Omnibus Geothermal Legislation

Although geothermal energy has the potential to contribute to the nation's energy needs, its development has been impeded by economic, technical, and institutional constraints. Proposed legislation would amend existing geothermal leasing and permitting laws, and provide additional Federal initiatives and incentives to aid the accelerated development of geothermal energy. Only four loan guarantees have been approved under the geothermal loan guarantee program, indicating a need to carefully consider and design incentives and initiatives so that they can aid geothermal development in the most effective and timely manner. Both bills under consideration contain provisions authorizing direct loans for geothermal development. One bill would authorize the establishment of a program to provide reservoir insurance to qualified, eligible applicants who are unable to obtain commercial insurance at reasonable premiums. While GAO generally favors financial incentives and other initiatives for promoting geothermal development and use, care must be taken to ensure that these incentives and initiatives are those which most directly overcome the constraints facing geothermal development and promise the most development for the funds expended. GAO is concerned that the Government's involvement in making direct loans could undermine the loan guarantee program efforts and prospects for greater program participation. In providing for a coordinated, prompt, and simplified process for Federal approval of geothermal energy facilities determined to be in the national interest, the proposed legislation would authorize the designation of a proposed geothermal energy facility as a priority geothermal energy project. The bills would also establish an Energy Mobilization Board which would set forth criteria for designating priority projects and for expediting their approval. GAO agreed with provisions requiring full and complete reviews of all relevant considerations associated with the significantly accelerated development of geopressured methane and hot dry rock systems and the need for environmental control technology to support the development of all forms of geothermal energy.