U.S. DEPARTMENT OF THE INTERIORBUREAU OF LAND MANAGEMENT
For Release: August 14, 2007
BLM Geothermal Lease Auction Signals New Trend in Renewable Energy
Competitive Leasing Implements Clean Energy Goals in Energy Policy Act
A competitive auction of lease parcels for geothermal energy resources on federal public lands in Nevada and California held in Reno today brought nearly $20 million in bids, including the highest per-acre bid in history. The results of the Bureau of Land Management’s second competitive sale of geothermal leases signal significant expansion of this renewable, low-emission source of energy.
“We were extremely pleased with the unexpectedly high interest in our first competitive sale, in June, for lands in Idaho and Utah,” said BLM Deputy Director Henri Bisson, “and the success of today’s sale is a harbinger of continued rising interest in developing the nation’s considerable geothermal energy resources, most of which are found on public lands.”
A total of 49 parcels – 43 in Nevada and six in California – were offered for lease in today’s combined sale. More than 2,700 acres in the famed Geysers geothermal field of California brought bids totaling over $8 million, including the historically high bid of $14,000 per acre for a 470-acre parcel, which totaled $6.5 million. This bid by Binkley Geo Resources, LLC, of Santa Monica, California surpassed the previous record of $11,000 per acre, in a 1982 sealed-bid sale of a 440-acre Geysers parcel. The second-highest bid was $2,000 per acre for a 320-acre California parcel offered in today’s sale, for a total of $640,000.
The 122,849 acres in Nevada sold for nearly $11.7 million. The highest bid for lands in Nevada from Ormat Nevada of Reno, Nevada, was $510 per acre on a 5,120-acre parcel, for a total bonus bid of $2.6 million. Other Nevada parcels brought per-acre bids of $300 or more. In the earlier Idaho-Utah sale, leases on eight parcels were sold for a total of $9.4 million.
Fifty percent of all revenues from the lease sale – including bonus bids, rentals and royalty monies collected on the leases – are distributed to the state in which the leased lands are located; 25 percent is distributed to the respective county. The remaining 25 percent goes to the BLM.
Under previous regulations, geothermal parcels were leased using a sealed bidding process. The Energy Policy Act of 2005 directed changes in the way federal geothermal resources are leased, including a requirement that leasing be competitive. Today’s sale offered on a competitive basis parcels that had been requested for leasing under previous regulations. Future geothermal lease sales will offer parcels formally nominated by the public using a process outlined in new regulations the BLM published in May 2007, which include a new nomination form, now available.
“The new regulations and nomination process implement the direction Congress provided in the Energy Policy Act,” Bisson said, “but when you add in the results of the two transitional competitive sales, you begin to see this as a larger, pivotal moment for renewable energy development on public lands. The new regulations and leasing process mean that the BLM is well-prepared to facilitate the development of clean, renewable energy resources. It’s exciting to see our efforts beginning to take off already.”
Since the Energy Policy Act became law in August 2005, the BLM has implemented a number of the Act’s provisions that relate to renewable energy, including program-level impact analysis and policy guidance for wind energy development, policy guidance on solar energy development, and steps to reach the Act’s goal of approving, by 2015, new renewable energy projects on public lands with the capacity to generate at least 10,000 megawatts (MW) of electricity.
The BLM is also the co-lead agency with the Department of Energy in an effort to designate energy transport corridors on federal lands in 11 western states. As directed by the Energy Policy Act, these corridors would facilitate delivery of electric power from places where it is generated to where it is needed in homes and businesses.
Geothermal energy production uses steam and hot water heated naturally beneath the surface of the earth to generate electricity with little or no need to burn fuel. Geothermal energy currently accounts for 8.5 percent of renewable energy generation and 0.3 percent of the total U.S. electricity supply. Though it generates a small portion of the nation’s electricity, the U.S. continues to be the world leader in generating electricity using geothermal energy. In 2005, geothermal energy generated approximately 16,010 gigawatt-hours (GWh) of electricity.
Almost half of the nation’s geothermal energy production occurs on public lands, and about 90 percent of U.S. geothermal resources are found on federal lands. The BLM is currently preparing a programmatic environmental impact statement (PEIS) that will further guide future geothermal leasing on federal lands in the West and identify the steps necessary to facilitate the processing of the approximately 100 pending geothermal lease applications.
The BLM administers 29 geothermal power plants, which use federal resources in California, Nevada and Utah. They have a total capacity of 1250 MW and supply the needs of 1.2 million homes.
For more information on BLM energy programs, visit:
Geothermal Programmatic EIS project website - http://www.blm.gov/wo/st/en/prog/energy/geothermal/geothermal_nationwide.html
Implementing the Energy Policy Act of 2005 - http://www.blm.gov/wo/st/en/prog/energy/epca_chart.html
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