steam is produced or utilized in commercial quantities (but for not more than 35 years).

(c) A lease committed to a cooperative plan, communitization agreement or a unit plan under or for which actual drilling operations were commenced prior to the end of the primary term of the lease, shall, if such operations are being diligently prosecuted at that time be extended for a period of five years and so long thereafter as geothermal steam is produced or utilized in commercial quantities (but for not more than thirty five years).

(d) Any lease on which there has been a suspension of operations or productions, or both, under 30 CFR 270.17 shall continue in effect for the life of the suspension and, at the end of the suspension, shall be extended for a period equal to that portion of the primary term during which the suspension was in effect.

(e) If, at the end of 40 years after the conclusion of the primary term steam is being produced or utilized in commercial quantities and the lands are not needed for other purposes, the lessee shall have a preferential right to a renewal of the lease for a second 40-year term on such terms and conditions as the Secretary deems appropriate.

§ 3203.1-5 Segregation of leases on commitment to, or contraction of, cooperative or unit plan or communitization or drilling agreement.

(a) Any lease committed to any cooperative plan, communitization agreement, drilling agreement, or unit plan, which covers lands within and lands outside the area covered by the plan or agreement, shall be segregated, as of the effective date of that plan or agreement, into separate leases, one covering the lands committed to that plan or agreement and the other as to the lands not so committed. The segregated lease covering the portion of the lands not subject to that plan or agreement shall not be entitled to an extension by reason of the segregation, but the term of the lease of such segregated lands shall be as provided in the original lease.

(b) When only part of the land subject to a lease included in a cooperative plan, a communitization agreement, a drilling agreement, or a unit plan is excluded from that plan or agreement because of the contraction of the area subject to that plan or agreement, the part of the lease which is excluded and the part which remains subject to the plan or agreement shall be segregated into separate leases. The term of the segregated lease composed of the excluded land shall not be extended because of production in commercial quantities or the existence of a producible well on the segregated lease remaining subject to the cooperative or unit plan or the communitization or drilling agreement or because actual drilling operations were at the time of contraction being conducted on that other lease, but the term of the lease composed of the excluded land shall be as provided in the original lease.

(c) Where all the land subject to a lease included in a cooperative plan, a communitization agreement, a drilling agreement, or a unit plan is excluded from that plan or agreement because of the contraction of the area subject to that plan or agreement, the term of the lease shall not be extended because of production in commercial quantities or the existence of a producible well on the lands remaining subject to the cooperative or unit plan or the communitization or drilling agreement or because actual drilling operations were being conducted on the other lands, but the term of the lease shall be as provided in the original lease.

(d) Contraction of a unit or cooperative plan or a communitization or drilling agreement causing all or part of the land in the lease to be excluded from such plan or agreement shall not serve to extend the term of such lease excluded by reason of the contraction where the 10-year primary term has already expired.

§ 3203.1-6 Conversion to mineral leases or mining claims.

(a) If the byproducts capable of being produced in commercial quantities are leasable under the Mineral

Leasing Act of February 25, 1920 as amended and supplemented (30 U.S.C. sections 181-287), or under the Mineral Leasing Act for Acquired Lands (30 U.S.C. sections 351-359), and the leasehold is primarily valuable for the production thereof, the lessee shall be entitled to convert his geothermal lease to a mineral lease under and subject to all the terms and conditions of the appropriate act, provided the lands and its resources are available for this purpose, upon application at any time before expiration of the lease extension by reason of byproduct production.

(b) The lessee shall be entitled to locate under the mining laws all minerals which are not leasable and which would constitute a byproduct if commercial production or utilization of geothermal steam continued. The lessee, to acquire the rights herein granted him, shall complete the location of mining claims within 90 days after the termination of the geothermal lease, provided the lands and its resources are available for location.

(c) Any lease converted under paragraph (a) or (b) of this section affecting lands withdrawn or acquired in aid of a function of a Federal department or agency, including the Department of the Interior, shall be subject to such additional terms and conditions as may be prescribed by that department or agency with respect to the additional operations or effects resulting from such conversion upon the utilization of the lands for the purpose for which they are administered.

§ 3203.2 Lease acreage limitation.

(a) A geothermal lease may not embrace more than 2,560 acres in a reasonably compact area, except where a departure is occasioned by an irregular subdivision or subdivisions, entirely within an area of 6 miles square or within an area not exceeding six surveyed or protracted sections in length or width measured in cardinal directions. A lease offer may not exceed 2,560 acres except where the rule of approximation applies.

(b) No lease shall be issued for less than 640 acres, except at the discretion of the Secretary. The Secretary may issue a lease for less than 640

acres where geothermal resources will be utilized for non-electrical purposes, or as provided for in Part 3230 of this chapter with respect to "conversion rights."

(c) Where a departure is occasioned by an irregular subdivision, the leased acreage may be less than 640 acres by an amount which is smaller than the amount by which the area would be more than 640 acres if the irregular subdivision were added.

(d) The authorized officer may add isolated tracts of more or less than 640 acres in nearby sections, to a lease application where it is determined that such addition is necessary for the proper management of the resource, provided the additional lands will not cause the lessee to exceed the maximum acreage limitation as provided in § 3201.2(a) of this chapter. However, prior to the issuance of such a lease based on the application as amended by the authorized officer, the applicant shall be given the option to refuse such a lease. Failure of the applicant to execute and return the lease within 30 days after receipt thereof will constitute a withdrawal of the application, as amended, without further notice.

[44 FR 12038, Mar. 5, 1979]

distances between the successive angle points on the boundary of the tract, in cardinal directions except where the boundaries of the lands are in irregular form, and connected by courses and distances to an official corner of the public land surveys or to a prominent topographic feature. In Alaska the description of unsurveyed lands must be connected by courses and distances to either an official corner of the public land surveys or to a triangulation station established by any agency of the United States (such as the U.S. Geological Survey, the Coast and Geodetic Survey, or the International Boundary Commission), if the record position thereof is available to the general public.

(c) Protracted surveys. When protracted surveys have been approved and the effective date thereof published in the FEDERAL REGISTER, each application or nomination for lands shown on such protracted surveys, filed on or after such effective date, shall describe the lands according to the legal subdivision, section, township, and range shown on the approved protracted surveys.

(d) Unsurveyed public lands adjacent to tidal waters in southern Louisiana and in Alaska. In lease applications embracing unsurveyed public lands adjacent to tidal waters in southern Louisiana and in Alaska, if the applicant finds it impracticable to furnish a metes and bounds description, as required in paragraph (b) of this section with respect to the water boundary, he may, at his option, extend the boundary of his application into the water a distance sufficient to permit complete enclosure of the water boundary of his application by a series of courses and distances in cardinal directions (the object being to eliminate the necessity of describing the meanders of the water boundary of the public lands included in the application). The description in the lease application shall in all other respects conform to the requirements of paragraph (b) of this section. Such description would not be deemed for any purpose to describe the true water boundaries of the lease, such boundaries in all cases being the ordinary high water mark of the navigable waters. The

land boundaries of such overall area shall include only the public lands embraced in the application. The applicant shall agree to pay rental on the full acreage included within the description with the understanding that rights under any lease to be issued on that application will apply only to the areas within that description properly subject to lease under the act, but that the total area described will be considered as the lease acreage for purposes of rental payments, acreage limitations under § 3201.2 of this chapter and the maximum or minimum area to be included in a lease pursuant to § 3203.2. The tract should be shown in outline on a current quadrangle sheet published by the U.S. Geological Survey or such other map as will adequately identify the lands described.

§ 3203.5 Diligent exploration.

Each geothermal lease will include provisions for the diligent exploration of the leased resources until there is production in commercial quantities applicable to the lands subject to the lease, and failure to perform such exploration may subject the lease to termination. Diligent exploration means exploration operations (subsequent to the issuance of the lease) on, or related to the leased lands, including, but not limited to, operations such as geochemical surveys, heat flow measurements, core drilling, or drilling of a test well. Exploration operations, in order to qualify as diligent exploration, must be approved by the Supervisor, and evidence of all expenditures therefor and the results thereof must be submitted annually to the Supervisor in compliance with applicable regulations and Geothermal Resources Operational (GRO) Orders or upon his request. Moreover, after the fifth year of the primary lease term, exploration operations, to qualify as diligent exploration for a year, must entail expenditures during that year equal to at least two times the sum of (a) the minimum annual rental required by statute, and (b) the amount of rental for that year in excess of the fifth year's rental, but in no event shall the required expenditures exceed twice the rental for the 10th year.

However, any expenditures for diligent operations during the first 5 years of the lease and any expenditures for diligent operations during any subsequent year in excess of the minimum required expenditures for that year may be credited, in such proportions as the lessee may designate, against (1) expenditures needed to qualify exploration operations as diligent operations for future years, or (2) any rental requirement for that or any future years in excess of the fifth year's rental pursuant to § 3205.3-3 of this chapter. In all cases, the lessee must pay the basic annual rental specified in the lease for the initial five years of the primary term until there is production of geothermal steam in commercial quantities on the leased lands.

§ 3203.6 Plans of development and operation.

No entry upon the leased lands for purposes other than casual use as defined in § 3209.0-5(d) of this chapter will be permitted until either a notice of intent or a plan of operation has been approved.

(a) The lessee shall submit a notice of intent in accordance with 30 CFR 270.78 prior to entry upon the lands for purposes of conducting exploration operations as defined in § 3209.0-5 of this chapter.

(b) The lessee shall submit a plan of operation pursuant to 30 CFR 270.34, prior to entry upon the leased lands for purposes of drilling exploratory and development wells, including construction of testing and production facilities, except as provided in paragraph (a) of this section. Subsequent well operations shall be conducted under a modified or amended plan of operations as provided in 30 CFR 270.35.

[44 FR 12038, Mar. 5, 1979]

tions and any GRO orders that may be issued pursuant to 30 CFR 270.11. Assuring compliance with the requirements of this section is the responsibility of the Supervisor as to the lands within the area of operations and is the responsibility of the appropriate land management agency as to the remaining lands in the lease.

(a) Equal employment opportunity. The lessee shall comply with Executive Order 11246, as amended, 30 FR 12319 (1965), and regulations issued pursuant thereto, 41 CFR Chapter 60 and 43 CFR Part 17.

(b) Public access. (1) The lessee shall permit free and unrestricted public access to and upon the leased lands for all lawful and proper purposes except in areas where such access would unduly interfere with operations under the lease or would constitute a hazard to health and safety. Restrictions on access will not be allowed without prior approval.

(2) During construction, the lessee shall regulate public access and vehicular traffic to protect the public, wildlife, and livestock from hazards associated with the project. For this purpose, the lessee shall provide warnings, fencing, flag men, barricades, and other safety measures as appropriate.

(c) Pollution abatement. The lessee shall comply with all Federal and State standards and all applicable local standards with respect to the control of all forms of air, land, water, and noise pollution, including, but not limited to, the control of erosion and the disposal of liquid, solid, and gaseous wastes. The Supervisor may, in his discretion, establish additional and more stringent standards, and, if he does so, the lessee shall comply with those standards. The lessee, in addition to any other action required by those standards, shall take the following specific actions:

(1) Pesticides and herbicides. The lessee shall comply with all rules issued by the Department of the Interior and the Environmental Protection Agency pertaining to the use of poisonous substances on public lands.

(2) Water pollution. The lessee shall conduct lease operations and maintenance in accordance with Federal and State water quality standards and

public health and safety standards, and applicable local water quality standards and public health and safety standards. Toxic materials shall not be released into any surface waters or underground waters. Reinjection of waste geothermal fluids into geothermal or other suitable aquifers will be permitted upon approval of the lessee's plan of operation submitted pursuant to 30 CFR 270.34.

(3) Air pollution. The lessee shall control emissions from operations in accordance with Federal and State air quality standards, and applicable local air quality standards.

(4) Erosion control. The lessee shall minimize disturbance to vegetation, drainage channels, and streambanks. The lessee shall employ such soil and resource conservation and protection measures on the leased lands as the Supervisor deems necessary.

(5) Noise control. The lessee shall control noise emissions from operations in accordance with Federal and State noise emission standards, and applicable local noise emission standards.

(d) Sanitation and waste disposal. The lessee shall remove or dispose of all waste material generated in connection with the exploration, development, production and transportation operations in a manner set forth in the approved plan of operation submitted pursuant to 30 CFR 270.34.

(e) Land subsidence, seismic activity. The lessee shall take precautions necessary to minimize land subsidence or seismic activity which could result from production of geothermal resources and the disposal of waste fluid where such activity could damage or curtail the use of the geothermal resources or other resources, or other uses of the land and take such measures as stipulated to:

(1) Monitor operations for land subsidence and for seismic activity; and (2) maintain, and when requested, make available to the lessor, records of all monitoring activities.

(f) Aesthetics. The lessee shall take aesthetics into account in the planning, design, and construction of facilities on the leased premises.

(g) Fish and wildlife. The lessee shall employ such measures as are

deemed necessary to protect fish and wildlife and their habitat.

(h) Antiquities and historical sites. The lessee shall conduct activities on discovered, known or suspected archeological, paleontological, or historical sites in accordance with lease terms or specific instructions.

(i) Restoration. The lessee shall provide for the restoration of all disturbed lands in an approved manner.

(j) Annual reports. The lessee shall submit annual reports to the authorized officer on compliance with the requirements of paragraphs (b) through (i) of this section and report within 24 hours, and if the report is oral, shall confirm the report in writing within 30 days, any significant environmental damage suffered by the lands subject to his lease. However, if, after drilling operations have begun, the lessee is required to submit a similar report under 30 CFR 270.30 and 270.76, he may fulfill the requirement of this subsection by submitting to the authorized officer a copy of that report. § 3204.2 Waste prevention.

All leases shall be subject to the condition that the lessee will, in conducting his exploration, development, and producing operations, use all reasonable precautions to prevent waste of geothermal resources and other natural resources found or developed in the leased lands.

§ 3204.3 Readjustment of terms and conditions.

(a) (1) Except as otherwise provided by law, the terms and conditions of any geothermal lease may be readjusted as determined by the authorized officer at not less than 10-year intervals beginning 10 years after the date the geothermal resource is produced and utilized commercially for any purpose including the generation of electricity.

(2) At such time as the geothermal resource is being commercially produced, the authorized officer shall give notice to the lessee, by written decision, of any proposed readjustment of the terms and conditions of the lease and the nature thereof, and unless the lessee files with the authorized officer an objection to the pro