Brief Description: Regarding geothermal core holes.

Sponsors: By House Committee on Technology, Energy & Communications (originally sponsored by Representatives VanDeWege, Hudgins, Morris, Eddy, Crouse, Hankins, McCoy, Takko, Hurst, McCune and Chase).

House Committee on Technology, Energy & Communications
Senate Committee on Water, Energy & Telecommunications

Background:

The Department of Natural Resources (DNR) manages more than five million acres of land for the state, including forest, range, commercial, agricultural, and aquatic lands. The DNR also monitors oil, gas, and geothermal exploration in the state.

Drilling a Geothermal Well.
Under the Geothermal Resources Act (Act), the DNR has the authority to regulate the drilling and operation of wells for geothermal resources. Any person proposing to drill a well or re-drill an abandoned well for geothermal resources must: (1) file a written application with the DNR for a permit; (2) pay a $200 permit fee; (3) provide public notice; and (4) participate in a public hearing.

Drilling Core Holes.
Any person proposing to drill a core hole for the purpose of gathering geothermal data must obtain a permit for each geothermal area. There is no charge for the permit. If the core hole is drilled more than 750 feet into the bedrock, the core hole is deemed a geothermal test well and is subject to a permit fee. If geothermal energy is discovered in a core hole, the core hole is deemed a geothermal well, and the applicant must then pay a $200 permit fee, provide public notice, and participate in a public hearing.

Plugging and Abandoning a Geothermal Well.
A geothermal well must be plugged and abandoned if: (1) it is not technologically practical to derive energy from the geothermal well to produce electricity, or the owner or operator has no intention of deriving energy to produce electricity; and (2) usable minerals cannot be derived, or the owner or operator has no intention of deriving usable materials, from the geothermal well.

Bonding Requirement.
An operator who engages in the drilling, re-drilling, or deepening of any geothermal well must file with the DNR a reasonable bond or bonds with good and sufficient surety, or an equivalent that is satisfactory to the DNR, which is conditioned on compliance with the provisions of the Act and all rules and permit conditions adopted under the Act.

Logs Related to Geothermal Wells.
An owner or operator of a geothermal well must keep careful and accurate logs of the drilling, re-drilling or deepening of the well. All logs are subject to inspection by the DNR. Upon request by the DNR, each owner or operator must file a copy of the logs pertaining to the geothermal drilling or operation.

If a geothermal well is plugged and abandoned, all logs and surveys pertaining to the well must be filed with the DNR within 30 days of the plugging and abandonment. If a geothermal well operation is suspended for more than six months, or the geothermal drilling project is complete, the operator must file all logs and surveys pertaining to the well within 30 days of suspension or completion.

Logs as Filed with the DNR.
Any records filed with the DNR are confidential for a 24-month period. During the 24-month period, which runs from the date of commencement of production or of abandonment of the well, such records are open to inspection only to personnel of the DNR for the purpose of carrying out the Act and persons authorized in writing by the owner or operator of the well.

Summary:

The Geothermal Resources Act (Act) is amended to include provisions relating to geothermal core holes.

Plugging and Abandoning a Core Hole.
A core hole must be plugged and abandoned if: (1) it is not technologically practical to derive energy from the core hole to produce electricity, or the owner or operator has no intention of deriving energy to produce electricity; and (2) usable minerals cannot be derived from the core hole, or the owner or operator has no intention of deriving usable materials from the core hole.

Bonding Requirement.
An operator who drills, re-drills, or deepens a core hole must file a reasonable bond or bonds with the DNR.

Logs Related to Geothermal Core Holes.
An owner or operator of a core hole or a geothermal well must keep a careful and accurate log, which must include heat flow, temperature gradients, and rock conductivity. Upon request by the DNR, each owner or operator must file a copy of such logs with the DNR.

If a geothermal core hole is plugged and abandoned, all logs and surveys pertaining to the core hole must be filed with the DNR within 30 days of the plugging and abandonment. If operations conducted with respect to a core hole are suspended for more than six months, or the geothermal drilling of the core hole is complete, the operator must file all logs and surveys pertaining to the core hole within 30 days of suspension or completion.

Logs Filed with the DNR.
After the 24-month confidentiality period has elapsed, the DNR must ensure that all logs and surveys that may have been run on a well or core hole are preserved in an electronic data system and made available to the public.

Cost Reimbursement Agreements.
The DNR may enter into a cost reimbursement agreement with a project proponent to recover from the proponent the reasonable costs incurred by the DNR related to permitting, including monitoring for permit compliance.

Votes on Final Passage:

House   96   0
Senate   46   2   (Senate amended)
House   97   0   (House concurred)

Effective: July 22, 2007

Partial Veto Summary: The Governor vetoed the section that extended the Department of Natural Resources' authority to enter into cost-reimbursement agreements to recover costs for activities related to permits and leases. (This authority was extended by other legislation previously enacted during the 2007 legislative session.)