BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 571| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 CONTINUED SB 571 Page 2 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 SB 571 Page 3 **** END ****