Federal geothermal royalty income derived from the benefits of government-sponsored R and D

The ability of Federally-sponsored geothermal R and D to, in effect, pay for itself through increased royalty payments resulting from enhanced resource development on Federal lands is investigated. The report concludes that achievement of current Federal R and D objectives is likely to result in significant royalty returns to both state and Federal governments. These returns are measured in terms of the increase in royalty payments attributable to the achievement of Federal R and D objectives, as opposed to those payments which would be expected from the on-going low level of private sector R and D absent any Federal support. To perform this analysis, an integrated approach sequentially addresses (1) future wildcat drilling activity, (2) the number and quality of new resource discoveries, (3) the technological potential (megawatts) of the discovered resource base, and the likelihood that it will be developed, and (4) the royalty income which will be generated as a result of development of Federal land. This computer-based modeling approach has been developed by Technecon over the last 5 years under the sponsorship of both the Department of Energy and private industry. Portions of this model have been specially modified and updated during the course of this study.