To date, U.S. Energy Corp. has invested $4.3 million in Standard Steam Trust LLC ("SST"), a private geothermal exploration and development company based in Denver, Colorado. SST has approximately 90,000 acres of BLM, state and fee leases in six prospect areas in three states.

Today, geothermal-powered electrical generation plants account for less than 1% of the electrical power generated nationwide.   More than half of the states in the Union have implemented mandatory renewable energy portfolio standards, requiring utilities to be generating from 5% to 33% of their power from renewable sources.   The deadlines for compliance with these standards take effect from 2009 to 2025 depending on the state.   Geothermal plants are "zero emission" and thus meet the renewable energy mandates.   The plants use existing technology to circulate hot water from wells through binary or flash heat exchangers to produce the power to drive turbines.   All the water is injected back into the earth to recharge the resource.
Geothermal power offers a number of advantages over other alternative energy sources, including continuous and reliable output, as geothermal is not weather dependent.   It is the only base load renewable power source.   Additional advantages include minimal pricing volatility, limited environmental impact, high sustainability and improved security of supply.   When viewed over the life of the project, geothermal is among the least expensive options when compared with both fossil fuel and alternative energy.   Initial infrastructure costs are substantially lower than some other alternative forms of production, and nominal energy inputs are required once the power plants are in production.

The Company’s investment in geothermal properties is not expected to return cash flows from operations.   Rather, it is the Company’s plan to work with other industry partners in the exploration and development of geothermal properties and when sufficient data has been gathered, sell them to utilities or large firms desiring the opportunity to construct and operate geothermal power plants.   The investment in the geothermal industry allows the Company to participate in the development of power resources in an environmentally friendly industry.   In April 2010, U.S. Energy received a $1.1 million cash distribution following SST’s sale of one of its projects for an undisclosed amount to a third party.