Regulation updates ease path for geothermal energy on federal land

The U.S. Bureau of Land Management is cleaning up the rulebook for geothermal energy in an effort to remove redundant and obsolete regulations. The move comes as interest is heating up in geothermal as a clean, around-the-clock energy source.

In documents published in the July 17 Federal Register, the BLM said, “It is neither efficient nor in the best interests of the public to maintain obsolete regulations that are no longer in use.”

Geothermal energy comes from the Earth’s natural heat, which can be harnessed and converted to electricity by sending steam through a turbine. The bureau is proposing to eliminate dozens of rules dating back 15 years to make the regulatory process easier.

Geothermal has stayed out of the political fray over how the U.S. should generate power. At a time when electricity demand is expected to surge, gas and coal face opposition over carbon dioxide emissions that contribute to climate change. At the same time, wind and solar face opposition because they cannot produce a consistent flow of electricity 24 hours a day. Geothermal produces a stable amount of power without the byproduct of carbon emissions, and the changes announced by BLM are expected to simplify paperwork requirements for projects on federal land. 

What changed about geothermal regulations? 

The bureau is removing four categories of outdated regulations that it said have become obsolete due to expired deadlines or redundant requirements.

Production incentives for geothermal projects that expired in 2011 are being eliminated. The BLM is also removing royalty rate provisions tied to the Energy Policy Act of 2005, since deadlines for companies to elect these rates have passed. The agency is also rescinding rules for lease applications that were pending before the 2005 Energy Policy Act. 

In an interview with Straight Arrow News, Bryant Jones, executive director of the trade group Geothermal Rising, said the changes will “clear out legacy rules and create space to design a more coherent regulatory framework that takes into account new geothermal technologies.”

The cleanup of outdated rules will “create more clarity and confidence” for attracting investors, Jones added.

Why is geothermal gaining popularity?

Geothermal energy systems have existed since the 1800s, but until recently, they were geographically limited. Adopting drilling technologies pioneered by the oil and gas industry has “made geothermal an everywhere technology,” Jones said. 

Previously, geothermal needed natural hot springs in order to work. Now, enhanced geothermal employs directional drilling and hydraulic fracturing to bring an external water source to hot rocks under the surface, generating steam. Developers can also create a closed-loop geothermal system — sometimes called advanced geothermal — using a pipe drilled underground to absorb heat into the fluid inside it. 

Jones also pointed out that the geothermal industry presents a “good off-ramp for the oil and gas workforce.” 

Currently, geothermal provides less than 1% of total U.S. electricity — most of it in California and Nevada. The largest enhanced geothermal site under construction, Fervo Energy’s Cape Station project in Utah, is set to deliver 500 megawatts of power to the grid in 2026. Cape Station’s permits allow it to produce up to 2,000 megawatts, which would put it on par with a large coal or nuclear power plant.

Enhanced and closed-loop geothermal have increased the industry’s potential to provide 24/7 energy free of carbon emissions, which Jones said appeals to lawmakers across the political spectrum. 

What’s next for geothermal developers? 

Unlike other renewable energy sources like wind and solar, geothermal companies maintained a long window until 2033 to qualify for federal tax credits under the recently passed package, “One Big Beautiful Bill.“

Jones said the cumulative effect of tax credits, the BLM’s recent clarifications and other policy changes over the past few years is “really propelling the geothermal industry and bringing the certainty and stability that is needed.”

This week, the BLM also approved the 30-megawatt Crescent Valley geothermal facility in Nevada, which could power more than 33,000 homes. The bureau plans to hold its next competitive geothermal lease sale in August in California, offering 13 parcels across 23,000 acres, with a comparable sale following in Idaho in September.