[Congressional Record Volume 156, Number 155 (Wednesday, December 1, 2010)]
[Senate]
[Pages S8349-S8350]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. WYDEN (for himself, Mr. Risch, Mr. Crapo, and Mr.
Merkley):
S. 3993. A bill to expand geothermal production, and for other
purposes; to the Committee on Energy and Natural Resources.
Mr. WYDEN. Mr. President, I am pleased to join with my colleagues
from Idaho and Oregon, Senator James Risch, Senator Mike Crapo, and
Senator Jeff Merkley, in introducing the Geothermal Production
Expansion Act of 2010. This legislation will amend an already existing
law--the Geothermal Steam Act--governing the way the Federal Government
leases public lands for the development of geothermal energy projects.
Geothermal energy facilities provide a continuous supply of renewable
energy with very few environmental impacts. Although the United States
has more geothermal capacity than any other country, this potential has
been barely tapped. This shortfall is partly due to the high initial
cost and risk involved in locating and developing geothermal resources.
Like oil and natural gas exploration, until exploration and production
wells are actually drilled, the true energy value of the site is not
known nor is the full extent of the underground reservoir or energy
source.
This legislation is intended to expand the future production of
geothermal energy on federally-owned lands by taking some of the
uncertainty and guess work out of the leasing and development process
by allowing the Interior Department to issue geothermal leases for
adjacent lands on a non-competitive basis, based on fair-market value.
This would allow a geothermal developer to expand a successful
geothermal lease without being forced into a bidding war with
speculators or uncooperative competitors who might threaten project
expansion or even prevent the project from reaching commercial scale.
Under current law, the Department of Interior is charged with issuing
geothermal energy leases through a competitive lease sale. There are,
however, several situations where the Department is allowed to issue
non-competitive leases, for example, if there were no competitive bids
offered, or where there is an already existing mining claim, or where
the geothermal energy will be used directly on site for heating or
other uses and not sold as electricity. This legislation would add an
additional category of non-competitive leases for lands that are
immediately adjacent to an existing, competitively-awarded, geothermal
lease where there is an identified, validated geothermal energy
discovery. They would not just be given away to an existing lease
holder. These non-competitive leases would be made at fair-market value
as independently determined by the Department of Interior. They could
also not be taken away from any existing lease holder, if they were
already leased, nor could they be removed from competitive leasing if
they had already been nominated to be competitively leased.
These safeguards are intended to insure that this new non-competitive
lease authority is a limited exception to the general policy of
competitive leasing for geothermal resources on our public lands. At
the same time, this new authority will help ensure that when and where
a geothermal resource has been discovered, the project developer will
be able to tap that resource and turn it into a viable, commercial
energy business and provide clean, renewable energy for our country.
This bill is a companion to bipartisan legislation sponsored by
Representative Jay Inslee in the House of Representatives. The House
Committee on Natural Resources held hearings on the underlying House
bill, H.R. 3709, in February of this year. The legislation Sen. Risch
and I are introducing today incorporates changes resulting from those
hearings, primarily making it clear that any non-competitive leases
issued under this authority would be at fair-market value.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the additional material was ordered to be
printed in the Record, as follows:
S. 3993
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Geothermal Production
Expansion Act of 2010''.
SEC. 2. FINDINGS.
Congress finds that--
(1) it is in the best interest of the United States to
develop clean renewable geothermal energy;
(2) development of that energy should be promoted on
appropriate Federal land;
(3) under the Energy Policy Act of 2005 (42 U.S.C. 15801 et
seq.), the Bureau of Land Management is authorized to issue 3
different types of noncompetitive leases for production of
geothermal energy on Federal land, including--
(A) noncompetitive geothermal leases to mining claim
holders that have a valid operating plan;
(B) direct use leases; and
(C) leases on parcels that do not sell at a competitive
auction;
(4) Federal geothermal energy leasing activity should be
directed towards persons seeking to develop the land as
opposed to persons seeking to speculate on geothermal
resources and artificially raising the cost of legitimate
geothermal energy development;
(5) developers of geothermal energy on Federal land that
have invested substantial capital and made high risk
investments should be allowed to secure a discovery of
geothermal energy resources; and
(6) successful geothermal development on Federal land will
provide increased revenue to the Federal Government, with the
payment of production royalties over decades.
SEC. 3. NONCOMPETITIVE LEASING OF ADJOINING AREAS FOR
DEVELOPMENT OF GEOTHERMAL RESOURCES.
Section 4(b) of the Geothermal Steam Act of 1970 (30 U.S.C.
1003(b)) is amended by adding at the end the following:
``(4) Adjoining land.--
``(A) Definitions.--In this paragraph:
``(i) Fair market value per acre.--The term `fair market
value per acre' means a dollar amount per acre that--
``(I) except as provided in this clause, shall be equal to
the market value per acre as determined by the Secretary
under regulations issued under this paragraph;
``(II) shall be determined by the Secretary with respect to
a lease under this paragraph, by not later than the end of
the 90-day period beginning on the date the Secretary
receives an application for the lease; and
``(III) shall be not less than the greater of--
``(aa) 4 times the median amount paid per acre for all land
leased under this Act during the preceding year; or
``(bb) $50.
``(ii) Industry standards.--The term `industry standards'
means the standards by which a qualified geothermal
professional assesses whether downhole or flowing temperature
measurements with indications of permeability are sufficient
to produce energy from geothermal resources, as determined
through flow or injection testing or measurement of lost
circulation while drilling.
``(iii) Qualified federal land.--The term `qualified
Federal land' means land that is otherwise available for
leasing under this Act.
``(iv) Qualified geothermal professional.--The term
`qualified geothermal professional' means an individual who
is an engineer or geoscientist in good professional standing
with at least 5 years of experience in geothermal
exploration, development, or project assessment.
``(v) Qualified lessee.--The term `qualified lessee' means
a person that may hold a geothermal lease under part 3202.10
of title 43, Code of Federal Regulations, as in effect on the
date of enactment of the Geothermal Production Expansion Act
of 2010.
``(vi) Valid discovery.--The term `valid discovery' means a
discovery of a geothermal resource by a new or existing slim
hole or production well, that exhibits downhole or flowing
temperature measurements with indications of permeability
that are sufficient to meet industry standards.
``(B) Authority.--An area of qualified Federal land that
adjoins other land for which a qualified lessee holds a legal
right to develop geothermal resources may be available for a
noncompetitive lease under this section to the qualified
lessee at the fair market value per acre, if--
``(i) the area of qualified Federal land--
``(I) consists of not less than 1 acre and not more than
640 acres; and
``(II) is not already leased under this Act or nominated to
be leased under subsection (a);
``(ii) the qualified lessee has not previously received a
noncompetitive lease under this paragraph in connection with
the valid discovery for which data has been submitted under
clause (iii)(I); and
[[Page S8350]]
``(iii) sufficient geological and other technical data
prepared by a qualified geothermal professional has been
submitted by the qualified lessee to the applicable Federal
land management agency that would lead individuals who are
experienced in the subject matter to believe that--
``(I) there is a valid discovery of geothermal resources on
the land for which the qualified lessee holds the legal right
to develop geothermal resources; and
``(II) that thermal feature extends into the adjoining
areas.
``(C) Determination of fair market value.--
``(i) In general.--The Secretary shall--
``(I) publish a notice of any request to lease land under
this paragraph;
``(II) determine fair market value for purposes of this
paragraph in accordance with procedures for making those
determinations that are established by regulations issued by
the Secretary;
``(III) provide to a qualified lessee and publish any
proposed determination under this subparagraph of the fair
market value of an area that the qualified lessee seeks to
lease under this paragraph;
``(IV) provide to the qualified lessee the opportunity to
appeal the proposed determination during the 30-day period
beginning on the date that the proposed determination is
provided to the qualified lessee; and
``(V) provide to any interested member of the public the
opportunity to appeal the proposed determination in
accordance with the process established under parts 4 and
1840, and section 3200.5, of title 43, Code of Federal
Regulations (as in effect on the date of enactment of the
Geothermal Production Expansion Act of 2010) during the 30-
day period beginning on the date that the proposed
determination is published.
``(ii) Limitation on nomination.--After publication of a
notice of request to lease land under this paragraph, the
Secretary may not accept under subsection (a) any nomination
of the land for leasing unless the request has been denied or
withdrawn.
``(D) Regulations.--Not later than 180 days after the date
of enactment of the Geothermal Production Expansion Act of
2010, the Secretary shall issue regulations to carry out this
paragraph.''.
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