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August 8, 2008
Full steam ahead: Geothermal leases on the rise in Elko County
By ALI HELGOTH - Staff Writer Elko Daily Free Press
Friday, August 8, 2008 11:14 PM PDT
ELKO - Elko County's hot water has become a hot commodity.
With oil prices at a record high and the cost of harnessing geothermal energy becoming increasingly cost-effective, 21,325 acres in the Bureau of Land Management's Elko District were leased for geothermal exploration and development, bringing the county more than $1 million per year for the next 10 years.
“Geothermal has become a much more popular option for energy with oil prices going so high,” said James Lindsay, supervising natural resource specialist for the Tuscarora Field Office.
In total, seven separate leases were awarded to five companies at a total cost of $4.49 million. Of the total amount paid, 50 percent, $2.24 million, goes to the state and Elko County and the federal government each receive 25 percent, $1.122 million each.
That revenue can help reduce the impact of reductions as a result of the economic downturn, Commissioner Warren Russell said.
Russell said he would like to see available revenue invested in natural resources, as a way to promote economic diversity.
Land was leased near Beowawe; north of Deeth near Mary's River and also east of Ruby Valley, Lindsay said.
Magma Energy of Reno bid $250 per acre for 1,735 acres near Beowawe for a total of $434,000.
Standard Steam Trust of Denver bid $480 per acre for two separate leases totaling 5,831 acres north of Deeth for a total of $3.42 million.
This land is most likely to be developed for geothermal uses, Lindsay said.
Rampower of Reno bid $60 per acre for two separate leases totaling 10,185 acres east of Ruby Valley for a total of $611,220.
Kodali of Reno bid $2 an acre, the minimum bid allowed, for 5,071 acres east of Ruby Valley for a total of $10,144.
Geothermal Technical Partners bid $2 an acre for 4,609 acres for a total of $9,220.
Bids for $2 an acre increase to $3 an acre in the second year.
Each lease expires after 10 years if there is no development, but can be renewed if there is.
By purchasing the lease, the companies are not guaranteed to be able to develop the land.
Each company must first submit a notice of intent with the Bureau of Land Management, which tells the federal agency where on the land they plan to explore, Lindsay said.
The notice of intent is generally not a long process, but some companies may be required to complete an environmental assessment, depending on the project.
After the notice of intent, companies submit a plan of development and complete an environmental assessment, which are often a lengthy and expensive process.
This could take several months or up to several years because of the impact to wildlife and other resources is substantial companies might be required to complete an environmental impact statement, Lindsay said.
In addition to the cost of leasing the land, the county will receive revenue if any of the companies develop power plants.
The county will see a 1.75 percent royalty for power produced in the first 10 years and then a 3.5 percent royalty for the next 10 years, Lindsay said.
In addition, jobs are created building and running power plants, he said
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