BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                   SB 571|
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                                 THIRD READING


          Bill No:  SB 571
          Author:   Maldonado (R)
          Amended:  As introduced
          Vote:     21

           
           SENATE NATURAL RES. & WATER COMMITTEE  :  10-0, 4/14/09
          AYES:  Pavley, Cogdill, Hollingsworth, Huff, Kehoe, Leno,  
            Padilla, Simitian, Wiggins, Wolk
          NO VOTE RECORDED:  Benoit
           
          SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8


           SUBJECT  :    Geothermal resources

           SOURCE  :     Author


           DIGEST  :    This bill extends the authority of the State Oil  
          and Gas Supervisor to deny approval of an operator's new or  
          expanded geothermal well operations if the operator fails  
          to pay a civil penalty, fails to remedy a violation, or  
          fails to pay the required well fee.  It extends current  
          authority to include geothermal well operations.

           ANALYSIS  :    Existing law authorizes the State Oil and Gas  
          Supervisor to deny approval of an operator's proposed gas  
          and oil well operations if the operator fails to remedy a  
          violation, fails to pay a civil penalty, or fails to pay  
          assessed charges.  The approval denial is in effect until  
          the operator remedies the violation to the satisfaction of  
          the supervisor, pays the civil penalty, or pays the  
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          assessed charges.

          This bill extends the authority of the State Oil and Gas  
          Supervisor to deny approval of an operator's new or  
          expanded geothermal well operations if the operator fails  
          to pay a civil penalty, fails to remedy a violation, or  
          fails to pay the required well fee.  It extends current  
          authority to include geothermal well operations.
           
          Background  

          Geothermal energy is natural heat generated deep inside the  
          earth. Generally, this heat is only usable when it occurs  
          near the earth's surface and heats underground water.   
          Geothermal resources are generally found in two forms:  dry  
          steam and hot water.  Dry steam is rare and valuable, due  
          to the relatively few mineral impurities it contains.   
          Geothermal wells are drilled into the more permeable,  
          steam-bearing fracture zones to tap the resource.  Hot  
          water geothermal resources are more common but also more  
          difficult to develop because they require dealing with the  
          highly mineralized geothermal water and the disposal of  
          spent geothermal water.  Geothermal wells bring hot water  
          to the surface at high pressure and convert the water into  
          steam. 

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           ARGUMENTS IN SUPPORT  :    According to the author, "The  
          State Oil and Gas Supervisor does not have authority to  
          deny approval of geothermal well operations proposed by an  
          operator who has failed to comply with an order, pay civil  
          penalties or well fees, or remedy other violations.  Thus,  
          an out-of-compliance operator may currently expand  
          operations, and, therefore, increase opportunities for  
          noncompliance while continuing to ignore their legal  
          obligations associated with current operations." 


          CTW:mw  4/29/09   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED








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