LAWSUIT RULING FAVORS GEOTHERMAL

Just before going to press, we received a negative decision on the Fourmile Hill lawsuit heard last September. Judge David Levi, a Bush I appointee, denied our claims on all grounds. Issues ranged from our challenge of the validity of the leases that were issued and renewed with little or no public input, to cumulative environmental impacts of multiple projects on the pure water, air, Native American cultural values and the exquisite natural setting of the Medicine Lake Highlands.
Our attorney at Earthjustice Legal Defense Fund, Deborah Sivas-representing the Mount Shasta Bioregional Ecology Center, Pit River Tribe, and Native Coalition for Medicine Lake Highlands Defense-is currently evaluating issues for an appeal to the Ninth Circuit Court of Appeals.

The ruling naturally comes as a great disappointment, as the hearing had led us to believe that the judge had understood at least some of our points. However, the ruling reads as if it was written by Calpine, the corporation that stands to gain $50 million in California ratepayer subsidies should the Fourmile Hill project and a second power plant at Telephone Flat begin generating power. Fourmile Hill could open the door to a whole slew of unsightly power plants, noisy wells, fragmenting pipelines and roads, 10 foot high cooling towers, night lighting and overall industrial blight. Calpine has publicly proclaimed its intention to develop as much as 1000 megawatts (20 times the wattage of the proposed development), and owns geothermal leases on 66 square miles of the Medicine Lake Highlands, which include a 32 square mile Native American Traditional Cultural District, two roadless areas, several lakes and springs, prime wildlife habitat-all of which sit over a pristine aquifer feeding the largest spring system in California. Yet the primary use of the Medicine Lake Highlands is as a source of inspiration and renewal to Native Americans and many others who enjoy the remote, geologically unique sacred land. Our resolve is clear: we'll continue to uphold the claim that even one power plant would introduce industrial elements that are out of character with the area's spiritual and natural values, and that obtaining power at all cost is not acceptable on any level.

Telephone Flat lawsuit to be re-evaluated

In light of the court ruling, attorneys at Earthjustice Legal Defense Fund are evaluating how we will challenge the November 2002 reversal of our earlier victory in defeating the Telephone Flat geothermal project proposed for the heart of the Medicine Lake Caldera. The legal battle may last another couple of years, and we need to maintain our strength in the face of large odds.

Important Water Permit Hearing In April

In our fall 2003 newsletter we described the potential of the Medicine Lake Highlands to become a toxic dump site due to geothermal activities that unearth heavy metals (such as arsenic and mercury), by Calpine's use of hydrofluoric and hydrochloric acids to fracture the geothermal reservoir, and the implementation of experimental technology. This hearing has been postponed at least 3 times due to the complexity of the issue before the Water Board and our voluminous comments submitted last spring. The revised permit will be available in the next few weeks. At stake is the contested permit and monitoring which would be required of Calpine, covering the discharges of waste from drilling geothermal wells and from the controversial use of those acids. Only after persistent efforts to get buried BLM reports on the previous use of acids in the 1988 exploratory drilling at Telephone Flat did we discover that the large swarm of documented earthquakes immediately followed injection of the acids. But the relationship between the fracturing of the reservoir with these acids, impacts to water resources, and the earthquakes has never been disclosed or analyzed in any environmental document! These discharges have the potential to degrade the purity of the springs, groundwater, and Medicine Lake as well as the Fall River Springs System (the largest spring system in all of California). The Regional Water Board has a serious responsibility under the Clean Water Act to protect the designated "high quality waters of the State" at the Medicine Lake Highlands. If you possible can, please attend the hearing with us! If interested, let us know by email or phone and we'll send you the exact date, time and place when they become available (please see Contact information).

STATUS OF
CALIFORNIA ENERGY COMMISSION SUBSIDIES

Money: The only thing 'green' about Geothermal

Since our fall 2003 newsletter, the California Energy Commission (CEC) has continued to evaluate the conditions of the 2002 Resolution that extended the nearly $50 million dollars in conditional awards granted to Calpine in 1999 for both the Telephone Flat and Fourmile Hill projects. In 1998 the energy companies applied to the CEC for funding the geothermal developments, setting forth an (unrealistic) power plant operational date of January 2001. Both projects failed to meet that deadline. Telephone Flat was still denied. Calpine claimed that they met the criteria for extension. Despite our participation in the hearings, the resulting CEC Resolution granted Calpine an extension with stipulations: Calpine must be able to start construction by June 2003 (that didn't happen) and be on-line by December 2005. Over the last 10 months, the Ecology Center, with the participation of the Native Coalition, has continued to request that the CEC cancel Calpine's funding awards because the objectives of the Resolution were not and cannot be met.

In 2002 the California Energy Commission also funded geothermal surveys and granted Calpine over $1 million to drill a deep well in the 10,800 acre Mount Hoffman Roadless Area. At that hearing, the CEC ignored our comments that such activities would be contrary to law in a Roadless Area. The good news is we were right and no drilling occurred. However, Calpine transferred the money to a different site with the CEC's nod of approval.

Calpine receives additional money from the Department of Energy (DOE). The most recent award is the subject of our intense scrutiny and opposition. DOE funded Calpine's program to inject highly hazardous acids in order to fracture the reservoir in hopes of making the resource more economical. Halliburton Corporation is the proposed contractor.

Calpine has already received many other monetary awards, including nearly $2 million for the exploratory drilling at the Fourmile Hill site. So let's be very clear about one thing-these financial subsidies from DOE and the CEC will make or break geothermal development in the sacred Medicine Lake Highlands. We know that the public would not support power plants that would desecrate the Medicine Lake Highlands, but ironically it is their money that the California Energy Commission disperses in form of awards.

Renewable Portfolio Standard

Bills passed by the Davis administration in September 2002 set forth a Renewable Portfolio Standard (RPS), requiring the state to achieve 20% of its energy production from renewable resources by 2017. Geothermal is currently considered a form of renewable energy (erroneously, we claim) along with wind, solar, and biomass.
At stake is over $100 million dollars in annual funding which would be allocated to the various 'renewable' projects based on the criteria set forth in Guidebooks currently being developed. The Ecology Center has participated in the proceedings for the proposed eligibility requirements and process for certification of renewable projects for RPS. We have requested preferential support to projects that have benefits to minority and low-income populations; essentially directing monies away from those that have a documented Environmental Justice Impacts. If the CEC enacted these provisions, projects like those proposed at the Medicine Lake Highlands would be denied certification and funding; thus eliminating the financial incentives that result in the degradation of sacred lands and cultural impacts to Native Americans. To date, the CEC has not incorporated our recommendations into the Guidelines.

PLEASE TAKE ACTION!

We're asking readers to contact the California Energy Commissioners with the following requests:

• Stop funding geothermal activities at the MLHs
• Cancel the two conditional awards of nearly $50 million for Fourmile Hill and Telephone Flat
• Implement RPS guidelines that favor projects benefiting minority and low-income population and include language which would exclude funding those projects which have documented Envionmental Justice impacts. This would make the Medicine Lake Highlands ineligible for funding.

Commissioner John Geesman
Phone: 916-654-4001
FAX: 916-654-4420
California Energy Commission
1516 Ninth Street, MS-31
Sacramento, CA 95814

Commissioner James Boyd
Phone: 916-654-3787
FAX: 916-654-4420
California Energy Commission
1516 Ninth Street, MS-34
Sacramento, CA 95814

Link to contact information on CEC Commissioners
http://www.energy.ca.gov/commission/commissioners/index.html

Augmented Native American Ethnographic Study

The Forest Service, in consultation with Native American elders and traditionalists, recently completed an augmented Native American Ethnographic Study that will provide the basis for an expanded Traditional Cultural District. In 1999 the Keeper of the National Register of Historic Places found that the 32 square mile Medicine Lake Caldera qualified for the National Register, but that there was not enough information on areas outside the Caldera, including the Fourmile Hill project area, to determine eligibility.

Medicine Lake Highlands
Among The Ten Most Threatened Wild Places

For the second year, the California Wilderness Coalition has included the Medicine Lake Highlands in its "California's Ten Most Threatened Wild Places Report, which is sent to hundreds of media contacts as well as to members of Congress and other decision makers. The criteria used to select the areas are the immediacy and severity of the problem and the potential damage to highly significant, ecologically critical areas.

Calpine Proposes Extensive Geophysical Surveys

The extent of Calpine's appetite in the Medicine Lake Highlands is further underscored by another currently proposed project, which targets over 200 sites for surveys whose purpose is to reveal additional geothermal resources. We have sent comments to the Forest Service against this proposal.

Calpine's Finances Not Out Of The Woods
Reuters reports dated February 2nd and 20th shows Calpine among companies at risk of bankruptcy, as it markets a $1 billion junk bond offering as part of its refinancing plan. The company needs the cash to pay off about $2.3 billion in bank loans maturing in November. With about $17 billion of total debt, Calpine is one of the biggest borrowers in the junk bond market, which is saturated with high-yield (and high risk) Calpine shares. Excess generating capacity, energy-efficient customers, tumbling energy prices, and burdensome debt loads will weigh on profits and keep some energy producers in a precarious position for years, according to a Standard & Poors report.

Calvert Fund Takes StrongPosition toward Calpine

Native Coalition members were active in a campaign to discredit Calpine Corporation's profile as a socially responsible company. The Calvert Social Investment Fund recently issued a Shareholders' Resolution demanding that Calpine "cease and desist" from its activities in the sacred Medicine Lake Highlands. The hope is that other socially-responsible investment firms will follow suit.

PLEASE DO YOUR PART BY CONTRIBUTING TO THE SAVE MEDICINE LAKE HIGHLANDS PROJECT. Click JOIN!

VISIT THE MEDICINE LAKE VIDEO WEBSITE & WATCH A SHORT DOCUMENTARY ON THIS CRITICAL EFFORT TO SAVE THE MEDICINE LAKE HIGHLANDS FROM GEOTHERMAL DEVELOPMENT:

http://www.medicinelakevideo.org/