Statements on Introduced Bills and Joint Resolutions

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Mr. WYDEN. Mr. President, today Sen. CRAPO, Sen. RISCH, Sen. MERKLEY, and I are introducing the Geothermal Production Expansion Act of 2011. The bill is aimed at making improvements to the Geothermal Steam Act and is very similar to legislation introduced in the 111th Congress as S. 3993.

Both bills contain identical provisions to allow the Secretary of the Interior to lease a limited amount of public land adjacent to existing geothermal property at fair market value. The reason for this change is to allow the rapid expansion of already identified geothermal resources without the additional delays of competitive leasing and without opening up those adjacent properties to speculative bidders who have no interest in actually developing the resource, only in extracting as much money as they can from the existing geothermal lease holder. Current lease holders are understandably reluctant to nominate adjacent lands to proven resources for competitive leasing because doing so would immediately signal the value of those adjacent properties. As a result, existing geothermal developers will likely not realize the full potential of the geothermal energy resources that they have spent millions of dollars exploring, proving, and developing without these changes. And, the Treasury will not realize the economic value of those adjacent parcels, which go unleased and undeveloped as a result. For these reasons, the bill has the strong support of the Geothermal Energy Association.

I want to emphasize that this bill is not a giveaway. The amount of land that can be leased non-competitively is limited to less than 640 acres per lease. It can only be leased where there are already proven resources and thus more likely than not to increase overall Federal royalties paid to the Treasury as the adjacent parcels are incorporated into the developer's geothermal energy project. Third, the bidder must pay fair market value for the lease as determined by the Interior Department. Finally, this bill contains an additional provision, which was not included in the prior version, which will significantly increase the annual rental payments for the newly acquired adjacent land in order to ensure that the bill comes as close as possible to full economic recovery for the taxpayers.

Current law sets two different annual rental payment levels for geothermal leases. These are amounts that the lease-holder pays per year for every acre held in lease. The rental rate for non-competitive leases is $1 per acre per year. The rate for competitive leases begins at $2 per acre for the first year and increases to $3 for the next 9 years. The sole difference between the bill introduced in the prior Congress and the bill being introduced today is that the version being introduced today treats the new, adjacent lease as a competitive lease for determining the annual rental even though it is being acquired as a non-competitive lease. This will have the clear effect of raising the annual rental payments on the newly acquired adjacent lands to the higher rate of $2 and then $3 per acre and increase revenue to the Treasury. This change underscores our intent, as sponsors of the bill, to ensure that the result of these changes in the Geothermal Steam Act is truly to increase geothermal energy production on Federal lands without any overall loss of revenue to the taxpayers from non-competitive award of these adjacent lands.

Geothermal energy is, by definition, a domestic renewable energy resource with enormous potential, but developers face high costs and economic risks of finding the right location to extract energy. These changes will help ensure that once those resources have been proven on Federal lands, they can be fully developed as quickly and efficiently as possible.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

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