Geothermal Energy

Salton Sea Geothermal Facility

Mar 29, 2022 | Renewable Energy

Objectives

Staff’s objectives are to manage the orderly and efficient development of geothermal resources on state lands and to contribute to the development of carbon-free electricity generation. Staff’s objectives are also to maximize revenue to the California State Teachers’ Retirement System, ensure public safety, and protect the environment. Staff also support the responsible development of lithium from geothermal brine at State-managed geothermal facilities.

Responsibilities

Staff processes applications for geothermal permits and leases on all State-owned lands, whether managed by the Commission or other state agencies. Staff oversees State-issued geothermal leases and evaluates proposed drilling, workover activities, overall reservoir development, and engineering projects at geothermal facilities, including conducting on-site inspections to assure lease compliance. Staff also monitors geothermal resource production volumes (i.e., steam and water) and verifies royalty calculations and payments.

Permit & Lease Types

Permit Types:

  • Exploration Permit: Non-exclusive and focused on data-gathering. This allows for less intensive prospecting activities and may qualify for exemption under the California Environmental Quality Act.
  • Prospecting Permit for Exploration: Requires California Environment Quality Act review. Provides for a preferential right to lease.

Lease Types:

  • Preferential Right to Lease: The permittee, as the first qualified, has the right to apply to the Commission for a geothermal lease before applications by other entities may be considered.
  • Lease Issued by a Competitive Bidding Process: The lease is awarded to the highest bidder.
  • Negotiated Lease: Used when lands are unsuitable for competitive bid due to their small size or other factors. Also issued when the State owns a fractional interest in the lands, or in any situation when the lease is determined to be in the best interests of the State.

A lease authorizes exploratory drilling or production. Some leases may produce under a unitization agreement. Unitization is considered when wells drilled upon private or public lands, including State-owned lands, may drain the geothermal resources from state-owned lands. Under a unitization agreement, the State is paid a percentage based on the leased acres.

Existing law requires lessees to pay a minimum 10 percent royalty rate on the gross value of steam or brines when no minerals are extracted (usually where the resource is used for heat or electricity generation). Leases issued by competitive bid have a maximum royalty rate of 16-2/3 percent, which is in addition to a biddable factor (typically a cash bonus or percentage of net profit). Existing law establishes a minimum 2 percent royalty rate on the gross revenue from the sale of mineral products or chemical compounds recovered from geothermal fluids (e.g., lithium, zinc, manganese).

Lease portfolio

The Geysers geothermal field

The Salton Sea geothermal field

Imperial County

State Lands Commission Geothermal Leases in the vicinity of the Salton Sea.

State Lands Commission Geothermal Leases in the vicinity of Truckhaven California.

State Lands Commission Geothermal Leases Southeast of the Salton Sea.

Lease Summary

Lessee Location Acres No. of Leases Issue Date & Term
ORNI 5, LLC Salton Sea 2,739 2 November 2020
5-year leases to drill.
CalEnergy / Magma Power Co. Salton Sea 615 2 May 2011
Continuous if producing.
Hudson Ranch I Holdings LLC
(assigned from Energy Source, LLC in 2021)
Salton Sea 40 1 September 2012
Continuous if producing.
Geysers Power Co. and CPN Wild Horse Geothermal, subsidiaries of the Calpine Corporation The Geysers 8,147 7
(2 agreements 1/16th)
May 1971 to September 2009
Continuous if producing