Chapter 522 — GeothermalResources

 

2009 EDITION

 

 

GEOTHERMALRESOURCES

 

MINERALRESOURCES

 

GENERALPROVISIONS

 

522.005 Definitions

 

522.015 Policy

 

522.019 Injectionof geothermal fluids; rules; water quality permit

 

522.025 Application

 

522.035 Ownershiprights

 

522.045 Decommissionedwell; jurisdiction

 

PROSPECTWELLS

 

522.055 Permit;application; fees

 

522.065 Circulationof application to state agencies; suggested conditions to permit; time limitfor permit action

 

522.075 Bondor security; conditions; cancellation

 

522.080 Operatorliability

 

522.085 Reportcertifying completion of decommissioning plan

 

GEOTHERMALWELLS

 

522.115 Permit;application; fees

 

522.125 Circulationof application to state agencies; suggested conditions to permit

 

522.135 Permit;time limit for action; grounds for issuance; conditions; fees

 

522.145 Bondor security; conditions; cancellation

 

522.155 Liabilityfor failure to protect ground water and surface water; rules

 

522.165 Requestfor permit modification; fee

 

522.175 Pluggingand decommissioning; rules

 

522.195 Monthlyproduction statement; rules

 

522.205 Noticeby prospective operator of transfer or purchase of well; application; fee;notice by buyer of land of transfer or purchase; rules

 

522.215 Suspensionof drilling or operation; application; terms; extension; presumption ofabandonment; unlawful abandonment; notice; proceedings against operator

 

522.225 Noticeof intent to plug and decommission

 

522.245 Departmentapproval of plugging and decommissioning; report by operator; effect of failureto comply; proceedings against operator

 

522.255 Resolutionof conflicts between geothermal and water uses

 

ADMINISTRATION

 

522.275 Administrationby State Geologist

 

522.305 Rules

 

522.315 Finalorder of department; delivery to operator

 

522.325 Compliancewith final order; appeal

 

WELLRECORDS

 

522.355 Recordsof well; contents; drill cutting and core samples

 

522.365 Filingrecord with department; exemption from disclosure

 

UNITIZATIONOF GEOTHERMAL RESOURCE AREA

 

522.405 Unitization;development of unit agreement; rules

 

522.415 Unitoperation plan

 

522.425 Provisionsin rule or order requiring unit operation

 

522.435 Rule,order to supersede previous board action

 

522.445 Conditionto effectiveness of unitization plan and unit agreement

 

522.455 Rehearingon rule or order; judicial review

 

522.465 Appointmentof unit operator

 

522.475 Boardreview of disputes over unit operation; appeal

 

522.485 Amendmentof unitization plan

 

522.495 Presumptionsregarding conduct of operation

 

522.505 Unauthorizedoperation in unit area prohibited; exemption

 

522.515 Whenagreement or plan held not to violate state securities or trade law

 

522.525 Landsubject to board authority; federal lands

 

522.535 Fees;rules

 

522.545 Rulemakingauthority

 

ENFORCEMENT

 

522.810 Suitsto enjoin violations

 

522.815 Rulesby board; scope; adoption; notice

 

PROHIBITEDACTS

 

522.910 Aidingin violations prohibited

 

522.915 Falseentries, omissions, destruction or removal of records or reports

 

PENALTIES

 

522.990 Penalties

 

GENERALPROVISIONS

 

522.005Definitions.As used in this chapter, unless the context requires otherwise:

(1)“Board” means the governing board of the State Department of Geology andMineral Industries.

(2)“By-product” means any mineral or minerals, exclusive of helium or of oil,hydrocarbon gas or other hydrocarbon substances, that are found in solution orin association with geothermal resources and that have a value of less than 75percent of the value of the geothermal resource or are not, because ofquantity, quality, or technical difficulties in extraction and production, ofsufficient value to warrant extraction and production by themselves.

(3)“Completed geothermal well” means a well producing geothermal resources forwhich the operator has received the department’s written assurance that themanner of drilling of and producing geothermal resources from the well aresatisfactory.

(4)“Cooperative agreement” means an agreement or plan of development and operationfor the production or utilization of geothermal resources in which separateownership units independently operate without allocation of production.

(5)“Correlative rights” means the right of each owner in a geothermal area toobtain that owner’s just and equitable share of the underlying geothermalresource, or an economic equivalent of that share of the resource, produced ina manner and in an amount that does not injure the reservoir to the detrimentof others.

(6)“Department” means the State Department of Geology and Mineral Industries.

(7)“Drilling” includes drilling, redrilling and deepening of a geothermal well.

(8)“Enhanced recovery” means the increased recovery from a reservoir achieved byartificial means or by the application of energy extrinsic to the reservoir.The artificial means include, but are not limited to, reinjection of hot brine,fluid or water into a reservoir.

(9)“Geothermal area” means any parcel of land that is, or reasonably appears tobe, underlaid by geothermal resources.

(10)“Geothermal reinjection well” means any well or converted well constructed todispose of geothermal fluids derived from geothermal resources into anunderground reservoir.

(11)“Geothermal resources” means the natural heat of the earth, the energy, inwhatever form, below the surface of the earth present in, resulting from, orcreated by, or that may be extracted from, the natural heat, and all mineralsin solution or other products obtained from naturally heated fluids, brines,associated gases, and steam, in whatever form, found below the surface of theearth, exclusive of helium or of oil, hydrocarbon gas or other hydrocarbonsubstances, but including, specifically:

(a)All products of geothermal processes, including indigenous steam, hot water andhot brines;

(b)Steam and other gases, hot water and hot brines resulting from water, gas, orother fluids artificially introduced into geothermal formations;

(c)Heat or other associated energy found in geothermal formations; and

(d)Any by-product derived from them.

(12)“Geothermal well” includes any excavation made for producing geothermalresources and any geothermal reinjection well.

(13)“Land” means both surface and mineral rights.

(14)“Operator” means the person:

(a)Who possesses the legal right to drill a geothermal well;

(b)Who has obtained a drilling permit pursuant to ORS 522.135; or

(c)Who possesses the legal right to operate a completed geothermal well or who hasbeen granted the authority to operate the well by that person.

(15)“Prospect well” includes any well drilled as a geophysical test well, seismicshot hole, mineral exploration drilling, core drilling or temperature gradienttest well and drilled in prospecting for geothermal resources. “Prospect well”does not include a geothermal well.

(16)“Reservoir” means an aquifer or combination of aquifers or zones containing acommon geothermal or ground water resource. “Reservoir” includes, but is notlimited to, a hot dry rock conductive system.

(17)“Royalty interest” means a right or interest in geothermal resources producedfrom land or in the proceeds of the first sale of those resources.

(18)“Unit agreement” means an agreement or plan of development and operationdeveloped under the provisions of ORS 273.775, 308A.050 to 308A.128, 522.015,522.405 to 522.545, 522.815 and 522.990 and this section for the production oruse of geothermal resources in separately owned interests as a singleconsolidated unit and that provides for the allocation of costs and benefits.

(19)“Unit area” means the area described in a unit agreement that constitutes theland subject to development under the agreement.

(20)“Unit operator” means the person designated in the unit agreement to manage andconduct the operation involving unitized land.

(21)“Unit production” means all geothermal resources produced from a unit area fromthe effective date of a unit agreement approved by the board under ORS 522.405.

(22)“Waste” means:

(a)Any physical waste, including, but not limited to, underground waste resultingfrom the inefficient, excessive or improper use or dissipation of reservoirenergy or resulting from the location, spacing, drilling, equipping, operationor production of a geothermal resource well in such a manner that reduces ortends to reduce the ultimate economic recovery of the geothermal resourceswithin a reservoir; and

(b)Surface waste resulting from the inefficient storage of geothermal resourcesand the location, spacing, drilling, equipping, operation or production of ageothermal resource well in such a manner that causes or tends to cause theunnecessary or excessive surface loss or destruction of geothermal resourcesreleased from a reservoir.

(23)“Working interest” means an interest in geothermal resources or in landcontaining geothermal resources that is held under a lease, operatingagreement, fee title or otherwise and under which, except as otherwise providedin a unit or cooperative agreement, the owner of the interest has the right toexplore for, develop, produce or utilize the resources. “Working interest” doesnot include a right delegated to a unit operator as such by a unit agreement. [1975c.552 §3; 1979 c.163 §1; 1981 c.588 §3; 1981 c.694 §4; 1999 c.314 §74; 2005c.22 §375; 2009 c.794 §1]

 

522.010 [1971 c.776 §2;1973 c.388 §1; repealed by 1975 c.552 §55]

 

522.015Policy.(1) The Legislative Assembly hereby finds and declares that:

(a)The people of the State of Oregon have a direct and primary interest in thedevelopment of geothermal resources situated in this state.

(b)The State of Oregon, through the State Department of Geology and MineralIndustries, shall control the drilling, redrilling and deepening of wells forthe discovery and production of geothermal resources so that such wells will beconstructed, operated, maintained, plugged and decommissioned in the mannernecessary to safeguard the life, health, property and welfare of the people ofthis state, to safeguard the air, water and other natural resources of thisstate, and to encourage the maximum economic recovery of geothermal resourcestherefrom.

(2)It is the policy of the Legislative Assembly that this chapter be administered:

(a)To prevent damage to and waste of geothermal resources;

(b)To prevent interference with or damage to waters used or to be used forbeneficial purposes that may result from improper drilling, operation,maintenance, plugging or decommissioning of geothermal or prospect wells;

(c)To supervise the drilling, operation, maintenance, plugging and decommissioningof geothermal or prospect wells in a manner permitting the operator to utilizeall methods known to the industry for the purpose of increasing the ultimateeconomic recovery of geothermal resources, that are suitable, and consistentwith protection of the air, water and other natural resources of the state; and

(d)To provide for the development, management and production of geothermalresources in a manner that minimizes state involvement, enhances resourcerecovery, prevents waste, maximizes economic development and protectscorrelative rights of the resource owners. [Formerly 522.050; 1981 c.588 §4;2009 c.794 §2]

 

522.019Injection of geothermal fluids; rules; water quality permit. (1)(a) In orderto accomplish the policy of ORS 522.015 all geothermal fluids derived from geothermalresources shall be reinjected into the same reservoir from which withdrawnunless it is determined by the State Department of Geology and MineralIndustries that these policies and the public interest require other disposalof the fluids.

(b)Subject to the determination in paragraph (a) of this subsection, injectioninto other reservoirs or disposal by other means may be allowed by thedepartment in specific instances where it is shown that such action isconsistent with the policies cited in this section. Disposal by other means mayinclude any secondary use of geothermal fluid after the primary use of suchfluid for electrical power generation or for other direct application of theheat or other associated energy contained in such fluids or for by-productextraction. Secondary uses may include, but shall not be limited to, use ofcondensate resulting from electrical power plant operations for plant-coolingpurposes, or use of such geothermal fluid for agricultural, commercial orindustrial purposes.

(2)The State Department of Geology and Mineral Industries shall adopt rulesgoverning the disposal by reinjection or other means of geothermal fluidsderived from geothermal resources from wells of 250 or more degrees Fahrenheitbottom hole temperature or wells 2,000 or more feet deep. The rules shallinclude standards whereby contamination may be determined, constructionstandards for reinjection wells, testing procedures for identifying aquifers,standards and procedures for determining whether adjacent aquifers are beingdegraded by the reinjection process, guidelines for conservation of theresource, criteria for evaluating reservoirs or zones for geothermal fluiddisposal and requirements for prior approval of all geothermal fluidreinjection proposals.

(3)In addition to the permit required by ORS 522.115, an operator of a geothermalwell must obtain a water quality permit from the Department of EnvironmentalQuality under ORS 468B.050 or under rules authorized by ORS 468B.195 beforeinjection of any fluid, except well drilling fluids. Nothing in this chapterlimits the authority of the Department of Environmental Quality to regulate thesubsurface injection of fluids pursuant to ORS 468B.195, 468B.196 and 468B.197.[1979 c.163 §4; 1979 c.547 §1; 2009 c.794 §3]

 

522.020 [1971 c.776 §32;repealed by 1975 c.552 §55]

 

522.025Application.(1) The provisions of this chapter relating to the location and drilling of anywell for the production of geothermal resources do not apply to any wellsproducing geothermal resources on July 1, 1975, or wells, other than prospectwells, where:

(a)The geothermal fluids produced are of less than 250 degrees Fahrenheit bottomhole temperature; or

(b)Such fluids have been appropriated pursuant to ORS 537.505 to 537.795 and537.992.

(2)The provisions of this chapter relating to regulation of production ofgeothermal resources from a geothermal reservoir apply only to wells with abottom hole temperature of at least 250 degrees Fahrenheit.

(3)If the bottom hole temperature of a well that was initially at least 250degrees Fahrenheit falls below 250 degrees Fahrenheit, the State Geologist andthe Water Resources Director, after consulting with the well owner, shalldetermine the agency with regulatory responsibility for that specific well.This determination shall be documented in writing and shall sup