RAPID/Best Practices/Geothermal Permitting and NEPA Timelines
Geothermal Permitting and NEPA Timelines
- Planning development projects to allow for combined and more comprehensive NEPA analyses
- Improved tracking of NEPA processes and timelines
- Potential agency policy changes
1. Utilize CUs, CXs and DNAs, which take less time than EAs and EISs.
- Finding ways to utilize these types of environmental reviews can lead to reduced timelines. Example: development of new geothermal-specific categorical exclusions, where applicable.
- NEPA timeline data are critical to identifying issues and in targeting additional potential for improvement in project timelines.
2. Track timelines to identify applicant/agency delays to increase overall accountability and transparency.
3. Implement BLM policy changes that can help facilitate the goal of lowering the NEPA permitting timelines.
- The 2008 PGEIS cleared 78% of geothermal parcels for lease using a DNA, eliminating the need to conduct 295 EAs and effectively reducing the overall project timelines.
- A programmatic EIS could be conducted for exploration drilling, or
- individual field offices could conduct pre-lease EAs for exploration drilling.
4. Address the development environment
- Actively engage with tribes and the public; and avoid areas containing wildlife protected under the Endangered Species Act (ESA), when possible.
5. Combine environmental analyses for exploration and development drilling.
- Use comprehensive POOs or PODs that may only require one EA as opposed to two or more.
- While the possibility exists for:
- potentially longer up-front analysis, delaying initial exploration efforts and
- potentially unnecessary expenditures on analyses for prospective GDPs that are never used due to negative exploration results,
- These time and cost expenditures could be more than offset by the time saved in projects that do indicate positive exploration results.
6. Develop EAs and EISs that are more comprehensive than necessary.
- Where a project may only require a defined number of drilling permits initially, developers that compile NEPA documents contemplating additional drilling permits (that may or may not be needed) have been able to realize approval for those additional permits by tiering a DNA of the initial EA or EIS.
- This practice could also be used for utilization activities, by contemplating more impacts than seemingly necessary in the POU.
- At a minimum, the data shows that the median approval time for a tiered DNA was just under 30 days, whereas the median approval time for an EA was 302 days.
- Developers may not have enough project data for early, upfront planning
The National Environmental Policy Act of 1969 (NEPA) requires federal agencies to review the potential environmental impacts of proposed actions in order to determine whether the proposed actions significantly affect the quality of the human environment. (NEPA, Sec. 102). The NEPA process integrates natural and social sciences, environmental design arts, agency cooperation, and public comment and opinion in order to achieve the Act’s stated goals (NEPA, Sec. 101). NEPA’s purpose is to outline a balanced approach in order to improve and coordinate federal plans in a way that allows for the United States (U.S.) to use the environment in a beneficial way, preserve historic and cultural resources, maintain safe and aesthetically pleasing surroundings, achieve resource use for an increasing population, and enhance the quality of renewable resources while approaching the maximum attainable recycling of depletable resources. (NEPA, Sec. 101).
The NEPA process is triggered whenever the federal government undertakes an activity that may impact the human or natural environment. For purposes of geothermal development, NEPA is commonly trigged either because the proposed project is on federally managed lands or federal funds are contributed to the project. Because 90% of the geothermal resources in the U.S. are on federally managed lands (DOI News Release, 2008) and multiple NEPA analyses are commonly required for the development of utility-scale geothermal projects, NEPA considerations are a major factor in present and future geothermal development projects.
In identifying the barriers to geothermal development, geothermal industry stakeholders list high up-front capital costs, lack of investment associated with perceived risk profiles caused by uncertainty in the probability of realized development, long project timelines, and the need for a more streamlined permitting process. (Blue Ribbon Panel; Islandsbanki Report). Because the NEPA process is almost always necessary in some form for geothermal projects, NEPA affects the uncertainty in permitting timelines, overall project timelines, and perceived risk profiles. While all federal projects must go through the sometimes-lengthy NEPA process, geothermal projects are unique. Each phase of development may require the NEPA process: a single location could conceivably trigger the NEPA process six separate times (Figure 1). The fragmentation exists because project developers may be unwilling to apply a more time-consuming NEPA process (e.g., an EA) to early, prospective project phases that may require a less-intense analysis (e.g., a CX). In addition, data from one phase of development is often used and relied upon to inform activity decisions in subsequent phases.
Reducing the overall project time directly attributable to NEPA, whether by reducing the time of individual NEPA processes or reducing the frequency of NEPA analysis for a particular project, can alleviate some of the major barriers to geothermal development. Reducing NEPA timelines directly decreases overall project timelines which indirectly decreases the perceived risk profile– lowering three of the four barriers to geothermal development identified by industry. Lowering these barriers is in line with one of NEPA’s stated goals: to “enhance the quality of renewable resources.”
In 2012, the United States Government Accountability Office (GAO) was asked by the House of Representatives Chairman of the Committee on Natural Resources to review the status of renewable energy permitting on federal land, which included the time frames for permit processing since enactment of the Energy Policy Act of 2005 (EPAct) as well as steps that the agencies have taken to expedite renewable energy development on federally managed lands.
The resulting report (GAO 2013), issued in January 2013, found that for the period following EPAct through May 2012, BLM received 29 new applications for developing geothermal power in Nevada, including Notices of Intent (NOIs) to Conduct Exploration, Geothermal Drilling Permits (GDPs), and Plans of Utilization (POUs). The approval time for completing NEPA analysis and obtaining geothermal permits ranged from 1 to 4 years, and depended largely on the type of NEPA analysis (e.g., CX, EA, EIS) that was required.
This best practice provides an overview of the different types of NEPA analyses, and of the permitting process for geothermal development and its relation to the NEPA-related environmental review processes. The discussion is focused on projects developed on Bureau of Land Management (BLM) and U.S. Forest Service (USFS) lands. An analysis of project timelines then presented by comparing the amount of time required for the specific NEPA processes for each phase of development of various past geothermal projects and outline specific factors within a sample of 39 geothermal projects shown to individually or cumulatively increase NEPA project timelines. Based on the timeline data analysis, proven and potential strategies are presented that could lower the time necessary to complete the NEPA process for individual geothermal projects.
1. Utilize CUs, CXs and DNAs
Median timelines for processing activities as CU, CXs and DNAs (1-2 months) are significantly shorter than median time frames for EAs (10 months) and EISs (25 months). Finding ways to process geothermal permits using these shorter reviews will help to reduce project time frames. One way to increase the potential application of CXs is to develop geothermal-specific CXs – either by administratively or statutorily (Levine and Young, 2014). Another is to increase the use of DNAs by expanding the scope of project EAs
2. Track NEPA Timelines
In meetings with industry and agency personnel (Young and Witherbee, 2012) the following causes for applicant/agency delays were highlighted as potential issues:
- Developers changing project plans after the initial application
- Waiting on developers to provide additional information
- Agency personnel on vacation with no back-ups in place
- Agency personnel with competing priorities
- Agency personnel without sufficient budget to process EAs
- Untrained agency personnel
- Lack of inter-agency coordination
Note that detailed project information (e.g. notes, emails, calendars) were not available for any of the projects reviewed, and therefore, it is not possible to know which, if any, of the above factors played a role in the project timelines.
A step towards reducing applicant and agency delays in NEPA timelines would be to track project schedules and metrics in more detail, thereby increasing overall accountability and transparency, as well as providing the needed information to identify causes of delays.
3. Implement BLM Policy Changes
Implementing BLM policy changes can help facilitate the goal of lowering the NEPA permitting timelines.
EXAMPLE: Combining Land Use Planning and Pre-Leasing Analyses
The Energy Policy Act of 2005 changed the BLM’s geothermal leasing program from essentially a noncompetitive leasing system to an all-competitive leasing system. The geothermal leasing regulations (43 CFR 3200) issued by BLM in June 2007 require that BLM first offer all geothermal leases for utility-scale electrical production through a competitive auction.
Lands for competitive geothermal leasing are formally nominated by the public. If the lands are available for leasing, BLM will conduct a leasing analysis, typically an EA, to determine what lands will be made available for leasing, and which site-specific stipulations will be attached to the lease. BLM is required to hold an auction, at a minimum of every two years when lease parcels are available.
Prior to completion of the PGEIS, an EA was typically prepared prior to offering a geothermal lease to an applicant or for competitive sale. Currently, lease nominations are cleared for leasing through a DNA tiered to the LUP. For Example, 295 of 375 geothermal lease parcels were cleared for leasing using the DNA process by tiering to the amended RMP, which was tiered to the PGEIS. This was a major improvement for geothermal development, in that the BLM was able to offer geothermal leases with the shorter DNA process, instead of having to prepare an EA.
4. Address the Environment
A review of 39 EAs for geothermal projects revealed that NEPA timelines increased when tribes or the larger public actively commented throughout the process. Assessment timelines also increased when the project area contained wildlife protected under the Endangered Species Act (ESA) and when there were overlapping jurisdictions of federal agencies.
Actively engaging with tribes and the public may help to reduce delays, and avoiding areas containing wildlife protected under the Endangered Species Act (ESA), when possible, may also help to reduce timelines.
5. Combined and Tiered NEPA Analyses
Another way to reduce project timelines is to reduce the number of times a project goes through the NEPA review process. As previously mentioned, one of the reasons the NEPA process time requirements can be a barrier to geothermal development is due to the number of activities and permits that require NEPA analysis throughout a geothermal project. Because each NEPA process takes time, and introduces uncertainty into the geothermal project, agencies and developers have looked at ways of reducing the timelines and risk by conducting fewer analyses. The strategy is to conduct a larger NEPA analysis (EA or EIS) that includes analysis of the potential impact of more project activities, along with subsequent smaller analyses (e.g. DNAs). We look at four examples of this concept in more detail below. 1. Combining Land Use and Pre-Leasing (Figure 1, NEPA Analyses #1 and #2) - see above 2. Combining Pre-Leasing and Exploration Drilling (Figure 1, NEPA Analyses #2 and #4) 3. Combining Exploration Drilling and Development Drilling (Figure 1, NEPA Analyses #4 and #5) 4. Tiering NEPA Analyses - relying on existing NEPA analysis for use in subsequent analysis (Figure 1, multiple combinations)
Including Exploration Drilling in Pre-Lease EAs
There have been discussions and recommendations amongst stakeholders recommending that a geothermal lease be conditioned so that geothermal exploration drilling (TGH or slim holes) can be permitted without having to conduct an additional EA. The major drawback is that an EA will be required prior to offering a lease parcel for competitive sale. One of the major industry concerns prior to the PGEIS was the time from lease nomination to being offered for sale. However, having a geothermal lease that would allow the lessee to access the lease for exploration drilling would eliminate the additional time required to conduct a post-lease NEPA analysis and the additional expense to the lessee. There is some concern that an agency would incur the expense of the pre-lease exploration drilling EA, and that the lease would not be sold, and therefore, the costs would not be recouped. Nevertheless, such a lease may be more valuable to potential bidders at a competitive lease sale, which could offset the additional BLM costs for the pre-leasing NEPA analysis.
Alternatively, geothermal stakeholders have suggested that a programmatic EIS for exploration drilling be conducted, similar to the programmatic EIS for leasing. This would reduce the burden on individual field offices to complete the exploration EA before lease sales.
One of the reasons this option is getting so much attention from industry relates to project risk. Until a resource is proven with exploration and confirmation drilling, a geothermal project has higher risks and more expensive financing options then once the project is at the development phase, and may have difficulties in finding financing at all (Speer, et al). Reducing permitting risk and time frames in the early phases of the project (NEPA analyses #3 and #4 in Figure 1) has the potential to increase potential value for geothermal developments.
Combining Exploration and Development Drilling NEPA Analysis
Some geothermal developers have submitted combined exploration and drilling plans for review in a single environmental analysis. Combined NEPA analysis requires the developer submit both permit application to the BLM including an NOI for drilling TGHs and a Sundry Notice or GDP for drilling slim holes and development wells as a POD or POO. An initial review of these combined NEPA documents indicates that the processing time is greatly reduced compared to the practice of submitting two separate permits that requires two EAs.
For example, the New York Canyon Geothermal Project, combined its exploration and drilling into a single EA and was able to complete permitting for the entire project in about four years.
This project’s timeline includes three separate NOI’s for geophysical exploration that were evaluated by BLM and determined to have met the CU criteria. The next phase of permitting included the preparation of an EA for NOI’s for TGH and GDPs for exploration development drilling. The final phase of permitting included the preparation of a subsequent EA to approve a POU for additional development of the geothermal reservoir and construction of a power plant with associated transmission lines.
An additional example is the Drum Mountain-Whirlwind Valley Project, for which the developer submitted a single combined application with an NOI for exploration wells and a POO for development wells. For the Leach Hot Springs Geothermal Exploration Project, the developer submitted a single, combined permit application. For these applications, the BLM combined the NEPA analysis in one document. And each combined analysis accommodated construction of exploration well pads and up to one temperature gradient well, one observation well, and one production well on each site.
Had the example projects conducted each permitting action and NEPA analysis individually, the time before development drilling would have been delayed until the completion of a second EA.
6. Tiering NEPA Analyses
Geothermal developers have also used the approach of developing comprehensive EAs or EISs early on in the project and then later having additional exploration or production wells approved through a DNA. Table 6 provides a list of DNAs completed for the EAs and EISs in the Geothermal NEPA Database. As shown in the table, the majority of DNAs (12/18) took less than a month for approval, with only one taking greater than two months. The median approval time for a tiered DNA was 27 days – significantly shorter than the median approval time of 302 days for an EA.
The information and data presented and analysis conducted for this study illustrate six main points.
- The NEPA process can add significant time to the development of geothermal projects. Finding ways both to adequately comply with the NEPA process and to decrease the time associated with compliance can greatly reduce the degree to which NEPA review prolongs geothermal development. Streamlining the NEPA permitting process could have the dual effects of reducing overall project timelines and lowering the perceived risk profiles of geothermal development projects.
- CUs, CXs and DNAs take less time than EAs and EISs. Finding ways to utilize these types of environmental reviews more often can lead to reduced timelines. One such way to accomplish this is through development of geothermal-specific categorical exclusions, where applicable.
- There may be potential to reduce NEPA timelines by tracking timelines and identifying applicant/agency delays, which will increase overall accountability and transparency. These data are critical to identifying issues and in targeting additional potential for improvement in project timelines.
- Recent policy changes provide a glimpse of the BLM’s ability to help facilitate the goal of lowering the NEPA permitting timelines. The 2008 PGEIS cleared 78% of geothermal parcels for lease using a DNA, eliminating the need to conduct 295 EAs and effectively reducing the overall project timelines. Expanding on this policy idea, a programmatic EIS could be conducted for exploration drilling, or alternatively, individual field offices could conduct pre-lease EAs for exploration drilling. Either option would further streamline the permitting process during the critical high-risk, low-financing-option early phases of geothermal development.
- NEPA process timelines can be reduced by combining the environmental analyses for exploration and development drilling through comprehensive POOs or PODs that may only require one EA as opposed to two or more. While the possibility exists for (1) potentially longer up-front analysis, delaying initial exploration efforts and (2) potentially unnecessary expenditures on analyses for prospective GDPs that are never used due to negative exploration results, those time and cost expenditures could be more than offset by the time saved in projects that do indicate positive exploration results.
- NEPA permitting timelines can be reduced by developing EAs or EISs that are more comprehensive than necessary. Where a project may only require a defined number of drilling permits initially, developers that compile NEPA documents contemplating additional drilling permits (that may or may not be needed) have been able to realize approval for those additional permits by tiering a DNA of the initial EA or EIS. This practice could also be used for utilization activities, by contemplating more impacts than seemingly necessary in the POU. At a minimum, the data shows that the median approval time for a tiered DNA was just under 30 days, whereas the median approval time for an EA was 302 days.
In conclusion, there are multiple strategies the BLM and developers may incorporate into their geothermal development management and practices that could help to lower NEPA permitting timelines and foster growth in the geothermal industry. Ultimately, developers need to find the best way to balance up-front project capital costs with a contingency-laden timeline. Focusing on improving NEPA efficiencies is one way to achieve this balance.