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Funding Mechanisms for Federal 

Geothermal Permitting

Geothermal Resource Council 37th Annual 

Meeting (GRC) Annual Meeting

Las Vegas, NV

Kermit Witherbee, Katherine Young, and 

Aaron Levine

October 1, 2013

NREL/PR-6A20-60385
2

Funding Mechanisms for Geothermal Permitting

Presentation Outline

• Background

o Geothermal Regulatory Roadmap

o Funding Concerns Raised by Both Agency and Industry Participants

• Revenues

o Authorities for Revenue Collection

o Revenue Sources

– Lease Revenues

– Cost Recovery 

o Revenue Distribution 

• Financial Relationships

o Annual Congressional Appropriations

o Historical Appropriations

o Set-Aside Budgets

o Cost Recovery Budgets

• Budgets

o Current Budgets

o Mechanisms for Increasing Budgets

• Conclusions.
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Funding Mechanisms for Geothermal Permitting

Background

• Geothermal Regulatory Roadmap (GRR)

o Initiated by the Department of Energy’s Geothermal Technologies Office

o Created in March 2012 to facilitate the development of utility-scale geothermal power 

o Conducted a series of workshops during the summer of 2012 and spring of 2013 which included key 

representatives of federal and state regulatory agencies, industry, and other stakeholders involved in 

geothermal permitting

• Issues raised on agency resources and funding.

Concern Description Potential Solution 

Discussed

Action Action 

Initiated

I

1 Human 

Resource 

Issues

Lack of experienced personnel to 

process permits due to a variety of 

human resource-related issues 

such as staff turnover, lack of 

dedicated personnel, lack of 

geothermal funding to process 

permits, and frequent periods of 

non-availability such as training, 

vacations, other agency priorities.

Have backups for all 

permits so if someone 

goes on vacation, backups 

can keep permit moving 

forward

Budget/Staffing BLM FY 13 

budget 

request

A2 Competing 

Priorities 

and 

Budgets

Processing geothermal isn't always 

the agency’s top priority (e.g., U.S. 

Forest Service (USFS) must 

contend with fire season); agency 

must spend time based on budget 

allocations.

Cost-recovery programs 

for geothermal

Regulatory

Increased geothermal

applications to fund hiring 

of consultants

Regulatory

1-Industry; 2-Agency
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Funding Mechanisms for Geothermal Permitting

Revenues: Description of BLM Mineral and Realty Revenue Authorities 

Revenue Authority Year Technology Description Federal 

Agency Comments

Congressional Acts

The Independent Offices 

Appropriations Act (IOAA) of 

1952

1952 No specific Authorized federal agencies to charge 

processing costs and fees for processing 

documents and applications. Required 

development of regulations 

ALL Funds deposited in federal treasury

The Federal Land 

Management Policy Act of 

1976 (FLPMA), Sec. 304 and 

Sec. 504

1976 Realty (solar, wind), 

geothermal, oil and gas, coal, 

non-energy leasable minerals, 

mineral materials, mining law

Specific authorities to charge fees for 

processing applications and other 

documents related to public lands

DOI1& USFS2 Funds deposited in federal treasury

Energy Policy Act of 2005, 

Section 364

2005 Oil and gas Established a permit processing fund for 

BLM O&G Pilot Offices

BLM3 Forbids BLM to institute Application for Permit 

to Drill (APD) processing fees until 

congressional approval

Energy Policy Act of 2005, 

Section 234

2005 Geothermal Provided for 25% of geothermal revenues 

made available to DOI for implementation 

of revisions to Geothermal Steam Act for a 

period of 5 years

BLM Funds transferred directly to DOI, not subject to 

appropriations or FY limitations; fund rescinded 

in DOI FY 2010 Appropriations Act

Regulations

43 CFR § 3203.12; CFR §

3000.12

2012 Geothermal Geothermal lease nomination fee BLM Adjusted annually. Currently $110 per 

nomination + $0.11/acre

43 CFR § 3000-3870 2012 Oil and gas, geothermal, coal, 

solid minerals, mining 

Document and application processing fees: 

applications for leasing, assignments, 

leasing nominations 

BLM Adjusted annually 

Annual Appropriations

Department of Interior 

Appropriations, FY 2008

2008 Oil and gas Authorized an APD permit process fee for 

$4,000.00 

BLM Receipts deposited in federal treasury, an 

offsetting collection

Department of Interior 

Appropriations, FY 2010 

2010 Oil and gas Increases APD processing fee to $6,500 BLM Receipts deposited in federal treasury, an 

offsetting collection

Department of Interior 

Appropriations, FY 2011-2014 

2011 Oil and gas BLM shall collect a non-refundable 

inspection fee to be deposited in the 

“Management of Lands and Resources 

Account” 

BLM Not yet authorized by Congress. Inspection fee 

for compliance inspections, receipts deposited 

in federal treasury, an offsetting collection 

1,2,3-The Department of the Interior (DOI) collects geothermal revenues on Bureau of Land Management (BLM)- and U.S. Forest Service (USFS)-managed lands. 
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Funding Mechanisms for Geothermal Permitting

Revenues: Geothermal Lease Revenues (FY 2007-2012)1

$74 million 

Competitive Sale 

Bonus Bids Lease Rentals Production Royalties

$15 million $72 million 

1 50% shared with the states; 25% to the counties; 25% to DOI (FY2006-2009); then 25% reverted to U.S. Treasury.

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

2007 2008 2009 2010 2011 2012

Royalty

(000)

Year

$0

$1,000

$2,000

$3,000

$4,000

200720082009201020112012

Rentals (000)

Year

$0

$10,000

$20,000

$30,000

$40,000

2007 2008 2009 2010 2011 2012

Bonus (000)

Year

Photo by: K. Witherbee BLM 2008 Photo by: K. Witherbee
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Funding Mechanisms for Geothermal Permitting

Revenues: Current BLM Fees on BLM and USFS Lands1

Geothermal and Oil and Gas Application / Document2 FY 13

Geothermal Drilling Permit (GDP)–geothermal only $0

Application for Permit to Drill (APD)–oil and gas only $6,500

Noncompetitive lease application (from #) $390

Competitive lease application $150

Assignment and transfer of record title or operating right $85

Name change, corporate merger or transfer to heir/devisee $205

Lease consolidation $430

Lease reinstatement $75

Nomination of land–geothermal only $110

Plus per acre nomination fee–geothermal only $0.11

Site license application–geothermal only $60

Assignment or transfer of site license–geothermal only $60

1 43 CFR § 3200.12

2 Note: with the exception of drilling permit fees, most other fees are the same for geothermal as for oil and gas.
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Funding Mechanisms for Geothermal Permitting

Revenues: 2013 Cost Recovery Processing & Monitoring Fee Schedule1

Processing and Monitoring 

Category

Federal Work Hours 

Involved

Processing and 

Monitoring Fee

Applications for new grants, assignments, 

renewals, and amendments to existing 

grants 

Estimated federal work 

hours are >1-8 

$117 

Estimated federal work 

hours are >8-24 

$410 

Estimated federal work 

hours are >24-36 

$773 

Estimated federal work 

hours are >36-50

$1,108

Master agreements Varies As specified in the 

agreement 

Applications for new grants, assignments, 

renewals, and amendments to existing 

grants 

Estimated federal work 

hours are >50 

Full reasonable costs 

(FLPMA)

2; Full actual costs 

(MLA)3

1 Rights-of-way (ROW) regulations at 43 CFR 2804.25(c) and 43 CFR 2884.21(b)

2 Federal Lands Policy and Management Act

3 Mineral Leasing Act.
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Funding Mechanisms for Geothermal Permitting

Financial Relationships

Developers

Federal Treasury BLM
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Funding Mechanisms for Geothermal Permitting

Financial Relationships

BLM/USFS Revenues:

• All revenues collected for 

geothermal development 

and operation go 

through the BLM, directly 

to the federal treasury

• Examples: permit 

application fees and 

lease revenues (bonus 

bids, rents, and 

production 

royalties).

TYPICAL YEAR
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Funding Mechanisms for Geothermal Permitting

Financial Relationships

Annual Appropriations:

• Each year, Congress 

creates a budget for 

BLM, typically with a line 

item for geothermal 

development

• Historically, annual BLM 

appropriations for 

geothermal are 

about 8% of 

geothermal 

revenues.

TYPICAL YEAR
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Funding Mechanisms for Geothermal Permitting

Financial Relationships

Annual Appropriations:

• Each year, Congress 

creates a budget for USFS, 

but there is no line item

for geothermal 

development

• Historically, one line item 

has accounted for 

minerals and geology, 

totaling less than 1% of 

the USFS budget.

• Spending 

decisions are 

based on 

priorities set 

at the forestunit level. 

TYPICAL YEAR
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Funding Mechanisms for Geothermal Permitting

Financial Relationships

Cost-Recovery Fees:

• Reimbursement of the 

reasonable cost of 

processing documents and 

applications for activities 

related to public lands 

• Congress may authorize cost 

recovery when budgets do 

not cover program costs

• Example: the BLM ROW 

process. 

TYPICAL YEAR
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Funding Mechanisms for Geothermal Permitting

Financial Relationships

Cost-Recovery Fees:

• Currently, the USFS does not 

have congressional 

authority to recover costs 

related to its minerals 

management programs. 

TYPICAL YEAR
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Funding Mechanisms for Geothermal Permitting

Financial Relationships

Energy Policy 

Act of 2005

(2006-2009)

Revenue Set-Asides:

• EPAct 2005, Section 234 

established a geothermal 

set-aside: money from 

geothermal revenues 

would be reserved 

specifically for 

geothermal use 

• The set-aside was 

authorized for a 

period of five 

years, but was 

cancelled by 

Congress a 

year early.
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Funding Mechanisms for Geothermal Permitting

Budgets: Historical Geothermal Budgets

Energy Policy Act of 2005:

The set-aside tripled the BLM geothermal annual budgets and 

allowed for a significant increase in federal agency geothermal 

activity. 

Impacts of the 

EPAct Set-Aside

1. Revision of BLM 

Geothermal Regulations.

2. Development of USGS 

Geothermal Resource 

Assessment.

3. Reprogramming of 

Mineral Management 

Service’s (now ONRR1) 

geothermal accounting 

programs.

4. Analyses and 

development of a 

geothermal leasing PEIS.

5. Increase in staffing, 

planning activities, 

environmental review, 

leasing, and permitting for 

USFS and BLM leads to 

clearing backlog of 

applications.

1 Office of Natural Resources Revenue 
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Funding Mechanisms for Geothermal Permitting

Financial Relationships

Current USFS Funding:

• There are no geothermalspecific sources of 

funding for the USFS to 

process permit 

applications

• Prior to EPAct 2005, lease 

applications could be 

waiting in the queue for 

more than 20 years

• Funding from the setaside cleared 

the queue, but 

now back to 

pre-EPAct 

2005 funding.
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Funding Mechanisms for Geothermal Permitting

Budgets: Current Funding Mechanisms

Agency Funding 

Mechanism Example How Authorized Congressional 

Review Currently Exists

Appropriation

Annual BLM

geothermal 

budget

Congress Annually Yes

Cost-Recovery BLM ROW costrecover program Congress By request Yes

Set-Aside

EPAct 2005 

Geothermal 

Steam Act 

Implementation 

Fund

Congress By request No

Summary of Geothermal-Specific Funding Mechanisms for BLM
18

Funding Mechanisms for Geothermal Permitting

Conclusion

• The Geothermal Steam Act Implementation Fund clearly demonstrated the value of set-aside 

funds: clearing of leasing backlogs as well as increasing staff and resources for leasing and 

permitting. 

• BLM’s ROW model for cost recovery fees, if implemented by the USFS or BLM for 

geothermal, may facilitate timely processing of permitting and environmental reviews. 

• Set-aside funds are currently available to BLM’s oil and gas and recreational programs. Both 

industry and federal agency participants in the Geothermal Regulatory Roadmap workshop 

recommended that a geothermal set-aside could be established for the development of 

project coordination offices and processing of geothermal permits and use authorizations. 

This change would provide funding certainty and a reduced permitting risk for developers.

• BLM’s budget request for FY 13 is for $7 million (350% increase from previous 3 years) and is 

about equal to geothermal funding levels when the Geothermal Steam Act Implementation 

fund was authorized. BLM is currently operating on a continuing resolution with a $2 million 

budget. 
Questions?