Senators’ New GEO Act Addresses Geothermal Exploration Catch-22

Developers in the geothermal industry report a common challenge: they often must wait years for permits before they can even determine whether a site is worth the trouble. Something must be done to address this grueling Catch-22, the industry has been saying for years. The Energy Department’s Geothermal Technologies Office and National Renewable Energy Laboratory (NREL) have also identified permitting as a major barrier to geothermal development in the U.S.

With that in mind, Senators Dean Heller (R-NV) and James Risch (R-ID) have introduced S. 562, the Geothermal Exploration Opportunities Act (GEO Act) to expedite permitting for exploratory drilling for geothermal resources.

U.S. Senator Dean Heller (D-Nevada) gave a preview of his new geothermal legislation, the GEO Act, at the 2015 State of the Geothermal Industry Briefing.

In a keynote address at the February 24 State of the Geothermal Energy Industry Briefing, hosted by the Geothermal Energy Association (GEA), Senator Heller said he recognizes that working on federal lands is tough. Nevada, in fact, which hosts extensive geothermal and mining resources, is 85 percent federal land. “At a time when Nevada is playing a major role in the United States’ ‘all-of-the-above’ energy strategy, the last thing our geothermal entrepreneurs need is unnecessary bureaucratic red tape,” he said.

“The legislation will simplify the review process for initial exploration activities and give developers the tools they need to unleash Nevada’s abundant geothermal potential,” Heller said in a statement.

The GEO Act creates a new categorical exclusion (CX) from the requirements of the National Environmental Policy Act (NEPA) that allows developers to conduct exploration for potential geothermal resource sites on an expedited basis. NEPA would still be applied before leasing any lands and again if a company decides to develop a geothermal electric generating facility on the site. Also, the GEO Act provides for review in certain cases where there are “extraordinary circumstances.”

Speaking at the event, Katherine Young, Senior Energy Analyst at NREL said, “Geothermal development projects can go through as many as six NEPA analyses.” Delays are caused by a variety of reasons, including competing priorities at agencies, lack of geothermal-specific funding, lack of training or inconsistencies at field offices, weather, fear of litigation, and more, Young said.

A CX can be established administratively through agency rulemaking or legislatively through congressional action. Most agencies use information from past actions to determine whether a CX is appropriate, Young said.

GEA Executive Director Karl Gawell said, “We look forward to working with Senator Heller and his colleagues in the Senate to promote enactment of this important proposal.

“As a bill that addresses the industry’s issues with the permitting process, this measure would significantly lower the upfront cost of production in an industry that is considered capital intensive,” he said.

The U.S. Geological Survey estimates nearly 90 percent of the geothermal energy potential in the nation is on federal lands. NREL estimates that approval for exploration activities takes between 18 to 24 months, and geothermal industry members have reported the process can take even longer than that.

Doug Glaspey, President at US Geothermal said, “The team that started US Geothermal came to the geothermal industry from the mining industry, and one of our goals for success was to avoid Federal property if at all possible, because we knew how long it took to get through the permitting process.  Focusing on private property is one of the primary reasons we were successful and now have three operating power plants.

“If geothermal exploration can get expedited treatment similar to the oil & gas and mining industries for the first phases of drilling, and we find out quickly whether there’s a commercial resource before we get into the lengthy permitting process, that will make a big difference to the development schedule and therefore cost for geothermal development,” Glaspey said.

“Ormat Technologies supports the GEO Act, and we commend Senator Heller for tackling this hurdle to geothermal development,” said Josh Nordquist, Director of Business Development at Ormat Technologies. “Geothermal is uniquely affected by federal environmental compliance rules — a single location may require developers to carry out the NEPA exercise many times. The GEO Act would do a great deal to simplify the exploration process and shorten timelines without undermining environmental quality at project sites.

“At the same time, it would reduce the labor burden on our friends at the Bureau of Land Management, who face an ever growing list of responsibilities. We look forward to working with Senator Heller to take this bill to the finish line,” Nordquist said.

Similar legislation was introduced last year in the House of Representatives. The bill has been referred to the Senate Energy and Natural Resources Committee.

Lead image: Hot springs via Shutterstock

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Leslie is located in Washington DC at the Office of the Geothermal Energy Association and serves on the Renewable Energy World North America Conference and Expo committee.

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