[House Report 115-502]
[From the U.S. Government Publishing Office]



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115th Congress    }                                 {         Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                 {          115-502
======================================================================



 
          ENHANCING GEOTHERMAL PRODUCTION ON FEDERAL LANDS ACT

                                _______
                                

January 9, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

     Mr. Bishop of Utah, from the Committee on Natural Resources, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 4568]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 4568) to amend the Geothermal Steam Act of 1970 
to promote timely exploration for geothermal resources under 
geothermal leases, and for other purposes, having considered 
the same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Enhancing Geothermal Production on 
Federal Lands Act''.

SEC. 2. GEOTHERMAL PRODUCTION ON FEDERAL LANDS.

  The Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) is amended 
by adding at the end the following:

``SEC. 30. GEOTHERMAL EXPLORATION TEST PROJECTS.

  ``(a) Definition of Geothermal Exploration Test Project.--In this 
section, the term `geothermal exploration test project' means the 
drilling of a well to test or explore for geothermal resources on lands 
for which the Secretary has issued a lease under this Act, that--
          ``(1) is carried out by the holder of the lease;
          ``(2) causes--
                  ``(A) less than 5 acres of soil or vegetation 
                disruption at the location of each geothermal 
                exploration well; and
                  ``(B) not more than an additional 5 acres of soil or 
                vegetation disruption during access or egress to the 
                test site;
          ``(3) is developed--
                  ``(A) less than 9 inches in diameter;
                  ``(B) in a manner that does not require off-road 
                motorized access other than to and from the well site 
                along an identified off-road route;
                  ``(C) without construction of new roads other than 
                upgrading of existing drainage crossings for safety 
                purposes;
                  ``(D) with the use of rubber-tired digging or 
                drilling equipment vehicles; and
                  ``(E) without the use of high-pressure well 
                stimulation;
          ``(4) is completed in less than 90 days, including the 
        removal of any surface infrastructure from the site; and
          ``(5) requires the restoration of the project site within 3 
        years of the date of first exploration drilling to 
        approximately the condition that existed at the time the 
        project began, unless the site is subsequently used as part of 
        energy development under the lease.
  ``(b) Categorical Exclusion.--
          ``(1) In general.--Unless extraordinary circumstances exist, 
        a project that the Secretary determines under subsection (c) is 
        a geothermal exploration test project shall be categorically 
        excluded from the requirements for an environmental assessment 
        or an environmental impact statement under the National 
        Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) or 
        section 1508.4 of title 40, Code of Federal Regulations (or a 
        successor regulation).
          ``(2) Extraordinary circumstances definition.--In this 
        subsection, the term `extraordinary circumstances' has the same 
        meaning given such term in the Department of the Interior 
        Departmental Manual, 516 DM 2.3A(3) and 516 DM 2, Appendix 2 
        (or successor provisions).
  ``(c) Process.--
          ``(1) Requirement to provide notice.--A leaseholder shall 
        provide notice to the Secretary of the leaseholder's intent to 
        carry out a geothermal exploration test project at least 30 
        days before the start of drilling under the project.
          ``(2) Review and determination.--Not later than 10 days after 
        receipt of a notice of intent under paragraph (1), the 
        Secretary shall, with respect to the project described in the 
        notice of intent--
                  ``(A) determine if the project qualifies for a 
                categorical exclusion under subsection (b); and
                  ``(B) notify the leaseholder of such determination.
          ``(3) Opportunity to remedy.--If the Secretary determines 
        under paragraph (2)(A) that the project does not qualify for a 
        categorical exclusion under subsection (b), the Secretary 
        shall--
                  ``(A) include in such notice clear and detailed 
                findings on any deficiencies in the project that 
                resulted in such determination; and
                  ``(B) allow the leaseholder to remedy any such 
                deficiencies and resubmit the notice of intent under 
                paragraph (1).''.

SEC. 3. GEOTHERMAL LEASING PRIORITY AREAS.

  The Geothermal Steam Act of 1970 (30 U.S.C. 1001 et seq.) is further 
amended by adding at the end the following:

``SEC. 31. GEOTHERMAL LEASING PRIORITY AREAS.

  ``(a) Definition of Covered Land.--In this section, the term `covered 
land' means land that is--
          ``(1) Federal land; and
          ``(2) not excluded from the development of geothermal energy 
        under--
                  ``(A) a land use plan established under the Federal 
                Land Policy and Management Act of 1976 (43 U.S.C. 1701 
                et seq.); or
                  ``(B) any other Federal law.
  ``(b) Designation of Geothermal Leasing Priority Areas.--The 
Secretary, in consultation with the Secretary of Energy, shall 
designate portions of covered land as geothermal leasing priority areas 
as soon as practicable, but not later than 5 years, after the date of 
the enactment of this section.
  ``(c) Criteria for Selection.--In determining which covered lands to 
designate as geothermal leasing priority areas under subsection (b), 
the Secretary, in consultation with the Secretary of Energy, shall 
consider if--
          ``(1) the covered land is preferable for geothermal leasing;
          ``(2) production of geothermal energy on such land is 
        economically viable, including if such land has access to 
        methods of energy transmission; and
          ``(3) the designation would be in compliance with section 202 
        of the Federal Land Policy and Management Act of 1976 (43 
        U.S.C. 1712), including subsection (c)(9) of that section.
  ``(d) Review and Modification.--Not less frequently than once every 
10 years, the Secretary shall--
          ``(1) review covered land and, if appropriate, make 
        additional designations of geothermal leasing priority areas; 
        and
          ``(2) review each area designated as a geothermal leasing 
        priority area under this section, and, if appropriate, remove 
        such designation.
  ``(e) Programmatic Environmental Impact Statement.--
          ``(1) Initial designations.--No later than one year after the 
        initial designation of a geothermal leasing priority area, the 
        Secretary shall prepare a supplement to any final programmatic 
        environmental impact statement for geothermal leasing that is 
        the most recently finalized such statement with respect to 
        covered land designated as a geothermal leasing priority area 
        under subsection (b).
          ``(2) Subsequent designations.--Each designation of a 
        geothermal leasing priority area under subsection (d) shall be 
        included in a programmatic environmental impact statement for 
        geothermal leasing or in a supplement to such a statement.
          ``(3) Consultations.--In developing any programmatic 
        environmental impact statement for geothermal leasing or 
        supplement to such a statement under this section, the 
        Secretary shall consult, on an ongoing basis, with appropriate 
        State, Tribal, and local governments, transmission 
        infrastructure owners and operators, developers, and other 
        appropriate entities.
          ``(4) Procedure.--The Secretary may not delay issuing a 
        permit or holding a lease sale under this Act because the 
        supplement required under paragraph (1) has not been finalized 
        by the Secretary.
  ``(f) Compliance With NEPA.--If the Secretary determines that the 
designation of a geothermal leasing priority area has been sufficiently 
analyzed by a programmatic environmental impact statement, the 
Secretary shall not prepare any additional analysis under the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) with respect 
to geothermal lease sales for such geothermal leasing priority area.''.

SEC. 4. FACILITATION OF COPRODUCTION OF GEOTHERMAL ENERGY ON OIL AND 
                    GAS LEASES.

  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) Land subject to oil and gas lease.--Land under an oil 
        and gas lease issued pursuant to the Mineral Leasing Act (30 
        U.S.C. 181 et seq.) or the Mineral Leasing Act for Acquired 
        Lands (30 U.S.C. 351 et seq.) that is subject to an approved 
        application for permit to drill and from which oil and gas 
        production is occurring may be available for noncompetitive 
        leasing under subsection (c) by the holder of the oil and gas 
        lease--
                  ``(A) on a determination that geothermal energy will 
                be produced from a well producing or capable of 
                producing oil and gas; and
                  ``(B) in order to provide for the coproduction of 
                geothermal energy with oil and gas.''.

SEC. 5. 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 further amended by adding at the end the following:
          ``(5) 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 (taking into account the 
                                determination under subparagraph 
                                (B)(iii) regarding a valid discovery on 
                                the adjoining land) 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 180-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 who 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 geothermal 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 270 days after the 
                date of enactment of this paragraph, the Secretary 
                shall issue regulations to carry out this paragraph.''.

                          Purpose of the Bill

    The purpose of H.R. 4568 is to amend the Geothermal Steam 
Act of 1970 to promote timely exploration for geothermal 
resources under geothermal leases.

                  Background and Need for Legislation

    Reliable and affordable domestic energy sources are 
essential for our economic health at the local, state, and 
federal level. Increasing the accessibility and affordability 
of renewable energy on federal lands is a critical component in 
an all-of-the-above energy strategy, which bolsters our 
nation's energy security and diminishes our reliance on foreign 
sources.
    Geothermal energy, naturally produced from the immense heat 
of the earth's core, is a clean, sustainable energy source. 
Unlike other renewables such as wind and solar, geothermal is 
not an intermittent source of energy, and therefore not reliant 
on a backup power source.\1\ As it requires no fossil fuels, it 
acts as an economic stabilizer in the energy market.\2\ Despite 
its usefulness and potential, geothermal energy is hampered by 
an unpredictable regulatory process, discouraging development.
---------------------------------------------------------------------------
    \1\Verdolini, Elena, Francesco Vona, and David Popp. ``Bridging the 
Gap: Do Fast Reacting Fossil Technologies Facilitate Renewable Energy 
Diffusion?'' The National Bureau of Economic Research (2016). http://
www.nber.org/papers/w22454.pdf.
    \2\Geothermal Energy Association. Potential Use (updated 2014). 
http://geo-energy.org/PotentialUse.aspx (Accessed November 13, 2017).
---------------------------------------------------------------------------
    The Enhancing Geothermal Production on Federal Lands Act 
begins by easing the regulatory hurdles at the very beginning 
of development--the exploration of a potential resource. Ninety 
percent of viable geothermal resources in the United States are 
on federally-managed lands, making almost all geothermal 
projects subject to review under the National Environmental 
Policy Act of 1969 (NEPA, 42 U.S.C. 4321 et seq.).\3\ 
Conceivably, it may take as long as seven to ten years for a 
geothermal project to begin production from its initial land 
use planning stage.\4\
---------------------------------------------------------------------------
    \3\Supra.
    \4\Young, et al., 894.
---------------------------------------------------------------------------
    While the general presence of a geothermal resource can be 
estimated by seismic surveys and other technologies, 
pinpointing the precise location requires an exploration well 
to test what is beneath the surface.\5\ Currently, most 
geothermal exploration wells require an Environmental 
Assessment (EA) to be filed before exploration begins. As an EA 
for geothermal projects averages 10 months, interested parties 
must wait nearly a year to determine if a viable geothermal 
resource even exists.\6\ Permitting testing sites without an 
extensive, lengthy NEPA analysis would greatly mitigate the 
risk of investing the high up-front capital costs that 
geothermal development requires.\7\
---------------------------------------------------------------------------
    \5\Young, Katherine R., Kermit Witherbee, Aaron Levine, Adam 
Keller, Jeremy Balu, and Mitchell Bennett. ``Geothermal Permitting and 
NEPA Timelines.'' Geothermal Resources Council Transactions 38 (2014): 
893-904. https://www.geothermal-library.org/
index.php?mode=pubs&action=view&record=1033639.
    \6\Young, et al., 900.
    \7\Supra, 893.
---------------------------------------------------------------------------
    The bill also allows for geothermal development on lands 
already leased for oil and gas development. This would 
encourage utilization of a valid geothermal resource if 
discovered on an existing federal oil and gas lease.
    Finally, this bill permits noncompetitive leasing on 
adjacent federal lands for geothermal energy production. This 
enables a current leaseholder to acquire neighboring lands at 
fair market value, so that the geothermal resource may be fully 
accessed. Without this provision, the boundaries of a lease 
could conceivably cut a resource in two, and thereby limit the 
amount of resources the leaseholder may access. If the 
adjoining land where the resource extends were leased for 
another purpose, the geothermal resource there could be 
rendered completely inaccessible.

                            Committee Action

    H.R. 4568 was introduced on December 6, 2017, by 
Congressman Raul R. Labrador (R-ID). The bill was referred to 
the Committee on Natural Resources. On December 12, 2017, the 
Natural Resources Committee met to consider the bill. 
Congressman Raul R. Labrador offered an amendment designated 
#1; it was adopted by unanimous consent. No further amendments 
were offered, and the bill, as amended, was ordered favorably 
reported to the House of Representatives by unanimous consent 
on December 13, 2017.

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                    Compliance With House Rule XIII

    1. Cost of Legislation and the Congressional Budget Act. 
With respect to the requirements of clause 3(c)(2) and (3) of 
rule XIII of the Rules of the House of Representatives and 
sections 308(a) and 402 of the Congressional Budget Act of 
1974, the Committee has received the following estimate for the 
bill from the Director of the Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, December 18, 2017.
Hon. Rob Bishop,
Chairman, Committee on Natural Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4568, the 
Enhancing Geothermal Production on Federal Lands Act,
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jeff LaFave.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

H.R. 4568--Enhancing Geothermal Production on Federal Lands Act

    H.R. 4568 would authorize the Bureau of Land Management 
(BLM) to award leases, on a noncompetitive basis, for the 
development of geothermal resources on certain federal lands. 
The bill also would require BLM to identify areas that are a 
priority for such development and would exempt certain 
geothermal projects from complying with provisions of the 
National Environmental Policy Act (NEPA).
    Using information provided by BLM and assuming the 
availability of appropriated funds, CBO estimates that 
implementing H.R. 4568 would cost less than $500,000 a year 
through 2022. Enacting H.R. 4568 could affect direct spending; 
therefore, pay-as-you-go procedures apply. However, CBO 
estimates that the net effect on direct spending would not be 
significant in any year. Enacting H.R. 4568 would not affect 
revenues.
    CBO estimates that enacting H.R. 4568 would not 
significantly affect net direct spending or on-budget deficits 
in any of the four consecutive 10-year periods beginning in 
2028.
    H.R. 4568 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.

Noncompetitive leasing of geothermal resources

    H.R. 4568 would authorize BLM to offer noncompetitive 
leases of up to 640 acres for lands adjacent to known 
geothermal discoveries. Under the bill, a company that 
identified a geothermal resource that extended onto federal 
land adjacent to company-controlled lands could acquire the 
lease for a specified amount (called a bonus bid) that is 
estimated by BLM to be equivalent to the fair market value 
rather than an amount determined through a competitive auction. 
In addition to paying the estimated fair market value for the 
parcel, the bill would require any company awarded such a 
noncompetitive lease to make annual rental payments equal to 
those required for lands that are leased competitively. 
Finally, a company could receive only one noncompetitive lease 
for each known geothermal discovery.
    CBO expects that awarding noncompetitive leases for lands 
adjacent to known geothermal discoveries could reduce the value 
of bonus bids on those parcels that would otherwise have been 
determined by auction. However, because the bill would require 
the companies that are awarded those leases to pay the 
estimated fair market value for them, we estimate that 
implementing H.R. 4568 would not reduce the amount of receipts 
deposited in the Treasury by more than $500,000 in any year. 
(Under current law, 75 percent of all receipts from bonus bids, 
rents, and royalties related to the development of geothermal 
resources on federal lands is paid to the states and counties 
in which those lands are located. The remaining funds are 
deposited in the Treasury and are recorded as offsets to direct 
spending.)
    In addition, CBO expects that implementing H.R. 4568 could 
increase receipts from royalties paid on geothermal energy 
production by reducing the amount of time it takes to develop a 
known geothermal resource and also by reducing the likelihood 
that lands containing geothermal resources would be acquired 
for speculative purposes. CBO estimates that any increase in 
the amount of royalty receipts that would be deposited in the 
Treasury would not exceed $500,000 in any year. Those amounts 
would offset any reduction in bonus bids from issuing 
noncompetitive leases under the bill. On balance, CBO estimates 
that allowing firms to acquire noncompetitive leases for lands 
adjacent to known geothermal discoveries would have no 
significant net effect on direct spending over the 2018-2027 
period.
    H.R. 4568 also would allow firms with federal oil and gas 
leases to acquire the rights, on a noncompetitive basis, to 
produce geothermal resources from those leases. Using 
information provided by BLM, CBO expects that very few 
geothermal leases would be acquired under this provision. Thus, 
enacting this provision would have no significant effect on the 
federal budget.

Priority areas for the development of geothermal resources

    H.R. 4568 would require BLM to designate priority areas on 
federal lands for the development of geothermal resources. 
After designating those areas, the agency would be required to 
prepare a supplement to any existing programmatic environmental 
impact statement (PEIS) unless the Secretary of the Interior 
determines that the designated areas were sufficiently analyzed 
by existing PEIS. Using information provided by BLM and 
assuming the availability of appropriated funds, CBO estimates 
that identifying the priority areas and completing the 
necessary supplement to the PEIS could take up to five years 
and would cost less than $500,000 a year.

Exploration test projects for geothermal resources

    Under H.R. 4568, certain geothermal exploration projects 
that meet specified requirements related to the duration of the 
activities, the amount of land disturbed, and the restoration 
of the project site would not be required to obtain an 
environmental impact review under NEPA. The Secretary would 
have 10 days to review proposed projects to determine whether 
they meet the requirements necessary to obtain a NEPA 
exemption. Using information provided by BLM, CBO estimates 
that implementing this provision would have a negligible effect 
on the agency's workload.
    On September 18, 2017, CBO transmitted a cost estimate for 
H.R. 825, the Public Land Renewable Energy Development Act of 
2017, as ordered reported by the House Committee on Natural 
Resources on July 26, 2017. H.R. 825 would require BLM to 
identify priority areas for the development of geothermal and 
wind resources whereas H.R. 4568 would require the agency to 
identify priority areas only for the development of geothermal 
resources. Those differences are reflected in the CBO cost 
estimates.
    The CBO staff contact for this estimate is Jeff LaFave. The 
estimate was approved by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.
    2. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill is to amend the Geothermal Steam Act of 
1970 to promote timely exploration for geothermal resources 
under geothermal leases.

                           Earmark Statement

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                       Compliance With H. Res. 5

    Directed Rule Making. This bill contains 1 directed 
rulemaking. Section 5 requires the Secretary of the Interior to 
issue regulations determining the fair market value for lands 
to be leased.
    Duplication of Existing Programs. This bill does not 
establish or reauthorize a program of the federal government 
known to be duplicative of another program. Such program was 
not included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-139 
or identified in the most recent Catalog of Federal Domestic 
Assistance published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169) as relating to other programs.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

                      GEOTHERMAL STEAM ACT OF 1970




           *       *       *       *       *       *       *
SEC. 4. LEASING PROCEDURES.

  (a) Nominations.--The Secretary shall accept nominations of 
land to be leased at any time from qualified companies and 
individuals under this Act.
  (b) Competitive Lease Sale Required.--
          (1) In general.--Except as otherwise specifically 
        provided by this Act, all land to be leased that is not 
        subject to leasing under subsection (c) shall be leased 
        as provided in this subsection to the highest 
        responsible qualified bidder, as determined by the 
        Secretary.
          (2) Competitive lease sales.--The Secretary shall 
        hold a competitive lease sale at least once every 2 
        years for land in a State that has nominations pending 
        under subsection (a) if the land is otherwise available 
        for leasing.
          (3) Lands subject to mining claims.--Lands that are 
        subject to a mining claim for which a plan of 
        operations has been approved by the relevant Federal 
        land management agency may be available for 
        noncompetitive leasing under this section to the mining 
        claim holder.
          (4) Land subject to oil and gas lease.--Land under an 
        oil and gas lease issued pursuant to the Mineral 
        Leasing Act (30 U.S.C. 181 et seq.) or the Mineral 
        Leasing Act for Acquired Lands (30 U.S.C. 351 et seq.) 
        that is subject to an approved application for permit 
        to drill and from which oil and gas production is 
        occurring may be available for noncompetitive leasing 
        under subsection (c) by the holder of the oil and gas 
        lease--
                  (A) on a determination that geothermal energy 
                will be produced from a well producing or 
                capable of producing oil and gas; and
                  (B) in order to provide for the coproduction 
                of geothermal energy with oil and gas.
          (5) 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 
                                (taking into account the 
                                determination under 
                                subparagraph (B)(iii) regarding 
                                a valid discovery on the 
                                adjoining land) 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 
                                180-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 who 
                        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 geothermal 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 270 days 
                after the date of enactment of this paragraph, 
                the Secretary shall issue regulations to carry 
                out this paragraph.
  (c) Noncompetitive Leasing.--The Secretary shall make 
available for a period of 2 years for noncompetitive leasing 
any tract for which a competitive lease sale is held, but for 
which the Secretary does not receive any bids in a competitive 
lease sale.
  (d) Pending Lease Applications.--
          (1) In general.--It shall be a priority for the 
        Secretary, and for the Secretary of Agriculture with 
        respect to National Forest Systems land, to ensure 
        timely completion of administrative actions, including 
        amendments to applicable forest plans and resource 
        management plans, necessary to process applications for 
        geothermal leasing pending on the date of enactment of 
        this subsection. All future forest plans and resource 
        management plans for areas with high geothermal 
        resource potential shall consider geothermal leasing 
        and development.
          (2) Administration.--An application described in 
        paragraph (1) and any lease issued pursuant to the 
        application--
                  (A) except as provided in subparagraph (B), 
                shall be subject to this section as in effect 
                on the day before the date of enactment of this 
                paragraph; or
                  (B) at the election of the applicant, shall 
                be subject to this section as in effect on the 
                effective date of this paragraph.
  (e) Leases Sold as a Block.--If information is available to 
the Secretary indicating a geothermal resource that could be 
produced as 1 unit can reasonably be expected to underlie more 
than 1 parcel to be offered in a competitive lease sale, the 
parcels for such a resource may be offered for bidding as a 
block in the competitive lease sale.
  (f) Leasing for Direct Use of Geothermal Resources.--
Notwithstanding subsection (b), the Secretary may identify 
areas in which the land to be leased under this Act exclusively 
for direct use of geothermal resources, without sale for 
purposes other than commercial generation of electricity, may 
be leased to any qualified applicant that first applies for 
such a lease under regulations issued by the Secretary, if the 
Secretary--
          (1) publishes a notice of the land proposed for 
        leasing not later than 90 days before the date of the 
        issuance of the lease;
          (2) does not receive during the 90-day period 
        beginning on the date of the publication any nomination 
        to include the land concerned in the next competitive 
        lease sale; and
          (3) determines there is no competitive interest in 
        the geothermal resources in the land to be leased.
  (g) Area Subject to Lease for Direct Use.--
          (1) In general.--Subject to paragraph (2), a 
        geothermal lease for the direct use of geothermal 
        resources shall cover not more than the quantity of 
        acreage determined by the Secretary to be reasonably 
        necessary for the proposed use.
          (2) Limitations.--The quantity of acreage covered by 
        the lease shall not exceed the limitations established 
        under section 7.

           *       *       *       *       *       *       *


SEC. 30. GEOTHERMAL EXPLORATION TEST PROJECTS.

  (a) Definition of Geothermal Exploration Test Project.--In 
this section, the term ``geothermal exploration test project'' 
means the drilling of a well to test or explore for geothermal 
resources on lands for which the Secretary has issued a lease 
under this Act, that--
          (1) is carried out by the holder of the lease;
          (2) causes--
                  (A) less than 5 acres of soil or vegetation 
                disruption at the location of each geothermal 
                exploration well; and
                  (B) not more than an additional 5 acres of 
                soil or vegetation disruption during access or 
                egress to the test site;
          (3) is developed--
                  (A) less than 9 inches in diameter;
                  (B) in a manner that does not require off-
                road motorized access other than to and from 
                the well site along an identified off-road 
                route;
                  (C) without construction of new roads other 
                than upgrading of existing drainage crossings 
                for safety purposes;
                  (D) with the use of rubber-tired digging or 
                drilling equipment vehicles; and
                  (E) without the use of high-pressure well 
                stimulation;
          (4) is completed in less than 90 days, including the 
        removal of any surface infrastructure from the site; 
        and
          (5) requires the restoration of the project site 
        within 3 years of the date of first exploration 
        drilling to approximately the condition that existed at 
        the time the project began, unless the site is 
        subsequently used as part of energy development under 
        the lease.
  (b) Categorical Exclusion.--
          (1) In general.--Unless extraordinary circumstances 
        exist, a project that the Secretary determines under 
        subsection (c) is a geothermal exploration test project 
        shall be categorically excluded from the requirements 
        for an environmental assessment or an environmental 
        impact statement under the National Environmental 
        Policy Act of 1969 (42 U.S.C. 4321 et seq.) or section 
        1508.4 of title 40, Code of Federal Regulations (or a 
        successor regulation).
          (2) Extraordinary circumstances definition.--In this 
        subsection, the term ``extraordinary circumstances'' 
        has the same meaning given such term in the Department 
        of the Interior Departmental Manual, 516 DM 2.3A(3) and 
        516 DM 2, Appendix 2 (or successor provisions).
  (c) Process.--
          (1) Requirement to provide notice.--A leaseholder 
        shall provide notice to the Secretary of the 
        leaseholder's intent to carry out a geothermal 
        exploration test project at least 30 days before the 
        start of drilling under the project.
          (2) Review and determination.--Not later than 10 days 
        after receipt of a notice of intent under paragraph 
        (1), the Secretary shall, with respect to the project 
        described in the notice of intent--
                  (A) determine if the project qualifies for a 
                categorical exclusion under subsection (b); and
                  (B) notify the leaseholder of such 
                determination.
          (3) Opportunity to remedy.--If the Secretary 
        determines under paragraph (2)(A) that the project does 
        not qualify for a categorical exclusion under 
        subsection (b), the Secretary shall--
                  (A) include in such notice clear and detailed 
                findings on any deficiencies in the project 
                that resulted in such determination; and
                  (B) allow the leaseholder to remedy any such 
                deficiencies and resubmit the notice of intent 
                under paragraph (1).

SEC. 31. GEOTHERMAL LEASING PRIORITY AREAS.

  (a) Definition of Covered Land.--In this section, the term 
``covered land'' means land that is--
          (1) Federal land; and
          (2) not excluded from the development of geothermal 
        energy under--
                  (A) a land use plan established under the 
                Federal Land Policy and Management Act of 1976 
                (43 U.S.C. 1701 et seq.); or
                  (B) any other Federal law.
  (b) Designation of Geothermal Leasing Priority Areas.--The 
Secretary, in consultation with the Secretary of Energy, shall 
designate portions of covered land as geothermal leasing 
priority areas as soon as practicable, but not later than 5 
years, after the date of the enactment of this section.
  (c) Criteria for Selection.--In determining which covered 
lands to designate as geothermal leasing priority areas under 
subsection (b), the Secretary, in consultation with the 
Secretary of Energy, shall consider if--
          (1) the covered land is preferable for geothermal 
        leasing;
          (2) production of geothermal energy on such land is 
        economically viable, including if such land has access 
        to methods of energy transmission; and
          (3) the designation would be in compliance with 
        section 202 of the Federal Land Policy and Management 
        Act of 1976 (43 U.S.C. 1712), including subsection 
        (c)(9) of that section.
  (d) Review and Modification.--Not less frequently than once 
every 10 years, the Secretary shall--
          (1) review covered land and, if appropriate, make 
        additional designations of geothermal leasing priority 
        areas; and
          (2) review each area designated as a geothermal 
        leasing priority area under this section, and, if 
        appropriate, remove such designation.
  (e) Programmatic Environmental Impact Statement.--
          (1) Initial designations.--No later than one year 
        after the initial designation of a geothermal leasing 
        priority area, the Secretary shall prepare a supplement 
        to any final programmatic environmental impact 
        statement for geothermal leasing that is the most 
        recently finalized such statement with respect to 
        covered land designated as a geothermal leasing 
        priority area under subsection (b).
          (2) Subsequent designations.--Each designation of a 
        geothermal leasing priority area under subsection (d) 
        shall be included in a programmatic environmental 
        impact statement for geothermal leasing or in a 
        supplement to such a statement.
          (3) Consultations.--In developing any programmatic 
        environmental impact statement for geothermal leasing 
        or supplement to such a statement under this section, 
        the Secretary shall consult, on an ongoing basis, with 
        appropriate State, Tribal, and local governments, 
        transmission infrastructure owners and operators, 
        developers, and other appropriate entities.
          (4) Procedure.--The Secretary may not delay issuing a 
        permit or holding a lease sale under this Act because 
        the supplement required under paragraph (1) has not 
        been finalized by the Secretary.
  (f) Compliance With NEPA.--If the Secretary determines that 
the designation of a geothermal leasing priority area has been 
sufficiently analyzed by a programmatic environmental impact 
statement, the Secretary shall not prepare any additional 
analysis under the National Environmental Policy Act of 1969 
(42 U.S.C. 4321 et seq.) with respect to geothermal lease sales 
for such geothermal leasing priority area.

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