Guidelines for the Exploration
and Development of Geo Power
Paul Morgan
Colorado Geological Survey
for the
Colorado Geothermal Working Group
Final 2011 Meeting
Loveland
20th October, 2011
General Guide to the Rules and
Regulations Controlling the
Exploration and Development of
Geothermal Resources of Electrical
Power Generation in Colorado
“Rather than illuminate, regulatory documents
generally highlight the darkness1”
1
Paraphrased from Terry Pratchet, 2008, Guards,! Guards!
Where to Start: Who Owns the Land?
• Private Ownership: Private permission for access; state
drilling permitting & generally state resources regulation.
• State Ownership: State Land Board access and resource
regulation; state drilling permitting.
• Federal Ownership (USFS/BLM): Federal access and
resource regulation; state and federal drilling permitting.
• Spilt Estate – Federal Subsurface: Private agreement for
reasonable access required (with reasonable
compensation); federal resource regulation; state and
federal drilling permitting.
• All Ownerships: Local government regulations, Neighbors,
Local water districts, CDPHE, EPA, PUC, etc.
What is / Who Owns the Resource?
• Private Land: Resource is Water; associated water appropriated
by State Engineer and Colorado Ground Water Commission
– Tributary water; hydrothermal resource; Owner - People of Colorado
– Confined aquifer; and/or hot-dry-rock (HDR) resource; Owner - Land Owner
(resource may be severed)
– Designated basin; hydrothermal or HDR resource; Owner - Land Owner
(resource may be severed)
• State Land: Resource is Mineral; “Owner” - State of Colorado
– Resources managed by State Land Board; royalties may be charged.
Associated water appropriated by State Engineer.
• Federal Land/ Split Estate, Federal Subsurface: Resource is
Mineral; “Owner” – Federal Government
– Resources is managed by BLM; royalties will be charged. Associated water
appropriated by State Engineer.
Colorado
Designated
Basins and
Management
Districts
(Water)
Source: Colorado Division of Water
Resources/Ground Water/Designated
Basins (CGWC):
http://water.state.co.us/groundwater/CGWC
/Pages/default.aspx
Potential Train Wreck – Hot Dry Rock
• Colorado Revised Statute 37-80.5-103.Definitions
– ‘(4) "Hot dry rock" means a geothermal resource which lacks
sufficient geothermal fluid to transport commercial amounts
of energy to the surface and which is not in association with
an economically useful groundwater resource.’ (My
emphasis)
• How are these economic conditions known before
drilling? Permitting requires designation of the owner,
which changes if the resource is tributary or HDR.
• All rocks below the water table may be considered to
be saturated. Lack of geothermal fluid is theoretically
not a problem: permeability is commonly a problem.
Surface Exploration (No Surface Disturbance)
• Private Land: Permission of Land Owner
• State Land: Geothermal Exploration Lease – may
include geothermal gradient wells and deep test wells
and flow tests
• Federal Land: Approved Notice of Intent to conduct
specified geothermal resource exploration. If split
estate – permission of owner of surface estate.
• If Surface Exploration is positive, suggest consider
first PUBLIC INFORMATION MEETING, prior to any
drilling.
Geothermal Gradient Test Wells & Other
Surface Disturbing Exploration Activity
• Private Land: Permission of land owner and agreement
on drill sites. Type A well permits required from State
Division of Water Resources.
• State Land: Exploration lease already required. Type A
well permits required from State Division of Water
Resources.
• Federal Land: Approved Notice of Intent for land
disturbing activities, federally approved drilling permits
and type A well permits required from State Division of
Water Resources.
• Check regulations of local government.
Geothermal Leasing
• Private Land: Suggest enter formal agreement with land owner
including agreement for discovery of any non-geothermal
resources. Maybe consider similar agreement for surface of split
estate?
• State Land: A Geothermal Exploration Lease is required before
this stage.
• Federal Land/Split Estate Land: A geothermal lease is required
before any deep drilling. Land must be nominated for lease
before a careful (and lengthy) review of the suitability of the land
for lease can begin. If found suitable, the land may be offered
for competitive bidding in a public auction, probably with
stipulations on the lease. The winner of the lease gains the
exclusive right in general to proceed with further exploration
during the lease period, but not permission to conduct any
specific activities.
Informational Meetings
• With leasing of federal land there is public input into the
information gathering process leading to the decision whether
or not to lease and the USFS/BLM is highly likely to hold one or
more meetings prior to a lease sale. Entities interested in the
lease may of may not be invited to these meetings.
• If there is a ground-swell of negative opinion based on
inaccurate information, a carefully considered response is
appropriate.
• Initiating planning meetings with local authorities at this stage is
very important to apprise them of your sensitivity to the needs of
the community, present an honest picture of where the
likelihood of development is at this stage, and discuss the
potential benefits vs. few negative aspects of development
should a project reach fruition.
Deep Test Wells
• Private Land: Permission of land owner (you did negotiate this
in lease agreement?!?). Type B drilling permit from the State
Division of Water Resources (DWR) and associated
construction permits.
• State Land: Check with State Land Board – Exploration lease
included these wells if originally included. Type B drilling permit
from the DWR and associated construction permits.
• Federal Land and Split Estate Land: Geothermal lease is
required before drilling any deep test wells. However, a
specific drilling permit is still required for each well from the
USFS/BLM together with a type B drilling permit from the DWR
and associated construction permits. On split estate lands
permission of the owner of the surface estate is required.
• For All Lands, check regulations of local authorities.
Flow Tests – Continuation of Deep Drilling
• All Lands
– Make necessary permit requests at same time as deep
well permitting;
• Surface water disposal regulated by Colorado
Department of Public Health and the Environment;
• Water Injection in Colorado regulated by the EPA;
• Capture and removal of geothermal fluid
– Local Authority regulations;
– Public information/education
• Opportunity for demonstration of
environmental stewardship.
Final Decision Time
• Go or No-go
– Public Information Meeting EITHER WAY!
• IF GO:
• Education
– Bring in elected officials, staff and public from other
communities that have had geothermal
development to meet with local authorities, and
public.
• If not already started, initiate power purchase
agreement for any power to be generated.
Develop Field: Drill Production and Injection Wells
• Private Land: Permission of land owner; Type B well
permits from DWR and associated construction
permits.
• State Land: Need new Geothermal Lease to cover
development of field from State Land Board. Type B
well permits from DWR and associated construction
permits.
• Federal Land and Split Estate Land: Drilling permits
from USFS/BLM and type B well permits from DWR
and associated construction permits. For split-estate
land need permission of owner of surface estate.
• All Lands: Check regulations of local authorities.
Reinjection and Power-Plant Design
• All Lands:
– Permit reinjection with EPA
– Design in consultation with land owner where
constructed, private, state, or federal land.
– Design in accordance with all relevant local,
state (PUC), and federal regulations and
guidelines.
– Design to meet all environmental standards
and requirements during operation.
Illumination?
• Insert tab A into slot B. Open steam valve. Turn
on Power. Illumination!
• Colorado is a patchwork of lands with different
ownerships ranging from private to the federal
government.
• Geothermal energy is old in Colorado, but also
new. It is transported by Colorado’s most
treasured commodity after her people: WATER.
• With that background, geothermal regulations in
Colorado are remarkably simple.
Recommendations
• Geothermal permitting in Colorado for
Idiots – not!
• Do not try this at home – what you have
seen here has been performed by highly
trained cheats under simulated conditions
• If lawyers only spoke English I am sure
that we would all be able to understand the
law (that goes for science too). Hire a
lawyer, but I hope that you now know what
you are paying for.
 Acknowledgements:
 Matt Sares, Colorado Department of Water Resources
 Many others who have patiently corrected my
misunderstandings of geothermal rules and regulations.
However, any remaining errors remain my own!
 For Further Information
 http://geosurvey.state.co.us/
 Programs & Projects
 Minerals & Energy Resources
 Geothermal
 Paul.Morgan@state.co.us
THANK YOU