[Congressional Record Volume 157, Number 81 (Tuesday, June 7, 2011)]
[Senate]
[Pages S3543-S3544]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself, Mr. Crapo, Mr. Risch, and Mr. 
        Merkley):
  S. 1149. A bill to expand geothermal production, and for other 
purposes; to the Committee on Energy and Natural Resources.
  Mr. WYDEN. Mr. President, today Sen. Crapo, Sen. Risch, Sen. Merkley, 
and I are introducing the Geothermal Production Expansion Act of 2011. 
The bill is aimed at making improvements to the Geothermal Steam Act 
and is very similar to legislation introduced in the 111th Congress as 
S. 3993.
  Both bills contain identical provisions to allow the Secretary of the 
Interior to lease a limited amount of public land adjacent to existing 
geothermal property at fair market value. The reason for this change is 
to allow the rapid expansion of already identified geothermal resources 
without the additional delays of competitive leasing and without 
opening up those adjacent properties to speculative bidders who have no 
interest in actually developing the resource, only in extracting as 
much money as they can from the existing geothermal lease holder. 
Current lease holders are understandably reluctant to nominate adjacent 
lands to proven resources for competitive leasing because doing so 
would immediately signal the value of those adjacent properties. As a 
result, existing geothermal developers will likely not realize the full 
potential of the geothermal energy resources that they have spent 
millions of dollars exploring, proving, and developing without these 
changes. And, the Treasury will not realize the economic value of those 
adjacent parcels, which go unleased and undeveloped as a result. For 
these reasons, the bill has the strong support of the Geothermal Energy 
Association.
  I want to emphasize that this bill is not a giveaway. The amount of 
land that can be leased non-competitively is limited to less than 640 
acres per lease. It can only be leased where there are already proven 
resources and thus more likely than not to increase overall Federal 
royalties paid to the Treasury as the adjacent parcels are incorporated 
into the developer's geothermal energy project. Third, the bidder must 
pay fair market value for the lease as determined by the Interior 
Department. Finally, this bill contains an additional provision, which 
was not included in the prior version, which will significantly 
increase the annual rental payments for the newly acquired adjacent 
land in order to ensure that the bill comes as close as possible to 
full economic recovery for the taxpayers.
  Current law sets two different annual rental payment levels for 
geothermal leases. These are amounts that the lease-holder pays per 
year for every acre held in lease. The rental rate for non-competitive 
leases is $1 per acre per year. The rate for competitive leases begins 
at $2 per acre for the first year and increases to $3 for the next 9 
years. The sole difference between the bill introduced in the prior 
Congress and the bill being introduced today is that the version being 
introduced today treats the new, adjacent lease as a competitive lease 
for determining the annual rental even though it is being acquired as a 
non-competitive lease. This will have the clear effect of raising the 
annual rental payments on the newly acquired adjacent lands to the 
higher rate of $2 and then $3 per acre and increase revenue to the 
Treasury. This change underscores our intent, as sponsors of the bill, 
to ensure that the result of these changes in the Geothermal Steam Act 
is truly to increase geothermal energy production on Federal lands 
without any overall loss of revenue to the taxpayers from non-
competitive award of these adjacent lands.
  Geothermal energy is, by definition, a domestic renewable energy 
resource with enormous potential, but developers face high costs and 
economic risks of finding the right location to extract energy. These 
changes will help ensure that once those resources have been proven on 
Federal lands, they can be fully developed as quickly and efficiently 
as possible.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1149

       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 2011''.

     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 toward 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--

[[Page S3544]]

       ``(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 this Act 
     (including applicable regulations).
       ``(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
       ``(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, with an 
     opportunity for public comment for a period of 30 days, any 
     proposed determination under this subparagraph of the fair 
     market value of an area that the qualified lessee seeks to 
     lease under this paragraph; and
       ``(IV) provide to the qualified lessee and any adversely 
     affected party the opportunity to appeal the final 
     determination of fair market value in an administrative 
     proceeding before the applicable Federal land management 
     agency, in accordance with applicable law (including 
     regulations).

       ``(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.
       ``(iii) Annual rental.--For purposes of section 5(a)(3), a 
     lease awarded under this paragraph shall be considered a 
     lease awarded in a competitive lease sale.
       ``(D) Regulations.--Not later than 180 days after the date 
     of enactment of the Geothermal Production Expansion Act of 
     2011, the Secretary shall issue regulations to carry out this 
     paragraph.''.
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