BLM denial of lease extension in California upheld in appeal

Death Valley National Park, California (source: flickr/ Ken Lund, creative commons)
Alexander Richter 29 Jul 2010

The termination of a geothermal lease held by Geo-Energy Partners in California has been upheld by a federal appeals court. The dispute involves companies Ormat Technologies and Magma Power.

Traditionally, geothermal leases provide a right to explore geothermal resources. If a company does not prove exploratory and development work as specified in the lease agreement, the lease can be terminated, as now upheld by a federal appeals court in California.

“A federal appeals court has rejected the bid of a California company to extend its leases for geothermal development in Fish Lake Valley in Esmeralda County.

The Bureau of Land Management terminated the leases of Geo-Energy Partners after two extension extensions and failure for commercial productions.

The U.S. Ninth Circuit Court of Appeals said the company, headquartered in Agoura Hills, Calif., “consistently failed to meet the requirements of the Fish Lake Unit Agreement …”

A spokesman for Geo-Energy Partners could not be reached for comment.

A dispute arose between Geo-Energy Partners and its partner Magma [Attention: It is MAGMA POWER and not Magma Energy Corp, which some readers have pointed out correctly]. And it was trying to reach an agreement with a firm named Ormat, a Nevada geothermal operator.

The appeals court said Geo-Energy admitted no drilling or exploratory work had occurred in the Fish Lake Unit in seven years and that Geo-Energy was unable to reach an agreement for the sale. The company accused Magma and Ormat of “trampling on its rights and frustrating the Fish Lake project.”

After the BLM terminated the leases on the public land, Geo-Energy appealed to the Interior Board of Land Appeals. It upheld the decision of the BLM and Geo-Energy filed suit in federal court in Reno. But former Federal Judge Brian Sandoval, now the GOP candidate for governor, backed up the BLM.

Holly Vance of the U.S. Attorney’s Office in Reno handled the appeal for the BLM but a spokeswoman in the office said she could not talk to the press. The call was referred to Natalie Collins, the public affairs specialist for the U.S. Attorney’s Office in Las Vegas, but she could not be reached for comment.”

Source: The Las Vegas Sun