Despite Lukewarm Lease Sales, Geothermal Heats Up

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"Companies are filling out their existing geothermal claim blocks."

An auction of geothermal leases on federal lands in Nevada last week drew tepid interest from a small handful of companies that are developing the renewable source of power generation.

But development of steam power is by no mean cooling down in the state, industry executives say.

Last week's auction, which put 51 parcels on the block at the Reno field headquarters of the Bureau of Land Management, netted just $456,000 in bids for 17 parcels. Leases on the remainder weren't sold.

By way of comparison, the BLM's 2008 geothermal lease auction netted a record $28.2 million, which translates into a decline of more than 98 percent in bids in two years.

However, geothermal industry executives say that last week's decline in leasing activity reflects the reality that companies are interested in simply filling in around their existing geothermal claim blocks. They have much less interest in leasing new land for prospecting in greenfields areas.

The annual geothermal lease auction drew similar mild interest from other developers in the state.

Prior to last week's auction, the BLM had a total of 547 parcels of land encompassing more than 1.14 million acres under lease to geothermal companies.

"A lot of companies have secured an awful lot of acreage, and now they have to go out there and do their testing," says Atanda Clark, branch chief of minerals adjudication for the BLM.

The bureau's 2010 auction netted $2.76 million among 75 parcels. Amounts generated from the leases are split between the state, county governments and the U.S. Treasury.

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