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While Some Might Say Geothermal Research and Permitting is Way Too Slow, Others are Saying, “Wait up”

Editor’s Note: This is part II of a series on geothermal energy development in Chaffee County. It will deal primarily with the procedural aspects of geothermal research and the permitting process that governs such actions.

You can read Part I here. The upcoming Ark Valley Voice Geothermal Energy Part III will focus on the technical side.

In that the bureaucratic aspect of geothermal energy is extraordinarily complicated, there is no possibility of covering every regulatory body and its particular permitting requirements over the course of just one article. If there is an aspect you would like discussed more in-depth, or have questions you would like to see answered, even after reading the upcoming Part III, reach out to

3,692 acres of land owned by the Colorado State Land Board, leased to Mt. Princeton Geothermal for geothermal resource exploration. Not pictured: the important stuff, approximately 6,000 ft below the surface. Photo by August Toevs.

A great many of the concerns raised by those involved with the Buena Vista (BV) Community for a Pristine Mt. Princeton (PMP) are couched in terms of technical and environmental worries. Could the geothermal plant contaminate aquifers and local, privately-owned wells? Will it be too loud? Or too big? Can it actually meet the hypothetical 10 MW (megawatt) output?

To be clear, these are legitimate worries, especially for the residents who are most likely to be affected by adverse impact of a geothermal energy production facility. This article does not intend to discount the validity inherent to their concerns.

But, as one attendee at PMP’s July 21 informational meeting noted, “In my opinion, this is a group that’s way ahead of itself.”

The Chaffee Board of County Commissioners (BoCC), in a statement released on Thursday, August 10, reaffirmed that sentiment, saying, “To date, the County has not received an Activity Notice for geothermal exploration nor been provided any information on proposed exploration for geothermal resources that would prompt requirements for an Activity Notice, nor received any request for geothermal projects that may prompt requirements for a 1041 Permit application.”

Benjamin Teschner, Solid Minerals Leasing Manager at the Colorado State Land Board (CSLB), which is the government agency that leased the land to Mt. Princeton Geothermal (MPG) on which they plan to drill test wells, echoed the above sentiments in so many words, “To say that this project is in its infancy would be an understatement.”

Teschner’s statement is incisive and leads to the major issue precluding any number of deliberative bodies from addressing concerns regarding a geothermal plant: geothermal energy in Chaffee County is still in its gestational form, which means no one is completely suited to give conclusive answers to many of the questions raised. They can’t provide specific details on land cost or impacts because the very productive viability of any geothermal resource near Rodeo Road and CR323 is so indefinite.

At this stage, experts on the subject—the engineers at MPG, or Sangre De Cristo Electric Association (SDCEA) for example—can do their best to make and provide well-informed, hypothetical answers to concerned stakeholders. But for now, that is all they are.

Geothermal Exploration May Reveal the Unknowns

Questions that can be answered at this time relate more so to the path that geothermal exploration may take from here, and how that path might be overseen by deliberative bodies in the nation, state, and county.

To start simply, the next step in geothermal production, and the next hurdle facing MPG, is the conclusive proving of an anomalous—especially hot—resource.

Practically speaking, that begins with a gradient test well. Gradient wells are shallow test wells, rarely going as deep as 500 meters (1,640 ft), according to the Geothermal Resource Group. That depth is especially relevant in its relationship to the much-discussed county 1041 regulations. Such a well may cost somewhere between $1 to $2 million, dependent on any number of variables like steel prices on the open market or labor costs. A Senate Appropriation request for  $1 million has already been denied.

In 2022, the state of Colorado put together a grant program to aid in geothermal development. But it is behind schedule, having yet to even begin taking applications. This slow deployment, combined with the denied Senate appropriations request, has MPG in a difficult funding environment.

Per the terms of Chaffee County’s 2013 guidelines for the “administration and use of geothermal resources”, any test well shallower than 2,500 ft is not subject to the permit application and review requirements enumerated in the 1041 regulatory procedure.

Instead, to drill a gradient test well at depths shallower than 2,500 ft, MPG would only have to submit an activity notice for exploratory actions to the county.

Such a notice would demand a significant amount of prior exploration. It must include extensive mapping of the proposed exploration area, descriptions of the means of exploration and site reclamation, plans for the protection of public health and the environment and a copy of permits issued by the state engineer.

MPG already has a geothermal resource testing lease from the CSLB for 3,692 acres of land. It was granted in June of 2020 and will expire in June of 2025.

To actually build a facility, MPG would have to renegotiate their lease with the CSLB, which would be a massive contractual overhaul. That land is also leased to several other parties, including Young Life and a private individual who grazes cattle on it. All other CSLB  leaseholders would have to be considered if MPG were to renegotiate their lease for a facility.

Drill Permits are the Charge of the State Engineer and ECMC

A drill permit for all test wells shallower than 2,500 ft must be given by the Colorado Division of Water Resources (DWR) and, at this time, the DWR permitting database shows no active permit issued to MPG or anyone else at the site of interest.

Neither does the Energy and Carbon Management Commission (ECMC), formerly known as the Oil and Gas Conservation Committee, who, as of May, are newly responsible for all deep geothermal activity in the state.

Right now, the ECMC is undertaking the process of revising existing regulations for deep geothermal operations in Colorado.

Permitting by the State Engineer demands applicants adhere to very specific standards for the preservation of the environment, such as the amount of required steel casing, the type of grouting used to seal the well, and the type of liquids allowed to be injected into the ground to eliminate the risk of contamination.

All of the above cannot be assembled without a bid from an engineering firm. MPG has put out a request for proposals, but we are told the details of their search for a contracting partner are confidential at this time.

Understanding Gradient Wells

Temperature gradient wells, categorized as type A wells in the state geothermal rules (<2,500 ft. and/or <212 degrees fahrenheit), measure the rate at which temperature increases with depth. Gradient wells are exploratory, and are not properly suited to be used for any type of production. If the gradient is found to be especially promising, geothermal developers must move onto type B wells.

Type B wells are deeper than 2,500 ft. and/or exceed 212 degrees Fahrenheit. These require more expensive, specialized equipment, further permitting from the DWR, and the permit of disposal for hazardous fluids by the Colorado Department of Public Health and Environment (CDPHE). These wells can be used for withdrawal testing or pump testing, where researchers examine the productivity rate of resource characteristics and take stock of the system’s capacity to handle the stress of reinjection.

According to geologist and SDCEA Key Account Specialist Mike Allen, it is likely that, before a facility could be built, developers would have to drill four to six type B wells at depths of around 6,000 feet. Each of these wells would be subject to lengthy review and 1041 regulations at a county level.

1041 regulatory provisions kick in anywhere past 2,500 ft. Here, the BoCC enter into a much more active, “quasi-judicial” role, which means they interpret and apply the 1041 regulations that currently exist in a way specifically suited to the project before them.

In the Chaffee community, the phrase “1041” may leave a bad taste in some readers’ mouths due to its relevance in a much-maligned 2009 water agreement between the county and Nestlé Waters North America (now BlueTriton Brands). Many residents charge it allows undue exploitation and burden on the county’s water resources.

1041 regulations are, by design, variable. County commissioners are given latitude to create specific provisions in order to carry out what 1041 rules say is their prerogative. Commissioner Keith Baker, for example, has decried BlueTriton Brands for neglecting to fulfill the section of their 1041 agreement that requires the hiring of local truck drivers.

Section 10-404, for example, deals with a range of approval criteria, such as the potential for degradation of the environment’s aesthetic quality, degradation of water quality in the area, and even the project’s potential economic impact on the county, positive or negative.

What specific, practical regulations are put into place regarding such considerations is up to interpretation by the commissioners. This is all in addition to the regulatory standards imposed by the DWR, among others.

1041 reviews are also largely public-facing, with only small provisions of confidentiality relating to proprietary information. So too is the permitting process for the DWR and ECMC, who require letters of notice to be sent to potentially impacted individuals, who can then voice concerns with the State Engineer.

So, if MPG drills a type A gradient well and finds encouraging data, then moves on to the more lengthy and heavily-regulated type B process, they will have only completed the testing phase. This could take — likely will take — years. This can even be stalled further as the ECMC goes through the arduous process of revising and then passing through the legislature its new regulations for deep geothermal operations.

Of course, if the testing proves that the geothermal resource is unable to be harnessed for energy production, abandonment or a pivot of intention is certainly possible. Then, the wells could be used for a greenhouse, or for residential heating and cooling infrastructure.

The drilling of a gradient well, from start to finish, may only take six weeks or so. But the bureaucracy and regulatory minutiae are not so efficient, which should prevent dangerous and malignant development activities.

The actual construction of a facility would itself prompt its own deluge of regulatory action and review processes, in that it would be subject to the DWR, ECMC, and even the Environmental Protection Agency (EPA). It is also expensive. Commercial-grade wells cost somewhere in the range of $5 million and can reach prices of $10 million, let alone the cost of facility construction itself.

Renegotiations of the lease with the CSLB would also have to take place. According to Teschner, the currently held exploratory lease is far cheaper (roughly $3/acre per year) than a usage lease.

In summary, not only is the ultimate construction of a geothermal power plant far down the road—monetarily as well as bureaucratically—but a great deal of the permitting and regulatory procedures are extremely public-facing in their process. That is to say, there are, and should be, a great many opportunities in the coming years for residents to make their opinions heard.

Read Part I here.  Stand by for Part III, which will outline the tactical aspects of tapping into geothermal energy.