[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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