The HEATS Act amends the Geothermal Steam Act of 1970 to remove the requirement for a federal drilling permit for geothermal exploration and production conducted on non‑Federal surface estates when the United States owns less than 50% of the subsurface geothermal estate and the operator holds a State permit. It also declares those activities to be not a "major Federal action" under NEPA, excludes them from consultation under ESA section 7, and limits National Historic Preservation Act coverage to situations where a State has no historic‑preservation law.
For developers and state regulators this is a direct devolution of permitting and review authority designed to speed project starts (allowing work to begin 30 days after the state permit is submitted). For federal land managers, tribes, and environmental reviewers it raises immediate questions about environmental safeguards, Tribal consultation, and how to determine a fractional federal interest in subsurface geothermal resources.
At a Glance
What It Does
The bill bars the Secretary from requiring a Federal drilling permit for geothermal activities on non‑Federal surface estates if the United States owns under 50% of the relevant subsurface geothermal estate and the operator submits a State permit. It declares such activities not to be a "major Federal action" under NEPA, excludes ESA Section 7 consultation, conditions NHPA applicability on the absence of state historic‑preservation law, and allows operations to begin 30 days after the State permit is submitted.
Who It Affects
State permitting agencies, private geothermal developers and utilities working on non‑Federal surface estates, the Department of the Interior and BLM field offices that currently process geothermal permits, and federally recognized Tribes whose lands or resources may be adjacent to or affected by geothermal operations.
Why It Matters
The bill creates a firm federal‑to‑state shift for many geothermal projects, shortening federal review timelines and reducing pathways for federal environmental review. That accelerates development risk profiles and raises novel legal and practical questions about ownership thresholds, Tribal protections, and the federal government's residual enforcement role.
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What This Bill Actually Does
Under the HEATS Act an operator who wants to explore or produce geothermal energy on land where the surface is non‑Federal can avoid a federal drilling permit if two conditions are met: (1) the United States owns less than half of the subsurface geothermal estate the operator will access, and (2) the operator holds and submits a State permit for the same activities. The bill therefore makes a State permit the gating instrument for federal non‑involvement in many projects that touch federally owned subsurface interests only partially.
The Secretary of the Interior’s role becomes largely passive unless the ownership threshold is exceeded or other statutory exceptions apply.
If those conditions are satisfied, the bill treats the activity as not constituting a "major Federal action" under NEPA and requires no further Federal action, meaning the usual NEPA process (EAs or EISs initiated by a federal lead agency) is not available. The measure also bars application of ESA section 7 consultation and narrows National Historic Preservation Act coverage — NHPA review applies only if the State where the activity occurs lacks any law addressing historic preservation.
The bill specifies a 30‑day clock: activities may commence 30 days after the operator submits the State permit to the Secretary.Despite the exemptions from permitting and certain environmental reviews, the bill preserves the United States’ right to receive royalties from electricity production using geothermal resources and any byproducts. It also authorizes the Secretary to conduct onsite reviews and inspections to verify production accounting and royalty payment.
The statute expressly excludes Indian lands and trust resources from the new regime and provides a statutory definition of "Indian land."The text is simple on its face but raises immediate practical questions that the bill does not resolve: how to calculate whether the United States owns "less than 50 percent" of a subsurface geothermal estate in settings with multiple fractional interests or split estates; what happens when state permits vary in scope or conditions from federal permit standards; and how federal inspectors will operationalize oversight without the leverage of a permitting process. Those questions will matter for developers, state agencies, Tribes, and federal field offices trying to apply the new rules.
The Five Things You Need to Know
The bill bars the Secretary from requiring a Federal drilling permit for geothermal exploration and production on non‑Federal surface estates when the U.S. owns less than 50% of the subsurface geothermal estate and a State permit is submitted.
Projects covered by the bill are declared not to be a "major Federal action" under NEPA and, therefore, the bill removes the federal NEPA process for those activities.
The bill expressly exempts covered activities from Endangered Species Act Section 7 consultation and limits National Historic Preservation Act obligations to states that lack a historic‑preservation law.
Covered activities may begin 30 days after the operator submits the State permit to the Secretary, creating a short statutory clock for commencement.
The statute preserves royalty obligations to the United States and authorizes the Secretary to perform onsite inspections to verify production accounting and payment, while explicitly excluding Indian lands from the new regime.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Short title — HEATS Act
This brief section names the bill the "Harnessing Energy At Thermal Sources Act" or "HEATS Act." It carries no substantive effect but frames the bill as targeted at geothermal resource development and allows references to the bill by its acronym in implementing guidance or litigation.
No Federal drilling permit when U.S. owns <50% and a State permit exists
This is the operational core: the Secretary shall not require a federal drilling permit for geothermal exploration and production on non‑Federal surface estates if two conditions are met — the United States owns less than 50% of the subsurface geothermal estate to be accessed, and the operator submits a State permit covering the activities. Practically, the provision shifts initial permitting responsibility to States for many projects that touch federal subsurface interests only partially. The text leaves the measurement of the "less than 50 percent" threshold undefined, which creates room for disputes over title, ownership shares, and the unit of measurement (e.g., by tract, pooled unit, or resource reservoir).
NEPA, ESA, NHPA carve‑outs and 30‑day commencement
This subsection declares covered activities to be not a "major Federal action" under NEPA, requires no additional Federal action, allows activities to start 30 days after State permit submission, exempts such projects from ESA section 7 consultation, and narrows NHPA application to states lacking historic‑preservation laws. Mechanically, that removes federal review and consultation processes that often extend timelines and trigger mitigation conditions; instead, the bill imposes a short, bright‑line 30‑day window after which operations can proceed. The NHPA limitation creates a variability depending on the State's legal regime: in States with robust preservation law, federal NHPA process still applies by its cross‑reference.
Royalties preserved and federal inspection authority retained
The bill preserves existing royalty obligations to the United States for electricity production using geothermal resources and byproducts, explicitly stating that the waiver does not alter amounts owed. It also authorizes the Secretary to conduct onsite reviews and inspections to ensure proper measurement, reporting, and payment of royalties. That creates a continued federal fiscal interest and an enforcement lever, but the provision stops short of specifying inspection frequency, remedial enforcement tools, or penalty structures tied to nonpayment.
Exceptions for Indian lands and definition of Indian land
These subsections exclude Indian lands and trust‑managed resources from the new permit waiver and define "Indian land" comprehensively (reservation boundaries and lands held in trust or restricted status). By carving out Indian lands, the bill preserves existing federal trust responsibilities and avoids applying the waiver where tribal trust interests are implicated. It does not, however, address potential impacts on tribal resources or consultation requirements where projects on adjacent non‑Federal surface estates could affect tribal interests.
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Explore Energy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Private geothermal developers and project owners — They gain faster starts and lower permitting transaction costs when projects meet the ownership threshold and have State permits, reducing the time and uncertainty associated with federal permitting and NEPA/ESA processes.
- State permitting agencies — States that issue geothermal permits will gain leverage and relevance, as their approvals become the primary authorization for many projects; that creates potential revenue and influence over project conditions.
- Electric utilities and clean‑energy investors — Reduced federal review can shorten project timelines and improve bankability for geothermal generation that relies on private or state permitting, making projects more attractive to capital providers.
Who Bears the Cost
- Department of the Interior and BLM field offices — They lose federal permitting control for many projects and will need to monitor compliance and royalties through inspections rather than permitting, potentially straining enforcement resources without a permitting leverage point.
- Federally recognized Tribes and tribal trust resources — Although Indian lands are excluded, tribes may still face indirect impacts from adjacent projects (water, seismic risk, cultural resources) and the bill reduces federal procedural hooks that sometimes trigger consultation or mitigation.
- Environmental and conservation organizations/local communities — Groups that rely on federal review processes (NEPA, ESA consultation, NHPA review) to secure environmental analysis, public input, and mitigation will have fewer avenues to influence or delay projects, raising concerns about local environmental protection and cumulative impacts.
Key Issues
The Core Tension
The central dilemma is between speeding decarbonizing infrastructure by devolving permitting authority to States and the risk of eroding federal environmental and tribal protections: the bill reduces procedural barriers to development but removes federal review tools that identify harms, require mitigation, and provide public and tribal involvement—thereby trading faster deployment for weaker centralized safeguards.
The bill accelerates project timelines by converting State permits into the decisive authorization for many geothermal activities, but it leaves crucial implementation questions unanswered. The statute does not define the unit or method for calculating "less than 50 percent" U.S. ownership of the subsurface geothermal estate, which could produce litigation over whether interest is measured by acreage, by leasehold share, by pooled units, or by resource reservoir.
That ambiguity creates legal risk for developers and uncertainty for federal field offices deciding whether to assert a federal permitting requirement.
A second tension concerns environmental and Tribal safeguards. By excluding NEPA and ESA section 7, the bill removes federal procedural opportunities to identify and mitigate impacts to species, habitats, or cumulative landscape effects.
The Secretary retains inspection authority and royalty enforcement, but inspections are a blunt tool for environmental management compared with the conditions and mitigation that often accompany permits. The NHPA rule, conditioned on the existence of state law, creates patchwork coverage and incentives for forum shopping.
Finally, excluding Indian lands preserves trust obligations on paper but does not address cross‑border impacts where non‑Indian surface projects affect Tribal resources or cultural sites, nor does it specify consultation protocols when tribal interests may be implicated.
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