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Administration files geothermal bills
In addition to modernizing statutes, legislation also provides AOGCC option to apply for primary for Class V, geothermal, wells
Kristen Nelson Petroleum News
In mid-February Gov. Mike Dunleavy introduced bills to make changes in the state’s statutes governing its geothermal resources. House Bill 74 and Senate Bill 69 would remove “obstacles for exploration and development of Alaska’s geothermal resources,” the administration said in a Feb. 15 press release. HB 74 was referred to the House Special Committee on Energy, where it was scheduled for a Feb. 23 hearing, and to House Resources. SB 69, with a single referral, to Senate Resources, had not been scheduled for a hearing when this issue of Petroleum News went to press.
The administration cited technological advances which have made lower temperature geothermal energy commercially viable, with “non-commercial uses of heat energy such as heat pumps that rely on shallow subsurface pipes to heat or cool residential structure.” The bills update the definition of geothermal resources to allow for modern uses.
The time for geothermal exploration is increased from 3 to 5 years, and the current permit system is changed to “an exploration license similar to oil and gas exploration,” the administration said, with the 5-year term for the license allowing “explorers more time to conduct background research, acquire any related permits, and perform the field work necessary to locate a resource and produce the data necessary to convert a license to a lease.”
Ring of Fire “Geothermal resources could be an important component of a sustainable energy mix,” Dunleavy said. “Our location on the Pacific Ring of Fire puts Alaska in a prime position to benefit from geothermal energy. This bill makes geothermal exploration more viable for private industry.”
The bills also increase the acreage limit for geothermal prospects from the current 51,200 acres to 100,000 acres and allow the Alaska Oil and Gas Conservation Commission “the option to pursue state permitting primacy over Class V geothermal wells from the U.S. Environmental Protection Agency in order to provide more expeditious responses to local concerns and projects,” the administration said.
AOGCC Commissioner and Chair Brett W. Huber Sr. said in that agency’s fiscal note that the legislation would consolidate geothermal regulation in the state and said the agency does not foresee a fiscal impact.
David LePain, director of the Department of Natural Resources’ Division of Geological and Geophysical Surveys, said the legislation would provide DNR’s Division of Oil and Gas “with tools to support the development of state geothermal resources, much as it currently does with the development of petroleum resources.” He said current statutes authorize permits for geothermal resources but “its limits and conditions make the program unattractive to industry.”
DGGS is requesting funding for a new geologist position to re-start its geothermal program, LePain said. “The position will coordinate with agencies and industry to publish new geology data to further the development of Alaska’s geothermal energy resources,” he said in the fiscal note.
The administration has introduced bills to update the state’s geothermal regulations in the past two Legislatures, and while the bills were heard, they were not passed. The biggest difference in this year’s legislation is the inclusion of the provision to allow AOGCC to seek primacy for Class V, geothermal wells.
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