BILL ANALYSIS
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2009-2010 Regular Session |
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BILL NO: SB 571 HEARING DATE: April 14, 2009
AUTHOR: Maldonado URGENCY: No
VERSION: As Introduced CONSULTANT: Estella Cisneros
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: Geothermal Resources
BACKGROUND AND EXISTING LAW
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.
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 assessed charges.
PROPOSED LAW
This bill would extend the State Oil and Gas Supervisor's
authority 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 would extend current authority to include
geothermal well operations.
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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."
The necessity for the bill rests on the high costs to the state
to remediate a geothermal well, which is currently about
$250,000. Stopping a bad actor from developing new or existing
well operations means the State will have to assume
responsibility to remediate fewer geothermal wells.
ARGUMENTS IN OPPOSITION
None received
COMMENTS
Argument in Opposition, as cited in Fact Sheet
The author generously noted in his fact sheet that one argument
in opposition to the bill is that denying proposed well
operations could limit the resources available to correct
outstanding well violations or pay penalties and well fees.
Although the Committee recognizes that possibility, the ability
of the State to stop non-compliant operators from expanding well
operations outweighs any potential lost revenue from allowing
non-compliant operators to expand or develop new well
operations.
SUPPORT
None Received
OPPOSITION
None Received
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