State completes offshore lease sale for geothermal

Drilling for energy in Texas’ coastal waters is nothing new, but going for something other than oil and gas is.

geothermlease

Just some of the thousands of acres off the Texas coast now open to geothermal exploration.

The Texas School Land Board awarded three geothermal energy leases off the Texas coast to Oregon-based Geo Texas this week, the first

“Texas is the nation’s new frontier for renewable energy and today’s lease sale is more evidence of that,” said Land Commissioner Jerry Patterson. “These leases should earn the state’s school fund millions and show that renewable energy is profitable in Texas.”

Geo Texas was the only bidder for the rights to 128,758 acres of state land off the coasts of Galveston, Brazoria and Matagorda counties. Under the terms of the deal the company will pay $2 an acre bonus and $3 an acre annual rental for the state submerged land.
If Geo Texas begins to produce electricity, the state’s Permanent School Fund will earn a 2.05 percent royalty for years 1 through 10 of the lease, and 3.8 percent on years 11 through 30. Even without any energy production, the state’s Permanent School Fund will earn more than $386,000 a year.
Geo Texas is led by Steve Munson, who’s also listed as CEO of Vulcan Power, an Oregon based renewable power firm that landed $145 million in funding from Denham Capital last year. Merrill Lynch Commodity Partners, an investment fund of Merrill Lynch, is also an equity stakeholder in Vulcan.

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