PRIA, Government Policy, Made Personal

Summary

The Secretary of Energy can make loans from the Geothermal Resources Development Fund to a person to explore or test whether a geothermal reservoir is worth developing. The work covered is surface exploration and drilling one or more exploratory wells. Loans must be paid back from the reservoir’s production revenue at a rate no greater than 20% of that year’s gross revenue. If the borrower sells the geothermal rights, they must immediately repay the loan balance or the money they got from the sale, whichever is less. If the Secretary confirms the reservoir, the Secretary can assume a reasonable revenue for repayment if the borrower does not try to put the reservoir into commercial use, uses the resource without selling the energy, or sells the energy at an unreasonably low price. That assumed revenue cannot be used during the three-year period after confirmation. If no revenue or commercial sales start within five years after confirmation, the Secretary may recover project assets up to the unpaid loan plus interest. The Secretary may cancel unpaid loan balances and interest if the reservoir is shown to be economically or technically unsuitable. “Person” here includes municipalities, electric cooperatives, industrial development agencies, nonprofits, and Indian tribes.

Title 30, §1511

Mineral Lands and Mining, Source: USLM XML via OLRC

(a)Authorization; purposes

The Secretary of Energy (hereafter in this chapter referred to as the “Secretary”) is authorized to make a loan to any person, from funds appropriated (pursuant to this subchapter) to the Geothermal Resources Development Fund established under section 1144 of this title, to assist such person in undertaking and carrying out a project which (1) is designed to explore for or determine the economic viability of a geothermal reservoir and (2) consists of surface exploration and the drilling of one or more exploratory wells.

(b)Repayment rates

Subject to subsection (c) and to section 1513(b) of this title, any loan under subsection (a) shall be repayable out of revenue from production of the geothermal energy reservoir with respect to which the loan was made, at a rate, in any year, not to exceed 20 per centum of the gross revenue from the reservoir in that year; except that if any disposition of the geothermal rights to the reservoir is made to one or more other persons by the borrower, the full amount of the loan balance outstanding, or so much of the loan balance outstanding as is equal to the full amount of the compensation realized by the borrower upon such disposition, whichever is less, shall be repaid immediately. In any case where the reservoir is confirmed (as determined by the Secretary), the Secretary may impute a reasonable revenue for purposes of determining repayment if—

(1)reasonable efforts are not made to put such reservoir in commercial operation,

(2)the borrower (or any such other person) utilizes the resources of the reservoir without a sale of the energy or geothermal energy resources therefrom, or

(3)a sale of energy or geothermal energy resources from the reservoir is made for an unreasonably low price;

except that no such imputation of revenue shall be made during the three-year period immediately following such reservoir confirmation. In the event of failure to begin production of revenue (or, where no sale of energy or geothermal energy resources is made, to begin production of energy for commercial use) within five years after the date of such reservoir confirmation, the Secretary may take action to recover the value, not to exceed the amount of the unpaid balance of the loan plus any accrued interest thereon, of any assets of the project in question, including resource rights.

(c)Cancellation of unpaid balance and accrued interest

The Secretary may at any time cancel the unpaid balance and any accrued interest on any loan made under this section if he determines, on the basis of evidence presented by the loan recipient or otherwise, that the geothermal energy reservoir with respect to which the loan was made has characteristics which make that reservoir economically or technically unacceptable for commercial development.

(d)“Person” defined

As used in this subchapter, the term “person” includes municipalities, electric cooperatives, industrial development agencies, nonprofit organizations, and Indian tribes, as well as the entities included within such term under section 1 of title 1.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This chapter, referred to in subsec. (a), was in the original “this title”, meaning title VI of Pub. L. 96–294, June 30, 1980, 94 Stat. 763, known as the Geothermal Energy Act of 1980. For complete classification of title VI to the Code, see

Short Title

note set out under section 1501 of this title and Tables. section 1144 of this title, referred to in subsec. (a), was repealed by Pub. L. 116–260, div. Z, title III, § 3002(i)(3), Dec. 27, 2020, 134 Stat. 2495.

§1511 Loans for Geothermal Reservoir Confirmation