30 C.F.R. Subpart H—Geothermal Resources
Title 30 - Mineral Resources
Source: 56 FR 57275, Nov. 8, 1991, unless otherwise noted.
(a) This subpart is applicable to all geothermal resources produced from Federal geothermal leases issued pursuant to the Geothermal Steam Act of 1970, as amended (30 U.S.C. 1001 et seq.). (b) The definitions in 30 CFR 206.351 are applicable to this subpart. (a) Royalties on geothermal resources, including byproduct minerals and commercially demineralized water, shall be at the royalty rate(s) specified in the lease, unless the Secretary of the Interior temporarily waives, suspends, or reduces that rate(s). Royalties shall be paid in value. The royalty due shall be the value determined pursuant to subpart H of 30 CFR part 206 multiplied by the royalty rate in the lease. (b)(1) Royalties are due on all geothermal resources, except those specified in paragraph (b)(2) of this section, that are produced from a lease and are sold or utilized by the lessee or are reasonably susceptible to sale or utilization by the lessee. (2) Geothermal resources that are unavoidably lost, as determined by the Bureau of Land Management (BLM), and geothermal resources that are reinjected prior to use on or off the lease, as approved by BLM, are not subject to royalty. The Minerals Management Service (MMS) will allow free of royalty a reasonable amount of geothermal energy necessary to generate electricity for internal powerplant operations or to generate electricity returned to the lease for lease operations. If a powerplant uses geothermal production from more than one lease, or uses unitized or communitized production, only that proportionate share of each lease's production (actual or allocated) necessary to operate the powerplant may be used royalty free. The MMS will also allow free of royalty a reasonable amount of commercially demineralized water necessary for powerplant operations or otherwise used on or for the benefit of the lease. (3) Royalties on byproducts are due at the time the recovered byproduct is used, sold, or otherwise finally disposed of. Byproducts produced and added to stockpiles or inventory do not require payment of royalty until the byproducts are sold, utilized, or otherwise finally disposed of. The MMS may ask BLM to increase the lease bond to protect the lessor's interest when BLM determines that stockpiles or inventories become excessive. (c) If BLM determines that geothermal resources (including byproducts) were avoidably lost or wasted from the lease, or that geothermal resources (including byproducts) were drained from the lease for which compensatory royalty is due, the value of those geothermal resources shall be determined in accordance with subpart H of 30 CFR part 206. (d) If a lessee receives insurance or other compensation for unavoidably lost geothermal resources (including byproducts), royalties at the rates specified in the lease are due on the amount of that compensation. This paragraph shall not apply to compensation through self-insurance. In no event shall the lessee's annual royalty payments for any producing lease be less than the minimum royalty established by the lease. (a) For geothermal resources used to generate electricity, the quantity on which royalty is due shall be reported on Form MMS–2014 (Report of Sales and Royalty Remittance) as follows: (1) For geothermal resources valued under arm's-length or non-arm's-length contracts, quantities shall be reported in: (i) Kilowatthours to the nearest whole kilowatthour if the contract specifies payment in terms of generated electricity, (ii) Thousands of pounds to the nearest whole thousand pounds if the contract specifies payment in terms of weight, or (iii) Millions of Btu's to the nearest whole million Btu if the contract specifies payment in terms of heat or thermal energy. (2) For geothermal resources valued by the netback procedure pursuant to 30 CFR 206.352(c)(1)(ii) or (d)(1)(ii), the quantities shall be reported in kilowatthours to the nearest whole kilowatthour. (b) For geothermal resources used in direct utilization processes, the quantity on which royalty is due shall be reported on Form MMS–2014 in: (1) Millions of Btu's to the nearest whole million Btu if valuation is in terms of thermal energy used or displaced, (2) Hundreds of gallons to the nearest hundred gallons of geothermal fluid produced if valuation is in terms of volume, or (3) Other measurement unit approved by MMS for valuation and reporting purposes. (c) For byproduct minerals, the quantity on which royalty is due shall be reported on Form MMS–2014 consistent with MMS-established reporting standards. (d) For commercially demineralized water, the quantity on which royalty is due shall be reported on Form MMS–2014 in hundreds of gallons to the nearest hundred gallons. (e) Lessees are not required to report the quality of geothermal resources, including byproducts, to MMS. The lessee must maintain quality measurements for audit and valuation purposes. Quality measurements include, but are not limited to, temperatures and chemical analyses for fluid geothermal resources and chemical analyses, weight percent, or other purity measurements for byproducts.
Title 30: Mineral Resources
PART 202—ROYALTIES
Subpart H—Geothermal Resources
§ 202.350 Scope and definitions.
§ 202.351 Royalties on geothermal resources.
§ 202.352 Minimum royalty.
§ 202.353 Measurement standards for reporting and paying royalties.
