Geothermal, Project Development

Geothermal Industry Backs Current Energy Bill

The Geothermal Energy Association (GEA) has spoken out in praise of the House and Senate compromise Energy Bill proposal, which has been in conference committee sessions for months. GEA said the proposal contains two significant provisions designed to stimulate investment and create new jobs in the US geothermal industry.

Washington D.C. – November 18, 2003 [SolarAccess.com] “Geothermal energy is an enormous, underused heat and power resource that is clean (emits little or no greenhouse gases), reliable (average system availability of 95 percent), and homegrown (making us less dependent on foreign oil),” according to the US Department of Energy’s web site. There is roughly 3,000 MW of geothermal power on-line in the Western United States. The proposed Energy Bill would expand the Section 45 Production Tax Credit (PTC) to include new geothermal power facilities. This tax provision, first adopted in 1992, has fueled the rapid expansion of wind power in the US. Under the Chairman’s proposal, new geothermal facilities placed in service by January 1, 2007 would receive a 1.8 cent per kWh tax credit during their first five years of operation. “Expanding the PTC to include geothermal energy will give investors the incentive needed to overcome the higher risk and large, upfront costs of new geothermal power plants,” GEA said. “As a result, hundreds of new megawatts of geothermal power will come on-line in the next few years. The second provision GEA highlighted would streamline and update the laws governing leasing and permitting on public lands. The proposal closely tracks legislation introduced by Representative Jim Gibbons (R-NV), H.R. 2772, the John Rishel Geothermal Steam Act Amendments of 2003. “These provisions will streamline administration of the law, reduce administrative costs for both companies and the government, improve how it works for state and local governments, and result in a clearer, fairer law,” GEA said. GEA presented testimony about this legislation before the House Resource Committee’s Energy Subcommittee in March. GEA and other witnesses told the Subcommittee that the John Rishel Act “would help address many of the obstacles to a revival in the use of our nation’s largely untapped geothermal resources.” “Together, the geothermal PTC and leasing law reforms will significantly advance national security,” said Karl Gawell, GEA’s Executive Director. “If we don’t take steps now to develop our renewable energy resources, we could become as dangerously dependent upon OPEC countries for natural gas as we are for oil. Expanded use of geothermal energy will help offset demand for new natural gas from constrained North American supplies.” According to the US Geologic Survey, there are significant undeveloped geothermal resources in Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington and Wyoming. “The USGS identified over 20,000 MW of clean geothermal power potential in those states twenty years ago, but investors have not had the incentive necessary to overcome the expense and risk involved in developing those systems,” Gawell said. In addition to the identified systems, the USGS estimated in 1978 that there could by an additional 72,000 to 127,000 MW in undiscovered systems in the Western States. “Tapping geothermal energy’s vast potential is also essential to achieving healthier air and cleaner water in the West, and reducing the threat of global warming for the entire nation,” said Gawell. “The Domenici/Tauzin proposal takes big steps in those directions.”