Quick answer
Geothermal energy is heat energy from the earth, and in a power plant that heat is converted to steam that drives turbines to produce electricity.[3] Direct use and district heating systems use hot water from springs or reservoirs near the earth's surface instead of generating electricity.[4] Federal law defines geothermal resources to include indigenous steam, hot water and hot brines; steam and other gases, hot water and hot brines resulting from water, gas or other fluids artificially introduced into geothermal formations; heat or other associated energy found in geothermal formations; and any byproduct derived from them.[5]
Where underground rock is hot but lacks natural permeability or fluids, an enhanced geothermal system injects fluid under controlled conditions to create new fractures and reopen existing ones, making a reservoir.[6] Most U.S. geothermal power plants are in western states and Hawaii, where geothermal resources are close to the surface, and California leads the country in geothermal electricity generation.[7]
Oil and gas wells can be used for geothermal energy in two ways: by retrofitting inactive or unproductive wells, or through co-production on wells that are still active.[22] In co-production, the hot water that oil and gas wells often encounter is used to generate electricity and is then injected back into the reservoir, so one well can produce two types of energy at once.[22] A Department of Energy-supported project in Tuttle, Oklahoma secured the first permit in that state to convert oil and gas wells for geothermal use.[22] Another project at an oil field in Nevada worked with the Bureau of Land Management to secure the required lease and approvals, which DOE describes as a pathway for future oil and gas well conversions on BLM leases.[22]
Texas: geothermal energy and associated resources are owned as real property by the landowner, or by the surface owner if the surface and mineral estates have been severed, unless an instrument expressly provides otherwise, under a 2023 law (S.B. 785).[1]
Texas excludes minerals dissolved or contained in groundwater, including hot brines, from that ownership rule.[1]
Utah: ownership of a geothermal resource derives from the surface, and the surface owner holds title to it notwithstanding a severance of the mineral estate, unless the surface owner expressly conveys or reserves it by a recorded instrument.[8]
Those Utah surface-ownership rules do not apply to school and institutional trust lands; for trust mineral estate owned as of May 6, 2026, the state owns title to the geothermal resource unless the state has expressly conveyed it by deed.[8]
Utah also provides that, subject to its separate rules on appropriating geothermal fluids, a person may not use a geothermal fluid without a water right.[8]
Under those rules, geothermal owners must apply to appropriate the geothermal fluids before starting or increasing production from a well, but flow testing of a discovery well does not require an application to appropriate geothermal fluids.[9]
Utah treats geothermal fluids as a special kind of underground water resource, related to and potentially affecting the state's other water resources.[9]
Nevada: the owner of real property owns the rights to the underlying geothermal resources unless they have been reserved by or conveyed to another person.[10]
Nevada makes a consumptive use of water brought to the surface outside a geothermal well subject to its water appropriation procedures, except for water returned or reinjected into the same aquifer or reservoir and water reasonably lost during a well test or a temporary system failure.[10]
Oregon: ownership rights to geothermal resources are in the owner of the surface property above them unless those rights have been reserved or conveyed, though the rule does not divest the people or the state of any rights, title or interest they may have in geothermal resources.[11]
Idaho: for its Geothermal Resources Act, geothermal resources, including groundwater of 212 degrees Fahrenheit or more at the bottom of a well, are declared sui generis, neither a mineral resource nor a water resource, though closely related to both.[12]
California: its state-lands statute defines geothermal resources as the natural heat of the earth and associated energy, minerals in solution and steam below the surface, excluding oil, hydrocarbon gas and other hydrocarbons.[13]
California's State Oil and Gas Supervisor supervises the drilling, operation, maintenance and abandonment of geothermal resources wells.[14]
What Buckhead buys depends on the deal, and Buckhead tells the seller up front which interest it is offering to buy — for example, the payments for the rest of the current lease term, a term easement, or a longer-term interest. A geothermal lease grants rights for a term: a federal geothermal lease has a primary term of 10 years and continues beyond it only on statutory conditions such as production or utilization in commercial quantities.[23] State leases can run longer; Idaho's land board may issue geothermal resource leases for terms of up to forty-nine years.[21] As BLM describes federal leases, leasing confers a right to future exploration and development of geothermal resources within the lease area, but not the right to conduct ground-disturbing activities.[15]
The geothermal resource can be conveyed or reserved separately: Texas assigns geothermal energy to the landowner or surface owner except as a conveyance, deed, reservation, lease or other binding obligation provides otherwise.[1] In Utah, outside school and institutional trust lands, a surface owner keeps title to geothermal resources unless the owner expressly conveys or reserves them by a recorded deed or other instrument conveying title.[8]
The Bureau of Land Management has authority to manage geothermal leasing on approximately 245 million acres of public lands, including 104 million acres of U.S. Forest Service lands.[15] Leasing federal geothermal resources gives the lessee a right to future exploration and development of geothermal resources within the lease area.[15] Except as the statute otherwise provides, federal geothermal land is leased competitively to the highest responsible qualified bidder, and a tract that receives no bids at a competitive sale is available for noncompetitive leasing for two years.[16] The statute also provides that land may be available for noncompetitive leasing to a mining claim holder with an approved plan of operations, and to the holder of a producing federal oil and gas lease with an approved permit to drill, on a determination that geothermal energy will be produced from an oil and gas well, for coproduction.[16]
Where the surface has passed from federal ownership but the minerals were reserved to the United States, the geothermal resources may be developed only under federal geothermal leases, and the statute leaves to the courts whether a given mineral reservation included geothermal resources.[17] BLM's Idaho State Office, for example, proposed a competitive geothermal lease sale of a split-estate parcel with private surface and federal mineral estate patented under the Stock Raising Homestead Act.[18] Minerals reserved in Stock Raising Homestead Act patents belong to the United States, and BLM directs landowners to their local BLM office to determine the mineral ownership under their land.[19]
A federal geothermal lease provides for a royalty on electricity produced from geothermal resources, measured against the gross proceeds from the sale of that electricity.[20]
A federal lease also provides for a royalty on certain mineral byproducts and for an annual rental paid in advance.[20]
For geothermal resources that a lessee uses for purposes other than commercial electricity generation and does not sell, the Interior Department sets a schedule of fees in place of royalties.[20]
Texas allows the School Land Board to lease permanent school fund land for the production of geothermal energy and associated resources.[1]
Idaho's state board of land commissioners may issue geothermal resource leases for terms of up to forty-nine years on state or school lands.[21]
Power sales: a federal electricity royalty is measured from the gross proceeds of electricity sales, so payments follow plant output and power sales.[20]
Lease stage: a federal geothermal lease has a primary term of 10 years, and it continues beyond that only on the statutory conditions, such as production or utilization in commercial quantities.[23]
Use type: direct-use projects that do not sell the resource pay under a fee schedule instead of an electricity royalty.[20]
Title: where an old mineral reservation exists, whether it included geothermal resources can be a question for the courts.[17]
Mineral Rights vs Surface Rights
Brine Minerals and Mineral Rights
Water, Brine and Saltwater Disposal Royalties
Wind Royalties and Lease Payments
Educational information only — not legal, tax, or investment advice. Consult a qualified attorney, CPA, or landman about your specific situation.
A geothermal lease grants the right to explore for and develop geothermal resources within a lease area; on federal land, BLM describes leasing as conferring that right on the lessee.[15]
It depends on the state: Texas gives geothermal energy to the surface owner where the surface and mineral estates have been severed, unless an instrument provides otherwise.[1] Utah, outside its school and institutional trust lands, gives title to the surface owner notwithstanding a severance of the mineral estate, unless the surface owner expressly conveys or reserves it by a recorded instrument.[8]
It is the federal law under which, subject to its exclusions, the Secretary of the Interior may issue leases to develop and use geothermal resources on Interior-administered lands, national forest lands and lands conveyed with the geothermal resources reserved to the United States.[2] The Act bars geothermal leases on certain lands, including lands administered under the 1916 National Park Service Organic Act, lands within a national recreation area, wildlife refuges and other listed fish and wildlife lands, and tribally or individually owned Indian trust or restricted lands.[24] Under it, land is generally leased competitively to the highest responsible qualified bidder, with noncompetitive leasing for two years on tracts that drew no bids; noncompetitive leasing may also be available in certain other cases, such as coproduction on a producing federal oil and gas lease.[16]
A federal lease pays a royalty on electricity measured from the gross proceeds of electricity sales, a royalty on certain mineral byproducts, and an annual rental paid in advance.[20] Direct-use resources that are not sold pay under a fee schedule instead of royalties.[20]
A federal geothermal lease has a primary term of 10 years, and the statute extends it on conditions such as meeting work commitments, making annual payments, or drilling begun before the primary term ends and being diligently prosecuted at that time, with steam later produced or utilized in commercial quantities.[23] A lease extended on that drilling condition can run for up to thirty-five years while steam is produced or utilized in commercial quantities, and the preferential right to renew it for a second term applies only if steam is still being produced or utilized in commercial quantities at the end of that extended term and the lands are not needed for other purposes.[23]
For its Geothermal Resources Act, Idaho declares geothermal resources to be neither a mineral resource nor a water resource.[12] Utah treats geothermal fluids as a special kind of underground water resource.[9] Nevada applies its water appropriation procedures to consumptive use of water brought to the surface outside a geothermal well, unless the water is returned or reinjected into the same aquifer or reservoir or is reasonably lost during a well test or a temporary system failure.[10]
Yes, according to the Department of Energy: inactive or unproductive wells can be retrofitted, and active wells can co-produce geothermal heat alongside oil and gas.[22]
Buckhead Energy buys geothermal leases and geothermal royalties.
[1] Texas Natural Resources Code Chapter 141, Geothermal Energy and Associated Resources — Texas Legislature (accessed November 1, 2026)
[2] 30 U.S.C. 1002, Lands subject to geothermal leasing — Office of the Law Revision Counsel, U.S. House of Representatives (accessed November 3, 2026)
[3] Geothermal Basics — U.S. Department of Energy (accessed November 1, 2026)
[4] Use of geothermal energy — U.S. Energy Information Administration (accessed November 1, 2026)
[5] 30 U.S.C. 1001, Definitions — Office of the Law Revision Counsel, U.S. House of Representatives (accessed November 3, 2026)
[6] Enhanced Geothermal Systems — U.S. Department of Energy (accessed November 1, 2026)
[7] Where geothermal energy is found — U.S. Energy Information Administration (accessed November 1, 2026)
[8] Utah Code Section 73-22-4 — Utah State Legislature (accessed November 3, 2026)
[9] Utah Code Section 73-22-8 — Utah State Legislature (accessed November 3, 2026)
[10] NRS Chapter 534A, Geothermal Resources — Nevada Legislature (accessed November 3, 2026)
[11] ORS Chapter 522, Geothermal Resources — Oregon State Legislature (accessed November 3, 2026)
[12] Idaho Code 42-4002 — Idaho State Legislature (accessed November 3, 2026)
[13] California Public Resources Code 6903 — California Legislative Information (accessed November 1, 2026)
[14] California Public Resources Code 3714 — California Legislative Information (accessed November 1, 2026)
[15] Geothermal Energy — Bureau of Land Management (accessed November 3, 2026)
[16] 30 U.S.C. 1003, Leasing procedures — Office of the Law Revision Counsel, U.S. House of Representatives (accessed November 3, 2026)
[17] 30 U.S.C. 1020, Publication in Federal Register; reservation of mineral rights — Office of the Law Revision Counsel, U.S. House of Representatives (accessed November 1, 2026)
[18] BLM Idaho competitive geothermal lease sale (split estate parcel) — Bureau of Land Management ePlanning (accessed November 1, 2026)
[19] Mining - Split Estate due to Stock Raising Homestead Act — Bureau of Land Management (accessed November 1, 2026)
[20] 30 U.S.C. 1004, Rents and royalties — Office of the Law Revision Counsel, U.S. House of Representatives (accessed November 1, 2026)
[21] Idaho Code 47-1601 — Idaho State Legislature (accessed November 1, 2026)
[22] Wells of Opportunity — U.S. Department of Energy (accessed November 1, 2026)
[23] 30 U.S.C. 1005, Lease term and work commitment requirements — Office of the Law Revision Counsel, U.S. House of Representatives (accessed November 3, 2026)
[24] 30 U.S.C. 1014, Lands subject to geothermal leasing (exclusions) — Office of the Law Revision Counsel, U.S. House of Representatives (accessed November 3, 2026)
Buckhead Energy buys geothermal leases and geothermal royalties.
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