National Geothermal Initiative

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

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

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

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.