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United States of America Congressional Ttecord proceedings and debates of the 99^ congress, first session Vol 1)1 WASHINGTON, WEDNESDAY, JUNE 19, 1985 No. 82 Senate y GEOTHERMAL STEAM ACT AMENDMENTS Mr. HECHT. Mr. President, today I am introducing legislation to resolve some unfinished business from the 97th and 98th Congress: geothermal leasing reform. I know this may seem a rather arcane and unimportant topic to most of my colleagues, but I would like to take a minute to expose a problem which is threatening to unravel the many hard-earned gains we have made over the past 10 years in the development of America's abundant geothermal resources. Congress passed the Geothermal Steam Act in 1970 to encourage the leasing and development of geothermal resources located on Federal lands. Spurred by the early success in harnessing northern California's dry steam for electricity production, many of us in Congress believed?or hoped? that passage of the Steam Act would ensure rapid development at the many other geothermal fields known to exist in the Western United States. Fifteen years later, we are still waiting for that development to occur. The combination of large front-end development costs, risky-powerplant technology, and uncertainty over future world energy prices has led to the cancellation or delay of many promising geothermal power projects. These problems are now being compounded by certain inflexible provisions of the Steam Act which prohibit the extension of leases where diligent field development has occurred but actual powerplant construction has been delayed by market forces. Section 319 of last year's continuing resolution gave geothermal leaseholders a temporary respite by allowing for the conditional 2-year extension of original 10-year leases issued under the Steam Act. The bill I am introducing today will provide a permanent mechanism for the granting of up to three successive 5-year extensions if the following conditions are met: A full report must accompany developer's extension request, explaining why they have not been able to produce geothermal energy in commercial Quantities, and either Drilling to a depth specified by the Secretary of Interior has commenced prior to each successive extension request, or Substantial investment (in excess of due diligence requirements) has been made in lease or lease unit up to time of extension request. In addition, my bill would strengthen the Geothermal Steam Act's provisions for secretarial review of unit and cooperative plans, where developers have proposed the integrated development of several individual leases. In past years, the Department of Interior has arguably been too generous in allowing companies to block up leases in large units in order to avoid acreage limitations under the act. As unit plans come up for review?every 5 years under current regulations?my bill will require the Secretary to consider dropping leases which are not reasonably necessary to the economic viability of a unit or cooperative plan. Finally, I would like to address a related issue that has frustrated our past attempts to amend the Geothermal Steam Act: National parks protection. Many members of this body, including former Senator Jackson and my colleague Senator Melcher, have sought to provide statutory protection for significant geothermal features in our National Part System. Our best-known example is the Old Faithful Geyser in Yellowstone National Park, which some experts believe may be threatened by geothermal development outside the park boundary. To combat this threat, Congress recently imposed a moratorium on the leasing of certain Federal lands adjacent to Yellowstone. Now it has also been proposed that Congress authorize the establishment of buffer zones around some 20 other national parks and monuments containing geothermal features, even though there does not appear to be any development interest in these areas. This idea has kindled a raging philosophical debate over the general concept of buffer zones, which in turn has poisoned the chances for congres- 2 sional passage of earlier geothermal leasing bills. I have no interest in picking a quarrel on the park protection issue, but it seems to me that we should not let it interfere with the passage of legislation which I believe is essential to the timely development of our Nation's abundant and environmentally benign geothermal resources. How many times have you heard people first say that they oppose conventional energy projects because of the superiority of alternative, soft path approaches, and then turn around and throw obstacles in the way of these very same alternative technologies? We've recently seen this happen with small hydro-power projects, wind power, co-generation, and a host of other exciting new technologies. I know this is not their intent, but by delaying legislation, the park protection advocates have dealt a serious blow to the entire geothermal industry because of their opposition to development in a few specific areas of the country. Let's not let this happen to geothermal; let's get on with this legislation and give geothermal energy a fighting chance to compete in our energy marketplace and contribute to our energy security. If the industry can revive itself and development interest ever materializes around these other national parks?which I seriously doubt?then Congress can take appropriate steps to protect them. This is a responsible bill which has been shaped by years of hearing testimony and congressional debate on geothermal leasing. I have stripped away all but the most essential elements of earlier, more comprehensive leasing proposals in the hopes of achieving prompt bipartisan support on this issue. It is absolutely critical that we resolve this issue in the 99th Congress. Anyone seeking more information or wishing to cosponsor this legislation should contact Dan Freihofer of my staff at extension 4-1582. Mr. President, I ask unanimous consent that the complete text of my bill, "The Geothermal Steam Act Amendments of 1985," be printed at this point in the Record. There being no objection, the Taill was ordered to be printed in the Record, as follows: S. 1322 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Geothermal Steam Act of 1970 (30 U.S.C. ?? 1001 et seq.) is amended as follows: Section 1. This Act may be cited as the "Geothermal Steam Act Amendments of 1985." Sec. 2. Sections 6 (a), (c), and (d) of the Geothermal Steam Act of 1970 (30 U.S.C. j ? 1005) are amended to read as follows: "(a) Geothermal leases shall be for a primary term of ten years. If geothermal steam is produced or uiilized in commercial quantities on a lease or under an approved cooperative or unit plan of development or operation in which a lease is included within this term or any administrative extension thereof under subsection (c), such lease shall continue for so long thereafter as geothermal steam is produced or utilized in commercial quantities, but such continuation shall not exceed an additional forty years." "(c) Any geothermal lease issued pursuant to the Act and in effect on or after July 27, 1984, shall be extended for successive five year periods, but totalling not more than 15 . years, if: i "(1) the lessee has submitted a report to the Secretary detailing bona fide efforts to bring such lease or approved cooperative or unit plan of development into commercial ' production, given the then current economic ic conditions; and either ? "(2) actual drilling operations, to a depth ' specified by the Secretary, were commenced ? prior to the end of its primary term and ; prior to the end of each successive five year extension period on such lease or on an-. other lease to the benefit of such lease t where, at the time application for extension r is made, both leases are included in an ap-' proved cooperative or unit plan of develop-" ment; or F "(3) in the opinion of the Secretary, sub-i stantial investment has been made during the primary term and during each successive five year extension period on such lease or on another lease to the benefit of such lease where, at the time application for extension is made, both leases are included in an approved cooperative or unit plan of development. "(d) For purposes of subsection (a) of this section, production or utilization of geothermal steam in commercial quantities shall be deemed to include the completion of well capable of producing geothermal steam in paying quantities." Sec. 3. Section 18 of the Geothermal Steam Act of 1970 (30 U.S.C. ?1017) is amended by inserting the following new paragraph after the first full paragraph of that section: "Five years after approval of any cooperative or unit plan of development or operation, and every five years thereafter, the Secretary shall review each such plan and, after notice and opportunity for comment, eliminate from inclusion in such plan any lease or part of a lease not regarded as reasonably necessary to cooperative or unit operations under the plan. Any lease or part of a lease so eliminated would be eligible for an extension under section 6(c) of this title if it separately meets the requirements for such an extension." Sec. 4. Every geothermal lease issued pursuant to the Geothermal Steam Act of 1970 and in effect on or after July 27, 1984 is eligible for an administrative extension under section 6(c) of that Act as amended if an application for such an extension is timely submitted either within 180 days of the date of enactment of this Act or 60 days prior to the expiration of the lease's primary term, whichever is later.