Geothermal Bill Fast-Tracks Exploration by Exempting Small Drilling Projects from Full NEPA Review

The “Enhancing Geothermal Production on Federal Lands Act” is basically a regulatory shortcut for geothermal energy developers looking to drill on federal land. The goal is to speed up domestic renewable energy production, and the main strategy is streamlining the environmental review process for smaller projects.

The NEPA Fast Pass: What Gets Skipped

For the average person, the biggest change here is how small-scale exploration is handled. The bill creates a new category called a “geothermal exploration project,” which is defined very specifically: it involves drilling wells (like monitoring wells) where the maximum disturbed area is limited to 8 acres and the entire project, including cleanup, must wrap up in 180 days. If a project meets these tight criteria, Section 2 of the bill dictates that it will not be considered a “major Federal action.”

Why does that matter? Being a “major Federal action” is what triggers the full, detailed environmental review under the National Environmental Policy Act (NEPA). By removing that label for these small, temporary projects, the government is essentially giving developers a fast pass. For a geothermal company, this means they can start drilling test wells faster and cheaper. For the public and environmental groups, it means less mandatory, detailed environmental scrutiny for these initial exploratory activities, which raises concerns about oversight, even if the projects are small.

Picking the Power Spots: Geothermal Priority Areas

Section 3 sets up a system to designate “geothermal leasing priority areas” on federal land. The Secretary of the Interior, working with the Department of Energy, has three years to identify these spots. When they pick an area, they have to consider whether it’s economically viable and, crucially, if there’s already a way to get the power to the grid (transmission access). This is a smart, pragmatic move—why lease land for energy if you can’t deliver the product?

However, the bill also addresses the notorious bureaucratic delays associated with environmental paperwork. For these newly designated priority areas, the Secretary must update the environmental impact statement (EIS) that covers them. But here’s the kicker: the bill explicitly states that the Secretary cannot hold up issuing a permit or having a lease sale just because that required EIS supplement hasn't been finalized yet. If the initial environmental review is less than 10 years old, they can proceed. This is great news for developers who want to avoid waiting years for paperwork, but it creates a potential risk for local communities and Tribal governments who might see lease sales move forward before they have a chance to review the most current analysis of environmental impacts.

The Real-World Trade-Off

This legislation is a clear trade-off between speed and scrutiny. On one hand, it addresses a major pain point for renewable energy developers: the slow, expensive permitting process on federal land. If successful, it could genuinely accelerate geothermal energy production, which is a reliable, always-on power source. This benefits the broader energy market and consumers.

On the other hand, the bill achieves this speed by dialing back required environmental checks. While an 8-acre disturbance might seem small, the cumulative effect of many such projects, combined with the provision allowing lease sales before environmental updates are complete, means that the public—and those most directly affected by the development—may have less opportunity for robust input. Developers must restore the land within three years after exploration, but the quality of that restoration will be key, and the bill’s definition of restoration is simply “to pretty much how it was,” which leaves some room for interpretation.