Memorandum of Disapproval of the Geothermal Steam Bill

I am withholding my approval from the "Geothermal Steam Act of 1966."

I am taking this action because many of the principles embodied in the bill violate the public interest.

Geothermal steam is produced by the internal heat of the earth. It is well known to every school child in America under other names. Old Faithful at Yellowstone is one example of a geothermal steam spring.

We know very little about how extensive or valuable our geothermal resources are. They may be an inexhaustible supply of energy. Today, for example, the steam from a single geothermal spring is generating enough electricity to serve a community of 50,000 people. Geothermal springs may also hold untapped mineral wealth--such as gold, lithium, and silver.

These circumstances dictate a policy of prudence and reason in the leasing of federal lands to develop this resource. S. 1674 does just the opposite.

It ignores the basic lessons we have learned much to our sorrow--that our natural resources are priceless treasures which must be developed with wisdom and foresight.

The bill is flawed by six major provisions which run counter to sound public policy:

First: It provides for unfair and unlimited "grandfather" rights. The holders of mineral or mining leases on Federal lands as of September 7, 1965, would be automatically entitled to convert them into geothermal leases. This amounts to a free gift, of valuable public property rights to these developers, and gives them an undue advantage over other prospective developers.

Second: It provides for maximum leases of 51,200 acres--an area four times greater than our experts say is needed for economical development. This could result in a single developer monopolizing the geothermal resources of entire states.

Third: It provides that royalties are payable only on steam "sold or utilized." This could encourage the wanton waste of a precious natural asset.

Fourth: It fails to provide specific and clear authority for the government to readjust the lease terms and conditions at suitable intervals. The public deserves this protection because we still know so little about our geothermal resources.

Fifth: It provides for perpetual leases to the developer if steam is produced in commercial quantities. As a result, future generations of Americans will have lost their stake in the formulation of policies for a natural resource which may be inexhaustible, and whose potential we are only beginning to appreciate.

Sixth: It gives the developer twenty years in which to begin production. Our scientists and engineers say that this is too long a period and will encourage speculation.

In short, I have withheld my approval because this bill does not sufficiently protect the interests of the American people.

If these were only technical flaws in a measure providing for the necessary development of geothermal energy, I would gladly sign the bill. For I believe we must move vigorously to make use of this promising national asset.

But they are more than technical flaws. They represent a serious failure to protect the people's interest.

When we consider landmark legislation of this sort, dealing with a vast and little known natural resource, we must remember that we are acting--not just for today or five years from today--but for decades to come. Once we have given away the people's interest in the wealth of their land, we cannot easily retrieve what has been lost. We must understand that we are trustees for two hundred million Americans. All that we do must 'protect their interest--and the interest of their children and grandchildren-in the rich legacy with which nature has endowed us.

This bill does not do that. And because it does not, I will not give it my approval.

This does not mean we should delay the development and use of these resources. Wise and prudent trustees do not lose opportunities to increase the value of the estate they manage. But we must assure ourselves that we have first protected the people's interest before we make our geothermal springs available for productive development.

I have directed the Secretary of the Interior and the Acting Attorney General to prepare a new proposal to accomplish our objectives--one that eliminates the pitfalls of the present bill.

Next year we will ask Congress for legislation to transform the potential of this national treasure into a reality. We will ask for legislation that will protect the public interest, encourage economic and efficient development with a fair and just return to the developer, and conserve the benefits of that development in coming generations. When that legislation comes before me, I shall sign it enthusiastically.

LYNDON B. JOHNSON

The White House

November 14, 1966