Geothermal Resources Lease (Statewide) Bond - BLM in All States
Table of Contents
Brief Summary
A statewide bond covers your geothermal drilling on every federal lease you hold in one state, so new leases and transfers in that state usually need no fresh bond. BLM will not approve a well pad or drilling until the bond is in place.
The BLM geothermal statewide bond covers all of a lessee's or operator's federal geothermal operations within one state. Under 43 CFR 3261.18 the minimum for drilling operations statewide is $50,000. A new statewide bond for exploration only has a $25,000 minimum under 43 CFR 3251.14. The bond goes on BLM Form 3000-4 and is filed with the BLM State Office for that state.
We can help with all All States bonds!
How to Apply for a Geothermal Resources Lease (Statewide) Bond:
- Confirm whether the bond covers drilling or exploration, since the statewide minimum differs.
- Identify the state and the BLM State Office that oversees your leases.
- Have the 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 and file one originally signed copy with that State Office.
- Wait for BLM approval before any ground disturbing work.
Detailed Information About the All States Geothermal Resources Lease (Statewide) Bond:
Which minimum applies to you
Federal geothermal rules set a different floor for each stage of work.
- Drilling operations, including building a well pad: at least $50,000 for all of your operations within a state (43 CFR 3261.18).
- Exploration under a new geothermal bond: at least $25,000 for all of your operations within a state (43 CFR 3251.14). An existing statewide oil and gas exploration bond can be extended to geothermal exploration by a rider in an amount BLM sets.
- Utilization: an electrical generation facility needs a separate site license bond of at least $100,000 (43 CFR 3273.19). BLM sets the amount for a direct use facility.
Drilling on leases committed to a unit needs a unit bond or a rider to the statewide bond in an amount BLM specifies.
What the bond guarantees
Under 43 CFR 3214.12 the bond covers exploration, drilling and utilization on federal leases, 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 conducting operations. BLM can collect up to the face amount if wells are not plugged, land is not reclaimed or royalties go unpaid, and the bond must be restored before work continues.
Transfers and higher amounts
When you take a lease interest in the same state, you do not need another bond if your statewide bond is large enough to cover the transferred lands (43 CFR 3214.19). BLM may raise any bond above the minimum for a history of noncompliance, a prior surety claim, unpaid royalties, or reclamation costs that exceed the bond (43 CFR 3214.14).
Filing
Use BLM Form 3000-4 or 3000-4a, June 1988 or later editions, with a surety listed in Treasury Circular 570. Statewide bonds are filed in the BLM State Office that oversees your leases or operations, one originally signed copy. Cash bonds are not accepted. Confirm the required amount with that State Office before the bond is issued.
Eligibility and Requirements for an All States Geothermal Resources Lease (Statewide) Bond:
- Corporate surety listed in Treasury Circular 570.
- At least $50,000 for statewide drilling operations, or at least $25,000 for a new statewide exploration bond.
- Bureau of Land Management, Department of the Interior, as obligee.
- Riders for unit operations and amount changes filed with the State Office holding the bond.
- Premium set by the surety after reviewing company financials and credit.
All States Geothermal Resources Lease (Statewide) Bond FAQs:
At least $50,000 for drilling operations within a state under 43 CFR 3261.18, or at least $25,000 for a new statewide exploration bond under 43 CFR 3251.14. BLM can require more.
No. An electrical generation facility needs its own site license bond of at least $100,000 under 43 CFR 3273.19.
With the BLM State Office that oversees your leases or operations in that state, per 43 CFR 3214.17.
After you ask and BLM finds the wells plugged and abandoned, the land reclaimed, and the requirements of 43 CFR 3200.4 met.
