This is an excerpt from EERE Network News, a weekly electronic newsletter.

May 09, 2007

Interior Department Encourages Geothermal Energy Development

Photo of a complex tangle of pipes and equipment, with a large pipe feeding into it in the foreground and transmission wires running away from it in the distance. The geothermal plant is in a desert setting with mountains in the background.

New federal rules are meant to encourage the development of geothermal energy resources on public lands.
Credit: Patrick Laney, INL

The U.S. Department of the Interior published new regulations on May 1st to advance the development of geothermal energy on public lands. The regulations require more competitive leasing, offer simplified royalty calculations, and share royalties with counties where production occurs. The new rules from the Bureau of Land Management (BLM) require competitive leasing for geothermal development rights on nearly all federal lands designated for this type of development (this excludes national parks, wilderness areas, recreation areas, and other protected lands). If no bids are received, these resources would be available for leasing on a non-competitive basis for two-year periods. The revamped regulations from the Minerals Management Service (MMS) offer an easy-to-use fee schedule (in lieu of royalties) for the direct use of geothermal resources, providing incentives to encourage the development and expansion of this alternative energy source. See the Interior Department press release.

The two sets of rules were proposed last July for public comment in response to the Energy Policy Act of 2005. The law mandates that 25 percent of the royalties from geothermal production be paid to the counties where the production occurs. MMS began making direct payments to counties shortly after the law was signed, increasing those local governments' revenues by $4 million a year. Previously, geothermal royalties were divided equally between federal and state governments; now half of the royalties are shared with state governments, and the remaining 25 percent go to the U.S. Treasury. For the next five years, Interior is able to use these funds to implement the geothermal provisions of the Energy Policy Act. See the full rules from the BLM and the MMS.