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WASHINGTON, DC, US, August 16, 2006 (Refocus Weekly) The U.S. Department of Interior has proposed new rules to encourage development of geothermal energy on public lands, including simplified royalty calculations and more competitive leasing.
“Developing alternative energy sources, such as geothermal, wind and solar, helps to increase and diversify our nation’s energy supply,” says secretary Dirk Kempthorne. “These draft regulations would add another tool in our efforts to encourage environmentally responsible development of renewable energy resources while ensuring a fair return to the United States.”
The measures are in response to the Energy Policy Act of 2005, and the proposed rules will encourage geothermal development on public lands by offering simplified royalty calculations and share royalties with counties where production occurs. They establish a fee schedule rather than royalty payments when geothermal energy is used directly to heat buildings or for aquaculture or greenhouses and, when the energy is used to generate electricity, royalty payments will be based on a percentage of the gross proceeds from selling the power.
Royalties currently are divided evenly between state and federal governments, but the new rules will give half of the royalties to the state and split the remaining half between the county and federal governments.
The change will also require competitive leasing on nearly all federal lands that are designated for geothermal development. If no bids are received, the lots will be offered non-competitively for two-year periods.
The DOI’s Bureau of Land Management currently administers 350 geothermal leases, 34 of which are geothermal power plants. BLM has been expediting the application process for geothermal leases, issuing more than 200 leases since 2001, compared to 25 leases in the previous five years.
BLM and another DOI branch, Minerals Management Service, both published separate sets of rules in the Federal Register, and the proposed rules will be open for public comment until September 19.
Geothermal generates 17% of the green power in the U.S., and half of the country’s geothermal production occurs on Federal land, much of it in California and Nevada. Other states with geothermal activity include Oregon, Utah, Idaho and New Mexico.
Both sets of proposed rules are in response to EPACT, which mandated comprehensive changes to leasing and royalty policies to encourage geothermal energy use without imposing additional administrative burdens on industry or government agencies. The new regulations place no additional burdens on local governments.
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