Bipartisan Geothermal Tax Parity Act 2025 Introduced

December 21, 2025 |By Kelly Hite

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NEW ORLEANS — The Geothermal Tax Parity Act of 2025 was introduced on Dec. 18 by a bipartisan group of Republicans and Democrats to expand geothermal energy development. The bill, sponsored by Democratic Rep. John Garamendi of California and Republican Rep. Celeste Maloy of Utah, would extend long-standing oil and gas tax provisions to geothermal projects. Republican Reps. Blake Moore of Utah and Russ Fulcher of Idaho, along with Democratic Rep. Steven Horsford of Nevada, are co-leading the legislation.

“Geothermal energy is one of the most promising, clean energy resources we have. It provides reliable, round-the-clock power, strengthens our energy security, and creates good-paying jobs,” said Rep. John Garamendi. “The bipartisan Geothermal Tax Parity Act is simple: if oil and gas receive a tax benefit, geothermal should too. By extending long-standing energy tax incentives to geothermal, we can accelerate next-generation clean energy deployment, leverage our existing workforce and engineering expertise, and position the United States as a global leader in geothermal power.”

Analysis from the U.S. Department of Energy indicates that scaling advanced geothermal systems could create and preserve about 60,000 permanent jobs, including positions that draw talent from the oil and gas industry.

The Geothermal Tax Parity Act would allow geothermal projects to qualify for the same passive loss treatment long available to oil and gas investments, enabling investors to deduct project losses against other income. The bill would also extend existing tax treatment for geological and geophysical exploration costs to geothermal development, reducing upfront risk and encouraging private sector investment.

“Geothermal energy is a reliable resource with enormous potential, especially in the West,” said Rep. Celeste Maloy. “Utah is already proving what next generation geothermal can deliver. This bill removes outdated barriers in the tax code so private investment can keep pace with innovation, strengthen our energy security, and create high quality jobs in rural communities.”

Implications for Louisiana

While geothermal development has traditionally been concentrated in the western states, policymakers and industry leaders say the Geothermal Tax Parity Act could have implications for energy-producing states like Louisiana. The state’s existing subsurface data, deep drilling expertise and existing oil and gas workforce position it as a potential hub for next-generation geothermal technologies, including enhanced geothermal systems that can be deployed in sedimentary basins along the Gulf Coast.

"Similar to oil and gas exploration, early well risk is the primary issue holding geothermal energy from taking off in the U.S., not technology risk," said Troy von Otnott, CEO of New Orleans-based HotRok Energy, a geothermal energy development company.

The risk von Otnott is referring to is the high upfront cost of drilling wells before developers know for certain whether a geothermal resource is commercially viable, the same risk that exists with exploratory oil and gas drilling.

"While qualitative subsurface data can reduce risk, and that geological data is desperately needed in Louisiana, putting geothermal energy production on par with oil and gas exploration from a corporate tax treatment perspective, can and will unleash a 'green wave' of investment capital into the Pelican state for clean, baseload energy generation for our industrial facilities, future AI data centers and utilities. I couldn't possibly support the Tax Parity Act legislation more."

As data centers and energy companies look for reliable, always-on energy to support industrial growth and grid resilience, geothermal provides baseload power similar to conventional generation, aligning with Louisiana’s focus on large-scale industrial demand.

Broad National Support for Geothermal Tax Parity

Democratic Rep. Steven Horsford of Nevada said the legislation is intended to correct what supporters view as a long-standing imbalance in the tax code by extending to geothermal the same incentives long available to oil and gas development. He said geothermal’s ability to provide firm, low-carbon power makes it well suited to support advanced manufacturing, data centers and grid resilience.

“Geothermal offers firm, reliable, low-carbon power that strengthens our energy security,” Horsford said. "Despite this, geothermal does not benefit from long-standing tax incentives that drive investment. I’m proud to co-lead the Geothermal Tax Parity Act to help level the playing field. By extending proven incentives to this emerging technology, we can deliver dependable power for advanced manufacturing, AI, and grid resilience. Nevada is already leading the way with twenty-eight operating and authorized geothermal plants, and this bill ensures the United States leads globally by investing in American resources, American workers, and American innovation.”

The Geothermal Tax Parity Act is supported by a broad coalition of industry groups and developers, including:

Industry Groups & Policy Organizations	Geothermal Developers & Companies
Geothermal Rising	Fervo Energy
Clean Air Task Force	Greenfire Energy
Citizens for Responsible Energy Solutions	Quaise Energy
Bipartisan Policy Center	Eavor

Supporters say extending established tax treatment to geothermal would improve early-stage project economics, reduce investment risk and help attract private capital to a technology viewed as a scalable source of around-the-clock power.

“The Geothermal Tax Parity Act offers a practical and targeted policy solution to advance U.S. geothermal development by improving early-stage project economics and expanding access to capital,” said Jeanine Vany, Executive Vice President, Corporate Affairs at Eavor.

Industry advocates also argue that aligning geothermal incentives with those used in oil and gas could accelerate deployment of next-generation geothermal systems, support workforce growth and strengthen U.S. energy security as electricity demand continues to rise.