hot water reservoirs are in parts of the western states remote from industry and population. Because steam can be pipelined efficiently for only a few miles, there is little market for this heat unless it can be converted to electricity, which could be transmitted hundreds of miles with relatively small losses. Power generation from the highest-grade geothermal resources is technically feasible now; rises in the prices of other fuels and advances in geothermal technology could render it economically feasible as well.

In addition to the technical and economic problems of locating and exploiting the different kinds of geothermal resources, development faces a number of institutional constraints. Federal and state leasing policies, for example, often conflict. Leasing itself is slow and costly to bidders. The tax status of geothermal development is unclear; the resources are treated as minerals in some states and as water resources in others. The form of future utility contracts with geothermal steam producers is uncertain. All of these problems will retard development and increase costs unless they are corrected. Their influences are discussed more fully later in this chapter, under the heading “Future Development of the Geothermal Resource.”

It is apparent that federal and state governments will largely determine the speed with which the present small geothermal industry can be expanded. By sponsoring research and development in exploration and production techniques, federal funds can provide the technical means. By streamlining leasing procedures, putting the geothermal resource on an equal tax footing with oil and gas, and providing financial assistance, especially in high-risk ventures, federal legislation could greatly speed the day when geothermal energy assumes a competitive place in the U.S. energy market. The timing and extent of these measures will dictate when that day arrives.


The geothermal resource is divided, for the purposes of this report, into six categories.


In many places in the United States, especially in the western states, are underground reservoirs of geothermally heated water, some of which are tapped for space heating and the like. Some electricity is generated abroad by such deposits, but because of their higher salinity the hotter geothermal brines, more suitable for this purpose, are very corrosive to generating

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