Legislature(2021 - 2022)BARNES 124
01/24/2022 01:00 PM House RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| HB135 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 135 | TELECONFERENCED | |
HB 135-GEOTHERMAL RESOURCES
1:04:13 PM
CHAIR PATKOTAK announced that the only order of business would
be HOUSE BILL NO. 135, "An Act relating to geothermal resources;
relating to the definition of 'geothermal resources'; and
providing for an effective date."
CHAIR PATKOTAK reminded committee members that today's hearing
on HB 135 is a continuation of the PowerPoint presentation
provided by the Department of Natural Resources (DNR) at the
bill's previous hearing on 1/21/22. He noted that clarification
would also be provided on previous questions about how HB 135
might affect water rights.
1:05:46 PM
SEAN CLIFTON, Policy and Program Specialist, Central Office,
Division of Oil and Gas (DO&G), Department of Natural Resources
(DNR), turned to the department's PowerPoint presentation, "HB
135 GEOTHERMAL RESOURCES," that was provided to the committee on
1/21/22. He displayed slide 9, "SECTION 2: PREFERENTIAL
RIGHTS," and explained that HB 135 seeks to clean up the
statutes pertaining to the Division of Oil and Gas (DO&G) rather
than to disposing of the State of Alaska's geothermal energy
resources, with the purpose of issuing exploration licenses and
leases and ultimately units of those leases, facilitating
getting clean and renewable energy into Alaskans' homes. He
pointed out that the mention water of water rights on this slide
was just meant to be analogous comparison, as HB 135 would have
no impact on the statutes that are relevant to water rights. He
noted that Mr. Tom Barrett is online to help clarify how water
rights would be potentially relevant to a geothermal development
situation as well as water rights generally.
1:07:45 PM
TOM BARRETT, Section Leader, Division of Mining, Land and Water,
Department of Natural Resources (DNR), explained that water
rights are a legal right to surface or ground water that is
granted pursuant to the [1966] Alaska Water Use Act. A water
right allows a specific amount of water from a specific water
source to be diverted, impounded, or withdrawn for a specific
use. When a water right is granted, it becomes pertinent to the
land where the water is being used for as long as the water is
being used. If the land is sold the water right transfers with
the land to the new owner. For example, a farmer with a creek
running through his or her property, would need a water right to
authorize the use of a significant amount of water. A
significant amount of water is defined as about 5,000 gallons
per day for consumptive use or 30,000 gallons for non-
consumptive use.
MR. BARRETT specified that a water right provides a legal
standing to serve those rights against conflicting water uses
that do not have water rights. He said Alaska follows the prior
appropriation system, meaning a person with water rights has
priority to use the water over persons who later file for a
water right from the same source. In Alaska, about 18,000 water
rights have been issued. To issue a water right, [DNR] takes an
application and small fee from an applicant, processes it for
completeness, the specific location, and method of diverting the
water. An impact analysis is done to be sure it isn't going to
affect other appropriates, although [DNR] doesn't guarantee
people's water. If it isn't going to affect other appropriates,
[DNR] issues a permit for 2-10 years depending on the amount of
water requested. In this permit phase, called proving the
applicant's water rights, the applicant uses their water and
reports their water use to [the department]. At the end of the
permit phase [DNR] issues a certificate for the water amount
actually used by the applicant.
1:11:11 PM
REPRESENTATIVE HANNAN referenced the bill's "bright line"
distinction between commercial users and non-commercial users.
In describing water rights, she asked whether there is a
distinction between commercial users and non-commercial users.
She further asked whether homeowners would need a water right to
put in well.
MR. BARRETT replied that the water right is purely based on
volume, the volume is what triggers it. So, he continued, a
homeowner with a well would not need to get a water right.
REPRESENTATIVE HANNAN posed a scenario in which an individual
has a well and a geothermal commercial property gets developed
and needs water for that commercial use. She asked how the
rights of the individual property owner with the well would be
preserved to ensure access to the water that is being used
without an established water right.
MR. BARRETT responded that that is the benefit for a water right
even when not required. That water right gives an individual
the prior priority base. If a homeowner doesn't have a water
right and a neighbor has a large commercial operation that uses
lots of water and causes an impact, the homeowner would have to
work with the neighbor regarding the impact. However, when
issuing a water right, [DNR] does look for surrounding water
users, but the best protection is to get a water right.
REPRESENTATIVE HANNAN asked whether there are any individual
noncommercial users in Alaska who currently have wells and have
established their water rights for those wells.
MR. BARRETT answered yes, there are a lot of household/domestic
water right owners.
1:15:09 PM
REPRESENTATIVE RAUSCHER recalled that during his 45 years in
Alaska it has been a big deal for everyone to establish their
water rights. He inquired as to whether that process has now
ended and drilling a [water] well is all that is needed to
establish specific water rights. He further inquired as to how
HB 135 would affect or put extra encumbrances on those rights.
MR. BARRETT replied that a well is basically just access to the
water. Someone wanting a water right must submit an application
to the department that describes how the applicant will get that
water, such as diverting a stream or putting in a well.
REPRESENTATIVE RAUSCHER asked whether HB 135 would in any way
affect private landowners who have water rights for their
property.
MR. BARRETT responded that HB 135 would not change that.
1:17:26 PM
REPRESENTATIVE MCCABE posited that the freshwater wells drilled
for drinking water and domestic consumption are usually 50-300
feet deep at the most, while in geothermal energy [systems] the
water is briny and located significantly deeper. He inquired as
to whether it is correct that these are two geologically
different horizons.
MR. BARRETT answered that geothermal [energy systems] can be one
thousand to several thousand feet deep [slide 16, "USEABLE
GEOTHERMAL ENERGY"], whereas warm springs and hot springs tend
to be much shallower. Freshwater aquifers also tend to be
shallow and at depths of less than a thousand feet.
REPRESENTATIVE MCCABE posited that, in theory, folks living in a
geothermal area can be producing domestic freshwater for their
homes and businesses, and because the two are separated by a
long column of rock they could co-exist without difficulty and
the two cannot be conflated.
1:20:15 PM
DAVID LEPAIN, Chief Geologist, Division of Geological and
Geophysical Surveys (DGGS), Department of Natural Resources
(DNR), confirmed that Mr. Barrett's answer is correct. As was
stated by Mr. Masterman [on 1/21/22] it is a difference in
scale. Part of the water wells are going to be up in the
shallow stratigraphy anywhere from a few tens of feet down to a
few hundred feet deep; for example, some wells in the hill areas
of Fairbanks are upwards of 500 feet deep. But still, they are
much shallower than what is being talked about for commercial
geothermal energy. Geothermal wells are going to be on the
order of many thousands of feet deep, so there will be a lot of
geology/rock separating those two systems and there is unlikely
to be communication between them.
CHAIR PATKOTAK drew attention to slide 16, "USEABLE GEOTHERMAL
ENERGY," in the presentation which highlights the difference in
depths between the two types of water resource.
1:21:34 PM
REPRESENTATIVE SCHRAGE recalled that some of the concern
expressed by committee members was regarding whether [geothermal
wells] at depths of 200-300 feet could impact freshwater wells.
He requested clarification that what is being talked about is
commercial geothermal power at thousands of feet, not
potentially 200 feet. He surmised that geothermal reservoirs
are deep as well as broad, and probably not an infinite source
of power or power generation. He asked whether one user of
geothermal power could dilute that source of energy for another
user in the region.
MR. LEPAIN replied that there is unlikely to be communication
between the shallow part of the water systems and the water
being tapped into by a geothermal project. Even if a geothermal
project is tapping into relatively shallow water, it is probably
going to be on the flanks of a volcano or some sort of
geothermal site, and those waters tend to be high in dissolved
solids and tend to be non-potable sources of water. It is
correct that most often geothermal projects are going to be
tapping non-potable water sources that are many thousands of
feet deep. Referring to [slide 16], he further stated that the
geothermal wells depicted on the slide at the shallow end of 200
feet are highly unlikely.
1:24:14 PM
MR. CLIFTON responded to the other part of Representative
Schrage's question, which he interpreted as being what would
happen if there were a conflict between two users of the same
geothermal reservoir. He said it would be handled much the same
way as done with other types of energy reservoirs, such as oil
and gas. One function of the Alaska Oil and Gas Conservation
Commission (AOGCC) is to monitor resource pools and ensure that
waste is prevented, and those things can be de-conflicted
through existing statutes. But, he added, it is almost never a
problem because the operators who seek to develop those
resources also don't want to waste the resources, they want to
maximize them, and they usually manage that on their own through
unitization of the resource. Also, it is unlikely there would
be a conflict between a private user of what would be a
commercial resource simply because the scale of a commercial-
related resource is much bigger and more powerful, such as
higher temperatures and pressures. It's unlikely that that's
the sort of thing which private home or cabin users are tapping
into. If that situation did come up, however, the AOGCC would
be able to de-conflict it through existing statute and policies.
1:26:18 PM
REPRESENTATIVE HANNAN drew attention to the description of
hydrothermal on slide 16. She asked whether the steam and hot
water in hydrothermal geothermal energy production is deep,
briny water that is already down near the geothermal source, and
surface water is not used for that.
MR. LEPAIN answered correct, for hydrothermal systems the water
being pumped is from a depth of thousands of feet; it is not
going to be surface water and it is very unlikely to be in
communication with surface water. There is a very significant
separation in terms of depth for commercial versus private home
use.
1:27:34 PM
REPRESENTATIVE HOPKINS inquired whether AOGCC has statutory
authority to deal with hydrothermal and geothermal resources
given that oil and gas are not geothermal.
MR. CLIFTON confirmed that AOGCC has statutory authority to
adjudicate that and to arbitrate conflicts.
1:28:27 PM
The committee took a brief at-ease.
1:28:50 PM
REPRESENTATIVE SCHRAGE brought attention to slide 16 and asked
whether a geothermal power plant would be pumping water from the
reservoir and then reinjecting the same water back into that
reservoir. He further asked whether this would run afoul with
the Department of Environmental Conservation (DEC) because water
is being discharged back into a reservoir.
MR. LEPAIN confirmed that hot water is pumped from significant
depths, then run through a steam turbine to generate
electricity, then the water goes to a cooling tower and after it
is cooled the water is reinjected into the subsurface at a
comparable depth. He deferred to the other experts online to
answer whether DEC would be involved.
MR. CLIFTON answered that the reinjection wells would be
permitted and regulated through AOGCC. This is something AOGCC
already does with other types of production and injection wells,
and this is a standard and usual practice. He added that AOGCC
pays close attention to the protection of other water resources,
such as drinking water sources. He confirmed that the potential
for surface contamination or discharge would be DEC's domain.
1:31:30 PM
LAURA ACHEE, Legislative Liaison, Department of Environmental
Conservation (DEC), qualified that as the legislative liaison
she is not familiar with the details specific of permits for
discharge as to water. Regarding questions asked during the
bill's 1/21/22 hearing, she said permits from DEC would be
required for discharging water and it would have to meet state
and federal water quality standards.
1:32:11 PM
REPRESENTATIVE SCHRAGE surmised that if the water is reinjected
into the reservoir, DEC does not have oversight; rather, that
would be permitted through AOGCC. But, he further surmised, if
the water is being discharged on the surface, DEC would be
involved and would monitor those discharges.
MS. ACHEE replied that she will get back to the committee with
an answer in this regard.
MR. CLIFTON added that for operating a facility like this there
is extensive review of the engineering and so forth, and DEC
would have to permit a contingency plan just like for any other
facility related to oil and gas or to generation. It is very
important to all of the state agencies connected with that
permitting process to protect the surface, the drinking water
resources, prevent to the greatest extent possible any sort of
environmental contamination, and to have contingincies in place
should anything like that occur. This wouldn't be any different
from any of the power generation facilities or oil and gas
related facilities that have already been permitted and
operating in Alaska for decades.
1:34:14 PM
REPRESENTATIVE RAUSCHER inquired about the number of agencies
that would be involved when putting in [a geothermal energy
project].
MR. CLIFTON responded that he doesn't offhand know all of the
agencies that would be involved. He said DNR does a fair bit of
the surface use permitting as well as some pipeline permitting,
which is also a surface area. In addition, DEC might be
involved through the spill contingency plan; as well, permits
would be needed for any planned discharge from the facility.
The Alaska Department of Fish and Game (ADF&G) could be involved
should there be any potential for disturbance of wildlife or
interference with streams. Federal agencies might also be
involved, so it can get quite broad depending on what the
potential impacts are. He offered to provide a list of all the
potential agencies that might be involved in permitting a
surface facility for power generation from geothermal resources.
CHAIR PATKOTAK confirmed the committee would like to receive
such a list prior to the bill's next hearing on 1/26/22.
1:36:34 PM
REPRESENTATIVE HOPKINS drew attention to slide 31, "DRILLING
REGULATIONS," and observed the statement that AOGCC jurisdiction
over geothermal is triggered by temperature or commerciality.
He futher observed the statement that the new definition in HB
135 ignores the temperature requirement. He asked whether AOGCC
would still have jurisdiction under the proposed change for how
AOGCC's jurisdiction is triggered.
MR. CLIFTON pointed out that the last bullet under AOGCC states:
"Exception: if well may encounter geothermal resources, fluid,
or water of enough heat/pressure to threaten life/health." In
this case, he continued, AOGCC would require permits, and that
would be regardless of whether it is a commercial development or
a private landowner.
1:38:07 PM
REPRESENTATIVE HOPKINS posed a scenario in which there is 90
degree heat in a shallow well that is pumped up to the ground
and that's not enough heat or pressure to threaten life or
health, and then there is a resource discrepancy between two
operations as they try to become commercial, AOGCC is not part
of that at that point?
MR. CLIFTON answered that a commercial development is going to
be permitted through AOGCC.
CHAIR PATKOTAK surmised that a commercial development is going
to be permitted through AOGCC despite temperatures.
MR. CLIFTON replied yes.
CHAIR PATKOTAK further surmised that if AOGCC's involvement
isn't already triggered with the rest of the process, it's
involvement would be triggered if the temperature [is greater
than] 120 degrees celcius or simply commerciality.
MR. CLIFTON responded correct.
REPRESENTATIVE HOPKINS offered his understanding that even
though HB 135 would not deal with temperature anymore, it would
still be a trigger for the jurisdiction of AOGCC.
MR. CLIFTON answered yes.
1:39:19 PM
[HB 135 was held over.]
1:39:58 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 1:40 p.m.
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