would vary from Mercury to Io.
The paper above is remarkable. It's an amazing chain of basically armchair logic that leads to the likelihood of volcanism on Io.
I often wonder about the results of planetary geology. Even the interior of the earth is still not very well understood, and most of the methods we use to understand it (e.g. seismometers) are not yet usable outside earth.
The paper you linked to used eccentricity, whereas I used periapsis and apoapsis - it's the same thing mathematically. Not sure where this "clearly eccentricity is the key" thing comes from when I just told you that Io's orbit is nearly circular.
I do like the materials science aspect of the article you linked to in regard to taking rigidity of the body into account, but at a very basic level the problem remains that Io's orbital shape alone doesn't yield enough of a change over time to account for a lot of tidal heating - certainly not compared to Mercury.
Apparently, my memory is faulty.
It also depicts people walking on the dark side staying just shy of the sun side.
I am sure I am missing something. Please enlighten me.