The NewsRoom
Date: July 21, 2006
Geothermal Rules Encourage Alternative
Energy Development on Federal Lands
Provide $4 Million in Revenue for County
Governments
WASHINGTON – To encourage
geothermal energy development on federal lands, Interior Secretary
Dirk Kempthorne today announced proposed rules that would require
more competitive leasing, offer simplified royalty calculations and
share $4 million in current royalties with counties where production
occurs.
“Developing alternative energy
sources, such as geothermal, wind, and solar, helps to increase and
diversify our Nation’s energy supply,” Kempthorne said. “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. We
welcome public comment.”
The proposed rules are published in
today’s Federal Register by the Interior Department’s
Bureau of Land Management and
Minerals Management Service. This Notice of Proposed Rulemaking
opens a 60-day public comment period.
Geothermal resources, such as steam
and hot water, are used directly to heat buildings and in
greenhouses and aquaculture; and indirectly to generate electric
power. This energy accounts for 17 percent of the electricity
generated from renewable sources in the United States. Half of the
Nation’s geothermal energy production occurs on Federal land, much
of it in California and Nevada. Other states with geothermal
activity include Oregon, Utah, Idaho, and New Mexico.
The
Bureau of Land Management’s proposed rule would require
competitive leasing for geothermal resources on nearly all federal
lands designated for this type of development. If no bids are
received, then these resources would be offered non-competitively
for two-year periods.
The
proposed
Minerals Management Service’s regulations establish a fee
schedule (in lieu of royalties) for the direct use of geothermal
resources that provides incentives to encourage the development and
expansion of this alternative energy source. The MMS rule also would
simplify the royalty calculations for electrical generation by
basing them on a percentage of gross proceeds from the sale of
electricity. This rule would reduce industry’s administrative costs
to comply.
The draft rules also mandate that 25
percent of the royalties be paid to the counties where the
production occurs, increasing those local governments’ revenues
initially by more than $4 million a year.
The two sets of proposed rules were
written in response to the Energy Policy Act of 2005, which mandated
comprehensive changes to leasing and royalty policies to encourage
geothermal energy use without imposing additional administrative
burdens on industry or government agencies. Previously, geothermal
royalties were divided equally between federal and state
governments. Under the new rules, the royalties would be divided as
follows: county governments would receive 25 percent, state
governments 50 percent and the federal government 25 percent. The
new regulations place no additional burdens on local governments.
Geothermal leasing is permitted on Interior and other federal lands
that are designated for this type of development but not on
restricted public lands, such as national parks, wilderness areas,
national recreation areas and other protected lands. The BLM
currently administers about 350 geothermal leases; 55 of those are
producing geothermal energy, including 34 power plants. The BLM has
been expediting the application process for geothermal leases,
issuing more than 200 leases since 2001, compared to 25 leases from
1996-2001.
Written comments on the BLM rules may
be submitted by any of the following methods: regular mail to
Director (630), Bureau of Land Management, Administrative Record,
Room 401 LS, Eastern States Office, 7450 Boston Boulevard,
Springfield, Virginia 22153; personal or messenger delivery to Room
401, 1620 L Street, NW, Washington, DC 20036; e-mail to Federal
eRulemaking Portal at
www.regulations.gov; or e-mail to
comments_washington @blm.gov (include “Attn: RIN 1004-AD87”).
More on the BLM’s efforts to implement the Energy Policy Act are at
www.blm.gov/nhp/spotlight/epa2005/ or call Kermit Witherbee at
(202) 452-0385.
Comments on the MMS rule may be
submitted via regular U.S. Mail to: Minerals Management Service,
Minerals Revenue Management, P.O. Box 25165, MS 302B2, Denver,
Colorado 80225; or via e-mail at:
mrm.comments@mms.gov. Please include “Attn: RIN 1010-AD32” and
include your name and address. Persons seeking additional
information on the MMS rule may contact Sharron Gebhardt, Lead
Regulatory Specialist, MMS, P.O. Box 25165, MS302B2, Denver,
Colorado 80225; via e-mail at
sharron.gebhardt@mms.gov; telephone at (303) 231-3211; or fax at
(303) 231-3781. All public comments received will be reviewed and
considered before the draft rules are finalized. The comment period
for both rules ends Sept. 19, 2006.
Relevant Web Site:
MMS Main Website
Media Contact:
Heather Feeney (BLM)
202-452-5031
Gary Strasburg
(MMS) 202-208-3985
MMS: Securing Ocean Energy & Economic Value for America
U.S. Department of the Interior
Privacy |
Disclaimers |
Accessibility |
Topic Index | FOIA
|