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The original documents are located in Box 6, folder "9/3/74 HR14920 Geothermal Energy
Research, Development and Demonstration (2)" of the White House Records Office:
Legislation Case Files at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald R. Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Exact duplicates within this folder were not digitized.
RUSH
THE WHITE HOUSE
Digitized from the White House Records Office: Case Legislation Files at the Gerald R. Ford Presidential Library
ACTION MEMORANDUM
WASHINGTON
LOG NO.: 553
Date: August 29, 1974
Time:
3:30 p.m.
FOR ACTION: Michael Duval
CC (for information): Warren K. Hendriks
NSC/S
Jerry Jones
Phil Buchen
Bill Timmons
FROM THE STAFF SECRETARY
DUE: Date: Friday, August 30, 1974
Time:
2:00 p. m.
SUBJECT:
Enrolled Bill H.R. 14920 - Geothermal Energy Research
Development and Demonstration Act of 1974
ACTION REQUESTED:
For Necessary Action
XX For Your Recommendations
Prepare Agenda and Brief
Draft Reply
For Your Comments
Draft Remarks
REMARKS: OK
make Durd
Please return to Kathy Tindle - West Wing
PLEASE ATTACH THIS COPY TO MATERIAL SUBMITTED.
If you have any questions or if you anticipate a
FORD LIBRANT
delay in submitting the required material, please
telephone the Staff Secretary immediately.
Warren K. Hendriks
For the President
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C. 20503
AUG 2 9 1974
MEMORANDUM FOR THE PRESIDENT
Subject: Enrolled Bill H.R. 14920 - Geothermal Energy
Research, Development and Demonstration
Act of 1974
Sponsor - Rep. McCormack (D) Washington
Last Day for Action
September 3, 1974 - Tuesday
Purpose
Establishes a management project to undertake a comprehensive
geothermal energy research and development program, including
construction of demonstration plants to produce electricity;
establishes a loan guarantee program to stimulate commercial
development of geothermal resources; and for other purposes.
Agency Recommendations
Office of Management and Budget
Approval
Federal Energy Administration
Approval
National Aeronautics and Space
Administration
Approval (informal)
National Science Foundation
No objection
Department of the Treasury
No objection
Atomic Energy Commission
No objection (informal)
Department of the Interior
Does not recommend Veto
Discussion
Geothermal energy is derived from the internal heat of the
Earth. While a small number of plants already produce
electricity from one type (dry steam), there are other types
2
of potentially high-energy geothermal resources, such as
hot dry rock and pressurized water, which have not been
developed. The full extent and potential of these resources
is not known, but they are suspected to offer a large, long-
range source of environmentally-acceptable energy. In
addition, dissolved materials such as sulfur and minerals
can probably be recovered as byproducts.
Recognition of the growing importance of geothermal energy
was reflected in enactment of the Geothermal Steam Act of
1970, which authorized the leasing of Federal lands for
geothermal development. The enrolled bill was characterized
in House floor debate (passed 404-3) as "the next logical
step forward" in developing these resources.
H.R. 14920 establishes a temporary interagency geothermal
energy management group. The management group -- to be known
as the Geothermal Energy Coordination and Management Project --
would be terminated and its functions transferred to the
Energy Research and Development Administration within 60 days
of the enactment of legislation creating that agency --
legislation for this purpose supported by the Administration
is now in conference. The bill also contains a number of new
research, development and demonstration authorities in the
field of geothermal energy, as discussed below.
The Geothermal Energy Coordination and Management Project
(the Project) would be composed of six members -- one at the
Assistant Secretary or comparable level from each of the four
agencies named below, an Assistant Administrator of the
Federal Energy Administration, and a member appointed by the
President. The President could designate any member to serve
as Chairman. The Project would have authority (until the ERDA
legislation is enacted) to establish or approve programs, and
its responsibilities would be carried out through the following
agencies:
- The Department of the Interior, which would evaluate
the resource base and develop technologies associated
with exploration;
- The National Aeronautics and Space Administration,
which would provide contract management capability,
evaluate the resource base, and develop technologies
as instructed by the Project;
3
- The Atomic Energy Commission, which would also be
responsible for technology development as the
Project would determine; and,
- The National Science Foundation, which would be
responsible for basic and applied research.
H.R. 14920 would direct the Project to:
- prepare, through NASA, a comprehensive "program
definition" of the effort needed to develop these
resources commercially by 1980, which would be
transmitted to the Congress by August 31, 1975
($2.5 million is authorized for this purpose) ;
- plan the orderly inventorying of geothermal resources
throughout the United States, and, through the
Geological Survey, carry out regional surveys after
developing new drilling techniques and advanced
methods of assessing resource value;
- initiate a research and development program to meet
eleven goals set out in the bill, which generally
concern new or improved drilling, extraction and
production technologies;
- initiate a program to design and construct pilot
and demonstration plants to produce electricity,
and enter into cooperative agreements with utilities
or with non-Federal governmental entities to build
such plants, or, under specified circumstances, to
build such plants without non-Federal participation;
and,
- support, through NSF, programs to train the necessary
scientific and engineering personnel.
The enrolled bill would also authorize the Project to establish
a program to guarantee, under appropriate conditions, loans
made by private financial institutions to companies to carry
out resource assessment, engage in research and development,
4
acquire rights to resources, or produce energy or byproducts.
An agency designated by the Project would be authorized to
guarantee payment of principal and interest on up to 75% of
the total value of any one project, not to exceed $25 million
for a single project or a total of $50 million for a series
of projects by any single company. A Geothermal Resources
Development Fund would be established in the Treasury for this
purpose. Authority for the loan guarantee program would expire
in ten years, and not to exceed $50 million annually would be
authorized for appropriation to the Fund to cover losses.
The enrolled bill contains the first energy-related loan
guarantee program to be enacted by the 93rd Congress, and
so may serve as a prototype for future similar programs.
After the bill had reached conference, Treasury and OMB staff
met informally with committee staff members in an attempt to
remedy sixteen deficiencies in the bill in relation to sound
Federal credit management policies. Since the House and
Senate versions had almost identical credit provisions, the
options were limited. While the number of perfecting provisions
accepted by the conferees --- eight -- was better than hoped for
under these conditions, a number of important improvements were
not adopted.
Treasury has received informal advice from the Senate Interior
Committee staff that certain additional perfecting amendments
would be considered by the committee if the enrolled bill is
signed. On the basis of this understanding, Treasury states
in its letter on the enrolled bill that it would have no
objection to approval, and that remedial legislation is being
prepared by that Department.
Although we do not believe the enrolled bill is essential to
the conduct of Federal research and development programs in
this area since many of the authorities already exist in
Federal agencies, it does offer a feasible interim arrangement
for managing research and development programs in several
agencies.
It does, however, have some remaining minor problems, since:
- the provisions of the loan guarantee program are
still not satisfactory, as discussed above; and,
- while the bill does provide for a transfer of
functions, its provisions are vague on whether
the actual agency operating programs are to be
transferred as well.
5
However, we recognize that the Congress has moved toward meeting
the Administration's major objections by modifying the bill
with regard to appointment of a member to the Project and
designation of the Chairman by the President, by accepting some
of our recommendations concerning the loan guarantee program,
and, most importantly, by providing for the Project to be
incorporated into ERDA. These improvements were, in fact,
suggested by the Executive Branch as a basic means for making
the bill acceptable.
On balance, we believe the bill should be approved. We will
work with Treasury in developing remedial legislation to correct
deficiencies in the loan guarantee authority as well as with
Interior, which has advised that it will wish to propose changes
in other provisions of the bill. Further, we will be prepared
to move expeditiously with appropriate administrative proposals
to provide for clarification and an orderly transition of the
pertinent authorities in the bill to ERDA when legislation
establishing that agency is enacted.
No expenditures are mandated, and the discretionary authority
in the bill will not require any increase in funding above the
$45 million which has already been appropriated for geothermal
energy programs in this fiscal year.
We understand that White House staff is preparing a signing
statement on the bill for your consideration. per W. Round
8/29/74
Welfred H Rommel
Assistant Director for
Legislative Reference
Enclosures
NATIONAL SCIENCE FOUNDATION
WASHINGTON, D.C. 20550
nsf
OFFICE OF THE
DIRECTOR
August 27, 1974
Mr. Wilfred H. Rommel
Assistant Director for
Legislative Reference
Office of Management and Budget
Washington, D.C. 20503
Dear Mr. Rommel:
A copy of the Enrolled Bill, H.R. 14920, the
"Geothermal Energy Research, Development, and
Demonstration Act of 1974" has not been received.
However, we have examined the bill as reported in
the Congressional Record for August 19, 1974 at
pages H 8600 to H 8603, inclusive.
We have no objection to approval by the President
of H.R. 14920 in that form.
Lowell J. Paige
Acting Director
OF
THE TREASURY THE
THE GENERAL COUNSEL OF THE TREASURY
WASHINGTON, D.C. 20220
1789
AUG 28 1974
Director, Office of Management and Budget
Executive Office of the President
Washington, D. C. 20503
Attention: Assistant Director for Legislative
Reference
Sir:
Reference is made to your request for the views of this
Department on the enrolled enactment of H.R. 14920, the
"Geothermal Energy Act of 1974."
The enrolled enactment would authorize a Federal program
to guarantee lenders against loss of principal or interest
on loans made to certain public or private agencies, corporations,
or other legal entities for the purpose of acquiring rights in
geothermal resources and performing exploration, development,
and construction and operation of facilities for the commercial
production of energy from geothermal resources.
The financial provisions of the House and Senate versions
of the bill were technically deficient in several important
respects and not consistent with overall Administration policy
with respect to Federal credit programs. Amendments to correct
these deficiencies were the subject of Treasury reports dated
August 1 to Chairmen Jackson and Teague. However, the conferees
did not adopt two amendments of particular importance to the
Department.
The first such amendment would have made taxable the interest
on any loan guaranteed under the proposal. This provision is
necessary to permit guaranteed loans to public bodies but to
prevent Federal guarantees of tax-exempt obligations. Federal
guarantees of tax-exempts have been clearly recognized by the
Administration and the Congress as bad budget, tax, and debt
management policy, and the Congress has prohibited such guarantees
under a number of Federal credit programs in recent years,
including most recently the Indian Financing Act of 1974.
-2-
The second such amendment would have authorized the program
administrator to borrow from the Treasury in the event that
amounts in the fund are insufficient to enable him to discharge
his responsibilities under the guarantee program. The guarantee
under this program is an obligation fully binding on the United
States, whether or not a source of funds for fulfillment of the
guarantee obligation has been specified. This amendment would
increase the market acceptability of the Federally guaranteed
obligations and reduce the cost of financing the program by
assuring the ability of the administrator to make timely payments.
We understand that these two amendments were not adopted
by the conferees because these specific provisions did not
represent an area of disagreement between the House and Senate
versions of the bill. We also understand from Senate Interior
Committee staff that the Committee may be willing to consider
remedial legislation and that there would be a good chance of
enactment early next year prior to implementation of the program.
With the understanding that the proposed guarantee program
will not be implemented prior to submission of such remedial
legislation, the Department would have no objection to a
recommendation that the enrolled enactment be approved by the
President.
Sincerely yours,
General Counsel
ATOMIC ENERGY COMMISSION
UNITED STATES
ATOMIC ENERGY COMMISSION
WASHINGTON, D.C. 20545
UNITED STATES OF AMERICA
AUG 28 1974
Mr. Wilfred H. Rommel
Assistant Director for
Legislative Reference
ATTN: Mrs. Louise Garziglia
Legislative Reference Division
Office of Management and Budget
Dear Mr. Rommel:
The Atomic Energy Commission is pleased to respond to your request for
our views on Enrolled Bill H.R. 14920, the "Geothermal Energy Research,
Development and Demonstration Act of 1974." We have not previously
been asked to comment on this bill.
The AEC supports the basic purposes of H.R. 14920. However, while we
interpose no objection to its approval, we believe that the bill is of
questionable value, as explained below.
Briefly, Title I of the bill would establish a Geothermal Energy
Coordination and Management Project, composed of six members, one of
whom would be appointed by the President and the remaining five serving
by virtue of positions in Government agencies. AEC would be represented
by its General Manager.
Of the four main aspects of the geothermal program contemplated by the
bill, the Project would look primarily to the Department of the Interior
for evaluation and assessment of the resource base; to the National
Aeronautics and Space Administration for contract management capability,
evaluation and assessment of the resource base and program definition;
to the AEC for the development of technologies; and to the National
Science Foundation for basic and applied research. The Geological Survey
would be utilized in connection with the inventorying of geothermal
resources on both Federal and non-Federal lands.
The bill contemplates the carrying out of demonstration projects for each
geothermal resource base. These projects could include cooperative
projects between Federal agencies and with utilities and non-Federal
entities.
Mr. Wilfred H. Rommel
2
AUG 28 .374
Title 11 of H.R. 14920 would authorize the Project Chairman to designate
a Federal agency to carry on a loan guarantee program, in consultation
with the Secretary of the Treasury, to encourage the commercial pro-
duction of energy from geothermal resources. The guaranty for any loan
for a project would be limited to $25,000,000, and the guarantees for
the loans of a single borrower could not exceed $50,000,000.
Under Title 111 of the bill, all research, development, and demonstration
functions of the Project (including the loan guaranty program) would be
transferred to a permanent Federal energy research and development agency,
if legislation for such an agency is enacted. In that event, the Project
members would provide advice and counsel to the new agency. Finally, the
bill would authorize $2.5 million to NASA for program definition in the
current fiscal year, and not to exceed $50 million annually for the loan
guarancy program.
In her February 6 testimony before the House Committee on Science and
Astronautics concerning H.R. 11212, a predecessor bill, Chairman Ray
pointed out that the central planning and coordination of all energy
research and development efforts in a single independent agency should
enable us to make the greatest use of our energy resources such as
geothermal. AEC continues to hold this view. While H.R. 14920 would
provide a transitional program, its usefulness diminishes markedly with
the increasing prospects for passage of the ERDA legislation in the near
term. However, we do not oppose approval of H.R. 14920 for two principal
reasons. First, the bill does not appear to affect ongoing agency
geothermal programs. While under Section (e) the Project would have
exclusive authority with respect to the establishment or approval of
programs initiated under the proposed Act, there is no provision for
discontinuing or redirecting existing geothermal programs. It should
be noted in this respect that the AEC's present geothermal activities
are broader than those contemplated in the bill, and include demonstration
power plants in cooperation with industry for the several geothermal
resource types. While the AEC would cooperate wholeheartedly in
implementing the provisions of H.R. 14920 if approved, we would be able
to continue our existing geothermal activities, which are funded for
FY 1975 in, the amount of $10.7 million in operating funds.
The other reason for our not objecting to the bill's approval is its
provision of an orderly procedure for transfer of Project activities
to an energy research and development agency, assuming enactment of
such legislation.
Sincerely,
WillinGone William A. Anders
Commissioner
OF THE INTERIOR
United States Department of the Interior
OFFICE OF THE SECRETARY
March
3.
1849
WASHINGTON, D.C. 20240
AUG 2 8 1974
Dear Mr. Ash:
This responds to your request for our views concerning H.R. 14920,
an enrolled bill "To further the conduct of research, development,
and demonstrations in geothermal energy technologies, to establish
a Geothermal Energy Coordination and Management Project, to amend
the National Science Foundation Act of 1950 to provide for the
funding of activities relating to geothermal energy, to amend
the National Aeronautics and Space Act of 1958 to provide for the
carrying out of research and development in geothermal energy
technology, to carry out a program of demonstrations in
technologies for the utilization of geothermal resources, and
for other purposes", which is before the President for approval.
The bill makes no significant contribution to implementation
of present Administration energy policy and includes several
objectionable features. However, we do not recommend veto of the
bill. In a subsequent letter, we will recommend administrative
steps to minimize its objectionable features, should the bill
become law.
H.R. 14920 provides for the development of a "Geothermal Energy
Coordination and Management Project" composed of six members
including representatives of the National Science Foundation, the
Interior Department, the National Aeronautics and Space Adminis-
tration, the Atomic Energy Commission and the Federal Energy
Administration together with a member appointed by the President.
The Project would carry out certain of its responsibilities
through Federal agencies as specified by the bill. Evaluation
and assessment of the geothermal resource base, including
development of exploration technologies, would be carried
out by this Department. The bill requires the Project to prepare
a "comprehensive program definition" with interim reports
being transmitted to the President and Congress not later
than November 30, 1974, and January 31, 1975, and the final
definition being prepared not later than August 31, 1975.
The Geological Survey would be required to prepare a schedule
and objectives for inventorying geothermal resources as part
of the comprehensive program definition. The bill also specifies
certain research and development programs to be undertaken
and contemplates a demonstration plant program.
In addition, H.R. 14920 authorizes a loan guarantee program
to be administered by an appropriate agency as determined by
the Project Chairman and with an annual authorization of $50
million. Research and development functions provided for
by the bill would be transferred to ERDA within 60 days after
legislation authorizing that organization is passed.
Establishment of the Geothermal Energy Coordination and
Management Project will hamper current Administration efforts
to develop and implement a comprehensive energy policy. The
Administration's geothermal program can be carried out under
existing authorities and the bill adds unnecessary organizational
arrangements and substantive requirements. These confuse existing
and planned responsibilities relating to geothermal energy.
Among other matters, the bill leaves unclear the division of
responsibility for evaluation and assessment of the resource
base and for the development of technology as contemplated by
section 101 (d) and would still require Executive Branch
determination of responsibility for these functions.
In addition, we object to authorization of loan guarantees for
geothermal development as provided by the bill. These provisions
are unclear and would arbitrarily favor the development of
one energy form over others. The need for loan guarantees has
not adequately been demonstrated and the bill fails to distin-
guish situations where such guarantees may be appropriate from
those where they are not.
Sincerely yours,
Assistant Jadi Secretary WCarlson of the Interior
Honorable Roy L. Ash
Director, Office of
Management and Budget
Washington, D.C. 20503
93D CONGRESS
HOUSE OF REPRESENTATIVES
REPORT
2d Session
No. 93-1301
GEOTHERMAL ENERGY RESEARCH, DEVELOPMENT,
AND DEMONSTRATION ACT OF 1974
AUGUST 19, 1974.-Ordered to be printed
Mr. TEAGUE, from the committee of conference,
submitted the following
CONFERENCE REPORT
[To accompany H.R. 14920]
The committee of conference on the disagreeing votes of the two
Houses on the amendments of the Senate to the bill (H.R. 14920) to
further the conduct of research, development, and demonstrations in
geothermal energy technologies, to establish a Geothermal Energy
Coordination and Management Project, to amend the National Science
Foundation Act of 1950 to provide for the funding of activities relating
to geothermal energy, to amend the National Aeronautics and Space
Act of 1958 to provide for the carrying out of research and develop-
ment in geothermal energy technology, to carry out a program of
demonstrations in technologies for the utilization of geothermal
resources, and for other purposes, having met, after full and free con-
ference, have agreed to recommend and do recommend to their respec-
tive Houses as follows:
That the House recede from its disagreement to the amendment of
the Senate to the text of the bill and agree to the same with an amend-
ment as follows:
In lieu of the matter proposed to be inserted by the Senate amend-
ment insert the following:
SHORT TITLE
SEC. 1. This Act may be cited as the "Geothermal Energy Research,
Development, and Demonstration Act of 1974".
FINDINGS
SEC. 2. The Congress hereby finds that-
(1) the Nation is currently suffering a critical shortage of
environmentally acceptable forms of energy;
38-006-74-1
2
(2) the inadęquate organizational structures and levels of fund-
ing for energy research have limited the Nation's current and
future options for meeting energy needs;
(3) electric energy is a clean and convenient form of energy
at the location of its use and is the only practicable form of energy
in some modern applications, but the demand for electric energy
in every region of the United States is taxing all of the alternative
energy sources presently available and is projected to increase;
some of the sources available for electric power generation are
already in short supply, and the development and use of other
sources presently involve undesirable environmental impacts;
(4) the Nation's critical energy problems can be solved only
if a national commitment is made to dedicate the necessary finan-
cial resources, and enlist the cooperation of the private and public
sectors, in developing geothermal resources and other noncon-
ventional sources of energy;
(5) the conventional geothermal resources which are presently
being used have limited total potential; but geothermal resources
which are different from those presently being used, and which
have extremely large energy content, are known to exist;
(6) some geothermal resources contain energy in forms other
than heat; examples are methane and extremely high pressures
available upon release as kinetic energy;
(7) some geothermal resources contain valuable byproducts
such as potable water and mineral compounds which should be
processed and recovered as national resources;
(8) technologies are not presently available for the develop-
ment of most of these geothermal resources, but technologies for
the generation of electric energy from geothermal resources are
potentially economical and environmentally desirable, and the
development of geothermal resources offers possibilities of process
energy and other nonelectric applications;
(9) much of the known geothermal resources exist on the public
lands;
(10) Federal financial assistance is necessary to encourage the
extensive exploration, research, and development in geothermal
resources which will bring these technologies to the point of com-
mercial application;
(11) the advancement of technology with the cooperation of
private industry for the production of useful forms of energy
from geothermal resources is important with respect to the Fed-
eral responsibility for the general welfare, to facilitate commerce,
to encourage productive harmony between man and his environ-
ment, and to protect the public interest; and
(12) the Federal Government should encourage and assist pri-
vate industry through Federal assistance for the development and
demonstration of practicable means to produce useful energy from
geothermal resources with environmentally acceptable processes.
DEFINITIONS
Sec. 3. For the purposes of this Act-
(1) the term "geothermal resources" means (A) all products
of geothermal processes, embracing indigenous steam, hot water,
3
and brines, (B) steam and other gases, hot water and hot brines
resulting from water, gas, or other fluids artificially introduced
into geothermal formations, and (C) any byproduct derived from
them;
(2) the term "byproduct" means any mineral or minerals which
are found in solution or in association with geothermal resources
and which have a value of less than 75 percent of the value of the
geothermal steam and associated geothermal resources or are not,
because of quantity, quality, or technical difficulties in extraction
and production, of sufficient value to warrant extraction and
production by themselves;
(3) "pilot plant" means an experimental unit of small size used
for early evaluation and development of new or improved proc-
esses and to obtain technical, engineering, and cost data;
(4) "demonstration plant" means a complete facility which
produces electricity, heat energy, or useful byproducts for com-
mercial disposal from geothermal resources and which will make
a significant contribution to the knowledge of full-size technology,
plant operation, and process economics;
(5) the term "Project" means the Geothermal Energy Coordi-
nation and Management Project established by section 101 (a) ;
(6) the term "fund" means the Geothermal Resources Develop-
ment Fund established by section 204(a); and
(7) the term "Chairman" means the Chairman of the Project.
TITLE I-GEOTHERMAL ENERGY COORDINATION AND
MANAGEMENT PROJECT
ESTABLISHMENT
SEC. 101. (a) There is hereby established the Geothermal Energy
Coordination and Management Project.
(b) (1) The Project shall be composed of six members as follows:
(A) one appointed by the President;
(B) an Assistant Director of the National Science Foundation;
(C) an Assistant Secretary of the Department of the Interior;
(D) an Associate Administrator of the National Aeronautics
and Space Administration;
(E) the General Manager of the Atomic Energy Commission;
and
(F) an Assistant Administrator of the Federal Energy
Administration.
(2) The President shall designate one member of the Project to
serve as Chairman of the Project.
(3) If the individual appointed under paragraph (1) (A) is an
officer or employee of the Federal Government, he shall receive no
additional pay on account of his service as a member of the Project.
If such individual is not an officer or employee of the Federal Govern-
ment, he shall be entitled to receive the daily equivalent of the annual
rate of basic pay in effect for level IV of the Executive Schedule (5
U.S.C. 5315) for each day (including traveltime) during which he is
engaged in the actual performance of duties vested in the Project.
4
(c) The Project shall have overall responsibility for the provision
of effective management and coordination with respect to a national
geothermal energy research, development, and demonstration pro-
gram. Such program shall include-
(1) the determination and evaluation of the resource base;
(2) research and development with respect to exploration, ex-
traction, and utilization technologies;
(3) the demonstration of appropriate technologies; and
(4) the loan guaranty program under title II.
(d) (1) The Project shall carry out its responsibilities under this
section acting through the following Federal agencies:
(A) the Department of the Interior, the responsibilities of
which shall include evaluation and assessment of the resource
base, including development of exploration technologies;
(B) the National Aeronautics and Space Administration, the
responsibilities of which shall include the provision of contract
management capability, evaluation and assessment of the resource
base, and the development of technologies pursuant to section
102 (b);
(C) the Atomic Energy Commission, the responsibilities of
which shall include the development of technologies; and
(D) the National Science Foundation, the responsibilities of
which shall include basic and applied research.
(2) Upon request of the Project, the head of any such agency is
authorized to detail or assign, on a reimbursable basis or otherwise,
any of the personnel of such agency to the Project to assist it in carry-
ing out its responsibilities under this Act.
(e) The Project shall have exclusive authority with respect to the
establishment or approval of programs or projects initiated under
this Act, except that the agency involved in any particular program
or project shall be responsible for the operation and administration of
such program or project.
PROGRAM DEFINITION
SEC. 102. (a) (1) The Chairman, acting through the Administrator
of the National Aeronautics and Space Administration, is authorized
and directed to prepare a comprehensive program definition of an inte-
grated effort and commitment for effectively developing geothermal
energy resources. Such Administrator, in preparing such comprehen-
sive program definition, is authorized to consult with other Federal
agencies and non-Federal entities.
(2) The Chairman shall transmit such comprehensive program
definition to the President and to each House of the Congress. Interim
reports shall be transmitted not later than November 30, 1974, and not
later than January 31, 1975. Such comprehensive program definition
shall be transmitted as soon as possible thereafter, but in any case not
later than August 31, 1975.
(3) As part of the comprehensive program definition required by
paragraph (1), the Chairman, acting through the Geological Survey,
shall transmit to the President and to each House of the Congress a
schedule and objectives for the inventorying of geothermal resources.
(b) The National Aeronautics and Space Administration is au-
thorized to undertake and carry out those programs assigned to it by
the Project.
5
RESOURCE INVENTORY AND ASSESSMENT PROGRAM
SEC. 103. (a) The Chairman shall initiate a resource inventory and
assessment program with the objective of making regional and national
appraisals of all types of geothermal resources, including identification
of promising target areas for industrial exploration and development.
The specific goals shall include-
(1) the improvement of geophysical, geochemical, geological,
and hydrological techniques necessary for locating and evaluating
geothermal resources;
(2) the development of better methods for predicting the power
potential and longevity of geothermal reservoirs;
(3) the determination and assessment of the nature and power
potential of the deeper unexplored parts of high temperature geo-
thermal convection systems; and
(4) the survey and assessment of regional and national geo-
thermal resources of all types.
(b) The Chairman, acting through the Geological Survey and other
appropriate agencies, shall-
(1) develop and carry out a general plan for the orderly in-
ventorying of all forms of geothermal resources of the Federal
lands and, where consistent with property rights and determined
by the Chairman to be in the national interest, of non-Federal
lands;
(2) conduct regional surveys, based upon such a general plan,
using innovative geological, geophysical, geochemical, and strata-
graphic drilling techniques, which will lead to a national inven-
tory of geothermal resources in the United States;
(3) publish and make available maps, reports, and other docu-
ments developed from such surveys to encourage and facilitate
the commercial development of geothermal resources for beneficial
use and consistent with the national interest;
(4) make such recommendations for legislation as may from
time to time appear to be necessary to make Federal leasing policy
for geothermal resources consistent with known inventories of
various resource types, with the current state of technologies for
geothermal energy development, and with current evaluations of
the environmental impacts of such development; and
(5) participate with appropriate Federal agencies and non-
Federal entities in research to develop, improve, and test technol-
ogies for the discovery and evaluation of all forms of geothermal
resources, and conduct research into the principles controlling the
location, occurrence, size, temperature, energy content, produci-
bility, and economic lifetimes of geothermal reservoirs.
RESEARCH AND DEVELOPMENT
Sec. 104. (a) The Chairman, acting through the appropriate Fed-
eral agencies and in cooperation with non-Federal entities, shall initi-
ate a research and development program for the purpose of resolving
all major technical problems inhibiting the fullest possible commercial
utilization of geothermal resources in the United States. The specific
goals of such program shall include-
(1) the development of effective and efficient drilling methods
to operate at high temperatures in formations of geothermal
interest;
6
(2) the development of reliable predictive methods and control
techniques for the production of geothermal resources from
reservoirs;
(3) the exploitation of new concepts for fracturing rock to
permit recovery of contained heat reserves;
(4) the improvement of equipment and technology for the ex-
traction of geothermal resources from reservoirs;
(5) the development of improved methods for converting geo-
thermal resources and byproducts to useful forms;
(6) the development of improved methods for controlling emis-
sions and wastes from geothermal utilization facilities, including
new monitoring methods to any extent necessary;
(7) the development and evaluation of waste disposal control
technologies and the evaluation of surface and subsurface envi-
ronmental effects of geothermal development;
(8) the improvement of the technical capability to predict envi-
ronmental impacts resulting from the development of geothermal
resources, the preparation of environmental impact statements,
and the assuring of compliance with applicable standards and
criteria;
(9) the identification of social, legal, and economic problems
associated with geothermal development (both locally and region-
ally) for the purpose of developing policy and providing a frame-
work of policy alternatives for the commercial utilization of
geothermal resources;
(10) the provision for an adequate supply of scientists to per-
form required geothermal research and development activities;
and
(11) the establishment of a program to encourage States to
establish and maintain geothermal resources clearinghouses, which
shall serve to (A) provide geothermal resources developers with
information with respect to applicable local, State, and Federal
laws, rules, and regulations, (B) coordinate the processing of
permit applications, impact statements, and other information
which geothermal resources developers are required to provide,
(C) encourage uniformity with respect to local and State laws,
rules, and regulations with respect to geothermal resources devel-
opment, and (D) encourage establishment of land use plans,
which would include zoning for geothermal resources develop-
ment and which would assure that geothermal resources developers
will be able to carry out development programs to the production
stage.
(b) The Chairman, acting through the appropriate Federal agen-
cies and in cooperation with non-Federal entities, shall implement a
coordinated program of research and development in order to demon-
strate the technical means for the extraction and utilization of the
resource base, including any byproducts of such base, and in order to
accomplish the goals established by subsection (a). Research author-
ized by this Act having potential applications in matters other than
geothermal energy may be pursued to the extent that the findings of
such research can be published in a form for utilization by others.
7
DEMONSTRATION
SEC. 105. (a) The Chairman, acting through the appropriate Fed-
eral agencies and in cooperation with non-Federal entities, shall ini-
tiate a program to design and construct geothermal demonstration
plants. The specific goals of such program shall include-
(1) the development of economical geothermal resources pro-
duction systems and components which meet environmental
standards;
(2) the design of plants to produce electric power and, where
appropriate, the large-scale production and utilization of any use-
ful byproducts;
(3) the involvement of engineers, analysts, technicians, and
managers from industry field and powerplant development, which
shall lead to the early industrial exploitation of advanced geo-
thermal resources;
(4) the provision for an adequate supply of trained geothermal
engineers and technicians;
(5) the provision of experimental test beds for component test-
ing and evaluation by laboratories operated by the Federal Gov-
ernment, industry, or institutions of higher education;
(6) the construction and operation of pilot plants; and
(7) the construction and operation of demonstration plants.
(b) In carrying out his responsibilities under this section, the
Chairman, acting through the appropriate Federal agencies, and in
cooperation with non-Federal entities, may provide for the establish-
ment of one or more demonstration projects utilizing each geothermal
resource base involved, which shall include, as appropriate, all of the
exploration, siting, drilling, pilot plant construction and operation,
demonstration plant construction and operation, and other facilities
and activities which may be necessary for the generation of electric
energy and the utilization of geothermal resource byproducts.
(c) The Chairman, acting through the appropriate Federal agen-
cies, is authorized to investigate and enter into agreements for the
cooperative development of facilities to demonstrate the production of
energy from geothermal resources. The responsible Federal agency
may consider-
(1) cooperative agreements with utilities and non-Federal gov-
ernmental entities for construction of facilities to produce energy
for commercial disposition; and
(2) cooperative agreements with other Federal agencies for the
construction and operation of facilities to produce energy for
direct Federal consumption.
(d) The responsible Federal agency is authorized to investigate the
feasibility of, construct, and operate, demonstration projects without
entering into cooperative agreements with respect to such projects,
if the Chairman finds that-
(1) the nature of the resource, the geographical location, the
scale and engineering design of the facilities, the techniques of
production, or any other significant factor of the proposal offers
opportunities to make important contributions to the general
knowledge of geothermal resources, the techniques of its develop-
ment, or public confidence in the technology; and
8
(2) there is no opportunity for cooperative agreements with
any utility or non-Federal governmental entity willing and able
to cooperate in the demonstration project under subsection (c)
(1), and there is no opportunity for cooperative agreements with
other Federal agencies under subsection (c) (2).
(e) Before favorably considering proposals under subsection (c),
the responsible Federal agency must find that—
(1) the nature of the resource, the geographical location, the
scale and engineering design of the facilities, the techniques of
production, or any other significant factor of the proposal offers
opportunities to make important contributions to the general
knowledge of geothermal resources, the techniques of its develop-
ment, or public confidence in the technology;
(2) the development of the practical benefits as set forth in
paragraph (1) are unlikely to be accomplished without such co-
operative development; and
(3) where non-Federal participants are involved, the proposal
is not eligible for adequate Federal assistance under the loan
guaranty provisions of title II of this Act.
(f) If the estimate of the Federal investment with respect to con-
struction and operation costs of any demonstration project proposed
to be established under this section exceeds $10,000,000, no amount
may be appropriated for such project except as specifically authorized
by legislation hereafter enacted by the Congress.
(g) (1) At the conclusion of the program under this section or as
soon thereafter as may be practicable, the responsible Federal agencies
shall, by sale, lease, or otherwise, dispose of all Federal property in-
terests which they have acquired pursuant to this section (including
mineral rights) in accordance with existing law and the terms of the
cooperative agreements involved.
(2) The agency involved shall, under appropriate agreements or
other arrangements, provide for the disposition of geothermal resource
byproducts of the project administered by such agency.
SCIENTIFIC AND TECHNICAL EDUCATION
SEC. 106. (a) It is the policy of the Congress to encourage the de-
velopment and maintenance of programs through which there may be
provided the necessary trained personnel to perform required geo-
thermal research, development, and demonstration activities under
sections 103, 104, and 105.
(b) The National Science Foundation is authorized to support pro-
grams of education in the sciences and engineering to carry out the
policy of subsection (a). Such support may include fellowships,
traineeships, technical training programs, technologist training pro-
grams, and summer institute programs.
(c) The National Science Foundation is authorized and directed to
coordinate its actions, to the maximum extent practicable, with the
Project or any permanent Federal organization or agency having
jurisdiction over the energy research and development functions of
the United States, in determining the optimal selection of programs
of education to carry out the policy of subsection (a).
9
(d) The National Science Foundation is authorized to encourage,
to the maximum extent practicable, international participation and
cooperation in the development and maintenance of programs of edu-
cation to carry out the policy of subsection (a).
TITLE II-LOAN GUARANTIES
ESTABLISHMENT OF LOAN GUARANTY PROGRAM
SEC. 201. (a) It is the policy of the Congress to encourage and assist
in the commercial development of practicable means to produce useful
energy from geothermal resources with environmentally acceptable
processes. Accordingly, it is the policy of the Congress to facilitate
such commercial development by authorizing the Chairman of the
Project to designate an appropriate Federal agency to guarantee loans
for such purposes.
(b) In order to encourage the commercial production of energy
from geothermal resources, the head of the designated agency is
authorized to, in consultation with the Secretary of the Treasury,
guarantee, and to enter into commitments to guarantee, lenders against
loss of principal or interest on loans made by such lenders to qualified
borrowers for the purposes of-
(1) the determination and evaluation of the resource base;
(2) research and development with respect to extraction and
utilization technologies;
(3) acquiring rights in geothermal resources; or
(4) development, construction, and operation of facilities for
the demonstration or commercial production of energy from geo-
thermal resources.
(c) Any guaranty under this title shall apply only to so much of
the principal amount of any loan as does not exceed 75 percent of
the aggregate cost of the project with respect to which the loan is
made.
(d) Loan guaranties under this title shall be on such terms and con-
ditions as the head of the designated agency determines, except that a
guaranty shall be made under this title only if-
(1) the loan bears interest at a rate not to exceed such annual
per centum on the principal obligation outstanding as the head of
the designated agency determines to be reasonable, taking into
account the range of interest rates prevailing in the private sector
for similar loans and risks by the United States;
(2) the terms of such loan require full repayment over a period
not to exceed thirty years, or the useful life of any physical asset
to be financed by such loan, whichever is less (as determined by
the head of the designated agency);
(3) in the judgment of the head of the designated agency, the
amount of the loan (when combined with amounts available to
the qualified borrower from other sources) will be sufficient to
carry out the project; and
(4) in the judgment of the head of the designated agency, there
is reasonable assurance of repayment of the loan by the qualified
borrower of the guaranteed indebtedness.
H.R. 1301-2
10
(e) The amount of the guaranty for any loan for a project shall not
exceed $25,000,000, and the amount of the guaranty for any combina-
tion of loans for any single qualified borrower shall not exceed
$50,000,000.
(f) As used in this title, the term "qualified borrower" means any
public or private agency, institution, association, partnership, corpo-
ration, political subdivision, or other legal entity which (as deter-
mined by the head of the designated agency) has presented satisfac-
tory evidence of an interest in geothermal resources and is capable of
performing research or completing the development and production
of energy in an acceptable manner.
PAYMENT OF INTEREST
SEC. 202. (a) With respect to any loan guaranteed pursuant to this
title, the head of the designated agency is authorized to enter into a
contract to pay, and to pay, the lender for and on behalf of the bor-
rower the interest charges which become due and payable on the un-
paid balance of any such loan if the head of the designated agency
finds—
(1) that the borrower is unable to meet interest charges, and
that it is in the public interest to permit the borrower to continue
to pursue the purposes of his project, and that the probable net
cost to the Federal Government in paying such interest will be
less than that which would result in the event of a default; and
(2) the amount of such interest charges which the head of the
designated agency is authorized to pay shall be no greater than
the amount of interest which the borrower is obligated to pay
under the loan agreement.
(b) In the event of any default by a qualified borrower on a guar-
anteed toan, the head of the designated agency is authorized to make
payment in accordance with the guaranty, and the Attorney General
shall take such action as may be appropriate to recover the amounts
of such payments (including any payment of interest under subsection
(a)) from such assets of the defaulting borrower as are associated
with the project, or from any other surety included in the terms of the
guaranty.
PERIOD OF GUARANTIES AND INTEREST ASSISTANCE
SEC. 203. No loan guaranties shall be made, or interest assistance
contract entered into, pursuant to this title, after the expiration of
the ten-calendar-year period following the date of enactment of this
Act.
GEOTHERMAL RESOURCES DEVELOPMENT FUND
SEC. 204. (a) There is established in the Treasury of the United
States a Geothermal Resources Development Fund, which shall be
available to the head of the designated agency for carrying out the
loan guaranty and interest assistance program authorized by this title,
including the payment of administrative expenses incurred in connec-
tion therewith. Moneys in the fund not needed for current operations
may, with the approval of the Secretary of the Treasury, be invested
in bonds or other obligations of, or guaranteed by, the United States.
(b) There shall be paid into the fund the amounts appropriated
pursuant to section 304 (c) and such amounts as may be returned to
11
the United States pursuant to section 202 (b), and the amounts in the
fund shall remain available until expended, except that after the ex-
piration of the ten-year period established by section 203, such amounts
in the fund which are not required to secure outstanding guaranty
obligations shall be paid into the general fund of the Treasury.
(c) Business-type financial reports covering the operations of the
fund shall be submitted to the Congress by the head of the designated
agency annually upon the completion of an appropriate accounting
period.
TITLE III-GENERAL PROVISIONS
PROTECTION OF ENVIRONMENT
SEC. 301. In the conduct of its activities, the Project and any par-
ticipating public or private persons or agencies shall place particular
emphasis upon the objective of assuring that the environment and the
safety of persons or property are effectively protected; and the pro-
gram under title I shall include such special research and development
as may be necessary for the achievement of that objective.
REPORTING REQUIREMENTS
SEC. 302. (a) The Chairman of the Project shall submit to the Pres-
ident and the Congress full and complete annual reports of the activ-
ities of the Project, including such projections and estimates as may
be necessary to evaluate the progress of the national geothermal energy
research, development, and demonstration program and to provide the
basis for as accurate a judgment as is possible concerning the extent to
which the objectives of this Act will have been achieved by June 30,
1980.
(b) No later than one year after the termination of each demon-
stration project under section 105, the Chairman of the Project shall
submit to the President and the Congress a final report on the activities
of the Project related to each project, including his recommendations
with respect to any further legislative, administrative, and other
actions which should be taken in support of the objectives of this Act.
TRANSFER OF FUNCTIONS
SEC. 303. (a) Within sixty days after the effective date of the law
creating a permanent Federal organization or agency having jurisdic-
tion over the energy research and development functions of the United
States (or within sixty days after the date of the enactment of this
Act if the effective date of such law occurs prior to the date of the
enactment of this Act), all of the research, development, and demon-
stration functions (including the loan guaranty program) vested in
the Project under this Act, along with related records, documents,
personnel, obligations, and other items to the extent necessary or
appropriate, shall, in accordance with regulations prescribed by the
Office of M anagement and Budget, be transferred to and vested in such
organization or agency.
(b) Upon the establishment of a permanent Federal organization
or agency having jurisdiction over the energy research and develop-
ment functions of the United States, and when all research and devel-
opment (and other) functions of the Project are transferred, the mem-
bers of the Project may provide advice and counsel to the head of such
12
organization or agency, in accordance with arrangements made at that
time.
AUTHORIZATIONS OF APPROPRIATIONS
SEC. 304. (a) For the fiscal years ending June 30, 1976, and Septem-
ber 30, 1977, 1978, 1979, and 1980, only such sums may be appropriated
as the Congress may hereafter authorize by law,
(b) There are authorized to be appropriated to the National Aero-
nautics and Space Administration not to exceed $2,500,000 for the
fiscal year ending June 30, 1975, for the purpose of preparing the
program definition under section 102 (a).
(c) In addition to sums authorized to be appropriated by subsection
(b), there are authorized to be appropriated to the fund not to exceed
$50,000,000 annually, such sums to carry out the provisions of the loan
guaranty program by the Project under title II.
And the Senate agree to the same.
That the House recede from its disagreement to the amendment of
the Senate to the title of the House bill and agree to the same with an
amendment as follows:
In lieu of the matter proposed to be inserted by the amendment of
the Senate to the title of the House bill, insert the following: "An Act
to further the conduct of research, development, and demonstrations in
geothermal energy technologies, to establish a Geothermal Energy
Coordination and Management Project, to provide for the carrying out
of research and development in geothermal energy technology, to carry
out a program of demonstrations in technologies for the utilization of
geothermal resources, to establish a loan guaranty program for the
financing of geothermal energy development, and for other purposes.".
And the Senate agree to the same.
OLIN E. TEAGUE,
MIKE McCormack,
DON FUQUA,
JAMES SYMINGTON,
CHARLES A. MOSHER,
BARRY M. GOLDWATER, Jr.,
JOHN WYDLER,
Managers on the part of the House.
HENRY M. JACKSON,
ALAN BIBLE,
FRANK CHURCH,
LEE METCALF,
FLOYD K. HASKELL,
PAUL FANNIN,
MARK O. HATFIELD,
JAMES A. MCCLURE,
Managers on the part of the Senate.
JOINT EXPLANATORY STATEMENT OF THE
COMMITTEE OF CONFERENCE
The managers on the part of the House and the Senate at the con-
ference on the disagreeing votes of the two Houses on the amendments
of the Senate to the bill (H.R. 14920) to further the conduct of
research, development, and demonstrations in geothermal energy tech-
nologies, to establish a Geothermal Energy Coordination and Manage-
ment Project, to amend the National Science Foundation Act of 1950
to provide for the funding of activities relating to geothermal energy,
to amend the National Aeronautics and Space Act of 1958 to provide
for the carrying out of research and development in geothermal energy
technology, to carry out a program of demonstrations in technologies
for the utilization of geothermal resources, and for other purposes,
submit the following joint statement to the House and the Senate in
explanation of the effect of the action agreed upon by the managers
and recommended in the accompanying conference report:
The Senate amendment to the text of the bill struck out all of the
House bill after the enacting clause and inserted a substitute text.
The House recedes from its disagreement to the amendment of the
Senate with an amendment which is a substitute for the House bill and
the Senate amendment. The differences between the House bill, the
Senate amendment, and the substitute agreed to in conference are
noted below, except for clerical corrections, conforming changes made
necessary by agreements reached by the conferees, and minor drafting
and clarifying changes.
SHORT TITLE
House bill
The House bill provided that this legislation shall be cited as the
"Geothermal Energy Research, Development, and Demonstration
Act of 1974".
Senate amendments
The Senate amendments provided that this legislation shall be
cited as the "Geothermal Energy Act of 1974".
Conference substitute
The conference substitute is the same as the House bill.
FINDINGS
House bill
Section 2 of the House bill provided that the Congress finds that
(1) there is a national energy shortage; (2) present organizational
structures and funding levels are not adequate to meet energy needs;
(3) although electric energy is a convenient form of energy, the
sources for electric power generation are in short supply; (4) national
energy problems can be solved only if there is a commitment to
(13)
14
develop geothermal resources; (5) undeveloped geothermal resources
are known to have a large energy content; (6) some geothermal
resources contain energy in forms other than heat; (7) some geo-
thermal resources contain valuable byproducts; (8) technologies for
the development of most geothermal resources presently are not
available, but such technologies are potentially economical and
desirable; (9) much of the known geothermal resources exist on public
lands; (10) Federal financial assistance is necessary for the develop-
ment of geothermal resources; and (11) there is a Federal responsi-
bility to encourage private industry in the development of geothermal
resources.
Senate amendments
Section 201 of the Senate amendments sets forth that the policy of
the Congress to encourage the development of geothermal energy
through resource inventory, research, and financial and technical as-
sistance for the construction of pilot and demonstration geothermal
developments.
Conference substitute
The conference substitute is the same as the House bill, except that
an addition is made to reflect the policy stated in section 201 of the
Senate amendments.
DEFINITIONS
House bill
Section 3 of the House bill defined the term "byproduct" as any
mineral found in association with geothermal steam and associated
geothermal resources which has a value of less than 75 percent of the
value of such geothermal steam and associated geothermal resources,
or which is not of sufficient value to warrant extraction and production
by itself.
Such section provided that the term "geothermal steam and associ-
ated geothermal resources" has the meaning given it by section 2(c) of
the Geothermal Steam Act of 1970 (30 U.S.C. 1001 (c)), except that
any amendment of such subsection occurring after the date of the
enactment of this legislation shall not affect the meaning of such term
for purposes of this legislation.
Such section provided that the term "known geothermal resources
area" has the meaning given it by section 2(e) of such Act (30 U.S.C.
1001 (e)), except that any amendment of such subsection occurring
after the date of the enactment of this legislation shall not affect the
meaning of such term for purposes of this legislation.
Such section defined the term "fund" as the Geothermal Resources
Development Fund.
Such section defined the term "Project" as the Geothermal Energy
Coordination and Management Project.
Senate amendments
Section 210 of the Senate amendments contained definitions of the
terms "geothermal resources", "qualified borrower", "pilot plant",
and "demonstration development". Section 104 of the Senate amend-
ments defined the term "fund" to mean the Geothermal Resources
D evelopment Fund.
15
Conference substitute
The conference substitute is the same as the House bill, except for
the following changes: (1) the definition of "known geothermal
resources area" is eliminated; (2) the Senate amendments' definition
of "pilot plant" and "demonstration development" are added, with
the latter term changed to "development plant"; (3) the definition
of "Chairman" is added; and (4) the Senate amendments' definition
of "geothermal resources" is substituted for the definition of "geo-
thermal steam and associated geothermal resources". The manner
in which the Senate amendments defined such term has the same
substantive effect as the definition contained in the House bill.
COORDINATION OF GEOTHERMAL ENERGY DEVELOPMENT
ESTABLISHMENT OF GEOTHERMAL ENERGY COORDINATION AND
MANAGEMENT PROJECT
House bill
Subsection (a) of section 101 of the House bill provided for the
establishment of the Geothermal Energy Coordination and Manage-
ment Project (hereinafter in this statement referred to as the "Proj-
ect"). Subsection (b) of section 101 provided that the Project shall
have the following members: the Administrator of the Federal Energy
Administration; an Assistant Director of the National Science Founda-
tion (hereinafter in this statement referred to as "NSF") an Assistant
Secretary of the Department of the Interior; an Associate Adminis-
trator of the National Aeronautics and Space Administration (herein-
after in this statement referred to as "NASA"); and the General
Manager of the Atomic Energy Commission (hereinafter in this state-
ment referred to as "AEC") Such subsection also provided that the
Administrator of the Federal Energy Administration (hereinafter in
this statement referred to as "FEA") shall act as Chairman of the
Project.
Subsection (c) of section 101 provided that the Project shall be
responsible for managing and coordinating national geothermal energy
research, development, and demonstration programs, including de-
termination and evaluation of the resource base, research and de-
velopment with respect to various technologies, demonstration of
appropriate technologies, and administration of the loan guaranty
program established by this legislation.
Subsection (d) of section 101 provided that the Project shall
cooperate with the Department of the Interior, NASA, AEC, and
NSF, in carrying out its responsibilities. Such subsection also pro-
vided for the responsibilities of each such agency.
Subsection (e) of section 101 provided that the Project shall have
overall authority with respect to programs and projects initiated
under this legislation. The agencies involved, however, shall be respon-
sible for the operation and administration of each such program or
project.
Senate amendments
The Senate amendments required functions to be performed with
respect to management and coordination of a national geothermal
energy research, development, and demonstration program, which are
similar to functions established by section 101(c) of the House bill.
16
The Senate amendments assigned such functions to Federal agen-
cies in the following manner: (1) section 202 of the Senate amendments
assigned the function of determining and evaluating the resource base
to the Secretary of the Interior (hereinafter in this statement referred
to as the "Secretary"); (2) sections 202(e) and 207 of the Senate
amendments assigned the function of research and development with
respect to exploration, extraction, and utilization technologies to the
Secretary and to AEC; (3) sections 202(e) and 207 of the Senate
amendments assigned the function of demonstrating appropriate
technologies to the Secretary and AEC; and (4) title I of the Senate
amendments required the Secretary to administer a loan guaranty
program.
Section 205 of the Senate amendments required NASA to prepare
and furnish a proposal for the employment of space technologies for
the inventorying and mapping of geothermal resources, and section
202(e) of the Senate amendments required the Secretary to participate
with NASA in the development of techniques for the discovery and
evaluation of geothermal energy resources.
Section 203 of the Senate amendments required the Secretary to
coordinate with the AEC geothermal energy development programs
established by the Senate amendments.
Conference substitute
The conference substitute is the same as the House bill, with th
following changes: (1) the conference substitute gives the President
authority to appoint a member to the Project; (2) the President is
given authority to designate one of the members of the Project to
serve as Chairman; (3) an Assistant Administrator of FEA is made
a member of the Project to replace the Administrator of FEA; and
(4) the conference substitute clarifies the intent that NASA shall
provide its contract management capabilities to aid other members of
the Project in accomplishing the goals of this legislation.
Specific inclusion of the Assistant Administrator of FEA as a mem-
ber of the Project was agreed to in light of the duty assigned to the
Administrator of FEA under section 5(b) (2) of the Federal Energy
Administration Act of 1974 (P.L. 93-275; 88 Stat. 99), whereby the
Administrator is "to assess the adequacy of energy resources". It is
believed that FEA, in its planning capacity, should be aware of the
activities and progress of the Project, and this goal would be served
by designation of the Assistant Administrator of FEA as a member of
the Project.
FUNCTIONS OF NATIONAL SCIENCE FOUNDATION
House bill
Subsection (a) of section 102 of the House bill amended section 3
of the National Science Foundation Act of 1950 (42 U.S.C. 1862) by
inserting a new subsection (e) which provides that the Director of
NSF shall support geothermal energy research, development, and
demonstration programs in accordance with section 102(b) of this
legislation.
Subsection (b) of section 102 provided that the Director of NSF
shall support and fund geothermal energy research, development, and
demonstration programs initiated and approved by the Project. Such
subsection further provided that its provisions in no way restrict the
17
authority of the Director to support and fund basic research, but that
such provisions do not authorize the Director to support and fund any
demonstration project which is not included in any program initiated
and approved by the Project. The Director may, however, support and
fund such a project if any other provision of law provides him with
authority to do SO,
Senate amendments
Section 202(e) of the Senate amendments required the Secretary to
participate with NSF, together with other Federal agencies, in the
assessment of geothermal energy resources.
Conference substitute
The conference substitute omits section 102 of the House bill and
section 202(e) of the Senate amendments. The omission of section 102
is based upon the fact that no amendment to the National Science
Foundation Act of 1950 is necessary in order to provide NSF with
authority to carry out functions assigned to it by this legislation.
FUNCTIONS OF NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
House bill
Subsection (a) of section 103 of the House bill amended section 203
of the National Aeronautics and Space Act of 1958 (42 U.S.C. 2473)
by inserting a new subsection (b) which provides that NASA shall
carry out geothermal energy technology research and development
in accordance with section 103 (b) of this legislation.
Subsection (b) of section 103 provided that NASA may undertake
and carry out programs assigned to it by the Project.
Subsection (c) of section 103 required the Administrator of NASA
to prepare, in consultation with various public and private agencies
and organizations, a comprehensive program definition with respect
to the development of geothermal energy resources.
Senate amendments
No provision.
Conference substitute
The conference substitute omits subsection (a) of section 103 of the
House bill. Section 103(b) is retained by the conference substitute
and subsection 103(c) is retained with the following changes: (1) the
interim report filing date is changed from October 31, 1974, to Novem-
ber 30, 1974; (2) the final report filing date with respect to the program
definition is changed from June 30, 1975, to August 31, 1975; and;
(3) a provision is added which establishes a resource inventory and
assessment program to be carried out by the Geological Survey as an
important part of the program definition. This latter provision is
drawn from section 202 of the Senate amendments.
RESOURCE INVENTORY AND ASSESSMENT PROGRAM
House bill
Subsection (a) of section 104 of the House bill required the Project
to make regional and national appraisals of geothermal resources.
The goals of the appraisal program shall include (1) improving
geophysical and other techniques necessary to locate and evaluate
18
geothermal resources; (2) developing better methods to predict the
power potential of geothermal reservoirs; (3) determining and assess-
ing the nature and power potential of high temperature geothermal
convection systems; and (4) surveying and assessing regional and
national geothermal resources.
Subsection (b) of section 104 required the Project, acting through
the Geological Survey and other appropriate agencies, to (1) inven-
tory geothermal resources on Federal land and, with the explicit
permission of the owner involved, on non-Federal land; (2) conduct
regional surveys, using drilling and other techniques leading to a
national inventory of geothermal resources; (3) make available maps
and reports developed from such surveys to encourage commercial
development of geothermal resources; (4) recommend legislation with
respect to Federal leasing policies for geothermal resources; and (5)
participate with various public and private agencies and organizations
in developing technologies for the discovery and evaluation of geo-
thermal resources.
Senate amendments
Section 203 of the Senate amendments required the Secretary to
undertake a resource inventory and assessment program similar to
the program established by section 104(a) of the House bill.
Section 202 of the Senate amendments required the Secretary,
acting through the Geological Survey, to undertake steps with respect
to resource inventory and assessment which are similar to the steps
required by section 104(b) of the House bill.
Conference substitute
The conference substitute is the same as the House bill, with the
following changes: (1) the heading for section 104 of the House bill
is changed to reflect the approach taken by the Senate amendments;
and (2) the nature of drilling techniques to be used is modified by the
conference substitute, to clarify the intent that this research should be
to establish the extent and nature of geothermal resources, and should
not involve any exploratory drilling which is and should remain the
province of private industry.
RESEARCH AND DEVELOPMENT
House bill
Section 105 of the House bill required the Project to initiate a
research and development program to resolve problems with respect to
commercial utilization of geothermal resources. The goals of such
program shall include (1) development of effective drilling methods;
(2) development of reliable predictive and control methods; (3)
exploitation of rock fracturing techniques; (4) improvement of ex-
traction equipment and technology; (5) development of geothermal
energy conversion methods; (6) development of methods to control
emissions and wastes; (7) development of waste disposal control
technologies; (8) improvement of the capability to predict the environ-
mental impact of developing geothermal energy resources; (9) identi-
fication of social, legal, and economic problems with respect to
geothermal resources development; (10) provision for an adequate
supply of scientists to perform required geothermal research and
development activities; and (11) establishment of a program to en-
courage States to establish geothermal energy clearinghouses to
19
facilitate the availability of information with respect to geothermal
energy research and development.
Such section also required the Project to implement a coordinated
research and development program to demonstrate extraction and
utilization technologies and to accomplish such goals.
Senate amendments
Section 207 of the Senate amendments established a research and
development program which was similar to the program established
by the House bill. The differences between the two programs are as
follows:
1. The Senate amendments required the AEC to carry out the
research and development program, in cooperation with private
industry.
2. The Senate amendments required the AEC to continue
research authorized by the Senate amendments having potential
applications in fields other than those exclusively related to geo-
thermal energy. The House bill limited the Project to research
which is directly related to geothermal energy.
3. The Senate amendments did not include specifically in the
research and development program the following goals: (1)
identification of social, legal, and economic programs related to
geothermal energy research; (2) provision for an adequate supply
of scientists; and (3) encouragement of States to establish geo-
thermal energy information clearinghouses.
Conference substitute
The conference substitute is the same as the House bill, except that
the conference substitute incorporates the provision of the Senate
amendments which requires the Project to continue research au-
thorized by this legislation having potential applications in fields
other than those exclusively related to geothermal resources.
It is the intent of the conferees that the term "non-Federal entity"
shall include, but shall not be limited to, private industry, academic
institutions, municipalities, public utility districts, State and local
governments, and private research laboratories.
DEMONSTRATION
House bill
Subsection (a) of section 106 of the House bill provided that the
Project shall initiate a program to design and construct geothermal
demonstration plants. The goals of such program include (1) develop-
ing economical geothermal energy production systems and compo-
nents; (2) designing and constructing plants to produce electrical
power; (3) operating such plants for a period of time; (4) providing
experimental test beds; (5) involving engineers and technicians from
private industry in developing methods of geothermal energy ex-
ploitation; and (6) providing for an adequate supply of trained geo-
thermal engineers and technicians.
Subsection (b) of section 106 permitted the Project to establish a
separate demonstration project for each geothermal resource base.
The Project was given authority to obtain, through appropriate Fed-
eral agencies, plants and other real property used in any demonstra-
tion project.
20
Any agency designated by the Project to conduct a demonstration
project shall provide for the disposal of electric energy and other geo-
thermal resource byproducts of such project. Such disposition, to the
maximum extent possible, shall be achieved through the sale of such
byproducts.
Such subsection also provided that, at the conclusion of the program
required under subsection (a), agencies designated by the Project to
conduct demonstration projects shall, to the extent possible or appro-
priate, dispose of such projects or dispose of all electric energy and
other geothermal resource byproducts produced by such projects.
Such subsection also provided that preference shall be given to
known geothermal resource areas in making site selections for demon-
stration plants.
Senate amendments
Section 208 of the Senate amendments authorized the AEC to enter
into cooperative agreements with non-Federal entities for the construc-
tion, operation, and maintenance of demonstration developments for
the production of electric or heat energy from geothermal resources.
The non-Federal participants would be expected to make some contri-
bution in the form of funds, rights in property, services, or other valu-
able consideration. The amount of the non-Federal contribution would
be left to the discretion of the AEC on a case-by-case basis.
It was anticipated that several such demonstrations would be
selected to reflect the development of a variety of geothermal resource
types, the application of a variety of energy development and utiliza-
tion technologies and a variety of conditions of energy and byproduct
needs.
The AEC was authorized to proceed with such developments in which
the estimated Federal investment will not exceed $10,000,000.
The AEC was authorized to investigate potential agreements
for major demonstration facilities (in which the Federal investment
will exceed $10,000,000) and to submit proposals to proceed with
such agreements to the Congress for authorization.
In preparing proposals for cooperative agreements with non-
Federal entities to construct major geothermal energy facilities, it was
intended that non-Federal participants shall be selected which have the
financial, technical, and management competence to perform the func-
tions required of them pursuant to the agreement.
Conference substitute
The conference substitute is the same as the House bill, with the
following changes: (1) the goals of the program established by section
106(a) of the House bill are expanded to include construction and
operation of pilot plants and demonstration plants; (2) the provisions
of the House bill relating to disposition of electric energy and demon-
stration projects are replaced by comparable provisions of the Senate
amendments; and (3) the conference substitute eliminates the pro-
vision that preference shall be given to known geother resource
areas in making site selections for demonstration plants.
The conference substitute incorporates provisions of section 208 of
the Senate amendments which would authorize the Project to enter
into cooperative agreements with non-Federal entities for the con-
21
struction, operation, and maintenance of demonstration plants for the
production of electric or heat energy from geothermal resources. The
non-Federal participants would be expected to make some contribu-
tion in the form of funds, rights in property, services, or other valuable
consideration. The amount of the non-Federal contribution would be
left to the discretion of the Project on a case-by-case basis.
The conference substitute also adds a provision which is intended to
complement the provisions of the Senate amendments which are
incorporated and to provide an opportunity for the establishment of
demonstration projects without cooperative agreements in the event
that there are no possibilities for cooperative agreements with non-
Federal entities.
The legislative intent of the Senate amendments was adopted by
the conferees regarding the disposal of electric energy produced by
demonstrations utilizing geothermal resources. The principal intent
is to clearly specify those conditions which must be fully met prior
to any consideration of Federal sale and disposition of electric energy
resulting from demonstration projects initiated under this legislation.
The measure insures that where electric energy is produced by jointly
financed demonstration projects the non-Federal participating entity
would market the power. In those instances where the criteria for a
totally federally financed and operated demonstration project are
met, the resultant electric energy is to be consumed only by the
Federal Government. In unusual circumstances, where (1) there is
no non-Federal entity willing and able to participate, (2) the stringent
criteria justifying a federally owned and operated project have been
fully met, and (3) there is no opportunity for Federal consumption
of the resultant electric energy, only then may the appropriate
Federal agency consider direct commercial sale and disposition of the
resultant electric energy.
The conference substitute also includes a provision, which is based
upon a provision contained in section 208 of the Senate amendments,
which requires specific congressional authority for any proposed
demonstration project if the estimated Federal investment for such
project exceeds $10,000,000.
SCIENTIFIC AND TECHNICAL EDUCATION
House bill
Section 107 of the House bill provided that it is the policy of the
Congress to encourage programs to provide trained personnel to carry
out geothermal research, development, and demonstration activities.
NSF was authorized to support educational programs designed to
effectuate such policy. NSF was required to coordinate its activities
with various public and private agencies and organizations, and was
authorized to encourage international participation and cooperation
with respect to such educational programs.
Senate amendments
No provision.
Conference substitute
The conference substitute is the same as the House bill.
22
LOAN GUARANTIES
ESTABLISHMENT OF LOAN GUARANTY PROGRAM
House bill
Subsection (a) of section 201 of the House bill provided that it is
the policy of the Congress to authorize the Chairman of the Project to
designate an appropriate Federal agency to guarantee loans to en-
courage commercial development of geothermal resources.
Subsection (b) of section 201 provided that the head of the desig-
nated Federal agency may guarantee any loan made for purposes of
(1) determining and evaluating the resource base; (2) extraction and
utilization research and development; (3) acquiring rights to geo-
thermal resources; and (4) constructing and operating geothermal
resources demonstration facilities.
Subsection (c) of section 201 provided that loan guaranties may not
exceed 75 percent of the aggregate cost of the project involved. Sub-
section (d) of section 201 authorized the head of the designated agency
to establish terms and conditions for loan guaranties, and further
provided that a guaranty may be made only if (1) the rate of interest
for the loan involved does not exceed prevailing interest rates for con-
ventional construction loans; (2) the loan must be fully repaid within
30 years; (3) the amount of the loan, together with amounts otherwise
available, is sufficient to carry out the project involved; and (4) there
is reasonable assurance of repayment of the loan by the qualified
borrower.
Subsection (e) of section 201 prohibited the head of the designated
agency from guarantying any loan if such loan is in excess of $25,000,-
000 for any project, or from guarantying any combination of loans to a
single qualified borrower in excess of $50,000,000.
Subsection (f) of section 201 defined the term "qualified borrower"
as any public or private agency or organization which, as determined
by the head of the designated agency, has an interest in geothermal
resources and is capable of carrying out research or development
activities with respect to energy production.
Senate amendments
The Senate amendments were the same as the House bill, with the
following differences:
1. The Senate amendments authorized the Secretary to ad-
minister the loan guaranty program.
2. The Senate amendments did not authorize specifically the
making of loan guaranties for the following purposes: (1)
determination and evaluation of the resource base; and (2) re-
search and development with respect to extraction and utilization
technologies.
3. The committee report with respect to the Senate amendments
indicated that section 101 (e) of the Senate amendments was de-
signed to permit loan guaranties of no more than $25,000,000 for
a single project, and loan guaranties of no more than $50,000,000
for a single borrower. The committee report with respect to the
House bill indicated that section 201 (e) of the House bill was
designed to permit loan guaranties for loans for a single project
if the amount of loans did not exceed $25,000,000, and to permit
loan guaranties for loans to a single borrower if the amount of
such loans did not exceed $50,000,000.
23
4. The definition of "qualified borrower" contained in section
210(b) of the Senate amendments specifically required that a
potential borrower, in order to be considered a qualified borrower,
must have the financial responsibility to operate a geothermal
energy commercial facility. The definition of "qualified borrower"
contained in section 201(f) of the House bill did not make any
specific reference to financial responsibility, but did require that
a qualified borrower be capable of performing research or com-
pleting development and production of geothermal energy in an
acceptable manner.
Conference substitute
The conference substitute is the same as the House bill, with the
following changes: (1) section 201 (e) of the House bill is clarified to
indicate that this legislation intends to permit loan guaranties of no
more than $25,000,000 for a single project, and loan guaranties of no
more than $50,000,000 for a single borrower; and (2) the conference
substitute makes technical changes in the provisions relating to the
operation of the loan guaranty program to conform with current
Federal practices and policies relating to the operation of similar loan
guaranty programs.
The conference substitute retains the provision of the House bill
which required the Chairman of the Project to designate the head of a
Federal agency to administer the loan guaranty program. It is the
intent of the conferees that the Federal agency which is designated
should have the competence and field organizations necessary to
receive and process applications.
The conference substitute also retains the provision of the House
bill which authorized the making of loan guaranties for the determina-
tion and evaluation of the resource base and for research and develop-
ment with respect to extraction and utilization technologies. The
conference substitute also retains the definition of "qualified borrower"
which is contained in the House bill and which is consistent with the
establishment of eligibility for research and development loans.
PAYMENT OF INTEREST
House bill
Subsection (a) of section 202 of the House bill provided that the
head of the designated agency may pay to the lender any interest
charges due on the unpaid balance of a guarantied loan if the head
of the designated agency finds that (1) the borrower is unable to
pay such interest charges and it is in the public interest to permit the
borrower to pursue the project involved; and (2) the amount of such
interest charges does not exceed an amount equal to the average
prime interest rate for the preceding fiscal year, plus one-half of 1
percent.
Subsection (b) of section 202 provided that if a qualified borrower
defaults on a guarantied loan, the head of the designated agency may
make payment in accordance with the terms of the guaranty. The
Attorney General of the United States was required to take appro-
priate action to recover the amount of such payments from assets of
the qualified borrower which are associated with the project involved.
24
Senate amendments
Section 102 of the Senate amendments was the same as the House
bill, except that section 102 assigned responsibilities to the Secretary,
and not to an agency designated by the Chairman of the Project.
Conference substitute
The conference substitute is the same as the House bill, except that
the conference substitute provides that the Attorney General also
may recover payments from surety contained in the loan guaranty
agreement.
PERIOD OF GUARANTIES AND INTEREST ASSISTANCE
House bill
Section 203 of the House bill provided that no loan guaranties or
interest assistance contracts shall be made after the 10-calendar-year
period following the date of the enactment of this legislation.
Senate amendments
Section 103 of the Senate amendments was the same as the House
bill.
Conference substitute
The conference substitute is the same as the House bill.
GEOTHERMAL RESOURCES DEVELOPMENT FUND
House bill
Subsection (a) of section 204 of the House bill established in the
Treasury of the United States a Geothermal Resources Development
Fund (hereinafter in this statement referred to as the "fund"). The
fund shall be available to the head of the designated agency for
carrying out the loan guaranty and interest assistance program
authorized by this legislation.
Such subsection also provided that moneys in the fund not needed
for current operations shall be invested in bonds or other obligations
of the United States.
Subsection (b) of section 204 provided that payments into the fund
shall be made from amounts appropriated by the Congress pursuant to
section 304(c) and from amounts returned to the United States pur-
suant to section 202(b).
Such subsection also provided that amounts in the fund shall remain
available until expended, except that amounts available in the fund
after the 10-calendar-year period following the date of the enactment
of this legislation shall be paid into the general fund of the Treasury.
Subsection (c) of section 204 required the head of the designated
agency to submit annual reports to the Congress with respect to the
operation of the fund.
Senate amendments
The Senate amendments were the same as the House bill, except
that the Senate amendments required the Secretary (and not the
head of a designated agency) to submit annual reports to the Congress
with respect to the operation of the fund.
Conference substitute
The conference substitute is the same as the House bill.
25
GENERAL PROVISIONS
PROTECTION OF ENVIRONMENT
House bill
Section 301 of the House bill provided that activities under this
legislation shall be designed to protect the environment and to assure
the safety of persons and property. Such section also provided that the
program developed by the Project under title I of this legislation shall
include special research and development to assure environmental
protection and the safety of persons and property.
Senate amendments
Section 201 and section 207 (a) (5) of the Senate amendments con-
tained provisions similar to those of the House bill with respect to
protection of the environment.
Conference substitute
The conference substitute is the same as the House bill.
REPORTING REQUIREMENTS
House bill
Subsection (a) of section 302 of the House bill required the Chairman
of the Project to submit biannual reports to the President and to the
Congress with respect to the activities of the Project.
Subsection (b) of section 302 required the Chairman of the Project
to submit reports to the President and to the Congress with respect
to each demonstration project conducted under section 106 of the
House bill.
Senate amendments
Section 206 of the Senate amendments required the Secretary to
submit the exploration plan and schedule required by section 202 of
the Senate amendments, to the President and to the Congress no later
than one year after the date of the enactment of this legislation. Annual
progress reports would be required thereafter.
Conference substitute
The conference substitute is the same as the House bill, except that
the conference substitute requires reports annually, and not semi-
annually.
TRANSFER OF FUNCTIONS
House bill
Section 303 of the House bill provided that, upon the establishment
of a permanent Federal organization or agency having jurisdiction
over energy research and development, the functions of the Project
shall be transferred to and vested in such organization or agency.
Such section also provided that, after such transfer and vesting,
members of the Project shall provide advice and counsel to the head
of such organization or agency.
Senate amendments
No provision.
26
Conference substitute
The conference substitute is the same as the House bill. It is the in-
tent of the conferees that the transfer procedures established by this
legislation will not involve the physical transfer of personnel, programs,
or agencies which are not otherwise specifically designated for such
transfer by legislation such as that creating the Energy Research and
Development Administration. Accordingly, it is contemplated that
such personnel, programs, or agencies which are engaged in the geo-
thermal programs created by this legislation and which are not trans-
ferred to a new agency such as the Energy Research and Development
Administration shall continue to engage in such existing programs
following the creation of such new agency.
AUTHORIZATION OF APPROPRIATIONS
House bill
Section 304 of the House bill provided that, for fiscal years 1976,
1977, 1978, 1979, and 1980, only such sums may be appropriated to
carry out this legislation as the Congress may authorize by law after
the date of the enactment of this legislation.
Such section also authorized to be appropriated $2,500,000 for fiscal
year 1975 to the Administrator of NASA to prepare program defini-
tions under section 103(c).
Such section also authorized to be appropriated $50,000,000 annually
to carry out the loan guaranty program established by this legislation.
Senate amendments
Section 106 of the Senate amendments authorized appropriations
to the fund not to exceed $50,000,000 annually.
Section 209 of the Senate amendments authorized appropriations
for fiscal years 1974, 1975, and 1976, as follows: (1) $10,000,000
annually to the Secretary; (2) $35,000,000 annually to AEC; and (3)
such amounts as may be required to NASA.
Conference substitute
The conference substitute is the same as the House bill.
OLIN E. TEAGUE,
MIKE McCormack,
DON FUQUA,
JAMES SYMINGTON,
CHARLES A. MOSHER,
BARRY M. GOLDWATER, Jr.,
HENRY M. JACKSON,
JOHN WYDLER,
Managers on the Part of the House.
ALAN BIBLE,
FRANK CHURCH,
LEE METCALF,
FLOYD K. HASKELL,
PAUL FANNIN,
MARK O. HATFIELD,
JAMES A. MCCLURE,
Managers on the Part of the Senate.
93D CONGRESS
HOUSE OF REPRESENTATIVES
REPORT
2d Session
No. 93-1112
GEOTHERMAL ENERGY RESEARCH, DEVELOPMENT,
AND DEMONSTRATION ACT OF 1974
JUNE 17, 1974.-Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. TEAGUE, from the Committee on Science and Astronautics,
submitted the following
REPORT
together with
ADDITIONAL VIEWS
[To accompany H.R. 14920]
The Committee on Science and Astronautics, to whom was referred
the bill (H.R. 14920) to further the conduct of research, development,
and demonstrations in geothermal energy technologies, to establish a
Geothermal Energy Coordination and Management Project, to amend
the National Science Foundation Act of 1950 to provide for the fund-
ing of activities relating to geothermal energy, to amend the National
Aeronautics and Space Act of 1958 to provide for the carrying out of
research and development in geothermal energy technology, to carry
out a program of demonstrations in technologies for the utilization of
geothermal resources, and for other purposes, having considered the
same, reports favorably thereon without amendment and recommends
that the bill do pass.
Page
Purpose of the bill
2
Explanation of the bill
2
Findings
4
Definitions
4
Geothermal Energy Coordination and Management Project
4
Amendment to National Science Foundation Act of 1950
5
Amendment to National Aeronautics and Space Act of 1958
5
Program definition of a national geothermal effort
5
Goals of the legislation
6
Exploration and resource assessment program
6
(1)
2
Explanation of the bill-Continued
Page
Research and development
6
Demonstration
6
Scientific and technical education
7
Loan guaranties
7
Protection of the environment
8
Reporting requirements
8
Transfer of functions
8
Authorization of appropriations
8
Background
9
Funding history of geothermal energy research and development
9
The Geothermal Resources Research Conference
9
Energy Task Force report
10
The Nation's energy future
10
Field trips
11
Geothermal energy legislation
11
88th-92d Congresses
11
93d Congress
12
Legislative history of H.R. 14920
14
September 1973 hearings on H.R. 8628 and H.R. 9658
14
Introduction of H.R. 11212
15
Legislation identical to H.R. 11212
16
February 1974 hearings on H.R. 11212
17
Introduction of H.R. 14172
19
Legislation identical to H.R. 14172
20
May 1974 hearings on H.R. 14172
21
Committee actions
22
Markup in subcommittee of H.R. 14172
22
Full committee action on H.R. 14920
23
Committee views
24
Effective coordination of geothermal R. & D
24
Amendment to the NASA Act
25
Scientific and technical education
25
Program definition
26
Definition of byproduct
26
Title II: Loan guaranties
26
Section by section summary of the bill
28
Cost and budget data
35
Committee recommendations
35
Department recommendations
35
Changes in existing law made by the bill, as reported
36
Additional views
41
PURPOSE OF THE BILL
The purpose of the bill is to create an administrative mechanism for
Federal coordination and management of research, development, and
demonstration activities in geothermal energy, including those pres-
ently funded by the Atomic Energy Commission, the Department of
the Interior, and the National Science Foundation; to direct the
Administrator of the National Aeronautics and Space Administration
to undertake in fiscal year 1975 a program definition for an integrated
national program to demonstrate the utilization of several geothermal
energy resources by the end of fiscal year 1980 and to initiate a loan
guaranty program as one means to further research, development, and
utilization of geothermal resources by the private sector.
EXPLANATION OF THE BILL
This bill provides for a coordination and management project for
geothermal energy research, development and demonstration. This is
an interim step, awaiting the establishment of the Energy Research
3
and Development Administration (ERDA) or some similar agency.
The bill also establishes goals for resource exploration and assessment,
research and development, and technology demonstration programs.
Funds are provided for a comprehensive program definition of the
overall national effort required to attain these goals. This program
definition is to be carried out by the Administrator of the National
Aeronautics and Space Administration (NASA) during fiscal year
1975. This bill also institutes a loan guaranty program to encourage
and assist the private sector in programs of resource evaluation, re-
search and development, demonstration, and exploitation of
geothermal resources.
Geothermal energy is presently utilized in many parts of the world.
Electricity is generated from dry steam resources at The Geysers field,
north of San Francisco, and in Lardarello, Italy. Wet steam is used to
generate electricity in Wairakei, New Zealand and Cerro Prieto,
Mexico.
The dry steam and wet steam resources are being exploited with
present technology in an economic manner. They are, however, severely
limited in resource size in comparison with other, presently unde-
veloped sources of geothermal energy. These undeveloped sources
include hot dry rock, geopressured water, and high and low salinity
convective systems.
There is a need to expand knowledge of these resources and develop
new technologies to permit their widespread utilization. This bill seeks
to accomplish this goal.
The detailed management and fiscal requirements to accomplish
such a goal have not yet been adequately determined. H.R. 14920 pro-
vides for the Administrator of NASA to conduct a comprehensive pro-
gram definition for this purpose during fiscal year 1975. Interim re-
ports on this program definition are to be filed at appropriate times
for inclusion in planning for the fiscal year 1976 budget.
Presently, there are three agencies heavily involved in geothermal
energy research and development: the National Science Foundation
(NSF), the Atomic Energy Commission (AEC), and the Depart-
ment of the Interior (Interior). The NSF is the lead agency and funds
about half of all Federal geothermal energy research and develop-
ment; AEC and Interior each support about one-fourth. Interior is
responsible primarily for the resource assessment conducted by the
U.S. Geological Survey.
Federal research and development on potential energy sources is
nowhere more fragmented than in the geothermal area. This bill
provides a mechanism for coordinating and effectively managing this
activity in the immediate future, prior to the creation and implementa-
tion of ERDA or an equivalent agency.
The private sector of the national economy has done much of the
pioneering work in geothermal energy in this country. The only com-
mercial exploitation of geothermal energy for the generation of elec-
tricity in the United States, at The Geysers, has been entirely pri-
vately funded. The entrepreneurs responsible for this activity are to
be commended for their foresight and determination in meeting this
important technological challenge.
In spite of the significant effort by the private sector, however,
progress has been admittedly slow. Much of the early technology for
4
exploiting the geothermal resources at The Geysers was completed
in the 1920's. As we view in this decade the overwhelming need for
new and environmentally acceptable energy sources, we cannot wait
for the normal mechanism of the marketplace to provide incentives
for private participation. Government funding, therefore, is rapidly
accelerating in the area of geothermal energy. Government support
should not, however, supplant private initiative.
In order to provide incentives for private participation, this bill pro-
vides a loan guaranty program. This program aims to help eliminate
the economic uncertainties associated with research and development,
demonstration, and exploration. It provides for Government sharing
of the risk associated with the generation of capital and other
activities involved in nurturing new technologies for geothermal
exploitation.
Findings
The Congress finds that there is a national energy shortage and
present organizational structures and funding levels are not adequate
to meet energy needs. Although electrical energy is a convenient form
of energy, the sources for electric power generation are in short supply.
There must be a national commitment to develop geothermal resources.
Undeveloped geothermal resources are known to have a large energy
content, and some geothermal resources also contain valuable by-
products. Technologies for the development of most geothermal re-
sources presently are not available, but such technologies are potentially
economical and desirable. Much of the known geothermal resources
exist on public lands. Federal financial assistance is necessary for the
development of geothermal resources, and the Federal Government
has a responsibility to encourage private industry in the development
of geothermal resources.
Definitions
This section defines terms used in the body of the legislation, and
clarifies specific words or terms of special importance.
The term "byproduct" is defined as any mineral found in association
with geothermal steam and associated geothermal resources which has
a value of less than 75 percent of the value of such geothermal steam
and associated geothermal resources, or which is not of sufficient value
to warrant extraction and production by itself.
Byproducts which may be obtained from "geothermal steam and
associated geothermal resources" include mineral salts, light metals,
and dissolved gases (both condensable and non-condensable). Methane
from geopressured water is specifically included, as well as any helium
which may be present.
The terms "geothermal steam and associated geothermal resources"
and "known geothermal resources area" are noted as having the same
meaning as that given in the Geothermal Steam Act of 1970.
"Project" will be synonymous with the Geothermal Energy Coordi-
nation and Management Project, and "fund" with the Geothermal Re-
source Development Fund.
Geothermal Energy Coordination and Management Project
The bill will create a Geothermal Energy Coordination and Man-
agement Project composed of-
5
The Administrator of the Federal Energy Administration;
An Assistant Director of the National Science Foundation;
An Assistant Secretary of the Department of Interior;
An Associate Administrator of the National Aeronautics and
Space Administration; and
The General Manager of the Atomic Energy Commission.
The Administrator of the Federal Energy Administration shall
serve as Chairman of the Project.
To improve upon the coordination of our present badly splintered
Federal effort, the Project will have the administrative authority and
responsibility to review and coordinate the diverse efforts of the vari-
ous participating agencies. The Project shall be responsible for devel-
oping, managing and coordinating national geothermal energy re-
search, development, and demonstration programs, including the loan
guaranty program.
The Project is not intended to be a separate agency with in-house ca-
pabilities. Rather, specific programs approved by the Project will be
carried out by existing Federal agencies working in coordination with
the Project. Each agency involved shall be responsible for the opera-
tion and administration of each specific program it undertakes.
Amendment to National Science Foundation Act of 1950
The bill amends section 3 of the NSF Act to direct NSF to fund and
support the programs approved by the Project.1 This section specifi-
cally notes that the new NSF funding responsibility and the Project
authority over geothermal technology are in no way a restriction on
the basic research authority of NSF.
Amendment to National Aeronautics and Space Act of 1958
The bill amends section 203 of the NASA Act to allow NASA full
participation in the Geothermal Energy Program outlined by the legis-
lation. It seeks to assure broad utilization of space and aeronautical
technology in identifying resources and exploiting geothermal
resources.
Program Definition of a National Geothermal Effort
The Administrator of the National Aeronautics and Space Admin-
istration is directed to prepare a comprehensive program definition of
an integrated effort for effectively developing the Nation's geothermal
energy resources. In preparing this program definition, the Adminis-
trator is authorized to consult with other Federal agencies, State and
local government agencies, and private organizations. This program
definition is to be submitted to the President, each House of the Con-
gress, and the Chairman of the Project (or the head of any permanent
Federal organization or agency having jurisdiction over energy re-
search and development) in interim forms by October 31, 1974, and
January 31, 1975, in order to be incorporated into the fiscal year 1976
budget cycle. A final program definition is to be transmitted as soon
as possible thereafter, but in any case not later than June 30, 1975.
An objective of this program definition is to define more accurately
the cost and administrative needs of the five-year Federal effort in geo-
thermal energy research, development, and demonstration. The
1 This assumes that an Energy Research and Development Administration. or equivalent,
is not enacted with authority over geothermal R. & D. NSF is presently the lead agency
in geothermal R. & D., and this section is designed to provide an orderly transition from
the status quo to an integrated program in the shortest possible time.
6
Administrator will be expected to receive procedural guidance in carry-
ing out this activity by referring to the five-year energy R. & D. study
performed in 1973 by Dr. Dixy Lee Ray, Chairman of the Atomic
Energy Commission.
Goals of the Legislation
The goal of H.R. 14920 is to bring to the commercial demonstration
stage the presently unused forms of geothermal energy resources.
This effort is to culminate in from 6 to 10 electrical powerplants of
approximately one to ten megawatt capacity each to be on line by the
end of fiscal year 1980, together with appropriate development of
technology to utilize byproducts. In attaining this goal, three distinct
programmatic efforts will be required and are discussed below.
Exploration and Resource Assessment Program.-The first is a
thorough resource exploration and assessment program that will deter-
mine the nature and extent of all geothermal resources. Where neces-
sary, an aggressive research and development program to advance the
technology needed to discover and quantify geothermal resources will
be undertaken. In particular, methods of remote sensing, such as those
developed for our satellites, will be refined for application in geo-
thermal resource assessment.
The Project, acting through the USGS and other appropriate agen-
cies, will make a thorough national inventory of geothermal resources
on both Federal and non-Federal lands. The results of this inventory
are to be made public in order to stimulate commercial interest in and
development of new geothermal resource areas. Where appropriate,
and based on studies and information developed in conjunction with
activities undertaken pursuant to this legislation, the Project shall
recommend legislation dealing with Federal leasing of geothermal
resources.
Research and Development.- The second major effort will begin
concurrently with resource exploration and development and will
involve identifying and carrying out the research and development
necessary for the economic extraction and utilization of the Nation's
geothermal resources and useful byproducts.
To achieve this goal, work is expected to be undertaken on the devel-
opment of effective drilling methods, rock fracturing techniques, im-
proved extraction equipment and technology, and more effective
geothermal energy conversion methods. Other research and develop-
ment can be expected on emissions and wastes control and disposal, im-
proved capability to predict environmental impacts of developing
geothermal energy resources, and identification of social, legal, and
economic problems with respect to geothermal resources development.
Training an adequate supply of scientists to perform the required
geothermal research and development activities will also be necessary.
Demonstration.-The final phase, demonstration, will draw on the
results of the first two. It will undertake the design, construction and
startup of plants generating electrical power and producing valuable
byproducts.
The goals of the demonstrations include (1) developing economical
geothermal energy production systems and components; (2) designing
and constructing plants to produce electrical power and utilize by-
products and low temperature heat: (3) operating such plants for a
period of time; and (4) providing experimental test beds for
geothermal systems and components.
7
When selecting potential sites for use in this demonstration pro-
gram, preference shall be given to known geothermal resources areas
(KGRA's). This should help insure prompt implementation of dem-
onstration projects and later commercial exploitation.
The Project has authority to establish a separate demonstration
project for each geothermal resource base, and various Federal agen-
cies will probably be involved in the different demonstrations. The
Project may obtain, through appropriate Federal agencies, plants and
other real property needed for the demonstration projects.
Even if ERDA or a similar agency is established, it is expected
that other agencies will be involved in demonstration projects on a
cooperative basis.
Any agency designated by the Project to conduct a demonstration
project shall provide for the disposal of electric energy and other
geothermal resource byproducts. This disposition, to the maximum ex-
tent possible, shall be achieved through the sale of the electrical energy
and byproducts.
When each demonstration project is concluded, the agency respon-
sible for that project must dispose of the real property and other
assets of the project in a manner consistent with existing law and
regulations.
Although there is a specific goal of from 6 to 10 demonstration proj-
ects (3 to 5 different resource types with approximately 2 projects
each), it should be emphasized that only those projects for which ade-
quate technology has been developed are expected to proceed to the
demonstration stage. Successful R. & D. programs as well as attractive
economic potential are needed before demonstrations are undertaken.
Scientific and Technical Education
An adequate supply of trained manpower is necessary for the suc-
cess of this effort. In order to meet this need, the Project is authorized
to fund manpower training programs for the duration of the effort-
approximately 5 years. NSF is authorized to implement the edu-
cational programs designed to assure that scientific manpower will
not be the limiting factor in developing geothermal energy. NSF
has already taken the lead in its designated traineeship programs,
and has demonstrated its competence to initiate and carry out inno-
vative and successful scientific and technical manpower development
activities.
Loan Guaranties
Involvement of private industry in all phases of geothermal re-
sources development is essential to the development of geothermal
technology and to the full commercial growth of geothermal energy
as a useful power source.
It is expected that private industry will be utilized by the Project
through contractual arrangements. One means other than direct gov-
ernment support to provide an incentive for industrial participation
is the loan guaranty program established by the bill. Activities
eligible for such guaranty must be related to one of the following:
resource assessment, research, development and demonstration or com-
mercial operation of geothermal facilities.
The Chairman of the Project will designate a Federal agency to
manage the loan guaranty program. For each loan, the guaranty will
8
not exceed 75 percent of the aggregate cost of the specific project.
A loan guaranty may be made if and only if the following con-
ditions are met: (1) the rate of interest for the loan involved does
not exceed prevailing interest rates for conventional construction
loans; (2) the loan is to be fully repaid within 30 years; (3) the
amount of the loan, together with amounts otherwise available, is suf-
ficient to carry out the project involved; and (4) there is reasonable
assurance of repayment of the loan by the qualified borrower. The head
of the administering agency may establish any additional terms and
conditions for the loan guaranty.
No guaranty will be made for a loan in excess of $25,000,000 for one
project or loans in excess of $50,000,000 to any single qualified
borrower.
In case of a default, the head of the agency may make the remain-
ing payments. The Attorney General of the United States is required
to take appropriate action to recover the amount defaulted.
This program will continue for a ten-year period.
Protection of the Environment
The programs developed by the Project shall include relevant
research and development to assure environmental protection and the
safety of persons and property.
Major concerns will be the environmental impact resulting from
commercial development of geothermal resources and provision for
adequate control of adverse side effects.
Reporting Requirements
The Chairman of the Project is required to submit biannual reports
to the President and to the Congress with respect to the activities of
the Project.
Within one year after the completion of each demonstration proj-
ect. the Chairman of the Project is required to submit a final report
on it.
Transfer of Functions
Research. development and other functions of the Management
Project will be transferred to any new permanent organization having
jurisdiction over energy research and development, such as the pro-
posed Energy Research and Development Administration, should such
an organization or agency be established by law. The transfer takes
place within 60 davs of the effective date of such a law. The members
of the Management Project mav continue to provide advice to the head
of such organization or agency by agreement with the Director of any
such entity.
Authorization of Appropriations
There is authorized $2.5 million to NASA for the Administrator to
carry out the program definition in fiscal vear 1975. Other fiscal year
1975 funds for geothermal energy have already been included in the
Special Energy Appropriations Act, which passed the House on
April 30, 1974. The bill requires subsequent congressional action for
authorization of appropriations for the remaining vears. This fund-
ing is expected to be based, at least in part, on the results of the
program definition.
In addition, $50 million per year is authorized to be appropriated
to carry out the loan guaranty program.
BACKGROUND
FUNDING HISTORY OF GEOTHERMAL ENERGY RESEARCH AND
DEVELOPMENT
Prior to 1970, there was little or no Federal effort in geothermal
energy. Work in the United States centered primarily around The
Geysers geothermal area in northern California. There, in 1960, dry
steam was used to produce commercially available electrical power.
Federal funding of geothermal energy R. & D. was separately iden-
tified for the first time in fiscal year 1971 and totalled $200,000. This
has grown to a fiscal year 1975 figure of $45.2 million and now
involves three Federal departments and agencies: the National
Science Foundation, the Department of the Interior and the Atomic
Energy Commission. As shown in Table 1, the most significant increase
in funding occurred between fiscal years 1974 and 1975.
TABLE 1.-FEDERAL GEOTHERMAL ENERGY R. & D.
Fiscal year-
1971
1972
1973
1974
1975 (House
(actual)
(actual)
(actual)
(actual)
appropriation)1
NSF
1
0.7
1.1
3.7
22.3
DOI
0.2
.7
3.5
2.8
10.2
AEC
-
-
I
4.7
12.7
Total
.2
1.4
4.6
11.2
45.2
1 H.R. 14434, Special Energy Research and Development Appropriation Act, 1975, approved by House of Representa-
tives Apr. 30, 1974.
The Geothermal Resources Research Conference
The potentials of geothermal energy and proposals for a major
research and development effort over the next 10 years were the subject
of the Geothermal Resources Research Conference sponsored by the
National Science Foundation in Seattle, Washington, September 18, 19,
and 20, 1972. Former Secretary of the Interior Walter J. Hickel was
chairman. A report of the conference, Geothermal Energy, A National
Proposal for Geothermal Resources Research, was published by the
University of Alaska, the NSF grantee.
The report emphasized the importance to the Nation of geothermal
resources in terms of potential power, electrical energy, oil equivalents,
and foreign exchange. It stated that by 1985 geothermal resources
could have an enormous impact on the Nation's supply of energy and
could also augment the supply of water in regions with insufficient
natural water. It also pointed out that the development of geothermal
resources could substantially assist efforts to attain national energy
self-sufficiency as well as dramatically improving the U.S. balance of
payments. The conference report emphasized that a vigorous research
and development program is necessary to assure the timely realization
of these advantages to the Nation. In order to accomplish this R. & D.,
(9)
H. Rept. 1112, 93-2-2
10
a budget totalling $684.7 million through fiscal year 1983 was recom-
mended. The report proposed an expenditure of $41.7 million in
fiscal year 1974, the first year of the program. The emphasis in fiscal
year 1974 would be on resource assessment and utilization technology.
The fiscal year 1975 recommendation was $61.0 million.
Energy Task Force Report
The use of geothermal energy received careful consideration in the
report of the Task Force on Energy of the Committee on Science and
Astronautics. This Task Force was constituted during the 92d Con-
gress specifically for the review of energy matters.
At the conclusion of the 92d Congress, following thorough investi-
gations and study during 1971 and 1972, the Task Force submitted its
final report. A major conclusion of the report was that, because the
reservoirs of thermal energy located in the Earth's underground water
and rocks are large and widespread, geothermal energy should have
greatly increased R. & D. emphasis. The Task Force noted that basic
and applied research in the field of geothermal energy should be in-
creased many times over the present level of effort. Since little attention
has been given to this area in the past, the investment of sums modest
compared to many other R. & D. programs has the potential now of
opening to development a vast new source of energy.
The Task Force recognized the need for demonstration of geo-
thermal technology, particularly for tapping the energy of hot dry
rocks. It noted the great technological effort that will be required
for deep drilling and direct experimentation on fracturing hot dry
rock in order to produce practical geothermal systems. It also cau-
tioned that this will be a complex, expensive undertaking requiring
careful and effective management.
The Task Force recognized that the size of the geothermal resource
must be accurately determined and suggested that this could be done
by a combination of terrestrial exploration and satellite studies.
The Nation's Energy Future
Dr. Dixy Lee Ray, Chairman of the Atomic Energy Commission, in
her recent report to the President on the energy future of the Nation,
recommended a Federal expenditure of $40 million in fiscal year 1975
and a total of $185 million over the next five years for geothermal
R.&D.
The goal of this program, according to the report, is "to exploit geo-
thermal sources by developing and demonstrating the technology that
would allow commercial production of electrical power and other
energy uses in environmentally acceptable ways."
The objectives enunciated by Dr. Ray were: to increase knowledge
of the location and nature of geothermal resources; to identify and
resolve environmental, legal, and institutional barriers to geothermal
utilization; to advance geothermal technology; and to accelerate,
through demonstration plants, the commercial production of elec-
tricity from geothermal resources.
The geothermal program called for in the report is designed to
stimulate the commercial production of at least 20,000 megawatts of
geothermally produced electricity by 1985 and to realize additional
fuel savings through the use of geothermal energy in space heating,
air conditioning, extraction of minerals, and desalination of brines.
11
Field Trips
Between January 1972 and February 1973, Members and staff of the
Subcommittee on Energy reviewed work at geothermal energy re-
search and development projects and commercial plants. The sites in-
vestigated were: The Geysers, California, a dry steam plant operated
by the Pacific Gas and Electric Company; the Atomic Energy Com-
mission Laboratory at Los Alamos, New Mexico, where research on
hot dry rock is being performed; Wairakei, New Zealand, a wet steam
field operated by the New Zealand Electricity Department; Cerro
Prieto, Mexico, a wet steam field operated by Comisión Federal de
Electricdad; and various geothermal research sites in the Imperial
Valley, California.
Geothermal Energy Legislation
88th-92d Congresses.Since 1962, Congress has been concerned
with formulating leasing procedures to encourage the exploration for,
and the development of, geothermal resources. In July and October
1963, the Senate Committee on Interior and Insular Affairs first held
hearings on the potential for geothermal steam resources. Following
these hearings, the Committee favorably reported S. 883, a bill to aid
development of the full potential of geothermal resources underlying
public lands (S. Report 88-1508). The Senate passed this measure on
August 21, 1964, but the House took no further action.
In the 89th Congress, a geothermal steam leasing bill (S. 1674)
passed both Houses. This bill authorized the disposition by the Secre-
tary of the Interior of the geothermal steam and related resources in
the public-owned lands of the United States. In the Senate Interior
Committee report on this measure, it was maintained that this energy
resource had been only slightly explored in the United States, es-
pecially on public domain, and the report encouraged its development
(S. Report 89-683). The Senate passed this measure on September 7,
1965.
During the second session, the House considered and reported the
bill (H. Report 89-2140). The House version omitted a "grand-
father clause," contained in the Senate bill, offering preference in
leasing to those who had already conducted exploration and/or devel-
opment of geothermal resources on public lands. The grandfather
clause was finally upheld without a conference, and S. 1674 was passed
in October 1966.
President Johnson opposed the grandfather clause, among other
things, and pocket vetoed the bill. The Senate Committee members
contended that this provision was carefully limited. They were dis-
satisfied with the President's failure to approve the measure.
In the 90th Congress, an identical bill was introduced (S. 23), along
with the Administration's version (S. 912). New legislation was intro-
duced in the 91st Congress. The discrepancies were finally resolved
when the Committee offered a new bill, S. 386 (S. Report 91-1160).
This measure was passed by the Senate on September 16, 1970, and by
the House on October 5, 1970 (H. Report 91-1544). The minor differ-
ences between the two bills were cleared up in early December, and the
Geothermal Steam Act was signed into law on December 24, 1970 (P.L.
91-581; 84 Stat. 1566; 30 U.S.C. 1001-1026).
The Geothermal Steam Act of 1970 authorized the Secretary of the
12
Interior to issue leases for the development and utilization of geo-
thermal steam and related resources. Such leases are classified into two
types: those issued in known geothermal resources areas (KGRA), in
which cases the highest responsible qualified bidder receives the lease
and those issued in areas where there is potential for development, in
which cases the first qualified person making application is entitled to
the lease.
During the 92d Congress, a few bills relating to geothermal resources
were introduced. Among these were H.R. 9749 and H.R. 14801, as
well as S. 564, S. 1349 and H. Con. Res. 448. One notable measure
that emerged during this Congress was S. Res. 45, "The National
Fuels and Energy Policy Study." This bill, introduced by Senators
Jennings Randolph and Henry M. Jackson on February 4, 1971, was
considered, amended and passed by the Senate on May 3, 1971. This
resolution authorizes the Senate Interior and Insular Affairs Com-
mittee and ex officio members of the Committees on Commerce and
Public Works and the Joint Committee on Atomic Energy to make a
full and complete investigation and study of the national fuels and
energy policies.
Pursuant to S. Res. 45, the Senate Interior and Insular Affairs Com-
mittee held oversight hearings in June 1972 to examine the progress
in implementing the Geothermal Steam Act, to examine the potential
of geothermal energy, to review available data concerning this poten-
tial, and to assess the status of future plans for the resources.
93d Congress.-The 93d Congress has thus far seen a variety of bills
introduced and a mounting interest in the potential of geothermal
resources. Among the measures introduced have been S. 1283 and H.R.
6602, which are identical bills; H.R. 8628 and H.R. 9658. identical
bills; H.R. 11212, and identical bills; H.R. 4413 and H.R. 4963,
identical bills; S. 2465, S. 2636, and H.R. 14172.
The following is a brief summary of the seven specific geothermal
bills introduced in the 93d Congress.
H.R. 4413 (Mr. Steiger of Ariz.). Introduced February 20, 1973,
to promote the exploration and development of geothermal resources
through cooperation between the Federal Government and private
enterprise. (Referred to the Committee on Interior and Insular
Affairs.)
S. 1283 (Mr. Jackson), the "National Energy Research and Develop-
ment Policy Act of 1973." Introduced March 19, 1973, to establish a
national program for research, development, and demonstration in
fuels and energy and for the coordination and financial supple-
mentation of Federal energy research and development; to establish
development corporations to demonstrate technologies for shale oil
development, coal gasification development, advanced power cycle
development, geothermal steam development, and coal liquefaction
development; to authorize and direct the Secretary of the Interior
to make mineral resources of the public lands available for said
development corporations; and for other purposes. This bill was
reported from the Senate Committee on Interior and Insular Affairs
and amended on December 1, 1973 (S. Report 93-589). The measure
was passed unanimously on December 7, 1973. and referred to the
House Committee on Interior and Insular Affairs on December 10,
1973, Title II of S. 1283 is similar to S. 2465.
13
H.R. 8628 (Mr. Brown), the "Geothermal Energy Development
Corporation Act." Introduced June 13, 1973, to further energy
research and development by establishing a Geothermal Energy Devel-
opment Corporation, to amend the National Science Foundation Act
of 1950, and to authorize the National Science Foundation to fund
research related to this resource. (Referred to the Committee on Sci-
ence and Astronautics.)
S. 2465 (Mr. Bible), the "Geothermal Energy Act of 1973." Intro-
duced September 21, 1973, to authorize the Secretary of the Interior to
guaranty loans for the financing of commercial ventures in geothermal
energy; to coordinate Federal activities in geothermal energy explora-
tion, research and development; and for other purposes. This bill
was reported from the Senate Committee on Interior and Insular
Affairs on May 2, 1974.
S. 2636 (Mr. McGovern), the "Solar, Hydrogen and Geothermal
Energy Act of 1973." Introduced October 30, 1973, to authorize supple-
mental appropriations for the National Science Foundation for energy
research and development. (Referred to the Committee on Interior
and Insular Affairs.)
H.R. 11212 (Mr. McCormack), the "Geothermal Energy Research
Development and Commercial Demonstration Act of 1973." Intro-
duced October 31, 1973, to further the conduct of research, develop-
ment and commercial demonstrations in geothermal energy
technologies, to direct the National Science Foundation to fund basic
and applied research relating to geothermal energy, and to direct the
National Aeronautics and Space Administration to carry out a pro-
gram of demonstrations in technologies for commercial utilization
of geothermal resources including hot dry rock and geopressured
fields. (Referred to the Committee on Science and Astronautics.)
H.R. 14172 (Mr. McCormack), the "Geothermal Energy Research,
Development, and Demonstration Act of 1974." Introduced April 10,
1974, to further the conduct of research, development and demonstra-
tions in geothermal energy technologies, to establish a Geothermal
Energy Coordination and Management Project, to amend the National
Science Foundation Act of 1950 to provide for the funding of activities
relating to geothermal energy, to amend the National Aeronautics and
Space Act of 1958 to provide for the carrying out of research and
development in geothermal energy technology, to carry out a program
of demonstrations in technologies for the utilization of geothermal
resources, and for other purposes. (Referred to the Committee on Sci-
ence and Astronautics.)
LEGISLATIVE HISTORY OF H.R. 14920
September 1973 Hearings on H.R. 8628 and H.R. 9658
Hearings on H.R. 8628 and H.R. 9658 (Brown et al.) were held on
September 11, 13, and 18, 1973, by the Subcommittee on Energy of the
House Committee on Science and Astronautics. These identical meas-
ures, entitled "The Geothermal Energy Development Corporation
Act," were introduced to further energy research and development by
establishing a Geothermal Energy Development Corporation. The bills
were to amend the National Science Foundation Act of 1950 to author-
ize and direct the National Science Foundation to fund basic and
applied research related to energy in support of the objectives of the
Geothermal Energy Development Corporation. The bills would also
have authorized the Corporation to select sites for demonstration in-
stallations, to develop technologies in this field, and to enter into con-
tracts and leases to such end. The Corporation was to be instructed to
submit detailed reports of its operations to the President and legisla-
tive recommendations to the Congress. The bills would have authorized
$8 million per year for 14 years after June 30, 1974, for the use of the
Corporation.
The witnesses who advised the subcommittee were:
September 11, 1973
1. Dr. Joseph Barnea, Office of the Under Secretary General,
United Nations.
2. Ralph B. Dewey, Assistant to the Chairman of the Board,
Pacific Gas & Electric Co.
3. Dr. Alfred J. Eggers, Jr., Assistant Director for Research
Applications, National Science Foundation.
September 13, 1973
4. William W. Lyons, Deputy Under Secretary, Department of
the Interior, accompanied by Dr. Gordon P. Eaton, Deputy
Assistant Chief Geologist, Geologic Division, Geological
Survey; William L. Miller, Physical Scientist, Division of
Metallurgy, Bureau of Mines; Dr. Russell G. Wayland,
Chief, Conservation Division, Geological Survey; and Fred-
erick N. Ferguson, Assistant Solicitor for Minerals, Depart-
ment of the Interior.
5. Dr. Gordon P. Eaton, Deputy Assistant Chief Geologist, Geo-
logic Division, Geological Survey.
6. William L. Miller, Physical Scientist, Division of Metallurgy,
Bureau of Mines.
September 18, 1973
7. Morton C. Smith, Project Manager, Geothermal Energy, Los
Alamos Scientific Laboratory, the University of California.
8. Dr. Robert W. Rex, President, Republic Geothermal, Inc.
9. Dr. W. R. McSpadden, Battelle Memorial Institute, Pacific
Northwest Laboratories, Richland, Wash.
(14)
15
In addition to the oral testimony, the following individuals and
organizations submitted statements for the record:
1. Allen, Donald R., attorney at law, Duncan, Allen & Mitchell.
2. Anderson, J. Hilbert, consulting engineer, York, Pa.
3. Church, Frank, U.S. Senator from Idaho.
4. Comisión Federal de Electricidad, Mexico (Sergio Mercado).
5. Department of Scientific and Industrial Research, New Zealand
(F. E. Studt).
6. Geothermal Kinetics Systems Corp. (Mike O'Donnell, executive
vice president), Phoenix, Ariz.
7. Hickel, Hon. Walter J., Anchorage, Alaska.
8. Magma Power Co. (B. C. McCabe, president), Los Angeles, Calif.
9. New York, State of, Public Service Commission (Alvin Kaufman,
director, Office of Economic Research), Albany, N.Y.
10. Orkustofnun, National Energy Authority (Sveinbjorn Bjornsson,
Department of Natural Heat), Reykjavik, Iceland.
11. Rhodes, John J., U.S. Congressman from Arizona.
12. San Diego Gas & Electric Co. (Carthrae M. Laffoon, senior vice
president), San Diego, Calif.
13. Sierra Club (Hamilton Hess, California geothermal coordinator),
San Francisco, Calif.
14. Standard Oil Co. of California, Western Operations, Inc. (Stanley
O. Hutchison, staff engineer, technology development), Bakers-
field, Calif.
15. Southern California Edison Co. (L. T. Papay, director, research
and development), Rosemead, Calif.
The hearing witnesses strongly endorsed the objective of furthering
research in the geothermal area. Dr. Joseph Barnea of the United
Nations accused members of the Department of the Interior of "play-
ing down" and "overlooking" the significance of geothermal resources.
He claimed that the research performed by these agencies had
resulted in unrealistically low predictions of future utilization
of geothermal resources for energy production. In response to Dr.
Barnea's assertions, the U.S. Geological Survey responded that theirs
was not a position of apathy, but rather of "guarded optimism." The
Survey pointed out that. in view of the scarcity of highly favorable
dry steam deposits like The Geysers and the many unsolved problems
with hot water systems, no more than qualified optimism is justified
at this time. The Survey feels that, given good prospects for adequate
Federal funding and favorable legal decisions on leasing and taxa-
tion, there is a good chance that the many remaining problems can be
solved or adequately controlled.
The Geological Survey did maintain, however, that geothermal
energy development needs optimists such as Dr. Barnea to publicize
its potential and encourage adequate assessment.
Introduction of H.R. 11212
In the September hearings, it became apparent that hot dry rock
and geopressured water were the geothermal resources in greatest need
of technical effort to achieve the breakthroughs needed to bring them
to commercial reality. Although these two resources have the greatest
potential resource base, almost no R. & D. was underway on either
of them in 1973.
16
Realization of this need for R. & D. programs aimed at hot dry rock
and geopressured water led directly to the introduction on October 31,
1973, of H.R. 11212, the Geothermal Energy Research, Development
and Commercial Demonstration Act of 1973. There were 90 cospon-
sors of this and identical bills, which had the objective of bringing to
commercial demonstration as quickly as feasible at least two new types
of geothermal resources. It was expected that the program envisioned
by the legislation would be completed in six years and would focus
on the very large but untapped hot dry rock and geopressured water
resources.
H.R. 11212 specified that the National Aeronautics and Space Ad-
ministration should perform the research, development, and related
activities, including pilot plant operation and demonstration plant
construction. In support of the demonstration program, the National
Science Foundation was called on to expand its program of basic
research in geothermal energy.
In conjunction with the commercial demonstration of electrical
generation, NASA was to develop for commercial use byproducts of
the geothermal resources such as methane from geopressured water.
Concurrent research and development was to be done on the environ-
mental impacts of each geothermal source and the necessary environ-
mental controls.
The bill authorized $80 million for NASA for the six-year period.
Legislation Identical to H.R. 11212
The widespread support in the Congress for accomplishing the goals
of this legislation was demonstrated by 99 Members' sponsorship of
legislation identical to H.R. 11212. A list of these Members and the
bills they introduced is given below.
Annunzio
H.R. 11436
Fisher
H.R. 11433
Baker
H.R. 11433
Forsythe
H.R. 11436
Bell
H.R. 11212
Fraser
H.R. 11435
Bergland
H.R. 11212
Frey
H.R. 11212
Boland
H.R. 11436
Froelich
H.R. 12437
Bowen
H.R. 11433
Fulton
H.R. 11435
Blackburn
H.R. 11435
Fuqua
H.R. 11212
Brown of Calif
H.R. 11212
Goldwater
H.R. 11212
Burgener
H.R. 11433
Grasso
H.R. 11435
Biester
H.R. 12029
Gunter
H.R. 11212
Boggs
H.R. 12029
Hamilton
H.R. 11435
Carney
H.R. 11433, H.R. 11435
Hanna
H.R. 11212
Casey
H.R. 11434
Hechler of W. Va
H.R. 11212
Cleveland
H.R. 11433
Heckler of Mass
H.R. 11433
Mrs. Collins of Ill
H.R. 11436
Helstoski
H.R. 11435
Conlan
H.R. 11212
Hicks
H.R. 11436
Conte
H.R. 11435
Hogan
H.R. 11435
Corman
H.R. 11433
Huber
H.R. 11435
Cotter
H.R. 11212
Harvey
H.R. 12029
Cronin
H.R. 11212
Johnson of Colo
H.R. 11435
Denholm
H.R. 11436
Jones of Okla
H.R. 11433
Derwinski
H.R. 11436
Kemp
H.R. 11436
Downing
H.R. 11212
Ketchum
H.R. 11435
Duncan
H.R. 11433
Leggett
H.R. 11433
Danielson
H.R. 12029
Lujan
H.R. 11436
Eckhardt
H.R. 11435
McCormack
H.R. 11212
Edwards of Calif
H.R. 11433
McDade
H.R. 11436
Esch
H.R. 11212
McKay
H.R. 11435
Eshleman
H.R. 11433
Martin of N.C.
H.R. 11212
Fish
H.R. 11436
Matsunaga
H.R. 11435
17
Mazzoli
H.R. 11433
Ryan
H.R. 11434
Murphy of N.Y
H.R. 11435
Roy
H.R. 12029
Melcher
H.R. 11436
Rinaldo
H.R. 12029
Milford
H.R. 11212
Schneebeli
H.R. 11436
Mitchell of N.Y
H.R. 11434
Steiger of Wis
H.R. 11433
Mosher
H.R. 11212
Shoup
H.R. 11436
Moss
H.R. 11433
Studds
H.R. 11433
Obey
H.R. 11433
Symington
H.R. 11212
Parris
H.R. 11212
Teague
H.R. 11212
Pepper
H.R. 11436
Thomson of Wis
H.R. 11436
Pickle
H.R. 11212
Thornton
H.R. 11212
Poage
H.R. 11436
Tiernan
H.R. 11436
Podell
H.R. 11436
Towell
H.R. 12029
Preyer
H.R. 11435
Ullman
H.R. 11433
Rees
H.R. 11433
Van Deerlin
H.R. 11436
Rhodes
H.R. 11434
Ware
H.R. 11435
Robinson of Va
H.R. 11435
Winn
H.R. 11212
Rodino
H.R. 12029
Wright
H.R. 11436
Roe
H.R. 11212
Yatron
H.R. 11435
Roush
H.R. 11433
February 1974 Hearings on H.R. 11212
Hearings on H.R. 11212 were held on February 5, 6, 7, and 11,
1974. Testimony was offered by 21 witnesses representing universities,
Federal and state agencies, and private industry and was supplemented
by written statements for the hearing record.
Presenting testimony were:
February 5, 1974:
1. Hon. Al Ullman, a Representative in Congress from the State
of Oregon, accompanied by Bernard (Bud) Byers, Oregon
State Representative, Lebanon, Oreg.
2. Hon. Victor V. Veysey, a Representative in Congress from
the State of California.
3. Dr. H. Guyford Stever, Director, National Science Founda-
tion, accompanied by Dr. Alfred J. Eggers, Jr., Assistant
Director for Research Applications; and Richard J. Green,
Deputy Assistant Director for Program Management
4. Dr. James C. Fletcher, Administrator, National Aeronautics
and Space Administration, accompanied by Charles W.
Mathews, Associate Administrator for Applications; and
Dr. Harrison H. Schmitt, Special Assistant to the Adminis-
trator for Energy R. & D.
February 6, 1974:
5. Hon. Dixy Lee Ray, chairman, U.S. Atomic Energy Com-
mission, accompanied by James C. Bresee, Assistant Di-
rector, General Energy Development, U.S. Atomic Energy
Commission
6. Dr. William A. Vogely, Acting Assistant Secretary for En-
ergy and Minerals, Department of the Interior
7. Dr. Gordon P. Eaton, Deputy Chief, Office of Geochemistry
and Geophysics, U.S. Geological Survey
8. Hon. John N. Nassikas, Chairman, Federal Power Commis-
sion, accompanied by Emmett J. Gavin, assistant to the
chairman; Lois D. Cashell, staff attorney, Office of General
Counsel; Robert B. Boyd, deputy chief, Bureau of Power;
Gordon K. Zareski, chief, Planning and Development Divi-
sion, Bureau of Natural Gas; Richard F. Hill, adviser on
Environmental Quality; Daniel Goldstein, assistant gen-
H. Rept. 1112, 93-2-3
18
eral counsel, Office of General Counsel and Charles Berg,
chief engineer, Federal Power Commission
9. Charles S. Matthews, Shell Oil Co.
10. Robert M. Hallman, Sierra Club
11. A. A. Maasberg and O. Osborn, The Dow Chemical Co.
12. Dr. C. O. Durham, Jr., Louisiana State University
February 7, 1974:
13. Hon. John J. Rhodes, a Representative in Congress from the
State of Arizona
14. Dr. John C. Sawhill, Deputy Administrator, Federal Energy
Office; accompanied by Robert Shatz and Raymond Zah-
radnik, Federal Energy Office
February 11. 1974:
15. Ted Livingston, Geology and Earth Resources, State Geolo-
gist, Department of Natural Resources, State of Washing-
ton
16. Dr. William R. McSpadden, manager, Marysville geothermal
project, Battelle-Northwest Laboratories
17. Dr. David D. Blackwell, Department of Geological Sciences,
Southern Methodist University
18. Dr. Arthur L. Austin, Lawrence Livermore Laboratories, U.S.
Atomic Energy Commission
19. Morton C. Smith, Los Alamos Scientific Laboratories, U.S.
Atomic Energy Commission
20. Richard G. Bowen, Department of Geology and Mineral In-
dustries, State of Oregon
21. Howard E. Nelson, Executive Secretary, Washington State
Sportsmen's Council
In addition, written testimony was received from:
1. J. Hilbert Anderson, consulting engineer
2. Linwood Holton, Assistant Secretary for Congressional Re-
lations, Department of State
3. Myron Dorfman, Department of Petroleum Engineering, The
University of Texas at Austin
4. Dr. Martin Goldsmith, Environmental Quality Laboratory,
California Institute of Technology
5. Norman P. Ingraham, executive director, Northern Cali-
fornia Power Agency
6. Dudley E. Ott, vice president, The American Society of
Mechanical Engineers
7. Jerome A. Lewis, president, Petro-Lewis Corp.
8. Hon. J. J. Pickle, Member of Congress, Texas
9. John C. Reed, College of Engineering, University of Florida
10. L. T. Papay, Director, Research and Development, Southern
California Edison Co.
Dr. Gordon P. Eaton of the U.S. Geological Survey stressed that
a commitment to exploitation of geopressured brines and hot dry rock
resources would be premature without prior or concurrent understand-
ing of the fundamentals of such systems. He indicated that, in his
opinion, six years is not an adequate period of time to accomplish
the stated objectives. He also asserted that the Geological Survey, the
Bureau of Mines, the Atomic Energy Commission and the Advanced
Research Project Agency should be centrally involved in any geother-
19
mal R. & D. program and that their roles and responsibilities should
be specified in the bill.
Dr. Dixy Lee Ray, Chairman of the U.S. Atomic Energy Commis-
sion, was also concerned that the addition of another major agency
(the National Aeronautics and Space Administration) to the other
agencies already performing R. & D. work in geothermal energy could
cause organizational problems. Dr. Guyford Stever, Director of the
National Science Foundation, agreed that further fragmentation of
the Federal geothermal program was undesirable.
Dr. John C. Sawhill of the Federal Energy Office indicated that
setting an even higher funding level would yield a more rapid solution
of the problems currently preventing widespread utilization of geo-
thermal energy and that the six-year time frame of the Act was
probably too short.
Dr. James C. Fletcher, Administrator, National Aeronautics and
Space Administration, pointed out that taking on responsibilities of
coordination and management of new high risk technologies was not
new to NASA. It is NASA's view, however, that the major technolo-
gies involved in exploiting geothermal energy resources are outside
of NASA's existing expertise and have a foundation in other sectors
of the Federal Government, such as the Department of the Interior,
the Atomic Energy Commission, and the Federal Power Commission.
The hearings did produce agreement on the need for geothermal
R. & D. Most witnesses shared the opinion expressed by Mr. John
N. Nassikas, Chairman of the Federal Power Commission. "The
energy potential of all sources of geothermal energy should be ex-
plored to determine the feasibility of commercial application. The
Nation cannot afford to neglect the development of these domestic
resources, which have the potential to provide a significant amount of
environmentally desirable energy."
Four major recommendations were repeatedly advanced during
these hearings:
First, the Congress should assume active leadership in developing a
comprehensive geothermal energy program for this country, as part
of an integrated national energy policy, particularly with respect to
research, development, and demonstration of alternate energy sources.
Second, the scope of any geothermal bill should include provisions
for-
Research on all forms of geothermal energy and byproducts;
Intensive exploration for and assessment of geothermal re-
sources; and
The necessary institutional changes required to insure the full
development of these resources.
Third, the Government agencies involved must have a mechanism
for effecting a coordinated effort in geothermal energy research, de-
velopment and demonstration.
Fourth, the Administration must be willing to cooperate with the
Congress in developing legislation to set up these programs and in
establishing the agencies to administer them.
Introduction of H.R. 14172
These recommendations led to a reconsideration of the legislation
and further review of our Federal effort in geothermal energy by the
20
Subcommittee. In the Administration's fiscal year 1975 budget, a total
of $44.7 million was requested with the following breakdown: $22.3
to NSF, $12.7 to AEC and $9.7 to Department of the Interior. Of the
various areas of energy research and development receiving Federal
support, only geothermal energy research and development is so heavily
splintered among various agencies.
The National Science Foundation has been designated the lead
agency, but it does not have the charter to pursue projects to a demon-
stration stage, nor does it have administrative control over the research
programs of the other agencies. In reality there exists no national
policy or set of goals to guide our total effort, nor does there exist an
effective administrative mechanism to direct or coordinate these vari-
ous programs. It was this situation that led to the introduction of H.R.
14172, the Geothermal Energy Research, Development and Demon-
stration Act of 1974, on April 10, 1974. This bill was co-sponsored by
all members of the Subcommittee, and an identical bill, H.R. 14633,
was co-sponsored by other members of the full Committee.
H.R. 14172 extended the scope of H.R. 11212 to all geothermal re-
sources and authorized the mechanisms for-
A coordinated geothermal R. & D. management;
Resource exploration and assessment;
Research, development, and demonstration of geothermal tech-
nologies; and
Government-guarantied loans for these purposes.
It set a goal of producing electricity in demonstration plants (of
from 1 to 10 megawatt capacity) from hot dry rock, geopressured
water and high and low salinity convective systems by June 30, 1980.
Funds for the program under H.R. 14172 would be authorized to be
appropriated to the NSF, the present lead agency. Management of the
overall program (including loan guaranty approval) and control of
budget priorities, however, would rest with the Geothermal Energy
Coordination and Management Project. The Project would be com-
posed of members from NASA, NSF, AEC, Interior, and a Chairman
to be appointed by the President. The Energy Research and Develop-
ment Administration (ERDA) or a similar agency would take over
these responsibilities when and if such an agency is created.
A budget of $300 million would be authorized for the fiscal years
1975-79, with an additional $50 million per year for the loan program.
Legislation Identical to H.R. 14172
In addition to H.R. 14172, identical bills were introduced with the
Members cosponsoring listed below :
Bell
14633
Hechler of W. Va
14633
Bergland
14172
Ketchum
14172
Brown of Calif
14172
McCormack
14172
Conlan
14172
Martin
14172
Cotter
14633
Mi'ford
14172
Cronin
14172
Mosher
14172
Davis
14633
Parris
14172
Downing
14633
Pickle
14172
Drinan
14632
Roe
14172
Esch
14172
Symington
14172
Frey
14633
Teague
14172
Fuqua
14172
Thornton
14172
Goldwater
14172
Wydler
14172
Gunter
14172
Winn
14633
Hanna
14172
21
May 1974 Hearings on H.R. 14172
A hearing on H.R. 14172 was held on Thursday, May 2, 1974. Pre-
senting testimony were Dr. John C. Sawhill, Administrator of the
Federal Energy Office, and Mr. Frank G. Zarb, Associate Director,
Natural Resources, Energy and Science, Office of Management and
Budget. Only policy issues were explored, since the two earlier sets of
hearings had adequately developed the technical issues.
In their testimony, both witnesses stressed the need for centralized
energy R. & D. management, and they supported the passage of legis-
lation establishing ERDA. Both felt that ERDA should be created
before enactment of a geothermal research, development and demon-
stration bill.
Mr. Zarb stressed, in particular, four elements in H.R. 14172 that
should be clarified or reconsidered: (1) the authority of the Project
to coordinate resource assessment, now the responsibility of the Geo-
logical Survey in the Department of the Interior, (2) the loan
guaranty program, (3) the possible amendment of previous mineral
Acts by certain definitions contained in H.R. 14172, and (4) the ques-
tionable need for a management project at all, since there are indica-
tions that the ERDA bill will be passed in the near future.
The Committee carefully considered these objections and amended
the legislation to better reflect administration preferences. It has also
been advised that H.R. 14920 does not change any existing mineral
Acts.
COMMITTEE ACTIONS
Markup in Subcommittee of H.R. 14172
On May 16, 1974, the Subcommittee on Energy marked up the bill
H.R. 14172.
During the course of the Subcommittee's deliberations on the bill,
a number of amendments were approved. In addition to minor, tech-
nical and conforming changes, several substantive amendments were
adopted as follows:
Section 3. Definition of Byproduct.-The definition of the term
"byproduct" was clarified and modification of the definition con-
tained in the Geothermal Steam Act of 1970 (30 U.S.C. 1001 [C})
was made explicit. For the purpose of resource assessment, re-
search, development and demonstration activities performed pur-
suant to this bill, the term byproduct includes oil, hydrocarbon
gas, or helium.
Section 101. Designation of Administrator of FEA as Project
Chairman.-FEA presently has a leadership role in Federal en-
ergy policy and Project Independence, and has an overview of the
Nation's energy activities and interactions. This change is de-
signed to eliminate the ordinary delay time in the selection and
appointment of an outside Chairman by the President. Further,
the Chairman of the Project in his FEA role would assure a
coordinated phasing of the Management Project programs into
ERDA or any other agency which might be created and charged
with overall energy R. & D. management responsibility.
Section 103. NASA Amendment.-The phrase "and directed"
was stricken from subsection (b) to emphasize that the commit-
tee expects NASA and other agencies to perform tasks for the
Project as the result of mutual agreement and that unilateral
direction of NASA by the Project to perform specific programs
is not expected.
Section 103 (c) (1). Program Definition.-This provides for
the Administrator of the National Aeronautics and Space Ad-
ministration to prepare a comprehensive program definition of an
integrated effort for effectively developing the Nation's geo-
thermal resources.
In preparing this program definition, the Administrator is au-
thorized to consult with other Federal agencies, State and local
government agencies, and private organizations. This program
definition is to be submitted to the President, each House of the
Congress, and the Chairman of the Project (or head of any
permanent Federal organization or agency having jurisdiction
over energy research and development) in interim forms by Oc-
tober 31, 1974, and January 31, 1975, in order to be incorporated
into the fiscal year 1976 budget cycle. A final program definition
(22)
23
is to be transmitted as soon as possible thereafter, but in any case
not later than June 30, 1975.
This program definition is intended to define carefully the cost
of this five-year Federal effort in geothermal energy research,
development and demonstration. The Administrator will be ex-
pected to receive some guidance in carrying out this activity by
referring to the energy R. & D. studies performed in 1973 by Dr.
Dixy Lee Ray, Chairman of the Atomic Energy Commission.
Section 107. Scientific and Technical Education.-This is a
new section concerned with scientific and technical education. A
limiting factor in the development of new energy resources such
as geothermal energy is the availability of trained scientific and
engineering manpower. This section clearly states congressional
intent that NSF provide adequate programs to assure training
and retraining of needed geothermal energy personnel. Further
details of Committee intent are included under Committee Views.
Section 304. Authorization of Funds.-Amendments approved
by the Subcommittee delete specific research, development and
demonstration funding for the fiscal years 1976-79. Instead, $2.5
million is authorized to NASA for the Administrator to carry out
the program definition in fiscal year 1975. Other fiscal year 1975
funds for geothermal energy have already been included in the
Special Energy Appropriations Act which passed the House on
April 30, 1974. The bill requires subsequent congressional action
for the authorization of appropriations for the remaining years.
This funding is expected to be based, at least in part, on. the
results of the program definition.
Full Committee Action on H.R. 14920
Following the Subcommittee actions described above, a clean bill was
introduced on May 21, cosponsored by all members of the Subcommit-
tee (including the full Committee Chairman and Ranking Minority
Member). The clean bill, H.R. 14920, was considered by the full Com-
mittee on May 29, 1974. A quorum being present, the Committee
approved H.R. 14920 unanimously with no changes and recommended
passage by the full House of Representatives.
COMMITTEE VIEWS
Effective Coordination of Geothermal R. & D.
It is the intent of the Committee that this legislation provide more
effective and responsive Federal coordination of geothermal research,
development, and demonstration than that which exists today and
an orderly transfer of responsibilities if and when an Energy Research
and Development Administration or equivalent entity is established.
Presently, the National Science Foundation is the lead agency for
geothermal energy R. & D. within the Federal government. NSF
chairs an interagency panel on Geothermal Energy Research with the
following members:
National Science Foundation
Department of the Interior
Geological Survey
Bureau of Reclamation
Bureau of Mines
Office of Energy R. & D. Policy (NSF)
Defense Advanced Research Projects Agency
Atomic Energy Commission
Council on Environmental Quality
Two difficulties hinder current efforts adequately to coordinate and
manage geothermal programs. First, NSF does not have any ad-
ministrative or fiscal control over the research projects of other agen-
cies belonging to the interagency panel. Second, NSF does not have
the authority to take projects through to their logical conclusion as
full-fledged demonstrations.
As noted earlier in this report, funding for geothermal activities
is also fragmented-much more SO than for any other area of research,
development, and demonstration on energy sources.
Establishment of an Energy Research and Development Adminis-
tration, or some similar organization, should help to unify the presently
diverse geothermal efforts. It will take time, however, to approve and
implement such legislation. Clearly, it is in the national interest to take
prompt action SO that funds appropriated for fiscal year 1975 will be
wisely spent in the context of an effectively coordinated Federal
program.
Therefore, the Committee feels strongly that a formal coordination
and management group with a chairman who retains administrative
and fiscal control is needed. The management role of the Project will
be that of providing overall direction to research, development, and
demonstration activities in order to maximize the returns from the
taxpayers' investment. The Project will not, however, undertake any
R. & D. or demonstration tasks by creating its own facilities, but
shall utilize existing Federal agencies. The Committee expects that
the Project will obtain a broad base of industry participation and will
utilize the services of small businesses wherever feasible.
(24)
25
Amendment to the NASA Act
An earlier version of this legislation, H.R. 14172, contains language
which would have directed NASA to carry out any geothermal pro-
gram assigned to it by the Project. This requirement was removed by
the Subcommittee on Energy during its markup.
The Committee should like to emphasize, however, its firm intent
that NASA assume appropriate responsibility for developing relevant
geothermal energy technologies. NASA is also encouraged to adapt
existing space technologies, such as the earth resources satellite tech-
nology, as much as possible to meeting the challenge of developing
geothermal energy sources.
Scientific and Technical Education
The Committee recognizes the necessity of considering scientific and
technical manpower requirements in establishing any new program
oriented toward development and implementation of new technologies.
Research results and scientific education must go hand in hand if the
research objectives are to be attained. Suitable emphasis upon the
training of geothermal scientists and technicians is necessary to insure
the practical success of the research programs and demonstration
projects.
It is intended that the educational activities carried out under the bill
Act be specifically aimed at educating individuals who will have the
capabilities to carry out the objectives of this legislation.
The Committee does not contemplate funding under this legislation
of geothermal educational activities beyond the time required to carry
out the objectives of the bill. Educational institutions must be aware
that long term training programs in geothermal energy will not be in-
definitely funded or supported under this legislation. The educational
need is current and specific, and should be considered in that manner.
The Committee feels that emphasis should be placed on the inter-
disciplinary (rather than merely multidisciplinary) nature of the
program. Institutions participating in some aspects of the program
should have proven ability and experience in conducting interdis-
ciplinary research and training. One activity of a particularly inter-
disciplinary nature would be special internships or short-term train-
ing programs for specialists in such fields as economics and law. The
legal implications of alternative technologies in terms of zoning and
property rights and relative costs could very well determine the direc-
tion that research and development takes. Apparently, there is a dearth
of persons in these non-technical fields who are qualified to advise on
the legal and economic trade-offs.
It is suggested that these programs will require large-scale experi-
mental facilities and that cooperative programs with industry and
with government laboratories would be economical and productive.
Equally important, in the Committee's view, is flexibility. One
specific recommendation that has been brought to the Committee's
attention is that funds for the training segment of the program should
be about 20% of the total amount of funds appropriated. Although
large grants cannot be transferred to institutions to dispose of entirely
as they wish, the institutions should not be overly restricted in deter-
mining how best to design training activities.
26
These educational programs will be funded by the Project, or its
successor agency, through transfer of funds to the National Science
Foundation. The NSF is currently supporting a number of such edu-
cational programs, and it is expected that this transfer would allow
significant augmentation of them. The Committee also expects NSF
to initiate retraining programs for scientists who could transfer their
expertise into geothermal energy development from other activities.
Program Definition
An integral part of establishing a national effort in geothermal
energy technology is proper definition of the program. The Commit-
tee has, therefore, included in the legislation a requirement that the
Administrator of NASA conduct a thorough and comprehensive pro-
gram definition during fiscal year 1975. This requirement was in-
serted in lieu of a section requesting NASA to indicate how it could
employ space technology for geothermal energy development. What
the Committee has done is to ask a neutral agency with a fine reputa-
tion in using a systems approach to the management of technology to
look at all aspects of geothermal energy research, development, dem-
onstration and resource assessment-including the economic require-
ments, the logistic needs, and the manpower which would be utilized.
Interim reports on this program definition are to be prepared for
the President, each House of the Congress, and the Chairman of the
Project (or the head of any permanent Federal organization or agency
having jurisdiction over energy R&D, should such an organization or
agency be enacted into law) by October 31, 1974, and January 31, 1975.
This schedule will permit the information which such reports contain
to be incorporated into the fiscal year 1976 budget review, authoriza-
tion and appropriation cycle.
Definition of Byproduct
The Committee has clarified the definition of the term byproduct for
the purposes of research, development and demonstration activities
performed under the bill. The Geothermal Steam Act of 1970, which
is the landmark legislation in this area, defines byproducts of geo-
thermal steam and associated resources in such a way that natural gas,
helium, and oil are excluded. Such a definition is not compatible with
the objectives of the bill, which seeks to utilize non-traditional geo-
thermal resources, as well as geothermal heat, in a systems approach
to energy and resource extraction. This is particularly important since
the geopressured fields contain large quantities of methane.
The Committee emphasizes that the revised definition is solely for
the purpose of activities carried out under this legislation, namely,
resource assessment, research, development and demonstration. In no
way does this legislation alter or impinge upon present leasing laws,
regulations or policies. It is anticipated, however, that recommenda-
tions for changes may result from studies and research carried out
pursuant to this legislation and funded by the Project, its successor
agency, or other entities of the Federal Government.
Title II: Loan Guaranties
The loan guaranty program is to be used not as the only financial
incentive, but as one which may be utilized as needed to insure a
broader base of participation by the private sector.
27
According to testimony received by the Committee, NSF is currently
conducting reviews of the legal, environmental, and regulatory con-
straints on geothermal development. It is hoped that the results of
these investigations will provide the basis for future legislation that
would remove other roadblocks to full geothermal energy development
and utilization.
It is the view of this Committee, that, by providing loan guaranties
and thereby assuming some of the associated risk, the Government
will, in the long run, reduce the Federal cost of a comprehensive, effec-
tive geothermal development program.
In addition, the Committee feels that one emphasis of the loan guar-
anty program should be to give small businesses direct encouragement
to participate in geothermal resource assessment, research, develop-
ment, demonstration and commercial exploitation.
It is expected that emphasis will be placed on loan guaranty requests
for activities in each of the four stated categories:
(1) the determination and evaluation of the resource base;
(2) research and development with respect to extraction and
utilization technologies;
(3) acquiring rights in geothermal resources;
(4) development, construction, and operation of facilities for
the demonstration or commercial production of energy from geo-
thermal resources.
SECTION-BY-SECTION SUMMARY
Following is a summary of the provisions of H.R. 14920 as reported
by the Committee on Science and Astronautics, May 29, 1974.
SHORT TITLE
The first section of this legislation provides that it may be cited as
the "Geothermal Energy Research, Development, and Demonstra-
tion Act of 1974".
FINDINGS
Section 2 provides that the Congress finds that (1) there is a na-
tional energy shortage; (2) present organizational structures and
funding levels are not adequate to meet energy needs; (3) although
electrical energy is a convenient form of energy, the sources for elec-
tric power generation are in short supply; (4) national energy prob-
lems can be solved only if there is a commitment to develop geothermal
resources; (5) undeveloped geothermal resources are known to have a
large energy content; (6) some geothermal resources contain energy
in forms other than heat; (7) some geothermal resources contain valu-
able byproducts; (8) technologies for the development of most geo-
thermal resources presently are not available, but such technologies are
potentially economical and desirable; (9) much of the known geo-
thermal resources exist on public lands; (10) Federal financial assist-
ance is necessary for the development of geothermal resources; and
(11) there is a Federal responsibility to encourage private industry in
the development of geothermal resources.
DEFINITIONS
Section 3 defines the term "byproduct" as any mineral found in
association with geothermal steam and associated geothermal re-
sources which has a value of less than 75 percent of the value of such
geothermal steam and associated geothermal resources, or which is not
of sufficient value to warrant extraction and production by itself.
Such section provides that the term "geothermal steam and associ-
ated geothermal resources" has the meaning given it by section 2 (c) of
the Geothermal Steam Act of 1970 (30 U.S.C. 1001 (c) except that
any amendment of such subsection occurring after the date of the en-
actment of this legislation shall not affect the meaning of such term
for purposes of this legislation.
Such section provides that the term "known geothermal resources
area" has the meaning given it by section 2 (e) of such Act (30 U.S.C.
1001 (e) except that any amendment of such subsection occurring
after the date of the enactment of this legislation shall not affect the
meaning of such term for purposes of this legislation.
Such section defines the term "fund" as the Geothermal Resources
Development Fund.
(28)
29
Such section defines the term "Project" as the Geothermal Energy
Coordination and Management Project.
GEOTHERMAL ENERGY COORDINATION AND MANAGEMENT PROJECT
ESTABLISHMENT
Establishment; membership
Subsection (a) of section 101 provides for the establishment of
the Geothermal Energy Coordination and Management Project (re-
ferred to in this explanation as the "Project"). Subsection (b) of
section 101 provides that the Project shall have the following mem-
bers: the Administrator of the Federal Energy Administration; an
Assistant Director of the National Science Foundation (referred to
in this summary as "NSF") ; an Assistant Secretary of the Depart-
ment of the Interior; an Associate Administrator of the National
Aeronautics and Space Administration (referred to in this summary
as "NASA") ; and the General Manager of the Atomic Energy
Commission. Such subsection also provides that the Administrator
of the Federal Energy Administration shall act as Chairman of the
Project.
Project responsibilities
Subsection (c) of section 101 provides that the Project shall be
responsible for managing and coordinating national geothermal energy
research, development, and demonstration programs, including deter-
mination and evaluation of the resource base, research and develop-
ment with respect to various technologies, demonstration of appro-
priate technologies, and administration of the loan guaranty program
established by this legislation.
Cooperation with other Federal agencies
Subsection (d) of section 101 provides that the Project shall co-
operate with the Department of the Interior, NASA, the Atomic
Energy Commission, and NSF, in carrying out its responsibilities.
Such subsection also provides for the responsibilities of each such
agency.
Program and project authority
Subsection (e) of section 101 provides that the Project shall have
overall authority with respect to programs and projects initiated
under this legislation. The agencies involved, however, shall be respon-
sible for the operation and administration of each such program or
project.
AMENDMENT TO NATIONAL SCIENCE FOUNDATION ACT OF 1950
Subsection (a) of section 102 amends section 3 of the National
Science Foundation Act of 1950 (42 U.S.C. 1862) by inserting a new
subsection (e) which provides that the Director of NSF shall sup-
port geothermal energy research, development, and demonstration
programs in accordance with section 102(b) of this legislation.
Subsection (b) of section 102 provides that the Director of NSF
shall support and fund geothermal energy research, development, and
30
demonstration programs initiated and approved by the Project. Such
subsection further provides that its provisions in no way restrict the
authority of the Director to support and fund basic research, but that
such provisions do not authorize the Director to support and fund
any demonstration project which is not included in any program ini-
tiated and approved by the Project. The Director may, however, sup-
port and fund such a project if any other provision of law provides
him with authority to do SO.
AMENDMENT TO NATIONAL AERONAUTICS AND SPACE ACT OF 1958
NASA program requirements
Subsection (a) of section 103 amends section 203 of the National
Aeronautics and Space Act of 1958 (42 U.S.C. 2473) by inserting a new
subsection (b) which provides that NASA shall carry out geothermal
energy technology research and development in accordance with sec-
tion 103 (b) of this legislation.
Subsection (b) of section 103 provides that NASA may undertake
and carry out programs assigned to it by the Project.
Geothermal energy program definition
Subsection (c) of section 103 requires the Administrator of NASA
to prepare, in consultation with various public and private agencies
and organizations, a comprehensive program definition with respect
to the development of geothermal energy resources.
RESOURCE EXPLORATION AND ASSESSMENT PROGRAM
Goals of program
Subsection (a) of section 104 requires the Project to make a regional
and national appraisal of geothermal resources. The goals of the ap-
praisal program shall include (1) improving geophysical and other
techniques necessary to locate and evaluate geothermal resources; (2)
developing better methods to predict the power potential of geothermal
reservoirs: (3) determining and assessing the nature and power po-
tential of high temperature geothermal convection systems; and (4)
surveying and assessing regional and national geothermal resources.
Other geothermal energy development requirements
Subsection (b) of section 104 requires the Project, acting through
the Geological Survey and other appropriate agencies, to (1) inven-
tory geothermal resources on Federal land and, in certain instances,
on non-Federal land; (2) conduct regional surveys leading to a na-
tional inventory of geothermal resources; (3) make available maps
and reports developed from such surveys to encourage commercial
development of geothermal resources; (4) recommend legislation with
respect to Federal leasing policies for geothermal resources; and (5)
participate with various public and private agencies and organizations
in developing technologies for the discovery and evaluation of geo-
thermal resources.
RESEARCH AND DEVELOPMENT
Section 105 requires the Project to initiate a research and develop-
ment program to resolve problems with respect to commercial utiliza-
31
tion of geothermal resources. The goals of such program shall include
(1) development of effective drilling methods; (2) development of
reliable predictive and control methods; (3) exploitation of rock frac-
turing techniques; (4) improvement of extraction equipment and tech-
nology; (5) development of geothermal energy conversion methods;
(6) development of methods to control emissions and wastes; (7) de-
velopment of waste disposal control technologies; (8) improvement of
the capability to predict the environmental impact of developing geo-
thermal energy resources; (9) identification of social, legal, and eco-
nomic problems with respect to geothermal resources development;
and (10) provision for adequate supply of scientists to perform re-
quired geothermal research and development activities.
Such section also requires the Project to implement a coordinated
research and development program to demonstrate extraction and
utilization technologies and to accomplish such goals.
DEMONSTRATION
Geothermal demonstration plants
Subsection (a) of section 106 provides that the Project shall ini-
tiate a program to design and construct geothermal demonstration
plants. The goals of such program include (1) developing economical
geothermal energy production systems and components; (2) designing
and constructing plants to produce electrical power; (3) operating
such plants for a period of time; (4) providing experimental test
beds; (5) involving engineers and technicians from private industry
in developing methods of geothermal energy exploitation; and (6)
providing for an adequate supply of trained geothermal engineers and
technicians.
Separate demonstration projects
Subsection (b) of section 106 permits the Project to establish a
separate demonstration project for each geothermal resource base.
The Project is given authority to obtain, through appropriate Federal
agencies, plants and other real property used in any demonstration
project.
Any agency designated by the Project to conduct a demonstration
project shall provide for the disposal of electric energy and other geo-
thermal resource byproducts of such project. Such disposition, to the
maximum extent possible, shall be achieved through the sale of such
byproducts.
Such subsection also provides that, at the conclusion of the program
required under subsection (a), agencies designated by the Project to
conduct demonstration projects shall, to the extent possible or appro-
priate, dispose of such projects or dispose of all electric energy and
other geothermal resource byproducts produced by such projects.
Such subsection also provides that preference shall be given to
known geothermal resource areas in making site selections for demon-
stration plants.
SCIENTIFIC AND TECHNICAL EDUCATION
Section 107 provides that it is the policy of the Congress to encourage
programs to provide trained personnel to carry out geothermal re-
32
search, development, and demonstration activities. NSF is authorized
to support educational programs designed to effectuate such policy.
NSF is required to coordinate its activities with various public and
private agencies and organizations, and is authorized to encourage
international participation and cooperation with respect to such edu-
cational programs.
LOAN GUARANTIES
ESTABLISHMENT OF LOAN GUARANTY PROGRAM
Policy of the Congress
Subsection (a) of section 201 provides that it is the policy of the
Congress to authorize the Chairman of the Project to designate an
appropriate Federal agency to guarantee loans to encourage commer-
cial development of geothermal resources.
Loan guaranty purposes
Subsection (b) of section 201 provides that the head of the desig-
nated Federal agency may guaranty any loan made for purposes of
(1) determining and evaluating the resource base; (2) extraction and
utilization research and development; (3) acquiring rights to geo-
thermal resources; (4) geothermal resources demonstration facilities.
Loan guaranty terms and requirements
Subsection (c) of section 201 provides that loan guaranties may not
exceed 75 percent of the aggregate cost of the project involved. Sub-
section (d) of section 201 authorizes the head of the designated agency
to establish terms and conditions for loan guaranties, and further
provides that a guaranty may be made only if (1) the rate of interest
for the loan involved does not exceed prevailing interest rates for
conventional construction loans; (2) the loan must be fully repaid
within 30 years: (3) the amount of the loan, together with amounts
otherwise available, is sufficient to carry out the project involved; and
(4) there is reasonable assurance of repayment of the loan by the
qualified borrower.
Subsection (e) of section 201 prohibits the head of the designated
agency from guarantying any loan if such loan is in excess of
$25,000,000 for any project, or from guarantying any combination of
loans to a single qualified borrower in excess of $50,000,000.
Definition of qualified borrower
Subsection (f) of section 201 defines the term "qualified borrower"
as any public or private agency or organization which, as determined
by the head of the designated agency, has an interest in geothermal
resources and is capable of carrying out research or development
activities with respect to energy production.
PAYMENT OF INTEREST
Conditions for payment
Subsection (a) of section 202 provides that the head of the desig-
nated agency may pay to the lender any interest charges due on the
unpaid balance of a guarantied loan if the head of the designated
agency finds that (1) the borrower is unable to pay such interest
charges and it is in the public interest to permit the borrower to pur-
33
sue the project involved; and (2) the amount of such interest charges
does not exceed an amount equal to the average prime interest rate for
the preceding fiscal year, plus one-half of 1 percent.
Default by qualified borrower
Subsection (b) of section 202 provides that if a qualified borrower
defaults on a guarantied loan, the head of the designated agency may
make payment in accordance with the terms of the guaranty. The
Attorney General of the United States is required to take appropriate
action to recover the amount of such payments from assets of the quali-
fied borrower which are associated with the project involved.
PERIOD OF GUARANTIES AND INTEREST ASSISTANCE
Section 203 provides that no loan guaranties or interest assistance
contracts shall be made after the 10-year period following the date of
the enactment of this legislation.
GEOTHERMAL RESOURCES DEVELOPMENT FUND
Establishment of fund
Subsection (a) of section 204 establishes in the Treasury of the
United States a Geothermal Resources Development Fund (referred
to in this explanation as the "fund"). The fund shall be available to
the head of the designated agency for carrying out the loan guaranty
and interest assistance program authorized by this legislation.
Such subsection also provides that moneys in the fund not needed
for current operations shall be invested in bonds or other obligations
of the United States.
Payments into fund
Subsection (b) of section 204 provides that payments into the fund
shall be made from amounts appropriated by the Congress pursuant to
section 304 (c) and from amounts returned to the United States pur-
suant to section 202 (b).
Such subsection also provides that amounts in the fund shall remain
available until expended, except that amounts available in the fund
after the 10-year period following the date of the enactment of this
legislation shall be paid into the general fund of the Treasury.
Reports
Subsection (c) of section 204 requires the head of the designated
agency to submit annual reports to the Congress with respect to the
operation of the fund.
GENERAL PROVISIONS
PROTECTION OF ENVIRONMENT
Section 301 provides that activities under this legislation shall be
designed to protect the environment and to assure the safety of persons
and property. Such section also provides that the program developed
by the Project under title I of this legislation shall include special
research and development to assure environmental protection and
the safety of persons and property.
34
REPORTING REQUIREMENTS
Biannual reports
Subsection (a) of section 302 requires the Chairman of the Project
to submit biannual reports to the President and to the Congress with
respect to the activities of the Project.
Demonstration project reports
Subsection (b) of section 302 requires the Chairman of the Project
to submit reports to the President and to the Congress with respect
to each demonstration project conducted under section 106.
TRANSFER OF FUNCTIONS
Section 303 provides that, upon the establishment of a permanent
Federal organization or agency having jurisdiction over energy
research and development, the functions of the Project shall be trans-
ferred to and vested in such organization or agency. Such section also
provides that, after such transfer and vesting, members of the Project
shall provide advice and counsel to the head of such organization or
agency.
AUTHORIZATION OF APPROPRIATIONS
Section 304 provides that, for fiscal years 1976, 1977, 1978, 1979,
and 1980, only such sums may be appropriated to carry out this leg-
islation as the Congress may authorize by law after the date of the
enactment of this legislation.
Such section also authorizes to be appropriated $2,500,000 for fiscal
year 1975 to the Administrator of NASA to prepare program defini-
tions under section 103 (c).
Such section also authorizes to be appropriated $50,000,000 annually
to carry out the loan guaranty program established by this legislation.
COST AND BUDGET DATA
In accordance with the requirements of section 252 (b) of the Legis-
lative Reorganization Act of 1970, the Committee estimates the costs
of the program provided for in the bill are:
(1) $2.5 million for fiscal year 1975 to the Administrator of NASA
to conduct the comprehensive program definition.
(2) To be placed in a special fund to insure loans, $50 million
annually.
(3) Funds required for implementing the bill for fiscal years 1976-
79 have not been precisely determined. Studies of comprehensive
5-year geothermal research, development, and demonstration pro-
grams by Federal agencies have resulted in widely varying cost
estimates. A more accurate estimate should result from the compre-
hensive program definition.
COMMITTEE RECOMMENDATIONS
A quorum being present, the Committee, by voice vote, unanimously
approved the bill.
DEPARTMENT RECOMMENDATIONS
Formal written reports requested on H.R. 14172 from the National
Aeronautics and Space Administration, the National Science Founda-
tion, the Department of the Interior, the Atomic Energy Commission,
and the Federal Power Commission have not been received. However,
testimony from all these organizations on H.R. 11212 was received and
is part of the hearing record. Furthermore, written statements from
NSF, AEC, and NASA are included in the hearing record of
H.R. 14172.
(35)
CHANGES IN EXISTING LAW MADE BY THE BILL,
AS REPORTED
In compliance with clause 3 of rule XIII of the Rules of the House
of Representatives, changes in existing law made by the bill, as re-
ported, are shown as follows (existing law proposed to be omitted is
enclosed in black brackets, new matter is printed in italic, existing law
in which no change is proposed is shown in roman) :
SECTION 3 OF THE NATIONAL SCIENCE FOUNDATION ACT OF 1950
FUNCTIONS OF THE FOUNDATION
SEC. 3. (a) The Foundation is authorized and directed-
(1) to initiate and support basic scientific research and pro-
grams to strengthen scientific research potential in the mathe-
matical, physical, medical, biological, engineering, social, and
other sciences, by making contracts or other arrangements (includ-
ing grants, loans, and other forms of assistance) to support such
scientific activities and to appraise the impact of research upon
industrial development and upon the general welfare;
(2) to award, as provided in section 10, scholarships and grad-
uate fellowships in the mathematical, physical, medical, bio-
logical, engineering, social, and other sciences;
(3) to foster the interchange of scientific information among
scientists in the United States and foreign countries;
(4) to foster and support the development and use of computer
and other scientific methods and technologies, primarily for re-
search and education in the sciences;
(5) to evaluate the status and needs of the various sciences
as evidenced by programs, projects, and studies undertaken by
agencies of the Federal Government, by individuals, and by
public and private research groups, employing by grant or con-
tract such consulting services as it may deem necessary for the
purpose of such evaluations; and to take into consideration the
results of such evaluations in correlating the research and educa-
tional programs undertaken or supported by the Foundation with
programs, projects, and studies undertaken by agencies of the
Federal Government, by individuals, and by public and private
research groups;
(6) to maintain a current register of scientific and technical
personnel, and in other ways to provide a central clearinghouse
for the collection, interpretation, and analysis of data on the avail-
ability of, and the current and projected need for, scientific and
technical resources in the United States, and to provide a source
of information for policy formulation by other agencies of the
Federal Government; and
(36)
37
(7) to initiate and maintain a program for the determination
of the total amount of money for scientific research, including
money allocated for the construction of the facilities wherein
such research is conducted, received by each educational institu-
tion and appropriate nonprofit organization in the United States,
by grant, contract, or other arrangement from agencies of the
Federal Government, and to report annually thereon to the
President and the Congress.
(b) The Foundation is authorized to initiate and support specific
scientific activities in connection with matters relating to international
cooperation or national security by making contracts or other arrange-
ments (including grants, loans, and other forms of assistance) for
the conduct of such scientific activities. Such activities when initiated
or supported pursuant to requests made by the Secretary of State or
the Secretary of Defense shall be financed solely from funds trans-
ferred to the Foundation by the requesting Secretary as provided in
section 15 (g), and any such activities shall be unclassified and shall
be identified by the Foundation as being undertaken at the request
of the appropriate Secretary.
(c) In addition to the authority contained in subsections (a) and
(b), the Foundation is authorized to initiate and support scientific
research, including applied research, at academic and other nonprofit
institutions. When SO directed by the President, the Foundation is
further authorized to support, through other appropriate organiza-
tions, applied scientific research relevant to national problems in-
volving the public interest. In exercising the authority contained in this
subsection, the Foundation may employ by grant or contract such
consulting services as it deems necessary, and shall coordinate and
correlate its activities with respect to any such problem with other
agencies of the Federal Government undertaking similar programs
in that field.
(d) The Board and the Director shall recommend and encourage
the pursuit of national policies for the promotion of basic research
and education in the sciences.
(e) The Director shall provide support for programs relating to
geothermal energy research, development, and demonstration. as pro-
vided in section 102(b) of the Geothermal Energy Research. Devel-
opment. and Demonstration Act of 1974.
[(e)](f) In exercising the authority and discharging the functions
referred to in the foregoing subsections, it shall be one of the objectives
of the Foundation to strengthen research and education in the sciences
including independent research by individuals, throughout the United
States, and to avoid undue concentration of such research and educa-
tion.
[(f)](g) The Foundation shall render an annual report to the
President for submission on or before the 15th dav of January of each
year to the Congress, summarizing the activities of the Foundation and
making such recommendations as it may deem appropriate. Such
report shall include information as to the acquisition and disposition
by the Foundation of any patents and patent rights.
38
SECTION 203 OF THE NATIONAL AERONAUTICS AND SPACE ACT OF 1958
FUNCTIONS OF THE ADMINISTRATION
SEC. 203. (a)
*
*
(b) The Administration shall carry out research, development, and
related activities in geothermal energy technology, as provided in sec-
tion 103(b) of the Geothermal Energy Research, Development, and
Demonstration Act of 1974.
[(b)](c) In the performance of its functions the Administration
is authorized-
(1) to make, promulgate, issue, rescind, and amend rules and
regulations governing the manner of its operations and the exer-
cise of the powers vested in it by law;
(2) to appoint and fix the compensation of such officers and
employees as may be necessary to carry out such functions. Such
officers and employees shall be appointed in accordance with the
civil-service laws and their compensation fixed in accordance
with the Classification Act of 1949,1 except that (A) to the extent
the Administrator deems such action necessary to the discharge
of his responsibilities, he may appoint not more than four hundred
and twenty-five of the scientific, engineering, and administrative
personnel of the Administration without regard to such laws, and
may fix the compensation of such personnel not in excess of the
highest rate of grade 18 of the General Schedule of the Classifica-
tion Act of 1949, as amended, and 2 (B) to the extent the Admin-
istrator deems such action necessary to recruit specially qualified
scientific and engineering talent, he may establish the entrance
grade for scientific and engineering personnel without previous
service in the Federal Government at a level up to two grades
higher than the grade provided for such personnel under the
General Schedule established by the Classification Act of 1949,2
and fix their compensation accordingly;
(3) to acquire (by purchase, lease, condemnation, or otherwise),
construct, improve, repair, operate, and maintain laboratories, re-
search and testing sites and facilities, aeronautical and space
vehicles, quarters and related accommodations for employees and
dependents of employees of the Administration, and such other
real and personal property (including patents), or any interest
therein, as the Administration deems necessary within and out-
side the continental United States; to acquire by lease or other-
wise, through the Administrator of General Services, buildings or
parts of buildings in the District of Columbia for the use of the
Administration for a period not to exceed ten years without re-
gard to the Act of March 3, 1877 (40 U.S.C. 34) to lease to others
such real and personal property; to sell and otherwise dispose of
real and personal property (including patents and rights there-
1 The Classification Act of 1949 was repealed and the reference is now to chapter 51 and
subchapter III of chapter 53 of title 5, U.S.C.
2 The Classification Act of 1949 was repealed and the General Schedule is in section
5332 (a) of title 5, U.S.C.
39
under) in accordance with the provisions of the Federal Property
and Administrative Services Act of 1949, as amended (40 U.S.C.
471 et seq.) ; and to provide by contract or otherwise for cafe-
terias and other necessary facilities for the welfare of employees
of the Administration at its installations and purchase and main-
tain equipment therefor;
(4) to accept unconditional gifts or donations of services,
money, or property, real, personal, or mixed, tangible or
intangible;
(5) without regard to section 3648 of the Revised Statutes, as
amended (31 U.S.C. 529), to enter into and perform such con-
tracts, leases, cooperative agreements, or other transactions as may
be necessary in the conduct of its work and on such terms as it
may deem appropriate, with any agency or instrumentality of
the United States, or with any State, Territory, or possession, or
with any political subdivision thereof, or with any person, firm,
association, corporation, or educational institution. To the maxi-
mum extent practicable and consistent with the accomplishment of
the purpose of this Act, such contracts, leases, agreements, and
other transactions shall be allocated by the Administrator in a
manner which will enable small-business concerns to participate
equitably and proportionately in the conduct of the work of the
Administration;
(6) to use, with their consent, the services, equipment, personnel,
and facilities of Federal and other agencies with or without reim-
bursement, and on a similar basis to cooperate with other public
and private agencies and instrumentalities in the use of services,
equipment, and facilities. Each department and agency of the
Federal Government shall cooperate fully with the Administra-
tion in making its services, equipment, personnel, and facilities
available to the Administration, and any such department or
agency is authorized, notwithstanding any other provision of law,
to transfer to or to receive from the Administration, without reim-
bursement, aeronautical and space vehicles, and supplies and
equipment other than administrative supplies or equipment;
(7) to appoint such advisory committees as may be appropriate
for purposes of consultation and advice to the Administration in
the performance of its functions;
(8) to establish within the Administration such offices and pro-
cedures as may be appropriate to provide for the greatest possible
coordination of its activities under this Act with related scientific
and other activities being carried on by other public and private
agencies and organizations:
(9) to obtain services as authorized by section 15 of the Act of
August 2, 1946 (5 U.S.C. 55a), at rates not to exceed $100 per
diem for individuals;
(10) when determined by the Administrator to be necessary,
and subject to such security investigations as he may determine
to be appropriate, to employ aliens without regard to statutory
provisions prohibiting payment of compensation to aliens;
(11) (Repealed by P.L. 88-448, Aug. 19, 1964)
40
(12) with the approval of the President, to enter into coopera-
tive agreements under which members of the Army, Navy, Air
Force, and Marine Corps may be detailed by the appropriate
Secretary for services in the performance of functions under this
Act to the same extent as that to which they might be lawfully
assigned in the Department of Defense;
(13) (A) to consider, ascertain, adjust, determine, settle, and
pay, on behalf of the United States, in full satisfaction thereof,
any claim for $5,000 or less against the United States for bodily
injury, death, or damage to or loss of real or personal property
resulting from the conduct of the Administration's functions as
specified in subsection (a) of this section, where such claim is
presented to the Administration in writing within two years after
the accident or incident out of which the claim arises; and
(B) if the Administration considers that a claim in excess of
$5,000 is meritorious and would otherwise be covered by this
paragraph, to report the facts and circumstances thereof to the
Congress for its consideration; and
(14) (Repealed by P.L. 91-646, Jan. 2, 1971.)
ADDITIONAL VIEWS OF MR. HECHLER OF
WEST VIRGINIA
I strongly support legislation for research, development, and dem-
onstration in geothermal energy. At a time when our Nation is
gravely concerned about energy sources for the short and long term,
this legislation promises to get us off to a fast start in developing geo-
thermal energy, a key environmentally sound energy source. How-
ever, I do have some serious questions about certain sections of
H.R. 14920.
During the full committee markup, I raised a number of questions
concerning the adequacy of protection for both consumers and tax-
payers who are investing in geothermal development. Since the
majority of geothermal resources are located on Federal lands, I feel
strongly that the public interest in geothermal development must be
protected, not necessarily by Federal ownership and development
but by insuring that a giant giveaway does not develop. I am con-
cerned that section 106 (b) (4) would require that at the conclusion
of the demonstration program, "the agencies designated by the Proj-
ect to conduct demonstration projects under this section shall, by
sale, lease, or otherwise, dispose of all projects which they have
undertaken pursuant to this section." This in effect means that the
Federal Government will develop the geothermal powerplant, do
all the spade work, and then turn it over for private exploitation. I
think this may be questionable given the fact that one of the major
advantages of geothermal plants over conventional or nuclear plants
is that it is economical to begin on a small scale and add generating
units as the reservoir is developed or as demand increases. In short,
disposing of these projects is not the same as getting rid of surplus
Army vehicles-these facilities may be of considerable value to the
public as well as to any private owners. Congress must consider
whether these facilities should be expanded and developed as a source
of power which will clearly benefit the public or be turned over to
private industry.
Title II of the bill sets up a system of loan guaranties and a Federal
role in covering interest payments on loans to private industries. The
rationale here is to encourage small businesses to move into the geo-
thermal energy area. This is certainly a laudable goal. However,
title II contains no requirements limiting the size of the corporation or
business utilizing the loan guaranty program nor does it require
any demonstration of need on the part of the borrower. Given the
fact that the huge major energy companies have completely domi-
nated the leasing of geothermal resources under the Geothermal
Steam Act of 1970, I would question whether this title would be any
more than just another break for the conglomerates. The limitations
on the amount any one borrower can borrow are not sufficient to
prevent the participation of all of the big energy companies.
KEN HECHLER.
(41)
o
Calendar No. 820
93D CONGRESS
SENATE
REPORT
2d Session
No. 93-849
GEOTHERMAL ENERGY EXPLORATION, RESEARCH
AND DEVELOPMENT
MAY 15, 1974.-Ordered to be printed
Mr. BIBLE, from the Committee on Interior and Insular Affairs,
submitted the following
REPORT
[To accompany S. 2465]
The Committee on Interior and Insular Affairs, to which was re-
ferred the bill (S. 2465) to authorize the Secretary of the Interior to
guarantee loans for the financing of commercial ventures in geo-
thermal energy to coordinate Federal activities in geothermal energy
exploration, research, and development; and for other purposes, hav-
ing considered the same, reports favorably thereon with amendments
and recommends that the bill as amended do pass.
The amendments are as follows:
1. On Page 3, strike subsection 101 (d) and insert the following:
(d) Loan guaranties under this title shall be on such
terms and conditions as the Secretary determines: Provided,
however, That guaranty shall be made under this title only
if-
(1) the loan involved is at a rate which does not ex-
ceed the prevailing interest rates for conventional con-
struction loans;
(2) the terms of such loan require full repayment
within thirty years after the date thereof;
(3) in the judgment of the Secretary, the amount of
the loan (when combined with amounts available to the
qualified borrower from other sources) will be sufficient
to carry out the project; and
(4) in the judgment of the Secretary, there is rea-
sonable assurance of the repayment by the qualified bor-
rower of the guaranteed indebtedness.
99-010
2
2. On Page 4, lines 16 and 17, delete the phrase: "payments, with
interest, from the defaulting borrower." and insert instead the phrase:
"payments from such assets of the defaulting borrower as are asso-
ciated with the project."
3. On page 5, in line 21, after the word "Congress" insert the phrase,
"by the Secretary."
4. On page 6, line 16, delete the word "exploration" and insert the
phrase "resource inventory."
On page 6, line 24, delete the word "exploration" and insert the word
"inventorying."
On page 7, line 9, delete the word "exploration" and insert the word
"surveys."
On page 8, line 19, delete the word "exploration" and insert the
word "inventorying."
5. On page 7, line 24, delete the word "resources." and insert instead
the following language:
resources, and conduct research into the principles controlling
the location, occurrence, size, temperature, energy content,
producibility, and economic lifetimes of geothermal reser-
voirs.
6. On page 8, line 1, delete the phrase "exploration plan" and insert
instead the phrase "inventory authorized by subsection (a) and
the applied research authorized by subsection (e)'
7. On page 8, line 24, delete the phrase "exploration of" and insert
instead the phrase "inventory of and applied research on"
8. On page 8, line 25, delete the word "202 (a) and insert instead the
word "202."
9. On page 9, line 21 delete the phrase "exploration and develop-
ment."
10. On page 9, line 22, delete the phrase "discovery and."
11. On page 10, line 21, delete the word "energy" and insert the
phrase "energy, water supplies, or minerals."
12. On page 11, lines 8 and 9, delete the phrase "contribute not less
than 25 per centum of" and insert instead the phrase "make contribu-
tions toward."
13. On page 11, line 22, delete the word "$5,000,000" and insert in-
stead the word "$10,000,000."
14. On page 12, line 25, before the word "provisions" insert the
phrase "loan guarantee."
15. On page 13, lines 9 and 10, delete the phrase "NASA to carry out
the requirements of section section 205." and insert instead the word
"NASA."
I. PURPOSE OF THE MEASURE
The measure, S. 2465, has several purposes which will contribute to
improvement of the Federal programs for exploration, research, and
development of geothermal energy resources:
Title I-would establish a Federal guarantee program for loans to
finance private geothermal development.
Title II-would accelerate and coodinate the Federal exploration
program for geothermal resources and expand the Federal program
of research, development, and demonstration of geothermal energy
technologies.
3
II. BACKGROUND
The Senate Committee on Interior and Insular Affairs has been
concerned with geothermal resources for many years. Under the lead-
ership of Senator Bible, the committee developed legislation which
culminated in the Geothermal Steam Act of 1970 (30 U.S.C. 1001-
1025).
In June of 1972, as a part of the committee's study of National Fuels
and Energy Policy being conducted pursuant to Senate Resolution 45,
92nd Congress, hearings were held on geothermal energy resources and
research which provided an overview of the state of technology and
the potential of the resource as a new energy source.
On June 13, 1973, the Subcommittee on Water and Power Resources
began a detailed investigation of the potential for the production of
power from geothermal resources with a hearing in Washington, D.C.
At that hearing the following Federal agencies, which have programs
related to geothermal energy, were requested to present testimony in
response to specific questions posed by the subcommittee:
(1) The Department of the Interior.
(2) The Atomic Energy Commission.
(3) The National Science Foundation.
(4) The National Aeronautics and Space Administration
(NASA).
(5) The Department of State.
Subsequent to that hearing, the subcommittee conducted field hear-
ings and inspections of existing and potential geothermal develop-
ments. On August 8, an inspection was made of the Geysers Geother-
mal Power Development of the Pacific Gas & Electric Co. in California
which is the only operating geothermal electric facility in the United
States.
On August 10, an inspection was made by helicopter of geothermal
areas in southern Idaho, which are being considered for early develop-
ment for power production. On that date, also, the subcommittee held
a public hearing in Idaho Falls, Idaho, to take testimony from wit-
nesses including public officials, authorities in geothermal energy, rep-
resentatives of industrial concerns involved in energy and various
citizens groups and individuals.
On August 11, a similar subcommittee hearing was held in Klamath
Falls, Oreg. The hearing at Klamath Falls was conducted at the
Oregon Technical Institute, in a modern academic building complex
which is entirely heated from géothermal wells.
The results of the subcommittee's investigations have been com-
piled in a report to the Senate which will be available shortly.
S. 2465, a bill introduced on September 24, 1973, by Senators Bible,
Fannin, Bartlett, Buckley, Church, Hansen, Haskell, Hatfield, Jack-
son, Johnston, McClure, and Metcalf, is to a considerable extent based
upon the evidence of the investigation concerning the need for defi-
nition of the Federal role in geothermal energy.
The Subcommittee on Water and Power Resources held a hearing
on S. 2465 on November 7, 1973. The text of S. 2465, with minor
amendments, was adopted as a new title II of S. 1283 on November 27,
1973.
4
S. 1283, the "National Energy Research and Development Policy
Act of 1973" was passed by the Senate with a unanimous vote on
December 7, 1973 including the substance of S. 2465 as a Title II.
Action in the House of Representatives on S. 1283 raises some ques-
tion as to whether the Geothermal Energy Act can be enacted as Title
II of that measure. To insure full consideration of S. 2465 and to
facilitate action by the House, the Committee on Interior and Insular
Affairs again considered S. 2465 and ordered it reported separately
on May 2, 1974.
III. CO-SPONSORS OF S. 2465
The following is a list of co-sponsors of S. 2465
Mr. Bible
Mr. McClure
Mr. Fannin
Mr. Metcalf
Mr. Bartlett
Mr. Goldwater
Mr. Buckley
Mr. Domenici
Mr. Church
Mr. Abourezk
Mr. Hansen
Mr. Gurney
Mr. Haskell
Mr. Nelson
Mr. Hatfield
Mr. Stevens
Mr. Jackson
Mr. Tunney
Mr. Johnston
IV. NEED FOR THE MEASURE
The Subcommittee on Water and Power Resources of the Commit-
tee on Interior and Insular Affairs conducted a detailed study in 1963
of the potential for energy production from geothermal resource. The
Subcommittee subsequently adopted a report including findings and
recommendations as follows:
I. FINDINGS AND RECOMMENDATIONS
A. FINDINGS
1. Electric power production from geothermal resources
has been shown to be technically and economically feasible in
certain locations and is presently providing 400 megawatts of
electricity in the United States.
2. The geothermal resources of the United States hold a
potential for the production of substantial amounts of energy
in the form of heat and electric power. They hold special
promise for making a significant contribution to regional
power supplies.
3. Potential geothermal technologies offer the possibility of
providing environmentally attractive energy production
techniques.
4. The available information about the resource is not ade-
quate to form reliable estimates on the nature and extent of
geothermal resources or to support reliable estimates of the
probable rate of geothermal energy development. There is a
need for increased exploration and classification of geothermal
resources.
5
5. There is a wide margin of uncertainty concerning the
potential magnitude of geothermal energy development and
the schedule of achievement of technological capabilities.
6. Geothermal resources occur in a variety of types and
situations which pose widely different types of technological
problems.
a. Dry-steam geothermal systems have been developed
successfully but their total potential is believed to be
limited.
b. Wet-steam geothermal systems have been harnessed
for useful applications, but the ultimate utility of the
resource depends upon development of methods to de-
velop energy from low-temperature brines and the suc-
cessful resolution of engineering and environmental
problems.
c. Hot dry-rock systems may offer the greatest power
potential over the long run, but significant research and
development work (including drilling technology and
advanced binary cycle heat exchange work) will be re-
quired to develop this resource.
d. Geopressured brines are believed to have potential
for energy development, but exploration and research on
this form of geothermal resource are especially limited.
7. There is considerable interest on the part of private in-
dustry in developing geothermal energy. However, the lack-
of a Federal leasing program, financing impediments, and
the risk involved in advanced technologies are inhibiting
development.
8. There is a lack of aggressive governmental leadership in
the development of geothermal energy. There is no lead
agency and as a result research and development is sporadic
and uncoordinated.
9. The Department of the Interior's implementation of the
Geothermal Steam Act, which has been law since 1970, has
not yet resulted in regulations which will permit orderly
development of attractive resources on the public lands.
10. The present Federal geothermal R.&D. program lacks
clearly enunciated goals and objectives, coordinated manage-
ment or adequate funding for the exploration, research, and
development activities which are needed.
11. There is a need for small-scale demonstration projects
which produce power from geothermal resources to provide
experience with and confidence in the resource use.
12. There is a need for more Federal assistance in explora-
tion, research, development, and demonstration of geothermal
technology and for financial assistance to non-Federal
developments.
B. RECOMMENDATIONS
1. The Department of the Interior should take steps to
insure prompt issuance of the final environmental impact
6
statement on its leasing regulations formulated pursuant to
the Geothermal Energy Act of 1970.1
2. A lead agency should be designated to take responsi-
bility for advancing geothermal energy resources research
and development.
3. Exploration activity for geothermal energy resources
should be greatly accelerated.
4. The level of funding for Federal research and develop-
ment activities in geothermal energy resources should be
greatly increased from the present level.2
5. In order to facilitate private development of geothermal
resources, a financial assistance program should be initiated
to overcome some of the uncertainties associated with new
technology development.3
The provisions of S. 2465 would carry out the legislative action
recommended by the Subcommittee. A discussion of the background
for the recommendations is included in the subcommittee's report.
V. COMMITTEE AMENDMENTS
The Committee adopted several amendments to S. 2465. The fol-
lowing explanations correspond to the numbered amendments set
forth.
1. This is a clarifying amendment which makes only one substantive
change. The maximum interest rate permissable for loans guaranteed
under the Act was set at the prevailing rate for conventional construc-
tion loans instead of being set at the prime rate plus one percent.
2. This amendment limits the liability of a defaulting borrower
to the amount of investment in the geothermal project covered by the
loan. The Committee believed that the extension of liability to other
assets of the borrower would deter investment in high-risk geothermal
ventures by industries which are unfamiliar with such investments.
3. This is a clarifying amendment.
4. A number of amendments are required to clarify the intent of
the bill concerning the preparation of an inventory of geothermal re-
sources by the Secretary of the Interior. The Committee amended the
bill to avoid the use of the word "exploration" which is a term of art
in the petroleum industry having connotations beyond those intended
in the bill.
5. This amendment was adopted by the Committee to clarify its
intent that the Geological Survey should be the lead agency in research
activities relating to the improvement of methods of determining the
physical properties of geothermal resources.
6. This is a conforming amendment.
7. This is a conforming amendment.
8. This is a technical amendment.
9. This is a conforming amendment.
10. This is a clarifying amendment.
1 This action has been taken since the report was prepared.
2 The fiscal year 1975 budget proposed by the administration reflects a sizable increase
in geothermal R. & D. programs.
8 U.S. Congress, Senate, Subcommittee on Water and Power Resources. The Potential for
Energy Production from Geothermal Resources, Committee print, 93d Cong., 1st sess.,
pp. 1-2.
7
11. This amendment makes clear the intent of the Committee to
authorize a research and development program encompassing all ap-
plications of geothermal resources.
12. This amendment was adopted to provide greater lattitude to the
administrator of the demonstration program to establish cost sharing
agreements commensurate with the risk benefits, and other considera-
tions of each potential venture.
13. This amendment was adopted to reflect technical testimony con-
cerning the probable cost of the types of demonstrations intended.
14. This is a clarifying amendment.
15. This is a technical amendment.
VI. SECTION BY SECTION ANALYSIS
Short Title
The short title of this title is the "Geothermal Energy Act of 1973."
TITLE I-LOAN GUARANTEE PROGRAM
Section 101
The Secretary of the Interior is authorized by section 101 to guaran-
tee loans made by financial institutions to qualified borrowers for the
purpose of geothermal energy development. Up to 75 percent of the
cost of the proposed project could be guaranteed; however, no more
than $25 million could be guaranteed for any single project nor more
than $50 million for any borrower. The probable major application of
geothermal resources in the short-term future will be for the produc-
tion of electric power. The financial structure of electric utilities and
other potential participants in such ventures, however, does not pres-
ently facilitate entry into costly, high-risk, geothermal developments.
The objective of Federal guarantees is to reduce the financial uncer-
tainties until more extensive experience with the technology exists.
Section 102
The Secretary is authorized pursuant to section 102 to contract with
the lender to guarantee such loans and to make payment in accordance
with the guarantee in the event of default by the borrower. In the
event that a borower becomes unable to pay interest charges and is
in danger of default, the Secretary may, if he finds it to be in the
public interest, pay the interest in behalf of the borrower and permit
the borrower to continue the project.
If a borrower is in default, and the Secretary has made payments to
the lender on his behalf, the Attorney General is authorized to take
action to recover the amounts of the payments from the assets of the
defaulting borrower which are associated with the project. The intent
of this limitation is to generally confine the risk taken by the borrower
to the amount of his investment in the geothermal venture.
If the borrower has invested other borrowed capital in the venture,
however, the Federal rights to the assets of the venture shall take
precedent over those of other creditors.
Section 103
Provides for a life of the loan guarantee program limited to 10
calendar years.
8
Section 104
Provides that a Geothermal Resources Development Fund be estab-
lished in the Treasury to be available for the purposes of the loan
guarantee program.
Section 105
The uses and disposition of the fund are set forth in section 105.
Section 106
Appropriations to the fund not to exceed $50 million annually are
authorized in section 106.
Section 107
Requires annual financial reports on the operation of the fund.
TITLE II-COORDINATION OF FEDERAL ACTIVITIES IN GEOTHERMAL
ENERGY EXPLORATION, RESEARCH, AND DEVELOPMENT
Section 201
Section 201 sets forth that the policy of the Congress to encourage
the development of geothermal energy through resource inventory, re-
search, and financial and technical assistance for the construction of
pilot and demonstration geothermal developments.
Section 202
In section 202 the Secretary of the Interior is authorized and di-
rected to carry out a program of resources inventory and research into
the geological forms of geothermal resources.
Section 203
Section 203 directs the Secretary to coordinate the geological re-
search program with the technological research program of the
Atomic Energy Commission.
Section 204
In section 204 the Secretary is authorized to employ private firms
or cooperate with Federal, State, and local agencies to obtain assist-
ance in carrying out the resources inventory.
Section 205
The Administrator of the National Aeronautics and Space Admin-
istration is directed in section 205 to prepare and transmit to the Sec-
retary within 6 months a proposal for the employment of space tech-
nologies and the capabilities of NASA in inventorying geothermal
resources.
Section 206
Section 206 directs the Secretary to submit the exploration plan and
schedule to the President and the Congress within 1 year. Annual
progress reports would be required thereafter.
Section 207
Section 207 authorizes the Atomic Energy Commission, in coopera-
tion with industry, to undertake a research and development program
to develop processes and equipment for the utilization of all forms of
geothermal energy.
9
Section 208
Section 208 authorizes the Commission to enter into cooperative
agreements with non-Federal entities for the construction, operation,
and maintenance of demonstration developments for the production of
electric or heat energy from geothermal resources. The non-Federal
participants would be expected to make some contribution in the form
of funds, rights in property, services, or other valuable consideration.
The amount of the non-Federal contribution would be left to the dis-
cretion of the Commission on a case-by-case basis.
It is anticipated that several such demonstrations would be selected
to reflect the development of a variety of geothermal resource types,
the application of a variety of energy development and utilization
technologies and a variety of conditions of energy and by-product
needs.
The Commission is authorized to proceed with such developments
in which the estimated Federal investment will not exceed $10 million.
The Commission is authorized to investigate potential agreements
for major demonstration facilities (in which the Federal investment
will exceed $10 million) and to submit proposals to proceed with such
agreements to the Congress for authorization.
In preparing proposals for cooperative agreements with non-
Federal entities to construct major geothermal energy facilities, the
committee expects that non-Federal participants shall be- selected
which have the financial, technical, and management competence to
perform the functions required of them pursuant to the agreement.
Section 209
Appropriations are authorized in section 209 for fiscal years 1974,
1975, and 1976, as follows:
(a) to the Secretary of the Interior, $10 million annually.
(b) to the Atomic Energy Commission, $35 million annually.
(c) to NASA, such amounts as may be required.
Section 210
Section 210 includes definitions which are self-explanatory.
VII. ESTIMATE OF COST
In. accordance with section 252 (a) of the Legislative Reorganiza-
tion Act of 1970 (Public Law 91-150, 91st Cong.) the committee pro-
vides the following estimate of cost of this measure.
(1) To be placed in a special fund to insure loans, $50 million an-
nually.
(2) To carry out other provisions of this Act, $45 million annually
in fiscal years 1974, 1975, and 1976, and such amounts as may be re-
quired for the participation of the National Aeronautics and Space
Administration in geothermal resources inventories.
VIII. COMMITTEE RECOMMENDATION
The Senate Committee on Interior and Insular Affairs in open
markup session on May 2, 1974, by unanimous vote of a quorum pres-
10
ent, recommends that S. 2465, be enacted with the amendments set
forth herein.
IX. EXECUTIVE COMMUNICATIONS
The comments of Executive agencies on S. 2465 are set forth in full
below.
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION,
Washington, D.C., November 6, 1973.
Hon. HENRY M. JACKSON,
Chairman, Committee on Interior and Insular Affairs, U.S. Senate,
Washington, D.C.
DEAR MR. CHAIRMAN: This is in further reply to your request for the
comments of the National Aeronautics and Space Administration on
the bill S. 2465, "To authorize the Secretary of the Interior to guar-
antee loans for the financing of commercial ventures in geothermal
energy; to coordinate Federal activities in geothermal energy explo-
ration, research, and development and for other purposes."
S. 2465 has as its purpose the encouragement of research and devel-
opment of geothermal energy in order to bring this energy source to
the point of practical and commercial application.
Title I establishes a loan guarantee program under the Secretary
of the Interior. The Secretary would be authorized to guarantee loans
made by financial institutions to qualified borrowers for the purposes
of exploration, development, acquisition of rights in geothermal re-
sources, and construction and operation of facilities to bring these
resources to use in the commercial production of energy. Loan guar-
antees would be available for up to 75 percent of the aggregate cost of
the project. A geothermal resources development fund would be estab-
lishment in the Treasury and be available to the Secretary of the In-
terior for carrying out this program.
Title II states the policy of the Congress to encourage private in-
dustry with Federal assistance and leadership to develop and bring
to the point of practical application the production of energy from
geothermal sources.
The Secretary of the Interior, through the U.S. Geological Survey,
would develop and carry out a plan for the overall exploration of all
forms of geothermal resources on Federal and non-Federal lands. He
would also conduct surveys leading to a national inventory of geo-
thermal resources and make available maps and other documents to
facilitate commercial development. NASA is authorized and directed
(section 205) to prepare a proposal for the use of space technologies
and the services and facilities of NASA for exploration and mapping
of geothermal resources. This report would be due in 6 months from
enactment of this legislation.
The Atomic Energy Commission (AEC) is given the lead research
and development role in cooperation with private industry to bring
geothermal resources to the point of commercial feasibility for the
production of useful energy (section 207). AEC is given a broad char-
ter to conduct all the necessary research, development, engineering,
laboratory and field experiments and marketing, engineering and eco-
nomic studies, etc. The Commission is instructed to coordinate its efforts
11
with those of the Department of the Interior to prevent duplication.
The AEC is also given authority to investigate potential interagency
agreements and coorperative agreements with non-Federal entities and
public utilities for the construction of commercial facilities.
The legislation would require NASA to prepare a proposal, as
noted above, for the use of space technologies and/or NASA facilities
and services for the exploration and mapping of geothermal resources.
In section 209 there is authority to be appropriated to NASA "such
amounts as may be required in fiscal years 1974, 1975, 1976 to carry
out the requirements of section 205." Thus the only authority
granted to NASA is the preparation of a report to be submitted within
6 months from enactment. Since there is no authority to do research
and development work, the authorization for appropriations in 3 fiscal
years is puzzling. It would seem that if NASA's proposal for the em-
ployment of space technologies and NASA services is acceptable to the
Secretary of the Interior, he should have the specific authority to ask
NASA to perform the necessary work. If this bill is to be considered
further, we suggest that it be SO amended.
As to the major policy considerations relating to whether S. 2465
should be enacted, the National Aeronautics and Space Administra-
tion defers to the Department of the Interior since it would assume the
primary role under this legislation.
The Office of Management and Budget has advised that, from the
standpoint of the administration's program, there is no objection to
the submission of this report to the Congress.
Sincerely,
GERALD D. GRIFFIN,
Assistant Administrator for Legislative Affairs.
U.S. DEPARTMENT OF THE INTERIOR,
OFFICE OF THE SECRETARY,
Washington, D.C., November 6, 1973.
Hon. HENRY M. JACKSON,
Chairman, Committee on Interior and Insular Affairs,
U.S. Senate, Washington, D.C.
DEAR MR. CHAIRMAN: This responds to your request for the views
of this Department concerning S. 2465, a bill "To authorize the Sec-
retary of the Interior to guarantee loans for the financing of commer-
cial ventures in geothermal energy; to coordinate Federal activities
in geothermal energy exploration, research, and development; and
for other purposes."
Although we support the general objective of encouraging devel-
opment of geothermal energy sources, to the extent that the bill pro-
vides new authority for loan guarantees in title I, of direct Federal
support for geothermal development in title II we recommend that
the bill not be enacted at this time.
S. 2465 would establish a 10-year Federal program of guarantee-
ing loans by financial institutions for certain private geothermal
resource developments. Annual appropriations of $50 million plus
administrative costs would be authorized, and loan guarantees could
12
not exceed 75 percent of the cost of the project for which the loan is
made. The bill also makes provision for the cooperative exploration,
research and development of geothermal resources by Federal agen-
cies. Among these provisions is authority to make direct Federal in-
vestments in certain geothermal projects.
Both the loan guarantee and the new exploration, research, and
development authority are premature in view of the present Federal
activities and policies for the development of geothermal energy.
This Department is in the process of issuing regulations under the
Geothermal Steam Act of 1970 (30 U.S.C. 1001-1025) with a view
to leasing and development of geothermal resources by nongovern-
mental parties. This accords with our view that the most appropriate
initial approach is for private enterprise to bear basic responsibility
for such development, supplemented by Federal research and guid-
ance. Adequate statutory authority exists for Federal action carry-
ing out this responsibility. Indeed, we believe that the cooperative ex-
ploration, research, and development program provided for by S. 2465
is largely duplicative of existing authority, except to the extent it
provides for direct Federal development of geothermal resources.
Private industry has already undertaken to harness geothermal
energy and we believe it can carry out this function, as energy needs
require. Should future events cast doubt on the ability of non-Federal
entities to do this, both the loan guarantee program and a program of
direct Federal participiation in geothermal development would war-
rant further consideration.
The Office of Management and Budget has advised that there is no
objection to the presentation of this report from the standpoint of the
administration's program.
Sincerely yours,
JOHN H. KYL,
Assistant Secretary of the Interior.
U.S. ATOMIC ENERGY Commission,
Washington, D.C., November 26, 1973.
Hon. HENRY M. JACKSON,
Chairman, Committee on Interior and Insular Affairs,
U.S. Senate, Washington, D.C.
DEAR MR. JACKSON: Thank you for the opportunity to comment on
S. 2465, a bill "[t]o authorize the Secretary of the Interior to guaran-
tee loans for the financing of commercial ventures in geothermal
energy; to coordinate Federal activities in geothermal energy explo-
ration, research, and development; and for other purposes."
The Atomic Energy Commission is sympathetic to the purposes of
S. 2465. However, at this time we do not support its enactment.
S. 2465 consists of two titles. Title I, a loan guarantee program,
would be administered by the Department of the Interior, to encourage
commercial development of energy production from geothermal
sources.
Title II of the bill would cover a coordinated effort by the Depart-
ment of the Interior, the Atomic Energy Commission, the National
13
Aeronautics and Space Administration, and the National Science
Foundation to encourage private industry through Federal assistance
for the development and demonstration of practical means to produce
useful, environmentally acceptable geothermal energy.
In his testimony prepared for presentation before the November 7
hearing of your Subcommittee on Water and Power Resources, Dr.
Gerald Johnson, Director of the AEC's Division of Applied Tech-
nology, expressed the AEC's interest in ,cooperative research and de-
velopment and demonstration programs in the field of geothermal
energy. We are looking toward initiation in this current fiscal year of
programs which would both broaden the technology base for geo-
thermal energy utilization and accelerate the commercial development
of the resource.
However, as pointed out by Dr. Johnson, S. 2465 is somewhat dupli-
cative of existing authority in part. For example, section 31a (6) of the
Atomic Energy Act of 1954, as amended (42 U.S.C. 2051a (6)) author-
izes the AEC to make arrangements for the conduct of research and
development activities relating to "the preservation and enhancement
of a viable environment by developing more efficient methods to meet
the Nation's energy needs." Dr. Johnson also noted the administra-
tion efforts presently underway concerning the planning of and
funding for 5-year energy research and development programs, and
the related organizational responsibilities for such programs. At this
time, therefore, and for the reasons stated, the AEC does not support
the enactment of S. 2465.
The Office of Management and Budget has advised that there is no
objection to the presentation of this report from the standpoint of the
administration's program.
Sincerely,
JOHN A. ERLEWINE,
Deputy General M anager.
X. CHANGES IN EXISTING LAW
Subsection (4) of rule XXIX of the Standing Rules of the Senate
requires a statement of any changes in existing law made by the
bill ordered reported. S. 2465 as reported makes no amendment to or
changes in existing laws.
241
H. R. 14920
Ainety-third Congress of the United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Monday, the twenty-first day of January,
one thousand nine hundred and seventy-four
An Act
To further the conduct of research, development, and demonstrations in
geothermal energy technologies, to establish a Geothermal Energy Coordi-
nation and Management Project, to provide for the carrying out of research
and development in geothermal energy technology, to carry out a program
of demonstrations in technologies for the utilization of geothermal resources,
to establish a loan guaranty program for the financing of geothermal energy
development, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SHORT TITLE
SECTION 1. This Act may be cited as the "Geothermal Energy
Research, Development, and Demonstration Act of 1974".
FINDINGS
SEC. 2. The Congress hereby finds that-
(1) the Nation is currently suffering a critical shortage of
environmentally acceptable forms of energy;
(2) the inadequate organizational structures and levels of fund-
ing for energy research have limited the Nation's current and
future options for meeting energy needs;
(3) electric energy is a clean and convenient form of energy
at the location of its use and is the only practicable form of energy
in some modern applications, but the demand for electric energy
in every region of the United States is taxing all of the alternative
energy sources presently available and is projected to increase:
some of the sources available for electric power generation are
already in short supply, and the development and use of other
sources presently involve undesirable environmental impacts;
(4) the Nation's critical energy problems can be solved only
if a national commitment is made to dedicate the necessary finan-
cial resources, and enlist the cooperation of the private and public
sectors, in developing geothermal resources and other noncon-
ventional sources of energy;
(5) the conventional geothermal resources which are presently
being used have limited total potential; but geothermal resources
which are different from those presently being used. and which
have extremely large energy content, are known to exist;
(6) some geothermal resources contain energy in forms other
than heat; examples are methane and extremely high pressures
available upon release as kinetic energy;
(7) some geothermal resources contain valuable byproducts
such as potable water and mineral compounds which should be
processed and recovered as national resources;
(8) technologies are not presently available for the develop-
ment of most of these geothermal resources, but technologies for
the generation of electric energy from geothermal resources are
potentially economical and environmentally desirable, and the
development of geothermal resources offers possibilities of process
energy and other nonelectric applications;
(9) much of the known geothermal resources exist on the public
lands;
H. R. 14920-3
(E) the General Manager of the Atomic Energy Commission;
and
(F) an Assistant Administrator of the Federal Energy
Administration.
(2) The President shall designate one member of the Project to
serve as Chairman of the Project.
(3) If the individual appointed under paragraph (1) (A) is an
officer or employee of the Federal Government, he shall receive no
additional pay on account of his service as a member of the Project.
If such individual is not an officer or employee of the Federal Govern-
ment, he shall be entitled to receive the daily equivalent of the annual
rate of basic pay in effect for level IV of the Executive Schedule (5
U.S.C. 5315) for each day (including traveltime) during which he is
engaged in the actual performance of duties vested in the Project.
(c) The Project shall have overall responsibility for the provision
of effective management and coordination with respect to a national
geothermal energy research, development, and demonstration pro-
gram. Such program shall include-
(1) the determination and evaluation of the resource base;
(2) research and development with respect to exploration,
extraction, and utilization technologies;
(3) the demonstration of appropriate technologies; and
(4) the loan guaranty program under title II.
(d) (1) The Project shall carry out its responsibilities under this
section acting through the following Federal agencies:
(A) the Department of the Interior, the responsibilities of
which shall include evaluation and assessment of the resource
base, including development of exploration technologies;
(B) the National Aeronautics and Space Administration, the
responsibilities of which shall include the provision of contract
management capability, evaluation and assessment of the resource
base, and the development of technologies pursuant to section
102 (b);
(C) the Atomic Energy Commission, the responsibilities of
which shall include the development of technologies; and
(D) the National Science Foundation, the responsibilities of
which shall include basic and applied research.
(2) Upon request of the Project, the head of any such agency is
authorized to detail or assign, on a reimbursable basis or otherwise,
any of the personnel of such agency to the Project to assist it in carry-
ing out its responsibilities under this Act.
(e) The Project shall have exclusive authority with respect to the
establishment or approval of programs or projects initiated under
this Act, except that the agency involved in any particular program
or project shall be responsible for the operation and administration of
such program or project.
PROGRAM DEFINITION
SEC. 102. (a) (1) The Chairman, acting through the Administrator
of the National Aeronautics and Space Administration, is authorized
and directed to prepare a comprehensive program definition of an inte-
grated effort and commitment for effectively developing geothermal
energy resources. Such Administrator. in preparing such compre-
hensive program definition, is authorized to consult with other Federal
agencies and non-Federal entities.
H. R. 14920-3
(E) the General Manager of the Atomic Energy Commission;
and
(F) an Assistant Administrator of the Federal Energy
Administration.
(2) The President shall designate one member of the Project to
serve as Chairman of the Project.
(3) If the individual appointed under paragraph (1) (A) is an
officer or employee of the Federal Government, he shall receive no
additional pay on account of his service as a member of the Project.
If such individual is not an officer or employee of the Federal Govern-
ment, he shall be entitled to receive the daily equivalent of the annual
rate of basic pay in effect for level IV of the Executive Schedule (5
U.S.C. 5315) for each day (including traveltime) during which he is
engaged in the actual performance of duties vested in the Project.
(c) The Project shall have overall responsibility for the provision
of effective management and coordination with respect to a national
geothermal energy research, development, and demonstration pro-
gram. Such program shall include-
(1) the determination and evaluation of the resource base;
(2) research and development with respect to exploration,
extraction, and utilization technologies;
(3) the demonstration of appropriate technologies; and
(4) the loan guaranty program under title II.
(d) (1) The Project shall carry out its responsibilities under this
section acting through the following Federal agencies:
(A) the Department of the Interior, the responsibilities of
which shall include evaluation and assessment of the resource
base, including development of exploration technologies;
(B) the National Aeronautics and Space Administration, the
responsibilities of which shall include the provision of contract
management capability, evaluation and assessment of the resource
base, and the development of technologies pursuant to section
102 (b) ;
(C) the Atomic Energy Commission, the responsibilities of
which shall include the development of technologies; and
(D) the National Science Foundation, the responsibilities of
which shall include basic and applied research.
(2) Upon request of the Project, the head of any such agency is
authorized to detail or assign, on a reimbursable basis or otherwise,
any of the personnel of such agency to the Project to assist it in carry-
ing out its responsibilities under this Act.
(e) The Project shall have exclusive authority with respect to the
establishment or approval of programs or projects initiated under
this Act, except that the agency involved in any particular program
or project shall be responsible for the operation and administration of
such program or project.
PROGRAM DEFINITION
SEC. 102. (a) (1) The Chairman, acting through the Administrator
of the National Aeronautics and Space Administration, is authorized
and directed to prepare a comprehensive program definition of an inte-
grated effort and commitment for effectively developing geothermal
energy resources. Such Administrator. in preparing such compre-
hensive program definition, is authorized to consult with other Federal
agencies and non-Federal entities.
H. R. 14920-4
(2) The Chairman shall transmit such comprehensive program
definition to the President and to each House of the Congress. Interim
reports shall be transmitted not later than November 30, 1974, and not
later than January 31, 1975. Such comprehensive program definition
shall be transmitted as soon as possible thereafter, but in any case not
later than August 31, 1975.
(3) As part of the comprehensive program definition required by
paragraph (1), the Chairman, acting through the Geological Survey,
shall transmit to the President and to each House of the Congress a
schedule and objectives for the inventorying of geothermal resources.
(b) The National Aeronautics and Space Administration is author-
ized to undertake and carry out those programs assigned to it by the
Project.
RESOURCE INVENTORY AND ASSESSMENT PROGRAM
SEC. 103. (a) The Chairman shall initiate a resource inventory and
assessment program with the objective of making regional and national
appraisals of all types of geothermal resources, including identification
of promising target areas for industrial exploration and development.
The specific goals shall include-
(1) the improvement of geophysical, geochemical, geological,
and hydrological techniques necessary for locating and evaluating
geothermal resources;
(2) the development of better methods for predicting the power
potential and longevity of geothermal reservoirs;
(3) the determination and assessment of the nature and power
potential of the deeper unexplored parts of high temperature geo-
thermal convection systems; and
(4) the survey and assessment of regional and national geo-
thermal resources of all types.
(b) The Chairman, acting through the Geological Survey and other
appropriate agencies, shall-
(1) develop and carry out a general plan for the orderly in-
ventorying of all forms of geothermal resources of the Federal
lands and, where consistent with property rights and determined
by the Chairman to be in the national interest, of non-Federal
lands;
(2) conduct regional surveys, based upon such a general plan,
using innovative geological, geophysical, geochemical, and strata-
graphic drilling techniques, which will lead to a national inven-
tory of geothermal resources in the United States;
(3) publish and make available maps, reports, and other docu-
ments developed from such surveys to encourage and facilitate
the commercial development of geothermal resources for beneficial
use and consistent with the national interest;
(4) make such recommendations for legislation as may from
time to time appear to be necessary to make Federal leasing policy
for geothermal resources consistent with known inventories of
various resource types, with the current state of technologies for
geothermal energy development, and with current evaluations of
the environmental impacts of such development; and
(5) participate with appropriate Federal agencies and non-
Federal entities in research to develop, improve, and test technol-
ogies for the discovery and evaluation of all forms of geothermal
resources, and conduct research into the principles controlling the
location, occurrence, size, temperature, energy content, produci-
bility, and economic lifetimes of geothermal reservoirs.
H. R. 14920-5
RESEARCH AND DEVELOPMENT
SEC. 104. (a) The Chairman, acting through the appropriate Fed-
eral agencies and in cooperation with non-Federal entities, shall initi-
ate a research and development program for the purpose of resolving
all major technical problems inhibiting the fullest possible commercial
utilization of geothermal resources in the United States. The specific
goals of such programs shall include-
(1) the development of effective and efficient drilling methods
to operate at high temperatures in formations of geothermal
interest;
(2) the development of reliable predictive methods and control
techniques for the production of geothermal resources from
reservoirs;
(3) the exploitation of new concepts for fracturing rock to
permit recovery of contained heat reserves;
(4) the improvement of equipment and technology for the
extraction of geothermal resources from reservoirs;
(5) the development of improved methods for converting geo-
thermal resources and byproducts to useful forms;
(6) the development of improved methods for controlling emis-
sions and wastes from geothermal utilization facilities, including
new monitoring methods to any extent necessary;
(7) the development and evaluation of waste disposal control
technologies and the evaluation of surface and subsurface envi-
ronmental effects of geothermal development;
(8) the improvement of the technical capability to predict envi-
ronmental impacts resulting from the development of geothermal
resources, the preparation of environmental impact statements,
and the assuring of compliance with applicable standards and
criteria;
(9) the identification of social, legal, and economic problems
associated with geothermal development (both locally and region-
ally) for the purpose of developing policy and providing a frame-
work of policy alternatives for the commercial utilization of
geothermal resources;
(10) the provision for an adequate supply of scientists to per-
form required geothermal research and development activities;
and
(11) the establishment of a program to encourage States to
establish and maintain geothermal resources clearinghouses, which
shall serve to (A) provide geothermal resources developers with
information with respect to applicable local, State, and Federal
laws, rules, and regulations, (B) coordinate the processing of
permit applications, impact statements, and other information
which geothermal resources developers are required to provide,
(C) encourage uniformity with respect to local and State laws,
rules, and regulations with respect to geothermal resources devel-
opment, and (D) encourage establishment of land use plans,
which would include zoning for geothermal resources develop-
ment and which would assure that geothermal resources devel-
opers will be able to carry out development programs to the
production stage.
(b) The Chairman, acting through the appropriate Federal agen-
cies and in cooperation with non-Federal entities, shall implement a
coordinated program of research and development in order to demon-
strate the technical means for the extraction and utilization of the
resource base, including any byproducts of such base, and in order to
H. R. 14920-6
accomplish the goals established by subsection (a). Research author-
ized by this Act having potential applications in matters other than
geothermal energy may be pursued to the extent that the findings of
such research can be published in a form for utilization by others.
DEMONSTRATION
SEC. 105. (a) The Chairman, acting through the appropriate Fed-
eral agencies and in cooperation with non-Federal entities, shall ini-
tiate a program to design and construct geothermal demonstration
plants. The specific goals of such program shall include-
(1) the development of economical geothermal resources pro-
duction systems and components which meet environmental
standards;
(2) the design of plants to produce electric power and, where
appropriate, the large-scale production and utilization of any use-
ful byproducts;
(3) the involvement of engineers, analysts, technicians, and
managers from industry field and powerplant development, which
shall lead to the early industrial exploitation of advanced geo-
thermal resources;
(4) the provision for an adequate supply of trained geothermal
engineers and technicians;
(5) the provision of experimental test beds for component test-
ing an evaluation by laboratories operated by the Federal Gov-
ernment, industry, or institutions of higher education;
(6) the construction and operation of pilot plants; and
(7) the construction and operation of demonstration plants.
(b) In carrying out his responsibilities under this section, the Chair-
man, acting through the appropriate Federal agencies, and in coop-
eration with non-Federal entities, may provide for the establishment
of one or more demonstration projects utilizing each geothermal
resource base involved. which shall include, as appropriate, all of the
exploration, siting, drilling, pilot plant construction and operation,
demonstration plant construction and operation, and other facilities
and activities which may be necessary for the generation of electric
energy and the utilization of geothermal resource byproducts.
(c) The Chairman, acting through the appropriate Federal agen-
cies, is authorized to investigate and enter into agreements for the
cooperative development of facilities to demonstrate the production of
energy from geothermal resources. The responsible Federal agency
may consider-
(1) cooperative agreements with utilities and non-Federal gov-
ernmental entities for construction of facilities to produce energy
for commercial disposition; and
(2) cooperative agreements with other Federal agencies for the
construction and operation of facilities to produce energy for
direct Federal consumption.
(d) The responsible Federal agency is authorized to investigate the
feasibility of, construct, and operate, demonstration projects without
entering into cooperative agreements with respect to such projects,
if the Chairman finds that-
(1) the nature of the resource, the geographical location, the
scale and engineering design of the facilities, the techniques of
production, or any other significant factor of the proposal offers
opportunities to make important contributions to the general
H. R. 14920-7
knowledge of geothermal resources, the techniques of its develop-
ment, or public confidence in the technology and
(2) there is no opportunity for cooperative agreements with
any utility or non-Federal governmental entity willing and able
to cooperate in the demonstration project under subsection (c)
(1), and there is no opportunity for cooperative agreements with
other Federal agencies under subsection (c) (2).
(e) Before favorably considering proposals under subsection (c),
the responsible Federal agency must find that-
(1) the nature of the resource, the geographical location, the
scale and engineering design of the facilities, the techniques of
production, or any other significant factor of the proposal offers
opportunities to make important contributions to the general
knowledge of geothermal resources, the techniques of its develop-
ment, or public confidence in the technology;
(2) the development of the practical benefits as set forth in
paragraph (1) are unlikely to be accomplished without such
cooperative development; and
(3) where non-Federal participants are involved, the proposal
is not eligible for adequate Federal assistance under the loan
guaranty provisions of title II of this Act.
(f) If the estimate of the Federal investment with respect to con-
struction and operation costs of any demonstration project proposed
to be established under this section exceeds $10,000,000, no amount
may be appropriated for such project except as specifically authorized
by legislation hereafter enacted by the Congress.
(g) (1) At the conclusion of the program under this section or as
soon thereafter as may be practicable, the responsible Federal agencies
shall, by sale, lease, or otherwise, dispose of all Federal property
interests which they have acquired pursuant to this section (including
mineral rights) in accordance with existing law and the terms of the
cooperative agreements involved.
(2) The agency involved shall, under appropriate agreements or
other arrangements, provide for the disposition of geothermal resource
byproducts of the project administered by such agency.
SCIENTIFIC AND TECHNICAL EDUCATION
SEC. 106. (a) It is the policy of the Congress to encourage the
development and maintenance of programs through which there may
be provided the necessary trained personnel to perform required geo-
thermal research, development, and demonstration activities under
sections 103, 104, and 105.
(b) The National Science Foundation is authorized to support pro-
grams of education in the sciences and engineering to carry out the
policy of subsection (a). Such support may include fellowships,
traineeships, technical training programs, technologist training pro-
grams, and summer institute programs.
(c) The National Science Foundation is authorized and directed to
coordinate its actions, to the maximum extent practicable, with the
Project or any permanent Federal organization or agency having
jurisdiction over the energy research and development functions of
the United States, in determining the optimal selection of programs
of education to carry out the policy of subsection (a).
H. R. 14920-8
(d) The National Science Foundation is authorized to encourage,
to the maximum extent practicable international participation and
cooperation in the development and maintenance of programs of edu-
cation to carrying out the policy of subsection (a).
TITLE II-LOAN GUARANTIES
ESTABLISHMENT OF LOAN GUARANTY PROGRAM
SEC. 201. (a) It is the policy of the Congress to encourage and assist
in the commercial development of practicable means to produce useful
energy from geothermal resources with environmentally acceptable
processes. Accordingly, it is the policy of the Congress to facilitate
such commercial development by authorizing the Chairman of the
Project to designate an appropriate Federal agency to guarantee loans
for such purposes.
(b) In order to encourage the commercial production of energy
from geothermal resources, the head of the designated agency is
authorized to, in consultation with the Secretary of the Treasury,
guarantee, and to enter into commitments to guarantee, lenders against
loss of principal or interest on loans made by such lenders to qualified
borrowers for the purposes of-
(1) the determination and evaluation of the resource base;
(2) research and development with respect to extraction and
utilization technologies;
(3) acquiring rights in geothermal resources; or
(4) development, construction, and operation of facilities for
the demonstration or commercial production of energy from geo-
thermal resources.
(c) Any guaranty under this title shall apply only to SO much of
the principal amount of any loan as does not exceed 75 percent of the
aggregate cost of the project with respect to which the loan is made.
(d) Loan guaranties under this title shall be on such terms and con-
ditions as the head of the designated agency determines, except that a
guaranty shall be made under this title only if-
(1) the loan bears interest at a rate not to exceed such annual
per centum on the principal obligation outstanding as the head of
the designated agency determines to be reasonable, taking into
account the range of interest rates prevailing in the private sector
for similar loans and risks by the United States;
(2) the terms of such loan require full repayment over a period
not to exceed thirty years, or the useful life of any physical asset
to be financed by such loan, whichever is less (as determined by
the head of the designated agency)
(3) in the judgment of the head of the designated agency, the
amount of the loan (when combined with amounts available to
the qualified borrower from other sources) will be sufficient to
carry out the project; and
(4) in the judgment of the head of the designated agency, there
is reasonable assurance of repayment of the loan by the qualified
borrower of the guaranteed indebtedness.
(e) The amount of the guaranty for any loan for a project shall not
exceed $25,000,000, and the amount of the guaranty for any combina-
tion of loans for any single qualified borrower shall not exceed
$50,000,000.
(f) As used in this title, the term "qualified borrower" means any
public or private agency, institution, association, partnership,
H. R. 14920-9
corporation, political subdivision, or other legal entity which (as
determined by the head of the designated agency) has presented satis-
factory evidence of an interest in geothermal resources and is capable
of performing research or completing the development and produc-
tion of energy in an acceptable manner.
PAYMENT OF INTEREST
SEC. 202. (a) With respect to any loan guaranteed pursuant to this
title, the head of the designated agency is authorized to enter into a
contract to pay, and to pay, the lender for and on behalf of the
borrower the interest charges which become due and payable on the
unpaid balance of any such loan if the head of the designated agency
finds—
(1) that the borrower is unable to meet interest charges, and
that it is in the public interest to permit the borrower to continue
to pursue the purposes of his project, and that the probable net
cost to the Federal Government in paying such interest will be
less than that which would result in the event of a default; and
(2) the amount of such interest charges which the head of the
designated agency is authorized to pay shall be no greater than
the amount of interest which the borrower is obligated to pay
under the loan agreement.
(b) In the event of any default by a qualified borrower on a guar-
anteed loan, the head of the designated agency is authorized to make
payment in accordance with the guaranty, and the Attorney General
shall take such action as may be appropriate to recover the amounts
of such payments (including any payment of interest under subsection
(a)) from such assets of the defaulting borrower as are associated
with the project, or from any other surety included in the terms of the
guaranty.
PERIOD OF GUARANTIES AND INTEREST ASSISTANCE
Sec. 203. No loan guaranties shall be made, or interest assistance
contract entered into, pursuant to this title, after the expiration of the
ten-calendar-year period following the date of enactment of this Act.
GEOTHERMAL RESOURCES DEVELOPMENT FUND
SEC. 204. (a) There is established in the Treasury of the United
States a Geothermal Resources Development Fund, which shall be
available to the head of the designated agency for carrying out the
loan guaranty and interest assistance program authorized by this title,
including the payment of administrative expenses incurred in connec-
tion therewith. Moneys in the fund not needed for current operations
may, with the approval of the Secretary of the Treasury, be invested
in bonds or other obligations of, or guaranteed by, the United States.
(b) There shall be paid into the fund the amounts appropriated
pursuant to section 304 (c) and such amounts as may be returned to
the United States pursuant to section 202(b), and the amounts in the
fund shall remain available until expended, except that after the
expiration of the ten-year period established by section 203, such
amounts in the fund which are not required to secure outstanding
H. R. 14920-10
guaranty obligations shall be paid into the general fund of the
Treasury.
(c) Business-type financial reports covering the operations of the
fund shall be submitted to the Congress by the head of the designated
agency annually upon the completion of an appropriate accounting
period.
TITLE III-GENERAL PROVISIONS
PROTECTION OF ENVIRONMENT
SEC. 301. In the conduct of its activities, the Project and any par-
ticipating public or private persons or agencies shall place particular
emphasis upon the objective of assuring that the environment and the
safety of persons or property are effectively protected; and the pro-
gram under title I shall include such special research and development
as may be necessary for the achievement of that objective.
REPORTING REQUIREMENTS
SEC. 302. (a) The Chairman of the Project shall submit to the Presi-
dent and the Congress full and complete annual reports of the activ-
ities of the Project, including such projections and estimates as may
be necessary to evaluate the progress of the national geothermal energy
research, development, and demonstration program and to provide the
basis for as accurate a judgment as is possible concerning the extent to
which the objectives of this Act will have been achieved by June 30,
1980.
(b) No later than one year after the termination of each demon-
stration project under section 105, the Chairman of the Project shall
submit to the President and the Congress a final report on the activities
of the Project related to each project, including his recommendations
with respect to any further legislative, administrative, and other
actions which should be taken in support of the objectives of this Act.
TRANSFER OF FUNCTIONS
SEC. 303. (a) Within sixty days after the effective date of the law
creating a permanent Federal organization or agency having jurisdic-
tion over the energy research and development functions of the United
States (or within sixty days after the date of the enactment of this
Act if the effective date of such law occurs prior to the date of the
enactment of this Act), all of the research, development, and demon-
stration functions (including the loan guaranty program) vested in
the Project under this Act, along with related records, documents,
personnel, obligations, and other items to the extent necessary or
appropriate, shall, in accordance with regulations prescribed by the
Office of Management and Budget, be transferred to and vested in such
organization or agency.
(b) Upon the establishment of a permanent Federal organization
or agency having jurisdiction over the energy research and develop-
ment functions of the United States, and when all research and devel-
opment (and other) functions of the Project are transferred, the mem-
bers of the Project may provide advice and counsel to the head of such
organization or agency, in accordance with arrangements made at that
time.
H. R. 14920-11
AUTHORIZATIONS OF APPROPRIATIONS
SEC. 304. (a) For the fiscal years ending June 30, 1976, and Septem-
ber 30, 1977, 1978, 1979, and 1980, only such sums may be appropriated
as the Congress may hereafter authorize by law.
(b) There are authorized to be appropriated to the National Aero-
nautics and Space Administration not to exceed $2,500,000 for the
fiscal year ending June 30, 1975, for the purpose of preparing the
program definition under section 102(a).
(c) In addition to sums authorized to be appropriated by subsection
(b), there are authorized to be appropriated to the fund not to exceed
$50,000,000 annually, such sums to carry out the provisions of the loan
guaranty program by the Project under title II.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.
August 22, 1974
Dear Mr. Director:
The following bills were received at the White
House on August 22nd:
S. 1871
H.R. 14402
S. 3703
H.R. 14920
H.R. 6485
H.R. 15205
H.R. 11864
H.R. 15842
Please let the President have reports and
recommendations as to the approval of these
bills as soon as possible.
Sincerely,
Robert D. Linder
Chief Executive Clerk
The Honorable Roy L. Ash
Director
Office of Management and Budget
Washington, D. C.