Some say proposal to build a geothermal power plant in the Valles Caldera is a ploy to extort money from the Forest Service

Valles Caldera National Preserve, New Mexico — Along the road that skirts the Valles Caldera in northern New Mexico, there’s a sign explaining that the valley beyond — the Valle Grande — was created by an eruption “500 times greater than the May 1980 eruptions of Mount St. Helens.” But the last line is almost unreadable, crossed out by a vandal’s swipe of yellow spray paint: “The young volcanic dome’s heat makes the area attractive for geothermal energy development.”

In 2000, when Congress coughed up $100 million to buy the area — an 89,000-acre geologic funhouse whose main attraction is the collapsed volcanic dome, or caldera — everyone from the U.S. Forest Service to environmental groups to Sen. Pete Dominici, R-N.M., breathed a collective sigh of relief that the unique property would be protected from future development.

But some of the rights to the resources beneath the valley were left in private hands. Congress directed the Forest Service to purchase the remaining mineral rights, but after several years of negotiations, the agency gave up on the effort. Now, the owner has leased those rights to GeoProducts, a Texas-based geothermal energy company, and the three-year-old national preserve may soon be home to a power plant, geothermal wells and power lines.

GeoProducts wants to convert the caldera’s 600-degree underground steam into electricity and sell that electricity to Los Alamos National Laboratory. The nuclear weapons facility is looking for new sources of electricity, and the Department of Energy finds the nearby geothermal plant an attractive and “clean” option.

“With geothermal (development), the market is almost just as important as the resource, because you need to build a plant as well as drill the wells,” says GeoProducts President Ken Boren. “If we were able to tie into DOE’s needs, it would give us that market.”

A tangled web

The Harrell family of Abiline, Texas, owns the outstanding 12.5 percent of the preserve’s mineral rights, and has tried negotiating with the Forest Service. But according to Don Harrell, the agency rejected the family’s initial offer of about $13 million — offering $1.8 million instead.

Harrell, whose family has owned the rights since the 1970s, says he’s still willing to negotiate. While GeoProducts now controls the rights, Boren says that he and Harrell have agreed to kill the project if the Forest Service makes an offer of about $15 million. Meanwhile, Harrell doesn’t hesitate to tell a reporter what’s at stake.

“Domenici has told the people of New Mexico that they’ve protected this wonderful piece of property,” says Harrell. “But they haven’t. It’s no more protected than it was the day they bought it.”

Some environmental groups and federal officials suspect the power plant proposal is a ruse aimed at goosing the Forest Service into plumping up its offer. But Boren is moving ahead: GeoProducts has already submitted a proposal to the Western Area Power Administration, a division of the U.S. Department of Energy, and has applied for state permits to reopen some geothermal wells drilled by a previous leaseholder.

“This is arguably the best geo-thermal in the United States that’s undeveloped,” says Boren. “There’s nothing else like it.”

Full steam ahead

GeoProducts plans to reopen about a dozen wells that were drilled by UNOCAL in the 1970s, and pipe the steam to a pair of on-site power plants. The steam-powered turbines would put out a total of 12 to 20 megawatts, which would be carried to a power station in Los Alamos by power lines through the Santa Fe National Forest.

Power demand at the lab is “pretty stable,” says Los Alamos spokesman Jim Danneskiold. He explains that the lab is only interested in electricity from the Valles Caldera plant as a way to comply with a federal directive for federal facilities to increase their use of renewable energy. But the lab is also in the running for the “modern pit facility” that would manufacture plutonium triggers for nuclear weapons, and such new projects could boost the lab’s power demand (HCN, 8/1/03: Courting the Bomb).

Gary Ziehe, executive director of the Valles Caldera Trust, which manages the preserve, says that unlike logging and ranching, energy development was not part of the federal government’s vision for the property. But ultimately, the trust’s hands may be tied. It’s up to the Forest Service and the Harrells to work out a deal, and they remain in a stalemate. The American Land Conservancy, a California-based land trust, has an option with the Harrells and GeoProducts to buy their rights and then convey them to the federal government. But so far, the Forest Service has been silent on the group’s offer.

And time is running out to stop the power plant: New tax incentives aimed at spurring renewable energy development, combined with higher electricity prices and interest from Los Alamos, are making the project increasingly attractive, Boren and Harrell say. At the same time, the preserve is looking for ways to meet its federal mandate to pay for its own management.

“We have come to the end of the yellow brick road,” Harrell says. “And there’s no pot of gold there.”