Legislature(2019 - 2020)BUTROVICH 205
03/11/2020 03:30 PM Senate RESOURCES
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| SB161 | |
| Adjourn |
* first hearing in first committee of referral
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| += | SB 161 | TELECONFERENCED | |
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SB 161-GEOTHERMAL RESOURCES
3:32:00 PM
VICE CHAIR COGHILL announced that the only order of business
would be SENATE BILL NO. 161, "An Act relating to geothermal
resources; relating to the definition of 'geothermal resources';
and providing for an effective date."
3:33:04 PM
STEVE MASTERMAN, Director, Division of Geological & Geophysical
Surveys, Alaska Department of Natural Resources, Fairbanks,
Alaska, advised that he will complete the presentation that he
started at the introductory hearing of SB 161. He explained that
his primary intent is to address the questions that came up
during the previous hearing.
MR. MASTERMAN commenced his presentation, Alaska Department of
Natural Resources SB 161 Geothermal Resources: Part 2. He
displayed slide 2, Overview:
• Review of 21 February presentation
• DNR geothermal leasing history
• Purpose of SB 161
• Sectional summary
• Analysis of selected sections & responses to questions
MR. MASTERMAN displayed slide 3, Review of 21 February
Presentation:
• Geothermal heat, where technically and economically
accessible, is an excellent form of sustainable energy
• Hydrothermal systems are the most common form of
energy extraction from geothermal heat
• Complex geologic parameters necessary for a viable
geothermal resource, all present at one location, is
rare
• Alaska contains several potential geothermal resources
• New technologies that will help expand geothermal
development into less favorable geology are on the
horizon
He said geothermal systems are present in a number of places in
Alaska. Where it can be recovered, it is a very efficient and a
cost-effective means to obtain electrical and heat energy.
Hydrothermal systems around old intrusive bodies or volcanoes
are the most common sources for geothermal heat in the Aleutians
and across the belt of granitic bodies in the Interior. He said
a fair amount of geologic information is needed to intercept the
hot fluids and get them to the surface without over drawing the
reservoir.
MR. MASTERMAN pointed out that geothermal energy technologies
are changing with a wider array of geothermal resource
development such as ground source heat pumps for homes, small
businesses, and university campuses across the nation. Current
and future geothermal technologies need a broader understanding,
he said.
3:36:42 PM
MR. MASTERMAN displayed a map of Alaska map on slide 4 that
shows the granite and volcano related geothermal systems
throughout the state. He said the map provides an overview of
Alaska's hot springs broken into three different temperature
bands: warm springs below 50 degrees Celsius on the surface, hot
springs which are between 50 and 75 degrees Celsius, and high
temperature hot springs that are above 75 degrees Celsius. Most
of the hotter springs are along the Aleutians.
VICE CHAIR COGHILL noted that hot springs proliferate in the
Interior.
MR. MASTERMAN agreed. He detailed that the springs in Interior
Alaska are granite-related systems with most of the granites
ranging in age from 50 million to 70 million years. He said
geology plays an important part in understanding the granite-
related system because fractures host the hot water.
VICE CHAIR COGHILL asked if there is any power at Manley Hot
Springs.
SENATOR BISHOP inquired if an intrusive granite dome, like the
Manly Hot Springs Dome, indicates geothermal resources.
MR. MASTERMAN answered that a granite dome is a good sign, but
not all granites are alike. Geothermal resources require younger
granites that are still cooling along with the right granite
composition.
3:38:33 PM
MR. MASTERMAN paraphrased slide 5, DNR Geothermal Leasing
History:
• Present: Currently there is one company, CYRQ Energy,
with a pending application for geothermal exploration
prospecting permit. A Best Interest Finding should be
issued in Spring 2020.
• 2013: Augustine Island 26 tracts were offered. Only
one tract was leased to a private individual and no
exploration work was conducted as a result of that
lease sale.
• 2008: Mount Spurr 16 tracts leased to Ormat and one
private individual. Ormat purchased 15 leases in the
2008 sale and drilled on southern flank of volcano.
They didn't find adequate temperatures in wells to
pursue the project. The state has the data available.
• 1986: Mount Spurr On June 24, 1986, DNR offered 2,640
acres in two tracts. Both tracts received bids. The
lease for Tract 1 expired in 1996, and the lease for
Tract 2 was terminated in 1990.
• 1983: Mount Spurr DNR held its first geothermal lease
sale in the Mount Spurr area on May 17, 1983. 10,240
acres in 16 tracts were offered in Competitive
Geothermal Lease Sale 1. One tract received a bid. The
lease for that tract was terminated in 1992.
3:39:20 PM
MR. MASTERMAN discussed the following bullet points on slide 6,
Purpose of SB 161:
• Diversify Alaska's energy portfolio
o More potential for providing affordable, renewable
energy to villages
o More potential for providing power to remote natural
resource extraction projects
o Promote clean energy industry job creation
o Increase attention to Alaska's geothermal exploration
program
• Streamline geothermal licensing by aligning with the oil
and gas exploration license program, increasing feasibility
for companies to develop resources
o More time for a company to identify and prove resource
to convert to leases
o Conversion to leases based on completion of work
commitment and submission of exploration plan instead
of proving discovery of commercial resource
o Doubles maximum acreage allowed for exploration
license
• Reforms definitions for geothermal resources to focus on
Commercial Use
MR. MASTERMAN summarized that the bill is threefold: diversify
Alaska's energy portfolio, streamline licensing processes, and
reform geothermal resource definitions.
He pointed out that Alaska's energy resources are very petroleum
centered. Geothermal resources have the potential to be viable
in rural communities. Streamlining geothermal licensing aligns
with well established oil and gas leasing that will help with
resource exploration.
He said redefining geothermal resources removes temperature
criteria, brings the definition in line with the evolving
geothermal industry, and brings focus on commercial uses.
3:41:19 PM
MR. MASTERMAN reviewed slide 7, Sectional Summary, Reflects
Proposed Amendments:
• Section 1 (AOGCC)
o Removes unnecessary reference to AS 41.06 from AS
31.05. (Related to Section 9)
• Section 2 (DNR)
o Changes "permits" to "licenses"
o Explicit exemption for geothermal resources intended
for domestic, noncommercial, or small-scale industrial
use (See also Section 10)
square4 Amendment deletes "drawn from a depth with a
ground temperature of not more than 30 degrees
Celsius"
o Removes preferential rights clause. This is an old
water rights provision, not appropriate for commercial
geothermal systems.
• Section 3 (DNR)
o Changes "permits" to "licenses"
o Replaces lease conversion requirement of commercial
discovery with work commitment.
• Section 4 (DNR)
o Changes "permits" to "licenses"
• Section 5 (DNR)
o Changes "permits" to "licenses"
o Increases maximum acreage from 51,200 to 100,000.
o Adds provision for rental fees to be defined in
regulation, rather than statute (easier to update).
• Section 6 (DNR)
o Changes "permits" to "licenses"
o Reduces primary term of license to 5 years with
reference to lease conversion provision.
• Section 7 (DNR)
o Adds new subsections providing for unitization of
geothermal leases.
o Uses same or similar language as oil and gas statutes
in AS 38.05.180.
• Section 8 (DNR)
o Replaces definition of geothermal resources. (Same as
Section 11)
• Section 9 (AOGCC)
o Amends AS 41.06.020(e), clarifies that AS 41.06 does
not limit DNR's authority over geothermal resource
management on state land.
• Section 10 (AOGCC)
o Explicit exemption for geothermal resources intended
for domestic, noncommercial, or small-scale industrial
use (See also Section 2)
square4 Amendment deletes "drawn from a depth with a
ground temperature of not more than 30 degrees
Celsius"
• Section 11 (AOGCC)
o Amends definition of "geothermal fluid" to remove
temperature references and better conform with other
changes in this bill.
• Section 12 (AOGCC)
o Replaces definition of geothermal resources. (Same as
Section 8)
• Section 13 (AOGCC)
o Repeals AS 41.06.005(b) and AS 41.06.030, since
geothermal units are managed by DNR.
• Sections 1417
o General provisions for applicability and effective
dates.
MR. MASTERMAN summarized that much of the bill replaces a
permitting system with a licensing system. The current two-year
permit changes to a five-year license term. The licensing system
will attract geothermal exploration.
VICE CHAIR COGHILL asked if the genesis of the geothermal
licensing program derives from oil and gas exploration
licensing.
MR. MASTERMAN answered no. He specified that the bill provides
more time for companies to explore an area before deciding on
whether to move forward to the next step. Current statues
provide two years before a requirement to define a commercially
developable resource. The bill provides more time and removes
the requirement to define a commercially viable resource, which
is substantive.
SENATOR BISHOP asked if a license holder could sell their five-
year license.
MR. MASTERMAN deferred the question to Sean Clifton.
3:43:43 PM
SEAN CLIFTON, Policy and Program Specialist, Division of Oil and
Gas, Alaska Department of Natural Resources, Anchorage, Alaska,
answered yes, a license holder can assign their license to
another party.
MR. MASTERMAN reviewed slide 8, Section 2: Private Use
Exemption:
• New language (includes requested amendment):
o A prospecting license or lease is not required under
this section to explore for, develop, or use
geothermal resources if the geothermal resource is
intended for domestic, noncommercial, or small-scale
industrial use.
• This explicitly excludes private geothermal users from a
requirement to apply for a license or lease.
• The old definition of geothermal resources technically
provided this exclusion.
• The updated definition made this exclusion necessary.
MR. MASTERMAN stated that the private use exemption explicitly
excludes private geothermal users from requiring a license or a
lease in order to develop their geothermal resources that are on
their property. He noted that the governor requested that the
legislation include a private use exemption.
SENATOR BISHOP said he assumes that the private use exemption
still requires somebody to go through the permitting protocol to
get drilling approval.
MR. MASTERMAN answered correct.
VICE CHAIR COGHILL asked if the bill easily defines small scale
industrial use or if it is an open topic for discussion.
MR. MASTERMAN answered that he imagined that small scale
industrial use is open to discussion because the legislation
does not provide a numeric definition. He said a fish processing
plant using geothermal energy is an example of small scale use,
but Alcoa using geothermal energy for aluminum smelting is a
large-scale-industrial-use example.
VICE CHAIR COGHILL said the examples are the two bookends but
getting into the middle ground could be a little more difficult.
3:46:16 PM
SENATOR KAWASAKI noted that the bill removes the 30-degree
Celsius requirement and asked why it was set in the original
legislation.
MR. MASTERMAN answered that AOGCC requested the 30-degree
requirement be withdrawn to provide flexibility in administering
the exemption from regulations. He noted that home and small
scale uses of geothermal energy are for low temperature systems.
Statutes in the Lower 48 either use the arbitrary 30-degree
number or the technical temperature limit for PVC pipe.
He reviewed the following bullet points on slide 9, Section 2:
Preferential Rights:
• The preferential rights provision is being deleted because
it is inappropriate to the situation (it's more relevant to
water rights or other surface use cases not associated with
the mineral estate).
• Surface owner rights are protected under AS 38.05.130.
• Rights to access the mineral estate are reserved under AS
38.05.125.
o Surface owners must provide reasonable access to
resource developers.
o The same condition exists for oil & gas or mining.
• If a surface use agreement can't be reached, resolution
process is in 11 AAC 86.145.
o DNR holds a hearing wherein the developer must prove
there is no other alternative location for the well or
data acquisition.
o If the Commissioner concurs, developer posts a bond to
compensate landowner for any impacts and work
progresses.
• Public notice is a part of the license issuance process,
and surface owners would be included.
MR. MASTERMAN reiterated that the bill attempts to clarify a
distinction between geothermal resources treated as an oil and
gas or mineral estate and a surface estate.
He noted that Senator Kiehl brought up a possible conflict
scenario between a small-scale geothermal system user for a home
versus a company that leases an area around the home for
geothermal use. He said there are statutory measures in place to
resolve conflicts between surface and subsurface ownership.
3:49:52 PM
SENATOR KIEHL asked for further explanation of how the surface
owner would be protected under AS 38.05.130.
MR. CLIFTON conceded that the statute is not very explanatory on
repaying damages. He explained that the regulation under the
statute, 11 AAC 86.145, clarifies how the commissioner
approaches the problem. If the two parties cannot reach an
agreement, then the commissioner will hold a hearing to hear
both sides. If the developer cannot prove that there is another
way to resolve the issue, then the commissioner will direct the
developer to post a bond for landowner compensation.
VICE CHAIR COGHILL asked if amending AS 38.05.181 will impact
the regulation under AS 38.05.130.
MR. CLIFTON answered that he did not think so. He explained that
if a case came up where the division recognized a deficiency in
the regulation, then they would try to revise the regulation.
3:52:36 PM
SENATOR BISHOP referred to the right to access a mineral estate
under AS 38.05.125 and asked if the commissioner or a civil
court would ultimately resolve a dispute between a developer and
a landowner.
MR. CLIFTON answered that private landowners usually come to an
agreement on surface use. However, the commissioner would
intervene to ensure access to the mineral estate if the two
parties cannot come to an agreement.
MR. MASTERMAN discussed the following bullet points on slide 10,
Section 2: Preferential Rights:
• If a surface owner is already using geothermal resource,
DNR protects the surface owner's rights under AS 38.05.130.
• If conflict arises, DNR ensures private landowners would
not be left without heat or power, or otherwise damaged by
commercial development.
• Scenario is unlikely because private landowners usually
don't have financial resources to develop a commercially
viable geothermal resource.
He said conflicts are not likely to happen because there are
only a few places in the state where there are overlapping
interests of geothermal resources and private land ownership.
VICE CHAIR COGHILL said there is a lot of public land in Alaska
and private rights are something that Alaskans preciously hold
to.
MR. MASTERMAN replied he does not think the bill degrades
private rights; statutorily protections are in place.
3:55:19 PM
MR. MASTERMAN reviewed the following on slide 11, Section 2:
Drilling regulations:
• Division of Oil & Gas (DO&G)
• Licenses or leases access to the resource (subsurface
use).
• Surface permitting (pads, facilities, and
infrastructure) in support of exploration and
development.
• Alaska Oil & Gas Conservation Commission (AOGCC)
• Ensures prevention of waste, protects correlative
rights, improves ultimate recovery, and protects
underground freshwater.
• Issues of permits to drill wells is AOGCC's
jurisdiction.
• Jurisdiction over geothermal triggered by temperature
(>120 ?C) or commerciality. New definition ignores
temperature.
• Domestic, noncommercial, or small-scale industrial
geothermal well not under AOGCC authority.
• Exception if well may encounter geothermal resources,
fluid, or water of enough heat/pressure to threaten
life/health.
• Department of Environmental Conservation (DEC)
• If the incidental discharge enters surface water, need
Alaska Pollutant Discharge Elimination System (APDES)
permit.
• DEC Division of Water has permitted geothermal
discharges using Plan Review in Lieu of Permit.
• Engineering Support and Plan Review (ESPR) conducts
plan reviews for smaller systems in municipality
(heating or cooling pumps at UAA, U-med district,
hatchery, etc.).
• DEC issues permits for hydrostatic testing, including
flushing and aquifer pump testing.
square4 General permit AKG003000 provides for coverage of
land disposal or discharge to surface water.
square4 One geothermal-related authorization issued in
2015 for the Akutan Geothermal Project.
He summarized that section 2 divides drilling regulation
responsibilities between DO&G, AOGCC, and DEC. He said the
section may address Senator Kiehl's earlier questions in that
DO&G looks at drilling from the land management and surface
permitting view point and they are also the entity who would be
collecting any royalties and lease payments. AOGCC is looking at
drilling from the permitting standpoint for the protection of
ground water and the determination of whether the geothermal
source is for private use or commercial use. DEC looks at
drilling from the standpoint of the environmental impacts from
using the water and any discharges into the environment. DEC
also issues permits for hydrostatic testing and for aquifer or
pump testing. He said the various entities have different parts
of the leasing, permitting, and environmental compliance aspect
of a geothermal system.
3:56:46 PM
MR. MASTERMAN reviewed slide 12, Section 7: Royalty reduction:
• Royalty reductions are not permanently established under a
unit agreement (AS 38.05.181(i)).
• They are adjudicated under the authority described in
sections AS 38.05.181(f) and (j).
• Same language used in AS 38.05.180(p) (oil and gas
unitization).
• This aligns geothermal management with existing
processes in oil and gas management.
• Royalties have never been paid on geothermal resources, so
exact process not yet established.
• Will be like the system used for oil and gas.
• Royalties are 1.75 percent of gross revenue for the
first 10 years of commercial operation
• Royalties are 3.5 percent after 10 years (See AS
38.05.181(g)).
• This is like oil and gas royalties.
• Royalties are paid upon removal of the resource from
the lease or unit (i.e. sale), regardless of profit.
• Geothermal energy isn't a measurable volume, so
royalties are paid on gross revenues (AS
38.05.181(g)).
• Royalty reduction provisions exist in statute for oil
and gas and are evaluated by application to the
Commissioner under specific circumstances provided for
in statute (See AS 38.05.180(j), for example).
• If there is no production, there are no royalties.
• License/lease rental rates are paid per acre.
MR. MASTERMAN explained that the royalty reductions in section 7
align with the present oil and gas royalties. The royalties are
different, but the protocols are basically the same. He noted
that the State has not charged for royalties on geothermal
resources, but the hope is to receive royalties from future
resource development.
He detailed that geothermal royalties are 1.75 percent of gross
revenue for the first 10 years and that increases to 3.5 percent
after 10 years. He said geothermal energy is a little different
than oil and gas in that it is not a volumetric product, so it
is not like a barrel of oil or cubic feet of gas. Geothermal
energy extraction is in the form of heat or electricity with
royalties based on gross sales instead of the material
production volume. He said no geothermal sales means there are
no royalties.
3:58:04 PM
VICE CHAIR COGHILL asked if royalties would be based on the heat
that a geothermal energy source produces.
MR. MASTERMAN answered that the royalty will be based on the
energy sold, either heat or electricity.
He continued to explain that another change is that annual lease
payments, which are statutorily set at $3.00 per acre, would
instead be set by regulation. This would make it easier for any
necessary modification.
VICE CHAIR COGHILL asked if the lease payments would be based on
geographical accessibility, thermal temperature, or some other
criteria.
MR. MASTERMAN answered that he is not aware of any conversations
within the department that would apply a variable rate to the
leasing per acre. He said leases are based on a flat rate per
acre for the entire state, but variable rates is an interesting
concept depending on the attractiveness of the potential energy
of the system.
4:00:00 PM
VICE CHAIR COGHILL explained that he asked because he wondered
why a regulation would be more useful than a blanket statute
when the idea is to generate better commerce capacity in the
four very different geographic areas that have thermal energy in
any kind of mass.
MR. MASTERMAN suggested Mr. Clifton respond.
MR. CLIFTON explained that DO&G wants the per acre rental rate
to be competitive to attract people to develop the state's
resource. The statutory $3 per acre is an archaic holdover that
needs to be more flexible to allow the division to judge rental
rates based on the circumstances. Statutory rates are much
harder to modify.
4:02:33 PM
VICE CHAIR COGHILL asked if putting the rate out for public
comment would be the division's way to test the market capacity.
MR. CLIFTON answered yes.
MR. MASTERMAN displayed slide 13, Section 11: Geothermal fluids:
AS 41.06.060(4) is requested to be amended as:
(4) "geothermal fluid means liquids, brines, water,
gases, or and steam at temperatures greater than 120
degrees celcius or any commercial use of liquids and
steam naturally or artificially present in a
geothermal system; "geothermal fluid" does not include
oil, hydrocarbon gases, or other hydrocarbon
substances at temperatures less than 120 degrees
celsius
• Aligns with modernized definition for geothermal
resources.
• Not limited by temperature because current
technology enables development of cooler geothermal
systems.
• Distinguishes geothermal fluids from hydrocarbon
resources.
He explained that slide 13 details the division's request to
amend the bill to change the definition of "geothermal fluids"
to remove the reference to 120 degrees Celsius and specifically
exclude hydrocarbons.
VICE CHAIR COGHILL asked if the committee had the amendment.
MR. MASTERMAN answered that he believes it is part of the bill
packet.
MR. MASTERMAN displayed slide 14, Sections 8 and 12: New
definition:
"Geothermal resources" means the natural heat of the earth;
the energy, in whatever form, below the surface of the
earth present in, resulting from, or created by, or which
may be extracted from, such natural heat; and all minerals
in solution or other products obtained from naturally
heated fluids, brines, associated gases, and steam, in
whatever form, found below the surface of the earth; but
excluding oil, hydrocarbon gases, or other hydrocarbon
substances.
• Modern definition for geothermal resources.
• Not limited by temperature because current technology
enables development of cooler geothermal systems.
• Ensures all the State's mineral estate resources are
captured in definition.
• Same definition being applied to both DNR & AOGCC statutes.
MR. MASTERMAN explained that slide 14 deals with the new
definition for geothermal resource. It removes 120 degrees
Celsius from the statute to allow more flexibility to include
systems at lower temperature that could be utilizing some of the
state's geothermal resources and generating electricity or heat.
The definition would be the same for DNR and AOGCC.
SENATOR KIEHL noted that slide 13 shows that the definition of
geothermal fluid in AS 41.06.060(4) includes water. However, the
geothermal resources definition in slide 14 does not include
water. He pointed out that the complex permitting system has
AOGCC covering the safety risk of resource blowout, DEC is doing
the water, and DO&G is doing the minerals in the water. He asked
which department goes first in the process.
4:05:41 PM
MR. MASTERMAN replied he did not have an answer.
MR. CLIFTON explained that the first thing a commercial
operation would have to do is disposal of the land or disposal
of the mineral interest. The developer would first go through
DO&G for the expiration license and then the lease process.
DO&G would generally approve drilling operations through a plan
of operations, but the specific approvals for individual wells
would come through AOGCC. Specific approvals for discharge and
other related concerns would come through DEC.
SENATOR KIEHL asked if AOGCC will do safety and resource waste
prevention as it does with hydrocarbons.
4:07:40 PM
DAN SEAMOUNT, Geologic Commissioner, Alaska Oil and Gas
Conversation Commission, Anchorage, Alaska, explained that AOGCC
is generally the last in line to approve drilling permits. They
ensure the wells are drilled correctly, that the resource is not
wasted, and that production is enhanced as much as possible. He
said they have not fully figured out the costs for geothermal
because it is more complex than oil and gas that is charged
based on a formula of fluid production and injection. AOGCC will
have to look at steam, water, or some other way to allocate
costs for geothermal.
SENATOR KIEHL said his question was answered; AOGCC will ensure
that geothermal resources are not wasted.
VICE CHAIR COGHILL remarked that geothermal energy is a work in
process that hopefully sees some progress.
SENATOR BISHOP commented that the definition for geothermal
resources warranted updating. He pointed out that Bernie Karl,
[owner of Chena Hot Springs Resort], has proven that low
temperature electron generation is possible.
VICE CHAIR COGHILL asked Senator Bishop to move the proposed
amendment.
4:09:52 PM
SENATOR BISHOP moved to adopt Amendment 1, work order 31-
GS2177\A.3, Radford, 3/2/2020.
AMENDMENT 1
Page 1, lines 13 - 14:
Delete "drawn from a depth with a ground
temperature of not more than 30 degrees Celsius"
Page 4, lines 26 - 27:
Delete "drawn from a depth with a ground
temperature of not more than 30 degrees Celsius"
Page 4, following line 27:
Insert a new bill section to read:
"* Sec. 11. AS 41.06.060(4) is amended to read:
(4) "geothermal fluid" means liquids,
brines, water, gases, or [AND] steam [AT TEMPERATURES
GREATER THAN 120 DEGREES CELSIUS OR ANY COMMERCIAL USE
OF LIQUIDS AND STEAM] naturally or artificially
present in a geothermal system; "geothermal fluid"
does not include oil, hydrocarbon gases, or other
hydrocarbon substances [AT TEMPERATURES LESS THAN 120
DEGREES CELSIUS];"
Renumber the following bill sections accordingly.
Page 5, line 16:
Delete "Section 14"
Insert "Section 15"
Page 5, line 17:
Delete "sec. 15"
Insert "sec. 16"
VICE CHAIR COGHILL objected for discussion purposes. He noted
that the amendment came from the administration and asked Mr.
Masterman for an explanation.
MR. MASTERMAN explained that the first part of the amendment
removes the 30 degrees Celsius temperature limit on exclusions
for domestic or small industrial uses. AOGCC made the request to
provide more flexibility in the exclusion to small-scale users.
He said this change broadens the range of geothermal systems or
geothermal uses that the statute would otherwise exclude from
leasing and licensing. This will benefit small users.
4:11:06 PM
VICE CHAIR COGHILL added that this refers to page 1, lines 13-14
and page 4, lines 26-27.
MR. MASTERMAN explained that the second part of the amendment
changes the definition of "geothermal fluid." It removes the 120
degree Celsius temperature criteria, which broadens it to
basically all fluids, and adds a specific exclusion for
hydrocarbons. The change conforms with the other changes in the
definition of geothermal resources.
VICE CHAIR COGHILL asked Commissioner Seamount if AOGCC
supported the amendment.
COMMISSIONER SEAMOUNT answered that AOGCC is in favor of the
bill and the amendment. They proposed removing the reference to
temperatures of 120 degrees Celsius in the definition of general
geothermal fluid so there is consistency and no confusion with
geothermal resources. For example, one of the most successful
geothermal projects in the world is in Klamath Falls, Oregon
where the entire town is heated with temperatures of 87-112
degrees Celsius. He said he didn't know if AOGCC would define
that as a geothermal resource at 120 degrees but somebody could
make the case that they couldn't. He added that Chena Hot
Springs Resort probably produces the lowest temperature power
generation in the world at 74 degrees Celsius, so 120 degrees
would not come close to applying.
He agreed with Mr. Masterman that removing the 30 degree Celsius
reference would give the commissioner more flexibility and
latitude.
VICE CHAIR COGHILL said everyone is very proud of Mr. Karl at
the Chena Hot Springs Resort.
COMMISSIONER SEAMOUNT said he received his master's degree in
geothermics and some literature says geothermal resources
worldwide can change range from heat pump use at 10 degrees
Celsius up to steam generation at 350 degrees Celsius. He
reiterated support for the bill and amendments.
4:15:19 PM
VICE CHAIR COGHILL removed his objection to Amendment 1. Finding
no further objection, he stated that Amendment 1 is adopted.
4:15:38 PM
VICE CHAIR COGHILL opened public testimony.
4:15:55 PM
VICE CHAIR COGHILL closed public testimony.
SENATOR BISHOP remarked that the state is obviously in new
territory. He asked if DNR and AOGCC have reached out to a
country like Iceland to inquire about geothermal best practices.
MR. MASTERMAN answered that inquiries are being made. He noted
that he has reached out to geological associations in all the
states to review their regulations, statutory definitions, and
how they address issues with small scale versus industrial uses.
4:17:27 PM
SENATOR BISHOP moved to report CSSB 161, version 31-GS2177\A as
amended, from committee with individual recommendations and
attached fiscal notes.
4:17:40 PM
VICE CHAIR COGHILL said there being no objection, CSSB 161(RES)
moved from the Senate Resources Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 161 ver. A.pdf |
SRES 2/10/2020 3:30:00 PM SRES 3/11/2020 3:30:00 PM |
SB 161 |
| SB 161 Sponsor Statement 2.4.2020.pdf |
SRES 2/10/2020 3:30:00 PM SRES 3/11/2020 3:30:00 PM |
SB 161 |
| SB 161 DNR Response to Committee Questions 2.20.2020.pdf |
SRES 3/11/2020 3:30:00 PM |
SB 161 |
| SB 161 2020_GeothermalMap_optimized.pdf |
SRES 3/11/2020 3:30:00 PM |
SB 161 |
| SB161 Presentation to SRES Geothermal 3.11.20.pdf |
SRES 3/11/2020 3:30:00 PM |
SB 161 |
| SB 161 Draft Amendment v. A.3.pdf |
SRES 3/11/2020 3:30:00 PM |
SB 161 |
| SB 161 Fiscal Note - DCCED-AOGCC-01-21-2020.pdf |
SRES 3/11/2020 3:30:00 PM |
SB 161 |
| SB 161 Fiscal Note - DNR-DGGS-01-21-2020.pdf |
SRES 3/11/2020 3:30:00 PM |
SB 161 |
| SB 161 Fiscal Note - DNR-DOG-01-21-2020.pdf |
SRES 3/11/2020 3:30:00 PM |
SB 161 |