U'S' Department of the Interior

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U.S. Department of the Interior Bureau of Land
Management Federal Land Management and
Geothermal Leasing Overview John Ascuagas Nugget
/ Geothermal Resources Council 2007 Annual
Meeting Sparks, Nevada September 28, 2007
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General Role and Responsibilities of Federal
Agencies Associated with Geothermal Leasing US
Forest Service National Forest Lands Bureau
of Land Management Public Lands
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General Role and Responsibilities of Federal
Agencies Associated with Geothermal
Exploration (on lease/off lease) US Forest
Service National Forest Lands Bureau of Land
Management Public Lands
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General Role and Responsibilities of Federal
Agencies Associated with Geothermal
Development/Utilization US Forest Service
National Forest Lands Bureau of Land Management
Public Lands
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General Role and Responsibilities of Federal
Agencies Associated with Geothermal
Development/Utilization US Forest Service
Surface Resources, ROWs Bureau of Land
Management Sundry Notices (pipelines/wellpads),
Drilling Permits, FCPs, Site Licenses,
Commercial Use Permits
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General Role and Responsibilities of Federal
Agencies Associated with Reclamation of
Geothermal Sites US Forest Service Surface
Resources, roads, ROWs Bureau of Land Management
Sundry Notices (pipelines/wellpads), Plugging
Wells, Drilling Permits, FCPs, Site Licenses,
Commercial Use Permits
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Geothermal Leasing of Federal Lands under
the Energy Policy Act of 2005 John Ascuagas
Nugget / Geothermal Resources Council 2007 Annual
Meeting Sparks, Nevada September 28, 2007 Sean
Hagerty California State Office - Geothermal
Program Lead Bureau of Land Management
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Geothermal Regulation TeamWashington, D.C.

• Joel Yudson, Solicitor
• Barbara Fugate, Solicitor
• Wyndy Rausenberger, Solicitor
• Kermit Witherbee, BLM-WO-Program Lead
• Ian Senio, BLM-WO-Fluid Minerals
• Frank Bruno, BLM-WO- Legs Regs
• Rich Hoops, BLM-Nevada SO
• Sean Hagerty, BLM-CA SO
• Rich Estabrook, BLM-CA-SO
• Cheryl Seath, BLM-Bishop Field Office
• Bob Henricks, BLM-Utah SO
• Bob Fujimoto, USFS-Region 6-Portland, OR
• Herb Black, MMS-Denver
• Sara Inderbitzen, Solicitor (MMS)

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Geothermal Leasing
Energy Policy Act of 2005 Revised 43 Code of
Federal Regulations Part 3200 Final Rule
Published in Federal Register on May 2,
2007 Regulations became effective on June 1,
2007
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Revised 43 Code of Federal Regulations Part 3200

• Federal Register Site
• May 2, 2007, Vol. 72, pages 24358 to 24446
• http//www.blm.gov/style/medialib/blm/wo/Communica
  tions_Directorate/regulations.Par.94775.File.dat/E
  7-7991.pdf

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Geothermal Leasing Sec. 221-237 Geothermal
Energy
Sec. 222. Competitive Lease Sale Requirements (43
CFR 3203) Sec. 223. Direct Use (43 CFR
3205) Sec. 225. Coordination of Geothermal
Leasing and Permitting on Federal Lands Sec. 231
Lease Duration and Work Commitment Requirements
(43 CFR 3207)
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Sec 222. Leasing Requirements

• Competitive Leasing (43 CFR 3203)
• Lands are nominated
• Available lands offered at sale
• Lease awarded to highest qualified bidder
• Noncompetitive Leasing (43 CFR 3204)
• Lands not receiving a bid
• Available for 2 years after sale
• Mining Claims with approved POO
• Pending Lease Applications (43 CFR 3212)
• Option of having lease issued under this Act and
  conversions of existing leases issued prior to
  the Act (August 8, 2005)

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Sec 223. Direct Use

• Lands Available
• Secretary of Interior may identify lands
  exclusively for direct use
• Lands may be leased noncompetitively
• Lease size not more than is reasonably necessary
  for proposed use
• Determine competitive interest
• 90 day public notice of lands to be leased
• If no competitive interest issue lease
• Competitive interest offered next lease sale
• Direct Use Fees
• Companion Mineral Management Service regulations
  (30 CFR 206)
• State, Tribal or Local Governments
• Uses without sale and for public purposes other
  then commercial generation of electricity
  nominal fee for use

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Section 225. BLM/USFS MOU

• MOU signed by the BLM Director and the US Forest
  Service, Chief of the Forest Service, on
  4/14/2006
• Administrative procedures for processing lease
  applications
• 5-year leasing program within USFS lands and
  updating every 5 years
• Program to reduce backlog of lease applications
  pending on 8/8/2005 by 90 within same time
  period
• BLM/USFS Programmatic EIS

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Sec. 231 Lease Duration and Work Commitment
Requirements (43
CFR 3207)

• Primary Term 10 yrs
• Initial Extension up to 5 yrs
• Additional extension up to 5 yrs
• Production extension up to 35 yrs
• Lessee must satisfy minimum work requirements
  (each yr after the 10th year)
• Establish a geothermal potential and if
  established confirm existence of producible
  geothermal resource.
• Secretary may establish payments in lieu of
  minimum work requirements
• Well capable of producing in commercial
  quantities or in actual production
• Geothermal Lease Overlying a Mining Claim
• Exempt from annual work requirements if a plan of
  operations has been approved

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Sec. 233 Annual Rental and Royalties

• Must always Pay Rent (43 CFR 3211.14)
• May credit rent towards royalty (43 CFR 3211.15)
• May not credit rent towards direct use fees (43
  CFR 3211.16)
• Noncompetitive Lease (43 CFR 3211.11)
• Years 1 10 1.00/Acre
• Year 10 5.00/Acre
• Competitive Lease (43 CFR 3211.11)
• Year 1 2.00/Acre
• Years 2 10 3.00/Acre
• Year 10 5.00/Acre
• Royalty (43 CFR 3211.17)
• 1.75 first 10 years of production
• 3.5 after first 10 years of production

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Sec. 235 Acreage Limitations (43 CFR 3206)
Maximum Lease Size 5,120 Acres Acreage
Limitations 51,200 Acres/State Lands subject to
an approved unit agreement, drilling contract,
or development contract are exempt (cooperative
agreements)
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Additional Amendments

• 25 share of federal revenues to counties
• USGS assessment of geothermal resources
• Federal revenues to be returned to DOI for 5
  years to use in program

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Production Well
Permitting Drilling

• Pacific Northwest Section of the Geothermal
  Resources Council and Bonneville Power
  Administration
• Introduction to Geothermal Power, Exploration,
  and Development
• Bend, Oregon
• May 22, 2007
• Sean Hagerty
• California State Office - Geothermal Program Lead
• Bureau of Land Management

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Geothermal Use Authorizations

• Exploration Permits Off Lease
• (43 CFR 3250)
• Notice of Intent (NOI) Temp Gradient Hole
• Exploration Permits On Lease
• (43 CFR 3260)
• Geothermal Sundry Notices (GSN)
• Geothermal Drilling Permits (GDP)
• Development/Utilization Permits
• (43 CFR 3270)
• Facility Construction Permits (FCP), Commercial
  Use Permits (CUP), and Site Licenses

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Schematic of a Typical Temperature Gradient
Hole Well Pad Layout
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Schematic for a Typical Deep Test Well Pad
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Typical Production Well Pad Layout
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An Example of an Industry Standard Rotary Rig
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An Example of an Industry Standard Rotary Rig
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Downhole Drilling Bits Tools
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Example of a Deep Exploration Well
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Example of a Deep Exploration Well and Well Pad
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Typical Geothermal Well
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Typical ProductionWell Completion
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Example of Blow Out Prevention Equipment Used
While Drilling
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Exploration Permits
Off Lease Notice of Intent to Conduct
Geothermal Exploration (NOI) Form 3200-9 (43 CFR
3250) On Lease NOI or Sundry Notice Form
3260-3 Geothermal Drilling Permit (GDP) Form
3260-2 (43 CFR 3260)

• Describes lands to explore, exploration plan
  procedures, approximate start end dates
• Temperature gradient wells describe drilling
  plan, surface use plan, evidence of bond coverage
  (5K/operation, 25 K statewide bond, or 50K
  nationwide), reclamation plan for each well
• GDP on-lease includes drilling plan, surface use
  plan and evidence of bond coverage (10K/lease,
  50K/State, or 150K/Nationwide)
• NEPA EA or EIS may be required

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Geothermal Drilling Permits 43 CFR 3260

• Completed and signed GDP (form 3260-2)
• Complete operations plan, may include Geothermal
  Sundry Notice (GSN) for well pad
• Complete drilling program (casing, depth, )
• An acceptable bond (10k, 50K, 150K)
• NEPA EA or EIS may be required
• Approval prior to commencing drilling operations

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Utilization of Geothermal Resources 43 CFR 3270
Electrical Generation Facilities FCP, CUP, Site
License Direct Use Facilities FCP, CUP, Site
License
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Utilization Operations Permitting
Site License and Facility Construction Permit
Plain English according to Al Gore. Submit plan
that shows what you want to do and a proposed
site license agreement BLM will review and decide
whether or not to issue a permit and license to
proceed. Until and unless we do, dont even
think about it (43 CFR 3271.10)
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Additional Information

• Forms
• https//www.blm.gov/FormsCentral/search-form.do
• Map Coverage/GIS/Leases
• http//www.geocommunicator.gov/GeoComm/index.shtm
• Regulations
• http//www.blm.gov/nhp/300/wo310/

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Utilization Operations Reclamation
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