Auction for geothermal leases nets US$20 million in bids
RENO, Nevada, USA, August 22, 2007. An auction for geothermal energy resources on federal public lands has set a record price of US$14,000 per acre.
The competitive auction involved 49 lease parcels in the states of Nevada and California, and resulted in $20 million in bids. It was the second auction held by the Bureau of Land Management for sale of geothermal leases and signals “significant expansion” of this renewable source of energy.
More than 2,700 acres in the Geysers geothermal field of California brought $8 million of bids, including a historically high bid of $14,000 per acre for a 470-acre parcel. The bid by Binkley Geo Resources of 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 for a California parcel offered in the latest sale was $2,000 per acre.
“We were extremely pleased with the unexpectedly high interest in our first competitive sale, in June, for lands in Idaho and Utah,” Henri Bisson of BLM. “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.”
The 122,849 acres offered in Nevada sold for $11.7 million, with the highest bid coming from Ormat at $510 per acre on a 5,120-acre parcel. Other Nevada parcels resulted in per-acre bids of $300.
In the earlier sale in Idaho and Utah, leases on eight parcels were sold for a total of $9.4 million. Half of all revenues from the lease sale (including bonus bids, rentals and royalty monies collected on the leases) are distributed to the respective states, 25% to the county in which the parcel is located and the balance to BLM.
Under previous regulations, geothermal parcels were leased using a sealed bidding process but the Energy Policy Act of 2005 directed changes in the way federal geothermal resources are leased, including a requirement that leasing be competitive. Future geothermal lease sales will offer parcels formally nominated by the public using process outlined in new regulations published in May by BLM.
Since the EPA became law in 2005, BLM has implemented a number of provisions that relate to renewables, including program-level impact analysis and policy guidance for development of wind and solar energy, and steps to reach the Act’s goal of approving 10,000 MW of green power on public lands by 2015.
“The new regulations and nomination process implement the direction Congress provided in the Energy Policy Act 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,” explains Bisson. “The new regulations and leasing process mean that the BLM is well-prepared to facilitate the development of clean, renewable energy resources.”
BLM and the Department of Energy are designating energy corridors on federal lands in eleven western states which the EPA says must facilitate delivery of green power from where it is generated to where it is consumed.
Geothermal currently generates 8.5% of U.S. green power and 0.3% of the country’s total electricity. The U.S. leads the world in electricity from geothermal, generating 16,010 GWh of electricity, with half the current output from facilities located on public lands and 90% of U.S. resources found on federal lands.
BLM is 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 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 1,250 MW and supply the needs of 1.2 million homes.
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