The HEATS Act streamlines geothermal energy development on non-entirely federal lands by eliminating the need for a federal drilling permit if state permits are obtained and federal resource ownership is below 50%.
Young Kim
Representative
CA-40
The Harnessing Energy At Thermal Sources (HEATS) Act streamlines the process for developing geothermal energy on lands where the federal government owns less than half of the subsurface resources. This bill exempts certain geothermal projects from requiring a federal drilling permit if a state permit is already secured. Consequently, these projects are generally excluded from major federal environmental reviews under NEPA and the Endangered Species Act. However, the bill maintains the federal government's right to collect royalties and conduct oversight on production measurements.
HEATS Act Cuts Federal Red Tape for Geothermal Drilling, Skips NEPA Review Where Feds Own Less Than 50% of Resources
The new Harnessing Energy At Thermal Sources Act, or HEATS Act, is focused on speeding up geothermal energy projects by significantly reducing the federal permitting process. Essentially, if a geothermal developer is working on land where the federal government owns less than half of the underground geothermal resources, they can largely bypass the federal drilling permit process. They just need to give the Secretary of the Interior a copy of their state-issued permit, and they can start work 30 days later, provided the surface land isn't federally owned.
The Fast Track: Skipping the Environmental Review
This bill’s biggest move is how it redefines what counts as a “major federal action.” By exempting these specific geothermal activities, the HEATS Act lets them skip the comprehensive environmental review required under the National Environmental Policy Act (NEPA). Think of NEPA as the law that forces the government to look before it leaps, assessing the full environmental impact of a project before it starts. This exemption means that detailed, public-facing environmental impact statements won't be required for these projects. Furthermore, these projects also get to skip the federal review under Section 7 of the Endangered Species Act (ESA), which is usually required to ensure projects don't jeopardize threatened or endangered species.
Who Benefits from the Shortcut?
For geothermal developers, this is a massive win. Time is money, and the NEPA process can take years. By relying on the state permit and a 30-day clock, they shave off significant time and cost, potentially accelerating the development of renewable energy sources. This streamlining is intended to make it easier to tap into underground heat, which could be a boon for grid stability and energy independence. However, this relies heavily on the quality and rigor of the state-level environmental review, which can vary widely. For folks living near these sites, the lack of a federal NEPA review means less public input and less federal oversight on potential impacts like groundwater contamination or habitat disruption.
Accountability and the Fine Print
It’s important to note that the federal government isn't completely stepping away. The bill is clear that even if a developer skips the drilling permit, they still owe the U.S. government royalties on any energy or byproducts generated from the federal resources they tap. The Secretary of the Interior retains the right to conduct on-site inspections to verify production amounts and ensure the correct royalties are being paid. So, while the environmental paperwork is cut, the financial oversight remains firmly in place.
Where the Rules Don’t Apply
There’s a critical exception built into the HEATS Act: none of these streamlined permitting rules apply to activities on Indian lands. This includes reservations, pueblos, or any land held in trust by the U.S. for a tribe or individual. This means that geothermal development on tribal lands must still navigate the existing federal permitting and review processes, including NEPA and ESA, which is a significant distinction. For tribes, this maintains the current level of federal scrutiny and consultation, keeping their resources and environmental safeguards under the existing framework, while adjacent non-tribal lands benefit from the new fast-track system.