2021-03-10                     House Journal                      Page 0305
HB 135                                                                                                                        
HOUSE BILL NO. 135 by the House Rules Committee by request of                                                                   
the Governor, entitled:                                                                                                         
                                                                                                                                
    "An Act relating to geothermal resources; relating to the definition                                                        
    of 'geothermal resources'; and providing for an effective date."                                                           
                                                                                                                                

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was read the first time and referred to the Resources and Finance                                                               
Committees.                                                                                                                     
                                                                                                                                
The following fiscal note(s) apply:                                                                                             
                                                                                                                                
1.  Zero, Dept. of Natural Resources                                                                                            
2.  Fiscal, Dept. of Natural Resources                                                                                          
                                                                                                                                
The Governor's transmittal letter dated March 9 follows:                                                                        
                                                                                                                                
"Dear Speaker Stutes:                                                                                                           
                                                                                                                                
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill revising statutes related to the                                                         
State's geothermal resources.                                                                                                   
                                                                                                                                
Alaska's economic prosperity is dependent on our ability to continue to                                                         
develop our tremendous energy resources. Geothermal is a rising star                                                            
in Alaska's energy constellation. Geothermal harnesses heat from the                                                            
earth's core and can power commercial, industrial, and residential                                                              
activities in some of Alaska's remotest areas. This bill encourages                                                             
these activities by removing obstacles to exploration and development                                                           
of Alaska's geothermal resources.                                                                                               
                                                                                                                                
First, it modifies the definition of "geothermal resources." The current                                                        
definition is defined as only those fluids hotter than 120 degrees                                                              
Celsius, which ignores technological advances that make lower-                                                                  
temperature geothermal energy commercially viable. For example,                                                                 
Interior Alaska's Chena Hot Springs generates electrical power and                                                              
supports a thriving visitor business with geothermal energy at                                                                  
approximately 80 degrees Celsius. The current definition also ignores                                                           
growing non-commercial uses of heat energy, such as heat pumps                                                                  
relying on shallow subsurface pipes to heat or cool residential                                                                 
structures. This updated definition eliminates such arbitrary                                                                   
temperature and other restrictions, making geothermal development                                                               
more attractive.                                                                                                                
                                                                                                                                
The bill also makes Alaska's geothermal energy a more lucrative target                                                          
for investment by expanding to five years the current two-to-three-                                                             
year window during which exploration companies must conduct                                                                     

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background research, acquire surface use permits, and perform the                                                               
field work needed to locate a resource and develop the data needed to                                                           
convert an exploration permit (or license) to a lease supporting                                                                
commercial development. This bill acknowledges the fact that                                                                    
geothermal resources tend to spread over larger acreages, by nearly                                                             
doubling the acreage limit for geothermal exploration licenses to                                                               
100,000 acres. This will likely draw greater interest from developers                                                           
grateful for the opportunity to economically explore and develop                                                                
larger parcels.                                                                                                                 
                                                                                                                                
Enactment will help Alaska continue to responsibly manage its natural                                                           
resources, provide alternative energy sources in some of our most                                                               
remote communities, grow the economy, and generate job creation.                                                                
                                                                                                                                
I urge your prompt and favorable action on this measure.                                                                        
                                                                                                                                
Sincerely,                                                                                                                      
/s/                                                                                                                             
Mike Dunleavy                                                                                                                   
Governor"