The Bureau of Land Management (BLM) announced it would approve a categorical exclusion—a way to cut red tape for projects that don’t have a significant effect on the environment—for geothermal energy exploration on public lands. The BLM’s action may help streamline the development of dispatchable, low-footprint, and zero-carbon geothermal energy on federal lands.
The BLM’s targeted determination will cover geophysical operations, core drilling, temperature-gradient wells, and associated access for exploration activities disturbing less than 10 acres of federal lands. These activities help developers confirm there is a usable heat resource and move toward commercial viability. They also help with research for emerging technologies such as next-generation geothermal and enhanced geothermal. Environmental safeguards still apply, as the BLM must verify that no “extraordinary circumstances” are present, such as “potential impacts to endangered species or cultural resources,” before a project can rely on a categorical exclusion.
Geothermal is a natural fit for this kind of streamlining. It’s overwhelmingly a Western resource that sits beneath federal land. BLM has authority over geothermal leasing, exploration, and development on roughly 245 million surface acres and 700 million acres of subsurface mineral estate, much of it in the West.
Geothermal enjoys broad bipartisan support, and the bottleneck has been caused by bureaucracy. Companies need to confirm that the resource exists before they will commit capital to a production facility, and until now, even that preliminary step required navigating the full weight of federal environmental review.
The Council on Environmental Quality’s (CEQ) implementing regulations for the National Environmental Policy Act of 1978 (NEPA) were rescinded effective April 2025. The CEQ was originally intended to serve in an advisory role to the president, but a Carter-era executive order gave its recommendations binding authority. The Trump administration revoked that order and cleared the way.
In their place, federal agencies were directed to develop and maintain their own NEPA procedures. In July 2025, a wave of agencies, including Interior, Energy, Defense, and others, began overhauling their environmental review regulations. The CEQ followed up with updated nonbinding guidance on categorical exclusions in late 2025.
Geothermal exploration is a perfect test case for a categorical exclusion. The BLM identified a low-impact activity, determined it doesn’t normally cause significant environmental effects, and published a predictable permitting path for it.
There’s real momentum in the legislature to codify changes to the United States’ lengthy and litigious permitting process. The House passed the SPEED Act (to reform NEPA) and the PERMIT Act (to address issues with the Clean Water Act) in late 2025. Senate Democrats came back to the table for negotiations in March 2026, and a deal could be struck before the midterms.
If fully unleashed, geothermal energy could account for 10% of net electricity generation in the future. Not only is it a reliable baseload source of generation, but it only occupies between one and eight acres.
The BLM geothermal exclusion may be small, but it offers a path toward commercial viability for a zero-carbon, dispatchable source of energy. It could also prove that agencies can streamline permitting while maintaining high standards of environmental protection.
Geothermal is in the right place and the right time to participate in America’s energy renaissance, and the BLM’s slashing of red tape will help.