Chat with Chic, December 21, 1984

Chat with Chic A Report from Washington December 21, 1984 By: U. S. Senator Chic Hecht Geothermal heat originates from the hot, molten core of the earth, called magma. Many of our Western States are considered to be geothermally "active" due to the relative thinness of the earth's crust, where underground water reservoirs are often heated to 300-500 degrees Fahrenheit by the nearby magma. When tapped, this hot water and/or steam can be used to generate electricity, heat buildings, dry food, and for other purposes. Our State of Nevada is on the leading edge of the world's geothermal technology. Across the state, several innovative space heating and food pro-cessing projects are already up and running. This past spring, the Nevada Public Service Commission approved three small-scale geothermal electric projects, all of which should be operational within the next two years. It has been estimated that eventually, Nevada could develop as much as 2000 megawatts of geothermal energy ? enough to light a city of two million people! Policy makers all agree that clean, renewable geothermal energy is an attractive, long-range alternative to oil, coal, nuclear, and other conventional sources of energy. Yet, because of its high initial development costs and technical risks, the geothermal industry needs special federal support programs in order to compete with these other fuels at today's prices. The real trick behind a cost-effective federal energy policy is to provide just enough m o r e Chat with Chic Column December 21, 1984 Page two near-term incentives to foster the growth of new technologies (like geothermal) which will be able to pick up the slack when oil prices double or triple (as they inevitably will) at sane point in the future. Many of these federal programs are scheduled to expire within the next two years unless renewed by Congress. Two of the most critical issues were spelled out in the oversight hearing I held in Sparks, Nevada, last April. First, the federal leasing laws must be amended to give developers more time to bring their geothermal leases into commercial production. While I was successful in attach-ing a stop-gap amendment to the 1985 Interior Department funding bill which addressed this problem, Congress must make some permanent changes in the geothermal leasing laws during the upcoming legislative session. Second, the geothermal tax credits are scheduled to expire at the end of 1985. These credits, which apply to both residential and commercial projects, are absolutely essential to continued development of Nevada's geothermal potential. It is also important that the Internal Revenue Service allow low-temperature geo-thermal projects ? such as we have in many Reno-area residential applications ? to qualify for the full federal tax credits. Obviously, many Congressmen will have bigger fish to fry in the upcoming legislative session ? budget deficits, aid to Nicaragua, etc. These problems must be confronted, but it is my policy to always respond to the people, problems and needs of Nevada first. This is why I have placed such a high legislative priority on fighting for policies that will encourage the continued development of one of Nevada's greatest natural resources ? geothermal energy.