Big prices for rights to tap heat

The federal government sold geothermal leases on public land in Nevada and California on Tuesday for $20 million including the highest per-acre bid in history.

At an auction in Reno, the Bureau of Land Management took bids on 49 parcels of land, including 43 in Nevada.

Bidders were seeking the right to tap into hot underground water and steam pockets that can be used to generate electricity. Geothermal power is considered a renewable energy that produces little pollution.

Nevada has vast resources of geothermal power, and Senate Majority Leader Harry Reid, D-Nev., has argued that geothermal energy should be used for power generation instead of coal.

The leases in Nevada total 123,000 acres in Churchill, Pershing, Mineral, Nye and Lander counties and sold for $11.7 million. Ormat Nevada of Reno submitted the highest bid for lands in Nevada, $510 per acre on 5,120 acres for a total of $2.6 million.

Other bidders paid $300 or more per acre for Nevada leases.

Binkley Geo Resources of Santa Monica, Calif., submitted the highest bid in history for a BLM geothermal lease for 2,700 acres in the Geysers geothermal field of California. The company will pay $14,000 per acre for 470 acres or $8 million.

BLM Deputy Director Henri Bisson in a statement said the agency was "pleased with the unexpectedly high interest" in the geothermal leases.

"The success of today's sale is a harbinger of continued rising interest in developing the nation's considerable geothermal energy resources, most of which are found on public lands," Bisson said.

Half of the money from the leases will go to Nevada. The county in which the lease is located will get one-quarter of the money; the rest will go to the BLM.

The BLM administers 29 geothermal power plants on federal land in Nevada, California and Utah. The power plants can generate 1,250 megawatts of power, enough to supply the needs of 1.2 million homes.

Nevada has geothermal plants with a total power generation capacity of 270 megawatts, enough for 270,000 households. There are more BLM geothermal leases in Nevada than in all other states combined, the BLM said. Most geothermal plants are in Northern Nevada.