Additional information-Continued Johnson, Hon. Harold T., etc.-Continued Inyo County Board of Supervisors, Resolution No. 67-23, ap- Lazague, John B., chairman, Modoc County Board of Super- Plumas County Taxpayers Association, resolution adopted Smith, Gordon I., district attorney and general counsel, Downie- Smith, Gordon I., district attorney and county counsel, Sierra 29 DISPOSITION OF GEOTHERMAL STEAM-1967 MONDAY, JUNE 12, 1967 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON MINES AND MINING OF THE Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m., in room 1324, Longworth House Office Building, Hon. Ed Edmondson (chairman of the subcommittee) presiding. Mr. EDMONDSON. The Subcommittee on Mines and Mining will come to order. We have a matter before us here this morning dealing with geothermal steam. If there is no objection we will make a part of the record at this point H.R. 3577 by Mr. Baring, which is pretty typical of the legislation on this subject, passed by the last Congress, and vetoed by the President, and H.R. 9583, introduced by the chairman of the subcommittee by request. Is there objection to it? Hearing no objection, these will be made a part of the record at this point. (The bills referred to follow :) [H.R. 3577, 90th Cong., first sess.] A BILL To authorize the Secretary of the Interior to make disposition of geothermal steam and associated geothermal resources, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Geothermal Steam Act of 1966". SEC. 2. As used in this Act, the term— (a) "Secretary" means the Secretary of the Interior; (b) "geothermal lease" means a lease issued under authority of this Act; (c) "geothermal steam and associated geothermal resources" means all fluid products of geothermal processes, embracing steam, naturally heated water and brines, and the heat or other energy associated with them and, in addition, any byproduct derived from them; (d) "byproduct" means any mineral or minerals (exclusive of oil, hydrocarbon gas, and helium) which are found in solution or in association with geothermal steam and which have a value of less than 75 per centum of the value of the geothermal steam or are not, because of quantity, quality, or technical difficulties in extraction and production, of sufficient value to warrant extraction and production by themselves; (e) "known geothermal resources area" means an area in which the geology, nearby discoveries, competitive interests, or other indicia would, in the opinion of the Secretary, engender a belief in men who are experienced in the subject matter that the prospects for extraction of geothermal steam or associated geothermal resources are good enough to warrant expenditures of money for that purpose. SEC. 3. Subject to the provisions of section 14 of this Act, the Secretary of the Interior may issues leases for the development and utilization of geothermal steam and associated geothermal resources (1) in lands administered by him, whether those lands are unreserved, withdrawn, or acquired, and (2) in any national forest or other lands administered by the Department of Agriculture through the Forest Service, whether those lands are withdrawn or acquired. SEC. 4. If lands to be leased under this Act are within any known geothermal resources area, they shall be leased to the highest responsible qualified bidder by competitive bidding under regulations to be formulated by the Secretary. If the lands to be leased are not within any known geothermal resources area, the qualified person first making application for the lease shall be entitled to a lease of such lands without competitive bidding. SEC. 5. Geothermal leases shall provide for (a) a royalty of not less than 10 per centum of the amount or value of steam, or any other form if heat or energy derived from production under the lease and sold or utilized by the lessee; (b) a royalty of not less than 5 per centum of the value of any byproduct derived from production under the lease and sold or utilized or reasonably susceptible of sale or utilization by the lessee, except that as to any byproduct which is a mineral named in section 1 of the Mineral Leasing Act of February 25, 1920, as amended (30 U.S.C. 181), the minimum rate of royalty for such mineral shall be the same as that provided in that Act and the maximum rate of royalty for such mineral shall not exceed the maximum royalty applicable under that Act; (c) payment in advance of an annual rental of not less than $1 per acre or fraction thereof for each year of the lease. If there is no well on the leased lands capable of producing geothermal resources in commercial quantities, the failure to pay rental on or before the anniversary date shall terminate the lease by operation of law: Provided, however, That whenever the Secretary discovers that the rental payment due under a lease is paid timely but the amount of the payment is deficient because of an error or other reason and the deficiency is nominal, as determined by the Secretary pursuant to regulations prescribed by him, he shall notify the lessee of the deficiency and such lease shall not automatically terminate unless the lessee fails to pay the deficiency within the period prescribed in the notice: Provided further, That, where any lease has been terminated automatically by operation of law under this section for failure to pay rental timely and it is shown to the satisfaction of the Secretary of the Interior that the failure to pay timely the lease rental was justifiable or not due to a lack of reasonable diligence, he in his judgment may reinstate the lease if— (1) petition for reinstatement, together with the required rental for such lease, is filed with the Secretary of the Interior; and (2) no valid lease has been issued affecting any of the lands in the terminated lease prior to the filing of the petition for reinstatement; and (d) a minimum royalty of $2 per acre or fraction thereof in lieu of rental payable at the expiration of each lease year for each producing lease, commencing with the lease year beginning on or after the commencement of production in commercial quantities. For the purpose of determining royalties hereunder the value of any geothermal steam and byproduct used by the lessee and not sold and reasonably susceptible of sale shall be determined by the Secretary, who shall take into consideration the cost of exploration and production and the economic value of the resource in terms of its ultimate utilization. SEC. 6. (a) Geothermal leases shall be for a primary term of fifteen years and for so long thereafter as geothermal steam is produced or utilized in commercial quantities. (b) Any lease for land on which, or for whic hunder an approved cooperative or unit plan of development or operation, actual drilling operations were commenced prior to the end of its primary term and are being diligently prosecuted at that time shall be extended for five years and so long thereafter as geothermal steam is produced or utilized in commercial quantities. (c) Leases which have extended by reason of production and have been determined by the Secretary to be incapable of further commercial production and utilization of geothermal steam may be further extended for a period of not more than five years from the date of such determination but only for so long as one or more valuable byproducts are produced in commercial quantities. If such byproducts are leasable under the Mineral Leasing Act of February 25, 1920, as amended (30 U.S.C. 181, et seq.), or under the Mineral Leasing Act for Acquired Lands (30 U.S.C. 351-358), and the leasehold is primarily valuable for the production thereof, the lessee shall be entitled to convert his geothermal lease to a mineral lease under, and subject to all the terms and conditions of, such appropriate Act upon application at any time before expiration of the lease extension by reason of byproduct production. Any such converted lease affecting lands withdrawn or acquired in aid of a function of a Federal department or agency, including the Department of the Interior, shall be subject to such additional terms and conditions as may be prescribed by such department or agency with respect to the additional operations or effects resulting from such conversion upon adequate utilization of the lands for the purpose for which they are administered. SEC. 7. Geothermal leases shall embrace a reasonably compact area of not less than six hundred and forty acres and not more than two thousand five hundred and sixty acres, except where a departure therefrom is occasioned by an irregular subdivision or subdivisions. No person, association, or corporation, except as otherwise provided in this Act, shall take, hold, own, or control at one time, whether acquired directly from the Secretary under this Act or otherwise, any direct or indirect interest in Federal geothermal leases in any one State exceeding fifty-one thousand two hundred acres. At any time after fifteen years from the effective date of this Act, the Secretary, after public hearings, may reduce this maximum holding by regulation. SEC. 8. If the production, use, or conversion of geothermal steam is susceptible of producing a valuable byproduct or byproducts, the Secretary shall require substantial beneficial production or use thereof unless, in individual circumstances, he modifies or waives this requirement in the interest of conservation of natural resources or for other reasons satisfactory to him. However, the production or use of such byproducts shall be subject to the rights of the holders of preexisting leases, claims, or permits covering the same land or the same minerals, if any. SEC. 9. The holder of any geothermal lease at any time may make and file in the appropriate land office a written relinquishment of all rights under such lease or of any legal subdivision of the area covered by such lease. Such relinquishment shall be effective as of the date of its filing. Thereupon the lessee shall be released of all obligations thereafter accruing under said lease with respect to the lands relinquished, but no such relinquishment shall release such lessee, or his surety or bond, from any liability for breach of any obligation of the lease. other than an obligation to drill, accrued at the date of the relinquishment, or from the continued obligation, in accordance with the applicable lease terms and regulations, (1) to make payment of all accrued rentals and royalties, (2) to place all wells on the relinquished lands in condition for suspension or abandonment, and (3) to protect or restore the surface and surface resources. SEC. 10. The Secretary, upon application by the lessee, may suspend operations and production on a producing lease and he may, on his own motion, in the interest of conservation suspend operations on any lease, but in either case he may extend the lease term for the period of any suspension. SEC. 11. Leases may be terminated by the Secretary for any violation of the regulations or lease terms after thirty days' notice, but the lessee shall be entitled to a hearing on the matter if request for the hearing is made to the Secre tary within the thirty-day period after notice. SEC. 12. The Secretary may waive, suspend, or reduce the rental or minimum royalty for any lease or portion thereof in the interests of conservation and to encourage the greatest ultimate recovery of geothermal resources, if he determines that this is necessary to promote development or that the lease cannot be successfully operated under the lease terms. SEC. 13. Subject to the other provisions of this Act, a lessee shall be entitled to use so much of the surface of the land covered by his geothermal lease as may be found by the Secretary to be necessary for the production and conservation of geothermal resources. SEC. 14. (a) Geothermal leases for lands withdrawn or acquired in aid of functions of the Department of the Interior may be issued only under such terms 2nd conditions as the Secretary may prescribe to insure adequate utilization of the lands for the purpose for which they were withdrawn or acquired. (h) Geothermal leases for lands withdrawn or acquired in aid of functions of the Department of Agriculture may be issued only with the consent of, and subject to such terms and conditions as may be prescribed bv. the head of that Department to insure adequate utilization of the lands for the purposes for which they were withdrawn or acquired. |
