Geothermal Energy Master Plan Town of Rico, Colorado Prepared by January 2012 TABLE OF CONTENTS Introduction—4 Master Plan Goals—7 Community Context—Demographics and Economics—8 Project Initiation and Partners— 12 Applied Science: Establishing a Trusted and Supported Information Base—13 Legal Analysis—17 Sustainable Geothermal Resource Development Strategies—19 Next Steps—24 2 ACKNOWLEDGEMENTS This project was funded by a grant from the State of Colorado Governor’s Energy Office. The Town of Rico and its citizens thanks the Governors Energy Office for their support and value this partnership going forward. Masami Nakagawa and the Colorado School of Mines Geothermal Academy and the National Renewable Energy Lab provided the scientific capacity to elevate the knowledge about geothermal resources in Rico as documented in this plan. Paul Morgan of Colorado State University also provided scientific knowledge and guidance throughout the process. Jay Montgomery of Moses, Wittemyer, Harrison & Woodruff provided legal expertise throughout this project and helped author the legal analysis of this report. Last but not least, this project would not have been possible without the tireless leadership of the Town of Rico and the willingness of its citizens to participate and volunteer.
Consulting Team: Gabe Preston, Managing Partner Andrew Klotz, Managing Partner RPI Consulting, Durango Colorado 970 382‐9153 3 INTRODUCTION The purpose of the Rico Geothermal Plan is to synthesize the existing research and geothermal resources planning and to involve the community in guiding next steps. Rico has a long history of natural resource development, but the community itself and the world around it have changed significantly since mining activity halted several decades ago. With the boom and bust cycle associated with mining still fresh in the memory of many long time residents, the community desires a more diverse and sustainable economic base that is more sensitive to impacts on the natural environment. The Town of Rico sits over a geothermal resource second only to Mt. Princeton in Colorado. The discovery of geothermal resource in Rico was made possible by data collected during the most recent minerals exploration in the 1970s and early 1980s by Rico Argentine Mining Company and Anaconda Minerals Company. Drill holes from this exploration north of Rico allowed hot water to flow to the surface, forming the hot springs used for occasional bathing. The mining companies recorded evidence of geothermal energy in drill holes throughout the region. 1900’s with a strong resurrection occurring in 1926. Bob Pellet and the Rico Mining Company began to revitalize the area mining industry, and in 1937 the Rico Argentine Mining Company constructed a new mill. A sulfuric acid plant brought better economic fortune from 1953 until 1965 (Town of Rico website). Since mining has been inactive for several decades now, the community’s economy has evolved to capitalize on natural beauty and recreational opportunities. With a long history of summer homes, the peak population occurs during the height of summer when second homeowners occupy their Rico homes. These residents contribute much needed revenue to the summertime economy. Rico is located on the San Juan Skyway Scenic Byway, which is traveled by hundreds of thousands of sight seers each year, mainly during the warmer seasons. These passersby inject revenues into the community as well. One of the most powerful economic drivers for Rico is its proximity to Telluride. Many residents conduct business or work in the Telluride region and bring their earnings home to Rico. Vacationers seeking a small town experience The Rico geothermal resource occurs in a geologic often opt to stay in Rico and drive to Telluride for structure known as the Rico Dome, a faulted resort amenities and events. anticline that has Precambrian greenstone and While the current economic base will continue to quartzite at its core and Paleozoic clastics and play an important role in the future, residents see carbonates on its northern and southern flanks. the need to diversify and build a more robust and Rico’s history is intertwined with natural resource sustainable economy. Geothermal resources development. Rico’s mining activity peaked in represent opportunities for sustainable natural 1892 only to bust with the silver panic of 1893. The resource development that fits the community as population of Rico naturally would rise and fall it has evolved. with the investment in the local mining industry with populations nearing a low of 70 and a high at nearly 5,000. Local mining occurred in the early 4 SUSTAINABLE NATURAL RESOURCE PLANNING GUIDING PRINCIPLES For sustainable natural resource development to There is a growing interest for citizens to be actively involved in natural resource development thrive, communities must be safe environments in as a means of expanding livelihoods and economic which a wide range of information and values can opportunities while maintaining the health of the be shared openly and understood. The process must be deeply democratic with empowerment natural environment. The foundation of extending to all people in the community sustainable natural resource development consists of authentic, active citizen involvement, a including those who do not live there but wish to focus on maintaining or improving ecosystem contribute their knowledge and interests. An inclusive vision that is supported by the integrity and stimulating long‐term economic community as well as by the larger society is one activity. that can be successfully implemented. Several guiding principles articulate the #2 Community Leadership ‐ Sustainable natural resource development starts with strong leadership. Leaders are respected individuals with or without formal authority in the community that #1 Community Involvement ‐ Residents need to participate meaningfully in making decisions that are willing to take risks to effect positive change affect their lives and surroundings. Without this, for the future. Their authority to act comes from they tend to resist or even defy those decisions. within ‐ the belief that it is the right thing to do. They believe in the ability of people to work foundation for sustainable natural resource development and are referenced throughout the master plan: FIGURE 1– INTEGRATED NATURAL RESOURCE PLANNING 5 together for change and lead by working through informal networks to achieve results. Effective leaders extend and share leadership with others, listen carefully, share information and resources and are quick to give credit to others rather than themselves. It is important for people with formal authority to recognize effective leaders in their own organizations and to enable them to work on behalf of the organization. #3 Integrated Science ‐ Because natural resource development involves people and the natural environment, the scientific information base must enjoy broad support by the community to be applied towards affecting positive change. The information base used for natural resource planning must be reliable and trusted and needs to integrate both local knowledge and scientific expertise. The source and flow of information must be transparent and well‐understood. #4 Integrated Natural Resource Planning ‐ The desired outcome of sustainable natural resource development is to enhance the interrelationships between humans and the ecosystems they are part of. In order to achieve this, natural resource development must align the economic/political, ecological/physical, and social/cultural elements of a place. Aligning these elements of a place produces local ownership, real economic choices, diversified economies, and the ability to capitalize on positive trends. 6 GEOTHERMAL MASTER PLAN GOALS Goals articulate what the community would like to achieve and are the guiding framework for the plan. Goals provide concise statements of WHAT the community aims to accomplish . The goals provide the basic organization and direction for the plan’s strategies. Strategies, discussed later in this document are specific actionable measures for HOW to implement the goals. Goals are interrelated and resource development strategies should bring the community closer to accomplishing all goals simultaneously. FIGURE 2 – GEOTHERMAL MASTER PLAN GOALS 7 COMMUNITY CONTEXT: DEMOGRAPHICS AND ECONOMICS Over the past decade, while the population steadily increased, economic development has remained stagnant. Population grew by almost a third while employment decreased by 50% and retail sales remained relatively static. As Rico’s population ages, the town must attract and retain younger residents in order to maintain stable population growth. If economic development is going to occur in conjunction with population growth, new economic opportunities must be explored and developed. It is the community’s hope that developing geothermal resources will expand and diversify the economy in a way that is sustainable for the long term. In 2000 the population totaled 205, and through 2010 total population grew to 265. In the past decade, Rico’s population increased by 29%, gaining 60 residents . Since 2000 Rico’s population has become generally older. Age cohorts under 14 and over 55 saw proportional increases while cohorts between 15 and 54 saw proportional decreases. In 2000 individuals over 55 made up 9% of the population, by 2010 this ratio increased to 22%. Population by Age FIGURE 3 – RICO POPULATION CHANGE 2000‐2010 2000 205 2010 265 Change 60 Annual Change 5 Total % Change 29% SOURCE: US CENSUS BUREAU FIGURE 4 – RICO POPULATION PERCENT CHANGE BY AGE 2000‐2010 350%
300%
250%
200%
150%
100%
50%
0%
‐50%
‐100%
300%
200% 200%
100%
67%
50%
25%
0%
‐7%
‐60% ‐50% ‐54%
2000
2010
% Change
SOURCE: US CENSUS BUREAU 0%
8 Household Composition Since 2000, households in Rico grew by 20% from 104 to 125. Family households grew at a larger rate than non‐family households and households with elderly grew at a faster rate than households with children. FIGURE 5– RICO HOUSEHOLD COMPOSITION CHANGE 2000‐2010 Total Households Family Households Non‐Family Households Households with Children Households with Elderly 2000 104 47 57 20 6 2010 125 64 61 34 13 Change 21 17 4 14 7 SOURCE: US CENSUS BUREAU % Change 20% 36% 7% 70% 117% In the past decade family households became a larger proportion of total households growing from 45% to 51%. Non‐family households account for fewer households decreasing from 55% to 49%. Households with children and elderly both experienced relative gains increasing from 19% to 27% and 6% to 10% respectively. FIGURE 6 – RICO HOUSEHOLD COMPOSITION PERCENT CHANGE 2000‐2010 SOURCE: US CENSUS BUREAU 9 Economics—Jobs and Retail Sales Since 2002 total jobs in Rico have been cut in half declining from 112 to 56. The majority of losses occurred in 2007 when the town lost 85 jobs declining from the peak of 127 to 42. However in recent years the total number of jobs has begun to increase from 2007 levels. FIGURE 7 – RICO CHANGE IN TOTAL JOBS 2002‐2009 Total Jobs 2002 112 2009 56 Change ‐56 % Change ‐50% SOURCE: US CENSUS BUREAU FIGURE 8 – RICO ANNUAL TOTAL JOBS 2002‐2009 140
120
112
100
127
119
105
100
80
60
56
42
40
Total Jobs
43
20
0
2002
2003
2004
2005
2006
2007
2008
2009
SOURCE: US CENSUS BUREAU 10 Retail Sales Since 2002, retail sales in Rico have remained relatively flat, decreasing at an average annual rate of less than 1%. Retail sales grew at strong rates between 2004 and 2005, peaking at $2.8 million. However in following years total sales decreased to below 2002 levels. FIGURE 9 – RICO CHANGE IN TOTAL RETAIL SALES 2002‐2010 2002 2003 2004 2005 2006 2007 2008 2009 2010 Average Retail Sales $2,317,713 $1,722,313 $2,029,947 $2,836,801 $2,252,390 $2,412,375 $2,479,860 $2,142,058 $1,859,223 SOURCE: COLORADO DEPARTMENT OF REVENUE Annual % Change ‐26% 18% 40% ‐21% 7% 3% ‐14% ‐13% ‐0.7% FIGURE 10 – RICO CHANGE IN TOTAL RETAIL SALES 2002‐2010 SOURCE: COLORADO DEPARTMENT OF REVENUE 11 PROJECT INITIATION AND PARTNERS RICO TOWNHALL Networking During the Winter and Spring of 2009, Town Board members and other community members attended meetings and conferences with geothermal and alternative energy professionals. During this phase the Town identified project partners: Colorado School of Mines and its Geothermal Academy, National Renewable Energy Lab, the Colorado Geologic Survey and the State of Colorado Governor's Energy Office Funding strategy for the Rico Geothermal Plan With the support of project partners and a series COLORADO SCHOOL OF MINES, GOLDEN CO of background studies that indicate the presence of a significant geothermal resource, Rico leaders took the next step to identify funding for the Geothermal Master Plan. Initially, Town board members communicated with the Governor’s Energy Office to learn about the programs and funding opportunities. Following this meeting, the Town of Rico consulted the project partners and submitted a grant application to Governor’s Energy Office and was awarded funding to develop the geothermal master plan. NATIONAL RENEWABLE ENERGY LAB, GOLDEN, CO 12 APPLIED SCIENCE: ESTABLISHING A TRUSTED AND SUPPORTED INFORMATION BASE Applicable Guiding Principle adheres to this guiding principle, scientists and #3 Integrated Science ‐ Because natural resource community leaders made a concerted effort to involve and inform the community from the development involves people and the natural environment, the scientific information base must beginning. At each stage, scientists met with the enjoy broad support by the community in order to community and invited them to observe or be applied towards affecting positive change. The participate in the research itself. The scientific research completed to date took information base used in sustainable natural place in two phases, both phases were executed resource planning must be reliable and trusted and needs to integrate local knowledge and with the intent of capitalizing on the existing expertise. The source and flow of information geologic and hydrologic information and must be transparent and well‐understood. utilization of primary data collection methods that optimize the available scientific and financial Approach resources. In order to establish an information base that FIGURE 11 – HEAT FLOW MAP OF THE RICO, COLORADO VICINITY Rico, CO
SOURCE: COLORADO GEOLOGIC SURVEY 13 1) Research and synthesis of existing geologic and contains a descriptive catalogue of direct uses of hydrologic data. geothermal energy that might be feasible in Rico. 2) Electrical geophysical surveys, a cost‐effective means of determining subsurface characteristics of the geologic and hydrologic setting in a rapid, cost‐effective and non‐invasive manner. Existing Data Research and Synthesis Geochemistry of Geothermal Fluids in Rico, Colorado School of Mines, 2009. Drawing from existing data on the Rico area contained in past studies by academic institutions and state agencies, this report profiles the chemistry and relevant chemical parameters of the Rico area geothermal features. In order to optimize the use of data that was already available from past studies and to advance Geothermal Power Plant Potential in Rico, the knowledge about the geothermal resource Colorado School of Mines 2009. This report efficiently, project partners began by gathering describes the basic mechanics of various types of and synthesizing available information. This research provided evidence of the combination of geothermal power plants and recommends the binary power plant as most appropriate given the faulting, magmatic activity, and evidence of nature of Rico's geothermal resource. hydrothermal alteration of some rock units and Geothermal Reservoir Engineering Applications, suggests that there is good potential for the presence of a geothermal resource in the Rico Colorado School of Mines 2009. This report area. The geologically recent magmatic activity in summarizes the application of a modeling the area provides a heat source, while the technique that optimizes available data to gain a complex network of faults provides highly conceptual understanding of the nature of the permeable fluid flow paths. And, finally, evidence geothermal reservoir in the Rico area. of hydrothermal alteration of various rock units Geophysical Techniques for Geothermal suggests that an active, or at least a recently Exploration of Rico, Colorado School of Mines active, hydrothermal system is present. 2009. This report discusses several geophysical techniques, comparing their pros and cons, and In general, the results from this background research indicate that geothermal resources in the identifies the best methods to explore and monitor the geothermal reservoir in the Rico area. Rico area are worth further exploration. Rico Geology Report, Colorado School of Mines, FIGURE 12 – GEOTHERMAL PLANNING PUBLIC 2009. Using existing information, this report establishes the geologic context for the Rico area KICK OFF MEETING and verifies that the geologic conditions indicate a significant geothermal resource. Of key importance in this report map is the evaluation and analysis of the Colorado heat flow maps created by the Colorado Geologic Survey. In Figure 11, the heat flow was color coded by heat flow intensity. The dark orange and purple indicates the highest heat flow. The heat flow map shows high heat flow in the Rico area and is the primary basis for the hypothesis for the existence of geothermal resources. Direct Use Applications of Geothermal Energy in Rico, Colorado School of Mines, 2009. This report 14 Public Involvement Process Kickoff Environmental in 2006, of groundwater and surface water resources also indicate the potential In order to let the community know what was planned and what organizations were going to be for geothermal water supply. However, the involved, Masami Nakagawa (CO School of Mines) subsurface flow regime was not well understood. came to Rico in Fall, 2009 and hosted a meeting In order to advance the scientific knowledge base and presentation describing planned research and to the next level, CO School of Mines assembled a the approach for keeping the community informed team to study the subsurface context of the and involved in the project. geothermal resource in the Summer 2010. The CO School of Mines team drafted the methodology, Electrical Geophysical Surveys findings and recommendations for next steps in While the heat flow map shows high heat flow in the 2011 report Rico Colorado Geophysical the Rico area and is the basis for the hypothesis Investigations, Revision 2. This master plan that there are geothermal resources, additional summarizes key elements of this report. information about water and permeability of the geology is necessary for determining whether the The most pragmatic approaches for collecting geothermal resource can be recovered from the additional information were electrical geophysical sub‐surface. Initial assessments, by Grayling surveys. Geophysical survey methodologies are FIGURE 13 – GEOTHERMAL SURVEYING IN RICO DURING SUMMER OF 2010 B
A
FIGURE 14 – GEOTHERMAL ROADSHOW FLIER AND PUBLIC INVOLVEMENT 15 used to measure electrical properties of the between science and the community cannot be subsurface, allowing inferences about the understated. Because sustainable natural properties of the geothermal resource and flow of resource development requires decision making geothermal water. One of the advantages of these by local citizens, it is important that the methods is that they are non‐invasive, do not information base is well‐understood and broadly require heavy equipment and are relatively cost‐ supported. effective. Geothermal Exploration Conclusions Public involvement for Geophysical Surveys: There is strong evidence of a heat source, but the Summer 2010 Geothermal Road Show exact nature of this heat source is not clear. The Colorado School of Mines research team organized and advertised eight public meetings throughout town to inform the community about the methods and results of the geophysical surveys and address concerns. Those interested in observing the process were also invited to shadow the fieldwork crews . The intent of the Geothermal Road Show was to provide transparency in the scientific process and to build trust and credibility for the research team their results. The importance of building the bridge Discharge of geothermal water appears to be associated with known faults and/or fracture systems. The data collected using electrical geophysical surveys identifies the Last Chance fault area as a significant component of the geothermal activity in the Rico area. A possible reservoir has been identified, but its extent, volume, and thermal properties are not known at this time. FIGURE 15 – GEOLOGIC MAP SHOWING FAULTS 16 Geothermal resource is not tied to surface ownership. Tributary Geothermal Water
Dry Hot Rock
Geothermal resource is tied to surface ownership, but can be severed, transferred or reserved. Heat pump or heat exchange closed (“geoexchange loop”)systems do not require appropriation of a water right; but a property right to the geothermal resource can be established based on actual utilization.
Geothermal resource development is required to comply with various bodies of state and federal law. This legal analysis, authored by Moses, Wittemyer, Harrison & Woodruff and RPI Consulting, outlines the basic legal pa‐
Re‐injection requires a Colorado Division of Water Resources well permit Re‐injection requires a Colorado Division of Water after notice to and consultation with the Resources well permit after notice to and Colorado Water Quality Control consultation with the Colorado Water Quality Division (CWQCD) and possibly with the Control Division (CWQCD) and possibly with the Colorado Oil and Gas Commission. Colorado Oil and Gas Commission. Applicants Applicants must also submit well must also submit well information to EPA under information to EPA under federal federal Underground Injection Control Underground Injection Control regulations. Discharge of geothermal fluid to regulations. Discharge of geothermal surface stream may require permit from CWQCD. fluid to surface stream may require permit from CWQCD. Geothermal Geothermal energy plants may also require Process Water, Stormwater and/or Groundwater energy plants may also require Process Water, Stormwater and/or Individual Industrial Wastewater permit.
Groundwater Individual Industrial Wastewater permit.
Pre‐1983 rights evidenced by court Pre‐1983 rights evidenced by court decree, Pre‐1983 rights evidenced by geothermal decree, geothermal lease or facilities in lease or facilities in existence prior to July geothermal lease or facilities in existence prior to existence prior to July 1, 1983 are 1, 1983 are grandfathered.
July 1, 1983 are grandfathered.
grandfathered.
A Drill Permit is required for A Drill Permit is required for construction of wells construction of wells to withdraw An individual constructing a geoexchange to withdraw geothermal fluid. The only permit geothermal fluid. The only permit loop system must be certified under State required for a geoexchange loop system is required for a geoexchange loop system Geothermal Rules. Drill permit also certification of the person constructing the construction is certification of the required if depth of more than 2,500 feet system. All wells are subject to the State person constructing the system. All or temperature higher than 212°F.
Engineer’s Geothermal Rules.
wells are subject to the State Engineer’s Geothermal Rules.
Geothermal groundwater rights are not based on prior appropriation but on ownership of the overlying land and assumption of a 100‐year aquifer life. Applicant has the burden of proof that the groundwater is non‐tributary and of the amount of such water underlying owner’s land. State Engineer’s Statewide Non‐Tributary Groundwater Rules apply.
Split estates require surface owners to Split estates require surface owners to allow surface access for sub‐surface allow surface access for sub‐surface owners in a reasonable manner and at a owners in a reasonable manner and at a reasonable time with compensation for reasonable time with compensation for damages (does not include the right to damages(does not include the right to construct surface facilities for utilization construct surface facilities for utilization of of the geothermal resource).
the geothermal resource).
Non‐Tributary Geothermal Water
Geothermal resource is tied to surface ownership, but can be severed, transferred or reserved.
LEGAL ANALYSIS Discharge permit
Drilling or well construction permit
Geothermal rights
Rights in tributary geothermal fluid are acquired through prior appropriation and require a Geothermal Permit. Diversionary or consumptive uses must meet one of three statutory criteria to prevent or to offset injury to prior water or geothermal rights. Applicants must demonstrate intent and ability to put the resource to beneficial use in order to receive a geothermal right. Geothermal resource is subject to prior Land ownership ‐ surface and
appropriation; split estate may provide surface subsurface estates severed (“split
access for sub‐surface owner to initiate an estates”).
appropriation of tributary geothermal fluid.
Land ownership
Legal Topic
rameters associated with geothermal resource develop‐
ment. The legal context of a particular geothermal energy strategy is dependent on several factors, such as whether water is tributary vs. non‐tributary water, whether the use of water is diversionary and/or consumptive use, and whether there are split estates involved in a particular ap‐
plication. 17 OTHER IMPORTANT LEGAL TOPICS Geothermal Management District (GMD) The purpose of a GMD is to prevent waste of the geothermal resource, maximize the economic recovery of a proven and delineated geothermal resource, and to protect water and geothermal rights that have vested by prior appropriation or exist as correlative rights of land owners. such as wilderness, wilderness study areas, national wildlife or recreation areas, and other protected lands. While the federal land around Rico is not designated to exclude geothermal development, nominated parcels would be evaluated for impacts on wilderness characteristics and wildlife habitat. Mitigation may be required and development may not be allowed in some areas. Because of the There are no GMDs in the state, which adds patchwork pattern of private land (patented uncertainty and a pioneering element to the mining claims) interspersed among the federal application process. lands around Rico, there is some uncertainty and The resource should be divided under the principles of equitable apportionment, giving each potential for conflict between federal and state jurisdiction over the geothermal resource. interested party a right to their portion of the resource, while protecting prior, appropriated A direct use lease allows a lessee to utilize a rights. geothermal resource for commercial, residential, GMDs are a legal tool allowing for landowners to agree on basic parameters for the use of geothermal resources, implying that landowners in a prospective GMD would support the application. Landowner opposition could be a significant barrier for an application to form a GMD. Because the resource must be divided equitably, detailed information about the nature and quantity of the geothermal resource must be presented by the applicant along with a comprehensive plan for the use of the resource and the "administrative controls" that would manage the resource. GMDs are approved under the authority of the state engineer and do not imply taxation authority. agricultural, public facilities or energy needs other than commercial energy production or generation of electricity. A direct use lease may be awarded to a qualified applicant without competitive bidding if, after notice, no nomination of the land for competitive bidding is submitted to the BLM and the BLM determines there is no competitive interest Geothermal leases for the commercial production of electricity are offered through a competitive bidding process. BLM also administers permits for exploration. Town regulatory powers 1041 permit authority If the Town enacts 1041 permitting authority it can regulate geothermal electrical power The State Engineer may impose conditions on the generation as an area of local interest. use of the resource regarding well spacing, reinjection requirements, apportionment of the resource to owners and other details. The State Engineer may delegate such authority to a GMD, once the GMD is created. Federal Leasing The U.S. Department of Interior, Bureau of Land Management (“BLM”) administers leasing on BLM and Forest Service lands, except geothermal leasing cannot occur on some designated areas 18 SUSTAINABLE GEOTHERMAL RESOURCE DEVELOPMENT STRATEGIES Applicable Guiding Principle #1 Community Involvement ‐ Residents need to have meaningful opportunities to participate in making decisions that affect their lives and surroundings. Without this, they tend to resist or even defy those decisions. For sustainable natural resource development to thrive, communities must be safe environments in which a wide range of information and values can be shared openly and understood. The process must be deeply democratic with empowerment extending to all people from the community even to those who do not live there but wish to contribute their knowledge and interests. An inclusive vision that is supported by the community as well as by the larger society is one that can be successfully implemented. •
Mail‐out invitations to all property owners in the Rico area and other advertising methods. •
A review and update about geothermal energy planning and research. •
A presentation about the legal parameters of geothermal energy: property and water rights. •
A key‐pad polling session aimed at prioritizing potential uses of geothermal energy. The back ground research report, Direct Use Applications of Geothermal Energy in Rico, by Colorado School of Mines, 2009 contains a descriptive catalogue of direct uses of geothermal energy that could be feasible in Rico. In order to identify preferences and opinions about the types of feasible uses of geothermal Approach In order to continue to involve the community in resource, the consulting team utilized key pad planning for geothermal energy use, the Town of polling to let the community prioritize those uses. The results of the key pad polling session show Rico hosted a geothermal energy strategies workshop in September 2011 featuring key pad that the strategies for geothermal use with the highest level of support in the community are polling that included: FIGURE 16 – KEY PAD POLLING RESULTS SOURCE: 2011 RICO GEOTHERMAL MASTER PLAN STRATEGIES WORKSHOP 19 bathing and swimming, space/structure heating, and electrical power generation. Recognizing the relative difficulty and expense associated with electric power generation, participants selected bathing/swimming and space/structure heating as the most sensible types for achieving short term success. Swimming/Bathing Key‐pad polling participants selected bathing/
swimming as the most sensible type of geothermal for initial development. Because the economy in the Rico‐Telluride region is based largely on natural amenities, tourism and second homes, nearly all of participants in the key‐pad polling session identified bathing and swimming as the most effective use of geothermal energy to promote economic development. Several participants mentioned a hot springs lodge as a desirable amenity in Rico that could capitalize on Rico's location on the San Juan Skyway scenic byway and its proximity to Telluride. For the most part, community members favored private development or public/private partnerships as the appropriate management strategy for bathing/
swimming facilities. Examples natural geothermal energy for hot springs and space heating. The ranch operates as a dude ranch in the summer, a bed and breakfast in the winter and opens its hot springs up to the public on a daily basis. The ranch is composed of a main lodge, a secondary lodge, a barn with meeting space and music hall, a dining hall, fishing ponds, natural hot springs and swimming pool, and riding arena. Waunita Ranch consistently receives “excellent” reviews on online travel sites such as Trip Advisor. Ouray, CO Municipal Hot Springs, The town of Ouray owns and operates a public hot springs facility composed of soaking pools, a lap pool, game pools and a fitness center. The springs are open year round and attract upwards of half a million visitors per year. The facilities are cash positive, with operating costs of around three‐
quarters of a million dollars and revenues totaling nearly one million dollars in 2010. Public Private Partnerships – It is not common for a public‐private partnership to operate and manage a hot springs resort or pool. However there are many parks where public recreational facilities are managed by private entities. Waunita Hot Springs Ranch, Gunnison, CO The Waunita Hot Springs Ranch, a family owned dude ranch located outside of Gunnison, uses FIGURE 18 – KEY PAD POLLING RESULTS FIGURE 17 – OURAY MUNICIPAL HOT SPRINGS SOURCE: 2011 RICO GEOTHERMAL MASTER PLAN STRATEGIES WORKSHOP 20 Space/Structure Heating Key‐pad polling participants selected space/
structure heating one of the most sensible types of geothermal use to develop initially. The combination of a mountain climate and dependence on electric and/or truck transported propane heat makes geothermal heating an attractive strategy in Rico. Most participants envisioned a geothermal heating district as the proper management strategy. Geothermal heating districts, also described in the Legal Analysis section of this master plan, are administrative structures used to manage and distribute direct use of geothermal energy for heating purposes. commercial or government buildings. The systems typically have positive cash flows and until recently costs have been up to 30% lower than natural gas. In the past two years, as the price of natural gas has fallen, prices have become approximately equal. Town of Pagosa Springs Since 1982 the Town of Pagosa Springs has owned and operated a municipal geothermal heating system. The system currently serves private residences, businesses, schools, town buildings, and churches. The system is manually operated and monitored on a daily basis. The system typically operates with positive cash flow except during years requiring large capital investments. Maintenance of the system Examples consumes a large portion of the annual budget, Boise Heating District and in recent years has become a top priority. The largest direct use geothermal heating system Currently the system requires one part‐time in the U.S. is composed of four sub districts, employee to manage all aspects of the system. supplies heat to businesses and homes in downtown Boise. Two districts, the City of Boise Single Use Geothermal Heating System – Box Canyon Lodge and Hot Springs, Ouray, CO and the Warm Water Springs heating district In addition to harnessing geothermal energy for serve public customers while the Veterans Administration (VA) district and the State District hot springs and spa purposes, Ouray’s Box Canyon provide heat to VA and State buildings. The four Lodge uses geothermal energy to heat their hotel rooms. The Lodge also uses geothermal to heat districts provide heat to over 200 homes and 85 water in guest rooms and laundry facilities. With FIGURE 19 – HOT SPRINGS IN PAGOSA greater reliance on geothermal heat and energy SPRINGS efficiency the Lodge has been able to cut its use of natural gas by 70%. Electric Power Generation State and federal agencies have developed programs, incentives, and regulations over the past decade aimed at encouraging renewable electrical energy development. For example, the Colorado Renewable Portfolio Standard (RPS) requires that an increasing share of electricity demand is met by renewable sources. Geothermal electric power is eligible as renewable energy under RPS . The Federal Renewable Electricity Production Tax Credit (PTC) is a per‐kilowatt‐hour tax credit for electricity generated by renewable 21 FIGURE 20 – KEY PAD POLLING RESULTS SOURCE: 2011 RICO GEOTHERMAL MASTER PLAN STRATEGIES WORKSHOP energy sources, including geothermal. While participants in the September 2011 key pad polling session recognize that electric power generation is an ambitious strategy, it emerged as the most well‐supported strategy. Because there is an ever‐expanding movement towards renewable energy and reducing reliance on carbon‐based fuels, community members believe that having a sustainable power source in Rico could attract attention and ultimately attract new residents and businesses that want to live or conduct business using renewable energy. In this respect, a geothermal electric power plant would stimulate economic development. Due to the FIGURE 21 – OIT GEOTHERMAL PLANT 22 complexity and expense of developing a power plant and distribution system, community members recognize that public‐private partnerships are the most realistic management scenario. FIGURE 22 – KEY PAD POLLING RESULTS Example Oregon Institute of Technology, Klamath Falls, OR Geothermal electric development can be local‐
scale and low impact. In 2010 Oregon Institute of Technology began using electricity generated from a 280 kw geothermal electric plant. The plant powers numerous campus buildings and is used as a demonstration project by the school for educational purposes. The project development cost was $1.1 million The plant is 1,300 square feet and saves the school approximately $3,500 per month. Greenhouse Climate Control Greenhouses need to regulate temperature to maintain optimal growing conditions. Geothermal resources can be used to heat and cool greenhouses. A growing component of the sustainability movement is local food/food security. Using greenhouses, food can be grown almost anywhere. In mountain environments, cold seasons and intense sunshine can make climate regulation in greenhouses cost prohibitive. By using geothermal energy for heating during cold seasons and for cooling during in warm seasons, greenhouses could become a viable option in Rico. SOURCE: 2011 RICO GEOTHERMAL MASTER PLAN STRATEGIES WORKSHOP Example Chena Hot Springs Greenhouse ‐ Fairbanks, Alaska 30 miles outside of Fairbanks, AK the Chena Hot Springs Resort has been growing fresh produce, in geothermal greenhouse for use in resort kitchens. Because greenhouses in Rico are not considered a The project started in 2004 with a 1,000 s.f. test significant catalyst for economic development, greenhouse and recently built a 4,300 s.f. they ranked as a lower priority for participants in structure. The greenhouses operate year round the September 2011 key pad polling session. and maintain and internal temperature of 78 However, a community greenhouse would be a degrees throughout the harsh Alaskan winter. sensible first step and could be a foundation for Crops grown include lettuce, tomatoes, developing more complicated and expensive cucumbers, green beans and herbs. The project is strategies. also operated in conjunction with the University of Alaska Agriculture department as an experiment site. 23 NEXT STEPS Create Partnerships: Establish partnerships The purpose of the Rico Geothermal Plan is to synthesize the existing research and planning and between the Town, State, and Federal Governments and private entities and individuals involve the community in guiding next steps. interested in pursuing sustainable geothermal Preparing for Next Steps resource development. Identify Funding and incentives: Identify all Continue to Involve the Community: One option applicable geothermal incentive programs, for keeping the community informed is to for a including: grants, loans, loan guarantees, drilling‐
geothermal energy committee consisting of Town risk insurance, production tax credits, renewable officials, landowners, scientists, attorneys and energy purchase requirements, renewable energy other individuals who can continue to create credits, etc. momentum to develop Rico's geothermal FIGURE 23 – POTENTIAL FUNDING RESOURCES Program Administrator Program Program Summary Resources Designed to provide early financing to energy related http://www.colorado.gov/cs/
Colorado Governors Energy Revolving Loan projects that may not be able Satellite/GovEnergyOffice/
CBON/1251599938908 to acquire traditional Office financing Program for the improvement of energy http://www.rurdev.usda.gov/
US Department of generation, transmission, and UEP_Our_Grant_Programs.h
Grants Agriculture distribution facilities in rural tml communities. http://www.rurdev.usda.gov/
Programs for energy US Department of Grants, Revolving efficiency improvements and UEP_Our_Grant_Programs.h
Agriculture Loan renewable energy systems tml http://www.irs.gov/pub/irs‐
Clean Renewable Energy IRS Federal Loan Bonds may be used to finance tege/tc_and_stcb_q‐a._09‐
renewable energy projects 07‐10_1.5.pdf Qualified Energy Conservation Bonds may be Timothy Jones, or David IRS Federal Loan White, (202)622‐3980 used to finance renewable energy projects Loan guarantees for projects that avoid, reduce or sequester air pollutants or US Department of http://
anthropogenic emissions of Federal Loan Energy www.lgprogram.energy.gov greenhouse gases; and employ new or significantly improved technologies 24 resource. groundwater gradients and flow directions. Conceptual models are used to evaluate Advance the Scientific Knowledge Base interaction of surface water/groundwater system Before investing time and money, more needs to with hydrothermal system. be known about the hydrology and geophysical Test well permitting: Regulatory compliance and context of the geothermal resource. The well permits (test borehole, thermal gradient Colorado School of Mines geophysical surveys holes) need to be obtained according to the conducted in 2010 concluded that a possible geothermal reservoir has been identified, but its requirements listed in the Legal Analysis section of this master plan. extent, volume, and thermal properties are not known at this time. Test wells drilling and analysis: Drilling of a test The uses of geothermal resources favored by the borehole (or possibly a set of boreholes) could be one of the most valuable, near‐term tools to community as documented earlier in this report enhance the understating of the Rico are dependent on the temperature and hydrothermal system. A test bore hole would cost accessibility of the geothermal resource. The about $200,000. Drilling of a series of thermal research and analysis of existing data indicates that the temperatures needed for these strategies gradient holes may also be of use for measuring exist hypothetically, but more scientific research is temperature and water level, but more geophysical data should be collected in order to needed to verify this. better determine optimal locations. • Swimming and Bathing ‐ 70 – 110 degrees F •
Electrical Power Generation ‐ 300 degrees F •
Space/Building and Water Heating‐ 100‐300 degrees •
Greenhouse ‐ 95‐180 degrees F The Colorado School of Mines team has identified several next steps to advance the knowledge about the geothermal resource as summarized in the 2011 report Rico Colorado Geophysical Investigations, Revision 2: Geophysical surveys: Employ additional non‐
invasive geophysical survey methods in the same locations used in the summer of 2010 Colorado School of Mines fieldwork to learn more about the geology and hydrology. Expand the geophysical survey study area to include the Silver Creek drainage and areas south of Rico Test Borehole. Groundwater tracer testing: Groundwater tracers are a non‐toxic, methods are used to characterize flow paths and estimate hydrogeologic parameters such as porosity, dispersivity, hydraulic conductivity, and storage capacity. Hydrogeologic modeling: Based on existing data, develop a hydrogeologic model to describe 25