Statements on Introduced Bills and Joint Resolutions

Mr. WYDEN. Mr. President, I am pleased to join with my colleagues from Idaho and Oregon, Senator James Risch, Senator Mike Crapo, and Senator Jeff Merkley, in introducing the Geothermal Production Expansion Act of 2010. This legislation will amend an already existing law--the Geothermal Steam Act--governing the way the Federal Government leases public lands for the development of geothermal energy projects.

Geothermal energy facilities provide a continuous supply of renewable energy with very few environmental impacts. Although the United States has more geothermal capacity than any other country, this potential has been barely tapped. This shortfall is partly due to the high initial cost and risk involved in locating and developing geothermal resources. Like oil and natural gas exploration, until exploration and production wells are actually drilled, the true energy value of the site is not known nor is the full extent of the underground reservoir or energy source.

This legislation is intended to expand the future production of geothermal energy on federally-owned lands by taking some of the uncertainty and guess work out of the leasing and development process by allowing the Interior Department to issue geothermal leases for adjacent lands on a non-competitive basis, based on fair-market value. This would allow a geothermal developer to expand a successful geothermal lease without being forced into a bidding war with speculators or uncooperative competitors who might threaten project expansion or even prevent the project from reaching commercial scale.

Under current law, the Department of Interior is charged with issuing geothermal energy leases through a competitive lease sale. There are, however, several situations where the Department is allowed to issue non-competitive leases, for example, if there were no competitive bids offered, or where there is an already existing mining claim, or where the geothermal energy will be used directly on site for heating or other uses and not sold as electricity. This legislation would add an additional category of non-competitive leases for lands that are immediately adjacent to an existing, competitively-awarded, geothermal lease where there is an identified, validated geothermal energy discovery. They would not just be given away to an existing lease holder. These non-competitive leases would be made at fair-market value as independently determined by the Department of Interior. They could also not be taken away from any existing lease holder, if they were already leased, nor could they be removed from competitive leasing if they had already been nominated to be competitively leased.

These safeguards are intended to insure that this new non-competitive lease authority is a limited exception to the general policy of competitive leasing for geothermal resources on our public lands. At the same time, this new authority will help ensure that when and where a geothermal resource has been discovered, the project developer will be able to tap that resource and turn it into a viable, commercial energy business and provide clean, renewable energy for our country.

This bill is a companion to bipartisan legislation sponsored by Representative Jay Inslee in the House of Representatives. The House Committee on Natural Resources held hearings on the underlying House bill, H.R. 3709, in February of this year. The legislation Sen. Risch and I are introducing today incorporates changes resulting from those hearings, primarily making it clear that any non-competitive leases issued under this authority would be at fair-market value.

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