S-363-113
Placed on the Union Calendar, Calendar No. 540.
Sponsored by Ron Wyden (D-OR)
What it does
This bill would change the Geothermal Steam Act of 1970 to allow the Department of the Interior to grant geothermal energy leases on up to 640 acres of federal land without a competitive bidding process. To qualify, a developer must already hold rights to geothermal resources on land next to the federal parcel, must show evidence that the geothermal resource extends from their private land onto the federal land, and must not have previously received such a noncompetitive lease for the same discovery. The federal land would be leased at fair market value, with public notice required and annual rental payments matching those paid by competitive lessees.
Who benefits
Geothermal energy developers and companies that already hold adjacent private or state land with confirmed geothermal resources. Domestic renewable energy producers seeking to expand operations onto neighboring federal land. Western states where most federal land and geothermal resources are concentrated (e.g., California, Nevada, Idaho, Utah). Utilities and consumers in regions where expanded geothermal capacity could increase electricity supply. Federal and state governments that would collect fair-market lease revenues and rental payments.
Who is hurt
Competing energy developers who would otherwise have the opportunity to bid on the same federal land through a competitive leasing process. Taxpayers, if "fair market value" determinations undervalue the geothermal resource compared to what a competitive auction might yield. Environmental groups and individuals who prefer that federal land decisions go through open, competitive processes with broader public input. Communities or interests that might prefer the federal land remain unleased or be used for other purposes.
Supporters argue
Supporters argue that when a developer has already confirmed a geothermal resource on adjacent private land and that resource clearly extends onto neighboring federal land, a competitive bidding process serves little practical purpose — no other bidder has the same access or infrastructure to develop that specific deposit. Requiring competition in such cases would delay or block clean energy development on land that only one party can realistically use. The bill preserves taxpayer value by mandating fair market value pricing and annual rental payments equal to competitive leases, so the public is not shortchanged. Expanding domestic geothermal energy would diversify the electricity supply, reduce dependence on fossil fuels, and support jobs in the renewable energy sector, all without opening new land to development — only land already adjacent to active geothermal operations.
Opponents argue
Opponents argue that bypassing competitive bidding, even with fair market value requirements, removes a key market mechanism that ensures the public receives the best possible return for the use of federal land owned by all Americans. An administrative appraisal of "fair market value" may not capture the true worth of a resource the way an open auction would, potentially leaving money on the table. The noncompetitive process also reduces transparency and public accountability in decisions about how federal lands are used. Critics further contend that the adjacency requirement, while logical on its face, effectively creates a monopoly for one developer over a public resource, foreclosing competition and concentrating economic benefits in the hands of companies that already hold neighboring rights. Broader public interest considerations — including environmental review and alternative land uses — may receive less scrutiny under an expedited noncompetitive process.
Constitutional context
Federal authority to lease public lands for energy development rests on the Property Clause (Art. IV, §3, cl. 2), which gives Congress broad power over federal lands. The Commerce Clause supports federal regulation of energy markets. The bill delegates leasing authority to the Department of the Interior, which — in the post-Loper Bright (2024) environment — means courts would independently review Interior's interpretations of statutory terms like "fair market value" and "valid discovery" rather than deferring to the agency. Under West Virginia v. EPA (2022), the major questions doctrine requires clear congressional authorization for agency actions of vast economic or political significance; however, this bill's relatively narrow scope likely does not rise to that threshold. Takings Clause considerations could arise if adjacent landowners or third parties claim the leasing process affects their property interests, though this is not a primary concern here.
Checks and balances
The bill shifts leasing authority to the executive branch (Department of the Interior), granting it discretion to determine fair market value, evaluate geothermal discovery data, and approve or deny noncompetitive lease applications. Congress retains oversight through the existing statutory framework and appropriations. The requirement for public notice of lease requests preserves a limited check by allowing public comment. Post-Loper Bright, federal courts would exercise independent judgment — rather than deferential review — over Interior's interpretations of the bill's qualifying criteria, modestly strengthening judicial oversight of executive leasing decisions.
Historical precedent
The Geothermal Steam Act of 1970 established the original competitive leasing framework for federal geothermal resources. Noncompetitive leasing provisions for adjacent landholders have precedent in the Mineral Leasing Act of 1920, which allows noncompetitive oil and gas leases in certain circumstances where competitive interest is limited.