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NATURAL RESOURCE AND ENVIRONMENTAL LAW—WATER LAW property right to such a geothermal resource in place is recognized as an incident of ownership of an estate in land.41 If geothermal resources were vested, either by being employed or having been awarded by court decree before July 1, 1983, the Geothermal Resources Act does not infringe on those vested rights.42 In addition to the federal leasing procedures, the Colorado State Board of Land Commissioners may issue leases for state lands holding geothermal resources either by competitive bidding or by negotiation.43 The operator of the geothermal well need not be the same entity or person as the owner of the well.44 Colorado permitting of geothermal resources. Permitting au- thority for geothermal wells involving liquid is vested in the SEO, with consultation by the Colorado Water Quality Control Com- mission and the Colorado Oil and Gas Conservation Commis- sion.45 The SEO has promulgated rules governing geothermal well permitting.46 Under the SEO rules, permits must be obtained pri- or to production of a geothermal well.47 The SEO rules also govern the drilling, monitoring, and operation of geothermal wells, in- cluding those that reinject water into the aquifer.48 A permit is re- quired for each exploration, production, or reinjection well, whether operated independently or as part of an interconnected system, and for associated replacement wells or increased production of existing wells, including conversion of a well built for another purpose.49 In addition, reinjection wells need to comply with the U.S. Environ- mental Protection Agency’s Underground Injection Control Pro- gram.50 At the request of any person owning an interest in the land or a geothermal right within the area of a proposed geothermal man- agement district, or on his or her initiative, the State Engineer may establish a geothermal management district.51 The purpose of a district is to prevent the waste of the geothermal resource, to maxi- mize the economic recovery of a proven and delineated geother- mal resource, and to protect vested or correlative water and geo- thermal rights.52 In such district, the State Engineer has the au- thority to control well spacing, to control the quantity of geothermal fluids extracted, to require the reinjection of the pro- duced fluids, and to adopt plans for the most efficient use of geo- thermal energy.53 The SEO reports that no geothermal districts have been formed to date in Colorado.54 Water rights issues. The Geothermal Resources Act states that an application to appropriate groundwater to use its geothermal energy will be considered an application to appropriate geother- mal fluid.55 Non-tributary geothermal wells are governed by the corresponding statute for non-geothermal water wells, CRS § 37- 90-137. Extraction of energy from geothermal sources of water is considered a beneficial use of water.56 Depending on the method of geothermal resource extraction, the water used for electricity production purposes may involve con- sumptive or non-consumptive uses of water. Binary power produc- tion forms of geothermal resource development—most likely the type of development to occur in Colorado—are non-consumptive, with water being re-injected into the aquifer after its heat has been transferred. A permit to appropriate geothermal groundwater required by the SEO rules may be waived by the State Engineer for a diver- sionary utilization method, which is shown by engineering analysis to be non-consumptive and will not impair valid, prior water rights.57 Consumptive uses of water that represent new appropria- tions to stream systems that are over-appropriated can divert water only pursuant to an approved augmentation or substitute water supply plan.58 For a plan for augmentation to be approved by a dis- trict court for one of Colorado’s seven state water divisions, the plan must use an approved substitute supply of water to replace de- pletions to the stream in location, time, and amount such that there is no injury to vested or decreed conditional water rights.59 Groundwater protection. Because conventional geothermal re- sources60 involvegroundwater,virtuallyallWesternstateshavelaws that protect groundwater from the effects of geothermal explo- ration and production. The SEO rules require drillers to install cas- ings to seal off any strata containing fresh water, and operators are normally liable, by statute, for any damage resulting from contami- nation or depletion of groundwater resources. 68 The Colorado Lawyer | September 2010 | Vol. 39, No. 9PDF Image | Getting Into Hot Water: The Law of Geothermal Resources in Colorado
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