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Regulatory and Permitting Information Desktop Toolkit

Montana State Geothermal Lease (3-MT-a)

This flowchart is intended to document the process behind the geothermal resource lease in Montana. The procedure is outlined in Rule 36.25.404.

The developer must obtain a geothermal lease from the Montana Department of Natural Resources & Conservation. Because geothermal fluids are considered water resources, developers must obtain an appropriative water right, unless an exception applies. State water laws apply to all geothermal developments involving the production and diversion of geothermal fluids, unless the limited exception in MCA 85-2-306(3) applies. Nonconsumptive closed-loop geothermal development not within the boundaries of the controlled groundwater area may fit within the exception.

Under MC 77-4-108, "If any geothermal development located on state land requires the utilization of water, the lessee may, at any time prior to 1 year before the expiration of his lease, make application to the board for permission to secure a water right to the land under his lease."

In Montana, all geothermal resources on state lands are retained by the state. See MC 77-4-105, "No right to seek, obtain, or use geothermal resources has passed or shall pass with any existing or future lease of state or school lands."

State Geothermal Lease Process

3-MT-a.1 - Application for Lease of State Lands; fee

The application is a form that may be obtained from the Montana Department of Natural Resources & Conservation. The application requires an adequate description of the lands. The application fee is $10.

3-MT-a.2 - Does the Director Decide to Announce the Sale Under Rule 36.25.404(2)?

Under Rule 36.25.404(2), "when sufficient applications have been received to warrant a sale, or at the director's discretion, a sale will be announced."

3-MT-a.3 - Post Notice of Sale

Rule 36.25.404(2)(a), requires notice be given by publication in a trade journal of general circulation in the geothermal industry or in 2 newspapers of general circulation in Lewis and Clark County, Montana. Notice should be published each week for 4 weeks preceding the date of the sale. Those on the list of interested parties under Rule 36.25.404(2)(b) must also be notified.

3-MT-a.4 - Sealed bid & 1/5 of the amount of bid

Sealed bids must be submitted within 40 days after the announcement of the sale. The bidder must include 1/5 of the amount of the bid in cash or by cashier's check, certified check or money order. The money will be returned to unsuccessful bidders.

3-MT-a.5 - Select successful bidder

The lease will be awarded to the qualified bidder who submits a bid of the highest cash amount per acre above the minimum bid of $1 per acre for the first year's rental for the right to lease state-owned geothermal lands. The successful bidder must submit to the department the remaining 4/5 of the amount of bid within 30 days following receipt of notice of award.

3-MT-a.6 - Geothermal Lease

The terms of the lease are written by the Montana Department of Natural Resources & Conservation. Common terms are contained in the Montana Rules.

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