STATEMENT OF

DR. MARK D. MYERS

DIRECTOR

U.S. GEOLOGICAL SURVEY

U.S. DEPARTMENT OF THE INTERIOR

BEFORE THE

COMMITTEE ON ENERGY AND NATURAL RESOURCES

UNITED STATES SENATE

LEGISLATIVE HEARING ON

S. 1543

NATIONAL GEOTHERMAL INITIATIVE ACT OF 2007

SEPTEMBER 26, 2007

Mr. Chairman and Members of the Committee, thank you for the opportunity
to provide the Department of the Interior views on S. 1543, "National
Geothermal Initiative Act of 2007."

The Department of the Interior supports the goal of increasing the
percentage of electricity production that comes from renewable sources,
which could have many positive effects on the environment and economy.
An expanded national geothermal resource assessment effort could
contribute to this goal by providing State and Federal government policy
makers, other Federal agencies, the energy industry, and the
environmental community with the information needed to estimate the
potential contribution of geothermal energy to the Nation's energy mix.
However, the Department has several concerns with S. 1543, including the
availability of funding for the work proposed in the context of overall
funding for the Administration\'s priorities. We share the Committee's
desire to increase the use of renewable energy, including geothermal
resources. That said, to ensure that we are able to promote renewables
through the most cost effective ways available, and to maintain
appropriate flexibility in budgetary management, the Administration
recommends that this bill be amended to authorize rather than require
the assessment within a statutorily prescribed timeframe. This would
ensure that the activities authorized under this bill would compete
under the normal prioritization, budgetary, and funding process. We
would like to work with the committee to revise the bill to address
these issues.

[Geothermal Energy- Existing Studies and Remaining
Questions]{.underline}

Domestic geothermal resources have the potential to provide significant
amounts of clean, renewable, and reliable energy to the United States.
Based on current projections, the United States will need to increase
its electrical power generating capacity by 40 percent over the next 20
years. A critical question is to what extent can geothermal resources
contribute to this increasing demand for electricity? Geothermal energy
already constitutes one of the Nation's largest sources of renewable
electrical power, yet the installed capacity of approximately 2850
megawatts falls short of current geothermal resource estimates.

Under § 226 of the Energy Policy Act of 2005 (EPAct), the U.S.
Geological Survey (USGS) is currently conducting a new assessment of
conventional moderate-temperature and high-temperature geothermal
resources and will report on the results of that assessment in the fall
of 2008. The new assessment will provide a detailed estimate of the
geothermal electric power generation potential from identified and
undiscovered resources and include an evaluation of major technical
challenges for increased geothermal development. Approximately 250
identified geothermal systems will be included in the current assessment
effort, which is resulting in improved understandings of the thermal,
chemical, and mechanical processes that lead to the formation of
productive geothermal systems.

In addition to characterizing and assessing conventional geothermal
reservoirs, under the EPAct authorization, the USGS is examining one
type of unconventional geothermal resource -- Enhanced Geothermal
Systems (EGS). EGS are geothermal resources that require some form of
engineering to develop the permeability necessary for the circulation of
hot water or steam and the recovery of heat for electrical power
generation. These types of reservoirs can range from subcommercial
geothermal reservoirs that need some modest permeability enhancement to
entirely impermeable "hot dry rock" that not only requires permeability
but also sufficient quantities of water. A provisional examination of
the onshore U.S. EGS resources will be included with the new USGS
national assessment efforts. However, EGS is the focus of rapidly
evolving scientific and technical study both in the United States and
abroad. With additional study and characterization that would be
authorized in S. 1543, the USGS could provide a more comprehensive
understanding of how this potential resource can contribute to the
domestic energy mix.

Besides EGS, there are several unconventional geothermal resources that
have potential for electrical generation. These include Geopressured
Geothermal resources and Co-Produced Geothermal and Oil & Gas.
Geopressured Geothermal resources are found in deep, high temperature,
permeable formations in sedimentary basins that have water at
significantly elevated pressures. This hot, high-pressure water is
saturated with methane, and the resource consists of a combination of
thermal, mechanical and chemical energy. Most of the geopressured
geothermal resources are located in the northern Gulf of Mexico Basin.
Co-produced geothermal and oil and gas is a relatively new concept.
Where geopressured geothermal resources rely on dedicated wells
producing from primarily water-bearing formations under high pressure, a
co-produced system is one in which the geothermal heat extraction
process is coordinated with new or existing oil wells. This requires
adapting geothermal electric power generation technology to the lower
fluid production rates typical of most oil wells.

Under S. 1543, USGS contemplates carrying out a national geothermal
resource assessment that would build on current USGS efforts by
including unconventional geothermal resources, as well as an enhanced
characterization and understanding of the domestic, conventional
geothermal resources.

In carrying out such a comprehensive assessment, USGS would coordinate
and cooperate with the Department of Energy's Office of Energy
Efficiency and Renewable Energy (EERE), other Department of the Interior
bureaus, State geological surveys, and other relevant entities that have
geothermal expertise and responsibilities. USGS and DOE are already
cooperating on the current national resource assessment mandated by
EPAct through shared technical expertise and DOE's provision of
supplemental funding to USGS.

Requirements of S. 1543

S. 1543 requires the Secretary of the Interior, acting through the
Director of the U.S. Geological Survey (USGS), to conduct and complete a
comprehensive nationwide geothermal resource assessment that examines
the full range of geothermal resources in the United States; submit to
the appropriate committees of Congress a report describing the results
of the assessment; and in planning and leasing, consider the national
goal established under this Act.

The USGS has geothermal and related expertise as well as an ongoing
effort in geothermal research and characterization. This bill would
require USGS to expand on the current assessment effort, and we believe
the best approach to a comprehensive national geothermal assessment is
to develop geologically based methodologies for evaluating
unconventional geothermal resources capable of producing electricity.
Additionally, our understanding of conventional reservoirs would be
improved by the enhanced characterization that could be done in
conjunction with evaluation of unconventional resources. At present,
most of the identified geothermal systems are incompletely developed and
inadequately characterized. The current USGS effort will help alleviate
some of this challenge, but more work can be done.

[Concerns with S. 1543]{.underline}

S. 1543 requires that a national assessment be completed by 2010. The
Department does not believe that this timeframe adequately recognizes
other important budgetary priorities and believes that the activities
authorized under this bill should compete under the normal
prioritization, budgetary, and funding processes. In order to
substantively undertake an evaluation of the unconventional geothermal
resources, a methodology for assessing these resources must first be
developed, peer reviewed, and published. Even with full funding at the
levels contemplated in this bill, methodology development would take
approximately one year. Once that methodology is developed and peer
reviewed, more time would be needed to conduct the national assessment
of the unconventional resources and a more robust evaluation of the
conventional geothermal resources. We are concerned about the statutory
timeframes for accomplishing the assessment laid down in this bill. We
would like to work with the committee to ensure that the timeframe used
by the Federal government for its assessment of unconventional resources
is prudent and consistent with the national goal identified in S. 1543.

With recent interest in offshore areas for geothermal development, we
would appreciate clarification as to whether unconventional resources
should include areas offshore such as the outer continental shelf (OCS).
If the national assessment includes the OCS, USGS would work in
cooperation with the Minerals Management Service which would have the
lead for the OCS portion of the effort. However, inclusion of the OCS
would increase the cost and time needed to complete this assessment.

Many geothermal resources are located on onshore Federal lands. The
availability of leases of geothermal resources to electricity producers
is important to the national goal identified in this act of increasing
the percentage of electrical energy production from geothermal
resources. It should therefore be noted that onshore geothermal
resources on the Federal lands are leased by the Bureau of Land
Management (BLM) under regulations developed pursuant to EPAct. The BLM
and Forest Service (FS) are already considering geothermal development
in their land use planning. BLM and FS are jointly preparing a
Geothermal Programmatic Environmental Impact Statement (PEIS) to plan
for and support future geothermal leasing. This PEIS will evaluate
pending geothermal lease applications and areas with high potential for
geothermal development, and in this sense support the goal identified in
S. 1543.

[Conclusion]{.underline}

In conclusion, the Department of the Interior believes that it is
important to consider all available options that may contribute to the
goal of a comprehensive national assessment of geothermal energy. Such
an assessment would provide a variety of organizations the information
needed to determine the viability of geothermal energy to contribute to
the Nation's domestic energy mix. However, we have concerns relating to
the bill's timeframe, clarity and scope. Significant changes are needed
to address the full range of the Administration's concerns before we
could support this legislation.

Thank you, Mr. Chairman, for the opportunity to present this testimony.
 I will be pleased to answer questions you and other Members of the
Committee might have.