| Summary |
Effective July 1, 2023, the bill changes the name of the oil and gas
conservation commission to the energy and carbon management
commission (commission) and expands the commission's regulatory
authority to include the authority to regulate a broader scope of energy
and carbon management areas beyond oil and gas (section 1 of the bill).
The bill also changes the name of the oil and gas conservation and
environmental response fund to the energy and carbon management cash
fund (fund) and allows the fund to also be used by the commission for the
purposes of administering the expanded regulatory areas (section 2).
Current law states that the property right to the natural heat of the
earth (geothermal resource) that lacks sufficient fluid associated with the
geothermal resource (geothermal fluid) to transport commercial amounts
of energy to the surface is an incident of ownership of the overlying
surface unless expressly severed. Section 6 states that, as to property
rights acquired on or after July 1, 2023, the property right to a geothermal
resource associated with nontributary groundwater (allocated geothermal
resource) is also an incident of ownership of the overlying surface unless
expressly severed.
Current law requires, prior to constructing a well to explore for or
produce geothermal resources, the operator of the well to obtain a permit
from the state engineer. Section 7 defines different types of geothermal
operations and bifurcates regulation of the different operations between
the commission and the state engineer. Specifically, the commission is
granted the exclusive authority to regulate operations (deep geothermal
operations) for the exploration for or production of:
•
An allocated geothermal resource; or
•
A geothermal resource that is deeper than 2,500 feet below
the surface.
The state engineer retains the exclusive authority to regulate
operations that are not deep geothermal operations (shallow geothermal
operations).
Prior to obtaining a permit from the commission to construct a well
for deep geothermal operations, the applicant must provide evidence of
any applicable siting application to the local government with jurisdiction
over the deep geothermal operations, unless the local government does
not regulate the siting of such operations. The commission and the state
engineer may adopt rules for the assessment of fees for the processing and
granting of a permit to construct a well for deep geothermal operations or
shallow geothermal operations, as applicable. Any fees collected by the
commission will be deposited by the state treasurer into the fund.
Current law requires, prior to the production of geothermal fluid
from a well, the operator of the well to obtain a permit from the state
engineer. Section 8 instead requires:
•
A permit from the state engineer prior to the use of a
geothermal resource that is not an allocated geothermal
resource (distributed geothermal resource);
•
The state engineer to issue the permit for the use of a
distributed geothermal resource after a determination that
the proposed use is in accordance with applicable
requirements for groundwater wells;
•
A permit from the state engineer prior to the use of an
allocated geothermal resource; and
•
The state engineer to issue a permit for the use of an
allocated geothermal resource after a finding that any
associated geothermal fluid is nontributary.
Current law allows the state engineer to adopt procedures that
establish geothermal management districts for the management of
geothermal operations within the district. Section 9 limits the scope of
geothermal management districts to distributed geothermal resources. The
state engineer is also required to notify the commission of any application
for a geothermal management district that is anticipated to affect deep
geothermal operations.
Section 10 allows the commission to adopt procedures by rule to
establish geothermal resource units for allocated geothermal resources.
Section 12 grants the commission the exclusive authority to
regulate any intrastate facility that stores natural gas in an underground
facility that is not a pipeline facility subject to regulation by the public
utilities commission (UNGS facility). If the commission submits a
certification to, or enters into an agreement with, the federal secretary of
transportation pursuant to applicable federal law, any rules regulating
UNGS facilities must be at least as stringent as the applicable federal
requirements. Before commencing construction of a new UNGS facility,
the operator of the facility must provide evidence of any applicable siting
application to a local government with jurisdiction over the UNGS
facility, if applicable.
The commission may assess and collect fees from operators of
UNGS facilities in an amount and frequency determined by the
commission by rule. Any fees collected will be deposited into the fund.
The bill directs the commission to conduct the following studies,
prepare reports summarizing the findings of the studies, and submit the
reports to the general assembly:
•
A technical study of the state's geothermal resources
(section 10);
•
A study, in collaboration with the state engineer, that
evaluates the state regulatory structure for geothermal
resources and whether any changes to law or rules are
necessary (section 10);
•
A study concerning the regulation and permitting of
hydrogen (section 18); and
•
A study, in coordination with the public utilities
commission, examining the siting and regulation of
interstate pipelines (section 18).
Sections 19 through 42 make conforming amendments.
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