Geothermal Regulations in Colorado--Land Ownership is the Key

Abstract

Geothermal resources in Colorado are separately classified as water on private land and as mineral on state and federallyadministered lands. In addition, where classified as mineral, only the heat is classified as mineral, regardless of the land administration. Any water used to extract the heat is administered by the Colorado State Engineer through the Division of Water Resources. Rules and regulations for permitting geothermal exploration and development are most readily understood if considered separately for private, state-administered, and federally-administered lands. Many geothermal resources cover more than one of these types of land, but the permitting processes are not synchronized. All well drilling associated with geothermal exploration and development requires permits from the Colorado Division of Water Resources. These permits and water use are the only regulatory activities that are the same on all types of land. On private land the scheduling of activities is primarily controlled by the land owner and permitting required by local authorities. Before any activity can take place on state-administered land, a Geothermal Exploration Lease is required. This lease can cover activities up to and including deep exploration test wells. On federally-administered land an approved Notice-of-Intent is required for activities up to and including temperature gradient wells. A competitively-bid Geothermal Lease is required for further exploration and development activities. An extensive environmental evaluation (typically taking at least12-18 months) is required before a Geothermal Lease Sale can occur. Exploration and development may therefore progress at different rates on different land types. The Colorado Division of Natural Resources has signed a Memorandum of Understanding with the Colorado Office of the Bureau of Land Management to collaborate in resolving conflicts in jurisdiction with geothermal rules and regulations. The purpose of this agreement is to minimize inter-agency, regulatory delays in the administration of geothermal development.