Thoughtful permitting reform can help expand next-generation geothermal

The United States has the heat, the technology, and growing investor interest to deploy enormous amounts of next-generation geothermal. Appropriate and thoughtful changes to the geothermal permitting and leasing system can help this exciting new energy source reach its full potential.

Drawing on recent technological innovations from the oil and gas sector, this emerging form of geothermal energy can deliver homegrown baseload power with minimal emissions and a small land footprint. Estimates suggest that by 2050, geothermal energy could meet 15% of U.S. energy demand growth,¹ helping address our country’s growing AI, data center, and industrial needs.

Geothermal energy is ready to deliver, but it lacks a permitting system that moves at the speed the grid demands. Many of the sites which are best for next-generation geothermal are on federal land. Unfortunately, the current federal leasing, permitting, and environmental review processes for geothermal energy can be slow and uncertain, which creates serious financing barriers for the emerging next-generation geothermal industry. Slow timelines delay project start dates and investor payback, while uncertain timelines drive away risk-averse investors and significantly increase financing costs.² Speedy, effective permitting and leasing is crucial to ensure that the next-generation geothermal industry can grow and scale. At the same time, appropriate regulation of these projects is needed to ensure they are developed and operated safely and in line with community and environmental protections.

To enable the rapid build-out of abundant, clean firm geothermal energy, a few key regulatory changes are needed. Today, the Energy and Mineral Resources Subcommittee of the House Natural Resources Committee held a hearing to consider a number of bills which relate to leasing, permitting, and environmental review processes for geothermal energy. These bills address many of those necessary changes, including:

Improving agency capacity for geothermal

The Bureau of Land Management (BLM) is significantly understaffed, limiting its ability to process geothermal permits and leases and conduct environmental reviews. To make things worse, next-generation geothermal energy is an emerging industry with relatively few proposed projects. This means that most BLM field office staff haven’t yet engaged on geothermal and have limited knowledge about the technologies used for its development, further slowing down processing times. Increasing the technical capacity of BLM to engage on geothermal energy (by adding new resources, expanding geothermal-specific technical expertise, and using existing resources more efficiently) is crucial to keep projects moving while ensuring safe development. Many of the bills considered in the legislative hearing address this important issue.

• H.R. 5631, the Geothermal Ombudsman for National Deployment and Optimal Reviews Act (Rep. Kennedy), would create a geothermal ombudsman within BLM who would lead a geothermal permitting task force to resolve disputes, monitor and facilitate permits, improve intra-agency coordination, and develop best practices. This would create a clear line of oversight to streamline decision-making and help field offices get up to speed on geothermal best practices. The bill also provides explicit statutory clarity that qualified staff from across BLM can support geothermal permit processes even if they are located in a different field office. This is an efficient allocation of BLM resources and will enable quicker permit processing without having to hire additional geothermal experts for each individual field office.
• H.R. 5617, the Geothermal Gold Book Development Act (Rep. Ansari), would require DOI to develop standard procedures and guidelines for geothermal land use planning, lease sales, permits, and environmental review, providing clarity and support to BLM staff.
• H.R. 398, the Geothermal Cost-Recovery Authority Act of 2025 (Rep. Ocasio-Cortez), would allow for cost recovery for processing geothermal applications and inspecting and monitoring geothermal projects. The additional revenue generated by this program could be used to improve agency capacity for geothermal within DOI.

Each of these bills individually improves the geothermal permitting and environmental review process. Taken together, they can have a more-than-the-sum-of-its-parts effect on BLM’s geothermal capacity and on overall project deployment.

To further advance the goals of these bills, Congress could require the creation of a publicly-viewable online tool to track geothermal permits and reviews across all BLM offices. A tool of this type would improve coordination among BLM offices and enable geothermal developers to track the status of their permits in real time.

Developing smarter environmental review processes through evidence-based categorical exclusions

Safe development of geothermal projects is crucial to the long-term viability of this emerging industry, and government agencies have a key role to play in evaluating project applications to ensure safety. Geothermal regulations and permit reviews occur through multiple mechanisms, including the Geothermal Steam Act of 1970 and the National Environmental Policy Act (NEPA). These laws are necessary to make sure geothermal energy can move forward without harming communities or the environment, which would threaten the industry’s public acceptance. However, there are opportunities to adjust permitting processes to maintain the U.S.’s long history of safe geothermal development while also making deployment more efficient.

• H.R.5576, the Enhancing Geothermal Production on Federal Lands Act (Rep. Fulcher), would create an exemption from NEPA for a variety of minor and low-impact geothermal exploration activities (such as temperature gradient wells, monitoring wells, calibration wells, and geotechnical explorations). Many of these activities were included in the categorical exclusion for geothermal resource confirmation which was finalized by BLM during the last administration, and the record of evidence from that agency-led categorical exclusion process shows that the geothermal exploration activities within the scope of that exclusion have no significant impact on the environment.³ This legislation would largely formalize existing categorical exclusions developed by the agency. Reducing the environmental review requirements for these activities canspeed up the process of geothermal development while continuing to protect communities and the environment.

Setting timelines for permitting review

BLM is understaffed and busy, and staff must constantly make choices about which permits and environmental review processes to prioritize. In many cases, geothermal has fallen to the bottom of the list. Congressional direction about priorities, in addition to increased agency capacity, can ensure that BLM takes action on geothermal applications in a more timely fashion.

• H.R. 301, the Geothermal Energy Opportunity (GEO) Act (Rep. Maloy), would require the processing of geothermal permit applications within 60 days after requirements are completed – a sensible measure that would speed up the processing of geothermal permits. The 60-day timeline requirement begins after requirements under applicable federal laws and regulations (such as NEPA and the Endangered Species Act) are completed, which ensures that agency staff have all the information they need to evaluate the application.
• H.R.1687, the Committing Leases for Energy Access Now (CLEAN) Act (Rep. Fulcher), has two provisions related to review timelines. First, the bill would require that DOI determine whether a geothermal drilling permit application is complete within 30 days of receipt. This requirement would improve timelines for geothermal permits, and 30 days is likely sufficient time to allow DOI to evaluate whether a geothermal drilling permit application is complete. The CLEAN Act would also require DOI to respond to complete applications within 30 days from the date of determination of completeness. 30 days is not a sufficient amount of time for DOI to evaluate a completed application, and if the agency does not have enough time to fully evaluate applications, it might approve permits that should not be approved – risking harm to communities and the environment – or deny permits out of an abundance of caution – running the risk that projects would be rejected for no good reason, needlessly slowing the development of geothermal energy in the U.S. Increasing the timeframe of this provision would fulfill the bill’s intent while ensuring that DOI staff have enough time to fully consider the permits that come across their desks.

Improving geothermal leasing processes

Slow lease sales are a significant bottleneck to geothermal development. BLM is required to hold geothermal lease sales every other year in areas where parcels have been nominated, but it has historically failed to meet this requirement. Next-generation geothermal is a rapidly-growing industry and many developers are eager to start building more projects. Currently, the region of the country most suitable for next-generation geothermal is the western U.S., where large amounts of land are owned by the federal government. Without improvements to federal leasing processes, developers can’t access the land they need to help geothermal scale.

• H.R.1687, the Committing Leases for Energy Access Now (CLEAN) Act (Rep. Fulcher), would require annual lease sales for geothermal energy and would require that all nominated parcels are offered for lease. Increasing the requirement to annual lease sales sends a clear signal to DOI that Congress cares about geothermal leasing and that lease sales must happen more frequently. However, all nominated parcels should not necessarily be offered for lease – BLM should have discretion to offer parcels which are well-suited to geothermal development and are not better-suited to a different use. Adequate staffing at BLM will also be crucial to ensure that the agency is able to meet the annual lease requirements proposed in this bill.
• H.R.5576, the Enhancing Geothermal Production on Federal Lands Act (Rep. Fulcher), would require the designation of geothermal leasing priority areas. This has the potential to streamline and improve the leasing process for geothermal projects.

Geothermal energy has the potential to revolutionize the U.S. energy system, producing clean baseload energy to help meet surging demand while benefiting communities and workers. With improvements to the regulatory system, the U.S. can facilitate safe, efficient deployment of this exciting new energy source.

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¹https://www.iea.org/reports/the-future-of-geothermal-energy

²https://cdn.catf.us/wp-content/uploads/2025/06/09154348/doe-liftoff-nextgen-geothermal.pdf

³https://eplanning.blm.gov/public_projects/2034686/200628933/20121177/251021157/Substantiation-Report_Geothermal_Resource_Confirmation.pdf; https://eplanning.blm.gov/public_projects/2034945/200630587/20126698/251026678/
Geothermal%20Exploration%20Resource%20Operation%20CX%20Substantiation%20Report-%20Proposed.pdf; see also https://www.catf.us/resource/clean-air-task-force-comments-categorical-exclusions-certain-geothermal-resource-confirmation-activities/ and https://www.catf.us/resource/clean-air-task-force-response-national-environmental-policy-act-implementing-procedures-bureau-land-management/