D. History of Geothermal Leasing Near Crater Lake National
Park by the Bureau of Land Management
* IF CONCLUSION IS REACHED THAT THE HYDROTHERMAL SYSTEMS ARE
CONNECTED, THEN PROCEED TO SECTIONS VI, VII, and VIII. Attachment 2-1
Geothermal Leasing History and Chronology For
Geothermal Units Mazama I and II
in the Winema National Forest
Adjacent to Crater Lake National Park Oregon
Prepared by the Bureau of Land Management
Oregon State Office. Division of Mineral Resources
Mount Mazama, the collapsed volcano which contains Crater Lake, is often cited
in the background and setting descriptions of Crater Lake National Park (CLNP).
Mount Mazama is an irregular, east-west elongated, ellipsoidal volcano covering
about 100 square miles entirely within CLNP. It is a shield and stratovolcano
complex (with certain exceptions) that collapsed from a major eruption some 6800
years ago and created the spectacular Crater Lake caldera. CLNP occupies a
roughly rectangular tract that includes additional smaller volcanos and covers
about 286 square miles.
Its rocks indicate a history of active volcanism covering more than 400,000
years with the most recent volcanic episode estimated to be about 4,000 years
before present. The tectonic/volcanic forces that operated throughout that
period still operate today. There are, however, no known hot springs associated
with Mount Mazama.
Geologic literature relating to the Mount Mazama area contains information that
make it and adjacent lands, an attractive geothermal resource target. Since
geothermal leasing is not possible within National Parks, adjoining lands have
attracted interest in exploring for geothermal resources.
Lands adjoining Mount Mazama were largely ignored by the geothermal community in
the initial surge of leasing from 1974-1980. In the spring and summer of 1982,
California Energy Company Inc. (CECI) started to apply for leases on National
Forest lands that border the Park. These National Forest lands have been
harvested for timber and contain a well developed road network, log landings and
clearings that could facilitate access to drill rigs and cleared drill sites.
Additional lease applications in National Forests nearby CLNP continued until
the summer of 1985. Total applications reached 110 and covered about 213,199
acres. Presently (5/91) only 46 leases remain covering about 76,516 acres.
Leasing interest northwest of CLNP in Douglas and Jackson Counties started in
the spring of 1982. The biggest push came in January 1984 when CECI applied for
a lease block in the Rogue River National Forest. By the summer of -1985, there
were 32 applications - 25 in the Rogue and 7 in the Umpqua National Forests
covering 59,942 acres.
From this activity there are now (5/91) only 15 applications pending in the
Rogue NF covering 25,712 acres. The Forest Service has never consented to
leasing in this area and no leases have been issued.
The two main lease application blocks were in the Winema National Forest on the
south and east side of CLNP covering about 85,475 acres. These blocks were
formed into Geothermal Leasing Units - called Mazama I and Mazama II. Leases
were issued beginning at the end of 1983 through the summer 1985, and contained
a "contingent right" stipulation. The stipulation requires that each phase of
exploration and development be analyzed and approved by the BLM Authorized
The Geothermal Leasing Unit rules are governed by the Code of Federal
Regulations (43 CFR 3280) and are set up in the interest of cooperative
exploration and conservation of the resource. Unit formation and agreements
provide environmental benefits, bringing an element of harmony, order and
cooperation among otherwise competing interests.
A Geothermal Leasing Unit is a block of land whose size and shape are based on
geology and development potential. The Unit is formed by one or a group of
lessees, and possibly non-lessees who have land or mineral rights in the unit
area. The unit members enter into an agreement with the Bureau of Land
Management on a plan of exploration with clear targets and guidelines. After
discovery, production and development issues are addressed.
The Unit members agree to share costs for a plan of diligent exploration which
is more rigorous than that normally required of geothermal lessees. In return
for the rigorous unit commitments, the acreage within the unit is excluded from
the member's statewide leasing acreage limitation of 51,200 acres. CECI is the
only federal lessee in the two units (Mazama I & II), though the units contained
both private and state lands.
At this writing, (5/91) the two units have about 76,516 acres under lease. Due
to the uncertainties regarding the future possibility of lease development
arising from the Congressional classification of Crater Lake as a Significant
Thermal Feature, (P.L. 100-443) the Bureau of Land Management has suspended the
leases and all unit obligations in Mazama I and II units.
Two major environmental reviews were completed addressing CECI's Plan of
Exploration and proposed revisions to the plan. Both involved cooperative
efforts between the Bureau of Land Management, the Forest Service, and the
National Park Service, including extensive public participation and review. The
reviews resulted in the creation of extensive reports, the involvement and
consultation of agency and outside experts, and the development of significant
protective stipulations for National Park and National Forest values, as well as
public safety and conservation of potential geothermal resources. Both required
the commitment of considerable workforce, budget and management attention.
Decisions arising from one of these reviews were challenged by several local and
national public interest organizations. Appeal documents were presented to the
Interior Board of Appeals (IBLA), and after an extensive eighteen month review,
the Bureau of Land Management's decisions were affirmed. Subsequent petitions
for reconsideration and a stay of action were dismissed. The integrity and
quality of the Government's environmental review process stood the rigorous test
and was sustained. No environmental damage of any consequence can be cited as a
result of the exploratory work performed since 1984.
In addition to the required environmental work performed in compliance with the
National Environmental Policy Act (NEPA) of 1964, the Bureau of Land Management
decided to learn more about the noise level generated by drilling. To do this,
it was necessary to learn about normal sound level within CLNP. There were no
previous sound studies within CLNP to use as a baseline.
Between 1985 and 1988, Bureau of Land Management staff took sound measurements
at eight locations selected by CLNP officials within the Park. These were taken
during times when both day and night drilling operations were ongoing, and when
no drilling took place. While a final report has not been completed, preliminary
data indicates that drilling sounds cannot be heard above the normal vehicular,
airplane and visitor noise in the park.
In August 1988 CECI addressed the noise issue by simulating the sound of a 120
MW geothermal power plant from the MZ I-11A drill site about a half mile from
the CLNP boundary. They used a powerful amplifier and large speakers to
broadcast the sound and publicized the test with invitations to the media. The
sound was not audible at the nearby Park boundary nor from other locations
within the Park. In 1989, CECI began air monitoring work as well.
The Federal agencies involved in or interfacing with leasing activity have
cooperatively exhibited a very high level of environmental responsibility and
conservative decision making throughout the process. This kind of performance
preceded and was independent of the Congressional classification of CLNP as a
Significant Thermal Feature.
The Congressional classification of Crater Lake as a Significant Thermal Feature
occurred in the midst of an approved exploration plan after about five years of
expenditure and investment by the lessee. Continuance of the Significant Thermal
Feature classification may impose regulatory and operational delays and costs
that could effectively render geothermal leases marginally viable or inoperable
and could deter or prevent future development of the geothermal resources nearby
The following chronology includes milestones and discrete steps in the leasing
activity that occurred on Geothermal Leasing Units Mazama I & II (Klamath
MAZAMA I (MZ I): No. U-410R L 001G (East of CLNP)
MAZAMA II (MZ II): No. U-410R L 002G (South of
Nov. 23, 1983: Unit Applications received by
BLM with all supporting information, maps, plans, and geologic report.
Dec. 19, 1983: BLM approves unit agreement
after review, coordination, discussion and revision.
Jan. 1, 1984: Agreement and leases take effect
MZ I covers a logical unit of 80,690.97 acres, this is composed of: Federal Land
68,832.49 acres; state owned land 2,500.22 acres; and privately owned land
9,358.26 acres. 38 leases cover about 68,284.65 acres. MZ II covers a logical
unit of 18,682.66 acres. 12 leases cover 16,642.66 acres.
Mar. 1, 1984: BLM receives a Plan Of
Exploration (POE) from CECI and begins work on an Environmental Analysis (EA).
The plan calls for drilling 24 slim core temperature gradient drill holes about
4,000' deep, with 4-9 holes to be drilled the first field season.
Mar. 8, 1984: BLM requests comments from public
April 1, 1984: Suspension of leases in unit
takes effect. Suspension due to delays required to perform environmental
April 2, 1984: Geothermal Drilling Permit (GDP)
applications filed for 6 sites in MZ I and 3 sites in MZ II.
May 11, 1984: EA available for public review.
July 3, 1984: Geothermal Exploration Permit
approved - Radon/Mercury sampling.
July 20, 1984: Public inspection of drill sites
and Crater Lake N.P.
Nov. 9, 1984: BLM issued a decision suspending
leases effective April 1, 1984.
Feb. 28, 1985: Forest Service provides
concurrence for approval of a modified Plan of Exploration.
April 15, 1985: CECI submitted GDP for drill
holes MZ I-11A and MZ II-1.
July 31, 1985: BLM decision issued, suspension
of operations on leases in unit is rescinded, effective on date of decision.
July 1985: CECI informally notified BLM that
planned drilling (of drill holes in MZ I and MZ II) would be postponed until
May 12, 1986: CECI informed BLM that it is
relinquishing four leases at the northern end of the unit totalling 8,411.92
acres, so that the remaining Federal lease acreage in Mazama I is 59,872.73
acres. State and private land at the southern end of the unit were also dropped
from the unit. BLM acknowledges the unit contraction.
May 27, 1986: CECI submitted an amended unit
agreement commensurate with its now reduced acreage in MZ I.
June 3, 1986: BLM accepts the Mazama I
amendment (referred to above) which contains specified escalating dollars per
Aug. 7, 1986: CECI submitted GDP application
for Sundry Notice for drill hole MZ I-11A.
Aug. 15, 1986: CECI withdraws Sundry Notice.
Aug. 21, 1986: CECI Submitted an amended Sundry
Notices (including one for drill hole MZ II-1) covering the size and length of
Aug. 29, 1986: BLM approves the Sundry Notice
for drill hole NZ I-11A, but postpones action on drill hole MZ II-1.
Oct. 3, 1986: CECI submits Emergency
Contingency Plans for both Newberry and Mazama core hole drilling -
safety/emergency procedures and H2S contingency plans.
Nov. 3, 1986: CECI submitted Sundry Notice to
temporarily abandon drill hole MZ I-11A.
Nov. 4, 1986: GDP for MZ II-1 approved.
Nov. 5, 1986: Drilling of MZ II-1 begins.
Nov. 10, 1986: BLM approved abandonment Sundry
Notice for MZ I-IIA.
Nov. 12 1986: CECI submitted Sundry Notice
requesting: 1- deepening drill hole MZ I-11A from 4000' to 5500' and 2- drilling
without returns. For MZ II-1, drilling reached TD @ 485'.
Dec. 1986: BLM began preparation of a
supplemental EA for modifying the approved GDPs.
Jan. 2, 1987: Approved Sundry Notice for
temporary abandonment of drill hole MZ II-1, TD-485'.
July 1, 1987: BLM signed a Decision Record
approving 1- modifications of the GDPs and 2-permission to drill on previously
July 28, 1987: Sierra Club and others filed
appeal to IBLA of a July 1, 1987 Oregon State Office decision to permit
continued temperature gradient drilling, deepening from 4,000' to 5500' and
drilling w/o circulation) Case to be known as IBLA 87-735 Appeal of Sierra Club
Inc. et. al. (107 IBLA 96).
Aug. 25, 28, and Oct. 29, 1987: CECI requested
suspension of lease and unit obligations due to environmental events and
litigation connected to drilling.
Nov. 12, 1987: BLM granted suspension of lease
and unit obligations effective
Nov. 1, 1986 (the first day of the month in
which operations actually ceased.
Aug. 4, 1988: CECI invites the public to
witness the simulated sounds of a 120 MW geothermal power plant broadcast from
the MZ I-11A site, a halfmile from CLNP boundary.
Sept 22, 1988: Geothermal Steam Act Amendments
of 1988 (P.L. 100-443) signed into law; Crater Lake NP classified as a
Significant Thermal Feature.
Feb. 1, 1989: IBLA affirmed BLM's decision that
no EIS is required and also affirmed BLM's approval of the amendments to CECI's
drilling permits (IBLA No. 87-735/107 IBLA 96).
Mar. 24, 1989: BLM rescinded a previous
decision (of Nov.12, 1987) suspending CECI's leasing and unit obligations for
Mazama I and Mazama II Unit Agreements). Effective May 1, 1989, CECI may resume
full enjoyment of its leasing rights and begin fulfillment of its leasing and
April 3, 1989: Sierra Club, Oregon Natural
Resources Council, & National Parks and Conservation Association filed with IBLA
a petition for reconsideration (of the IBLA 87-735/107 IBLA 96 decision) and a
motion for a stay, pending the Board's decision on the petition for
April 27, 1989: Sundry Notice for revised
drilling in the Winema NF is approved and sent to CECI.
July 7, 1989: CECI reentered drill hole MZ
July 31, 1989: IBLA denied Sierra Club et. al.
(April 3) petition for reconsideration and request for a stay on IBLA 87-735
(107 IBLA 96).
Aug. 5, 1989: Drill hole MZ I-11A reached Total
Depth (TD); tubing placed to 4670' depth.
Aug. 14, 1989: Re-entry drilling began on MZ
Aug. 16, 1989: ONRC-Sierra Club appeals
decision to withhold some of the Proprietary and Confidential Material.
Sept. 7, 1989: MZ II-1 reached TD @ 2844', well
was set up and left for temperature observation.
Sept. 11, 1989: CECI spudded drill hole MZ
Sept. 11, 1989: Two Geothermal Sundry Notices
approved - Air monitoring stations (footings poured, but stations not yet
Sept 26, 1989: Drill hole MZ I-lB plugged and
abandoned @ 270' due to inability to maintain circulation.
Sept. 29, 1989: CECI sent expenditure period
and exploration work status report.
Oct. 4, 1989: BLM acknowledged significant
exploration expenditures incurred.
Jan. 1990: CECI informally notified BLM of
preliminary plans to drill two more holes under existing EA. BLM solicited an
opinion from the Sierra Club.
Feb. 16 1990: Sierra Club objected to approving
two holes beyond drill hole MZ I-11B.
Mar. 26, 1990: CECI submitted Sundry Notice on
MZ II-1 to allow for commencement of drilling operation, planned to begin on
June 1, 1990 to a depth of 5500'.
April 24, 1990: MZ II-1 Sundry Notice approved.
It allowed drilling to 4830' with drilling below that subject to additional
May 1, 1990: BLM approved Designation of
Operator from California Energy Co. to CE Exploration Co.
June 8, 1990: Geothermal Drilling Permit MZ I-1
Aug. 17, 1990: BLM received request from CE
Exploration for suspension and/or extension of unit drilling obligations due to
lack of market and extreme fire danger conditions.
Nov. 2, 1990: BLM responded to request for
suspension/extension of unit drilling obligations and granted a conditional
Nov. 16, 1990: CE Exploration submitted a unit
Feb. 13, 1991: BLM Director Jamison directed
that the leases in the Mazama units be suspended to allow time for consideration
of the pending report on presence or absence of significant thermal features at
Crater Lake NP.
Feb. 20, 1991: BLM issued a formal Decision to
the lessee on suspending the Mazama leases effective Feb. 13, 1991.