BLM – Geothermal Resources Lease Bond (Nationwide)

The Bureau of Land Management (BLM), part of the U.S. Department of the Interior, mandates a geothermal bond for lessees or operators before operations can begin.
The BLM coordinates local, state, and tribal governments to protect federal lands during natural resource extraction. They determine the lease conditions for federal lands usage, including drill permit applications. The BLM also ensures compliance with federal laws via inspections, which range from drilling and environmental checks to theft inspections.
The obligee, in this case, the BLM, requires a surety bond for leasing federal lands for oil, gas, and geothermal drilling. This bond guarantees compliance with federal regulations. If there’s a failure to comply, the BLM can file a claim against the bond. Should a claim be paid out by the surety, the operator (principal on the bond form) will be responsible for repayment.
To meet the permit requirements, operators can opt for financial security through a surety bond or a personal bond.
The surety bond remains in effect from the lease’s initiation till its release and can only be canceled by the BLM. It carries an annual premium renewal for the lease’s duration. Failure to maintain this bond could lead to a claim.
Surety bond requirements differ based on lease types – Nationwide, Statewide, Individual, or National Petroleum Reserve. Nationwide bonds cover multiple operations throughout the nation, while Statewide bonds cover multiple operations in a single state. Individual bonds are for single lease operations, and National Petroleum Reserve bonds cover either single or multiple leases for operations.
For Individual Surety Bonds, a minimum of $10,000 per well is required, which may vary by state. State, Nationwide, or National Petroleum Reserve Surety Bonds require a minimum of $25,000 for all leases in one state.

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