Geothermal Resources Lease (Nationwide) Bond - BLM in All States
Table of Contents
Brief Summary
One nationwide bond covers your geothermal drilling on every federal lease you hold, in every state, so you are not filing a new bond each time you pick up acreage. BLM will not let you build a well pad or drill until the bond is approved, so getting it placed early keeps the project schedule intact.
The BLM geothermal nationwide bond covers all of a lessee's or operator's federal geothermal operations across the country. Under 43 CFR 3261.18 the minimum for drilling operations nationwide is $150,000. A new nationwide bond limited to exploration has a $50,000 minimum under 43 CFR 3251.14. The bond goes on BLM Form 3000-4 and can be filed at any BLM State Office.
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How to Apply for a Geothermal Resources Lease (Nationwide) Bond:
- Confirm which operations the bond must cover, drilling, exploration or both, since the nationwide minimum differs.
- Have the legal names of all record title owners, operating rights owners and operators the bond will cover.
- Complete the surety application and review the quoted premium.
- Have the bond executed on BLM Form 3000-4 or 3000-4a by a Treasury-listed surety.
- File one originally signed copy at any BLM State Office.
- Wait for BLM approval before building a well pad or drilling.
Detailed Information About the All States Geothermal Resources Lease (Nationwide) Bond:
Which minimum applies to you
The nationwide amount depends on the work the bond has to cover. Federal geothermal rules set different minimums for each stage.
- Drilling operations, including building a well pad: at least $150,000 for all of your operations nationwide (43 CFR 3261.18).
- Exploration operations under a new geothermal bond: at least $50,000 for all of your operations on public lands nationwide (43 CFR 3251.14). If you already carry a nationwide oil and gas exploration bond, you can add geothermal exploration by rider in an amount BLM sets.
- Utilization: an electrical generation facility needs its own bond of at least $100,000 for the site license (43 CFR 3273.19). A direct use facility bond is set by BLM.
Drilling on leases committed to a unit needs either a separate unit bond or a rider to your nationwide bond, in an amount BLM specifies.
What the bond guarantees
Under 43 CFR 3214.12 the bond covers exploration, drilling and utilization on the federal lease, reclamation of the surface and other resources, rental and royalty payments, and compliance with 43 CFR 3200.4. It must cover all record title owners, operating rights owners, operators and anyone who conducts operations on the lease. BLM can collect up to the face amount if wells are not plugged, land is not reclaimed or royalties go unpaid, and you must restore the bond before operations continue.
When BLM can ask for more
The figures above are floors. BLM may raise the amount for a history of noncompliance, a prior claim against a surety, unpaid royalties, or when the bond would not cover estimated reclamation cost (43 CFR 3214.14).
Filing
Use BLM Form 3000-4 or 3000-4a, June 1988 or later editions. The surety must be on the Treasury Department's Circular 570 list. A nationwide bond may be filed in any BLM State Office, with one originally signed copy. BLM does not accept cash bonds. Confirm the exact amount for your operations with the BLM State Office before the bond is issued.
Eligibility and Requirements for an All States Geothermal Resources Lease (Nationwide) Bond:
- Corporate surety listed in Treasury Circular 570.
- At least $150,000 for nationwide drilling operations, or at least $50,000 for a new nationwide exploration bond.
- Bureau of Land Management, Department of the Interior, as obligee.
- Riders for unit operations, transfers and amount changes filed at the BLM State Office holding the bond.
- Premium set by the surety after reviewing company financials and credit.
All States Geothermal Resources Lease (Nationwide) Bond FAQs:
For drilling operations the minimum is $150,000 under 43 CFR 3261.18. For a new exploration bond the nationwide minimum is $50,000 under 43 CFR 3251.14. BLM can require more under 43 CFR 3214.14.
Not by default. An electrical generation facility on a site license needs a bond of at least $100,000 under 43 CFR 3273.19, and BLM sets the amount for direct use facilities.
Not if your existing statewide or nationwide bond is large enough to cover the transferred lands, per 43 CFR 3214.19. Otherwise BLM will want a bond before approving the transfer if unreclaimed wells or disturbance exist.
No. BLM accepts corporate surety bonds or personal bonds backed by items such as a certificate of deposit or irrevocable letter of credit, but not cash bonds.
The surety prices the bond from the bond amount and its review of the company's financial statements and credit. Larger nationwide amounts usually get closer underwriting.
