When developing Chaffee County’s draft geothermal 1041 regulations, the consultant aimed to support geothermal development while protecting property rights, as the county requested, officials said at a special work session Tuesday. The 1041 regulations, when passed by the commissioners, will govern the use of geothermal resources for commercial production of electricity.
The consultant who drafted the regulations, Barbra Green, partner at Sullivan Green Seavy LLC, said the draft contains flexible language that will give the county tools to handle all applications, from simple to controversial. “No one else in the state has geothermal regulations yet,” Green said. The process “is not easy and never perfect,” but she said she wants to talk through the draft with the county, hear feedback and get the regulations as close to the goals of the county as possible.
The county’s draft geothermal 1041 regulations create a “permit-driven” process, Mary Keyes, Sullivan Green Seavy LLC paralegal, said. Unless staff makes a “finding of no impact,” any use of geothermal for commercial electricity will require a 1041 permit, she said.
Chaffee County Commissioner Dave Potts asked when a project would get a finding of no impact. Green said she did not know how a geothermal project could actually get a finding of no impact. To do so, the project would have to cause no change on the site or surrounding properties in a number of areas. She said the draft has the no-impact language because in the future new technology or processes could possibly have no impact.
The draft regulations include a mandatory pre-application meeting, Green said. Such meetings help all parties involved, by getting everyone on the same page, clarifying and answering questions about the application process. The meeting lets applicants determine their responsibilities and how to ensure their applications have everything they need up front instead of dealing with it later, she said.
Once staff declares the application complete, the information goes to all reviewing agencies or consultants determined necessary, Keyes said. Then staff will compile all findings from the review agencies and consultants into a staff report prior to the public hearing for the application, she said.
After the walkthrough of the process, the commissioners, consultant, county staff and others attending the meeting addressed areas of the draft they thought had issues or conflicts, and discussed possible solutions.
The county will have to decide if it wants the drilling of exploration holes to fall into the definition of geothermal 1041 regulations, and therefore require a 1041 application, Green said. Hank Held and Fred Henderson, both of Mt. Princeton Geothermal LLC, spoke during public comments, saying the county should consider less regulation, not only on the drilling of exploration holes, but also on the entire geothermal 1041 regulations. Held said the county’s draft geothermal 1041 regulations duplicate both state and federal regulations. In cases such as drilling exploration holes, a company already must go through a regulatory process at the state level that could cover the need for regulation, he said.
Green said in some cases the county has different standards than the federal or state regulations, so it may appear the county has redundant regulations.
Paul Morgan, with the Colorado Geological Survey, warned commissioners that the west side of the Upper Arkansas River Valley has a large fault line running along it. He said, “I don’t think (county geothermal 1041 regulations) should have an option of a (finding of no impact). If an earthquake happens near geothermal development, “someone will sue the county,” he said.
The county will hold a public hearing to start the process of approving the draft geothermal 1041 regulations during the May 21 regular commissioners meeting in Buena Vista, Jenny Davis, Chaffee County attorney, said. While the public hearing will start the process, the commissioners do not have to make a decision then, she said. Green will take comments and recommendations from the commissioners after the public hearing to work any requested changes into the draft document, she said.
To develop geothermal 1041 regulations, Chaffee County partnered with Archuleta and Ouray counties and Pagosa Springs to hire the consultant for the process, Davis said previously. After the partners received a grant, Chaffee County’s portion of the contract for the consultant comes to $2,937.50, Don Reimer, Chaffee County development director, said previously.
The county will have the most current version of its geothermal 1041 draft regulations on its website, chaffeecounty.org
The 800-acre Mount Princeton geothermal lease was recently terminated for nonpayment of rent. The lease owner, 3E Geothermal LLC in Colorado Springs, is a wholly owned subsidiary of Young Life, which also owns the Frontier Ranch youth camp on the flanks of Mount Princeton. The Bureau of Land Management Colorado leased the parcel to 3E Geothermal during its November 2010 oil, gas and geothermal lease sale. The lease was issued Jan. 1, 2011. As reported at that time by The Mountain Mail, Young Life officials made clear their intention to use the lease to protect the camping experience at Frontier Ranch by preventing development that would affect the natural beauty of the area.
Denise Adamic, public affairs officer for the Bureau of Land Management Royal Gorge Field Office in Cañon City, said, “Rent needs to be received every year by the Office of Natural Resources Revenue by the anniversary date … the date the lease went into effect.”
Adamic said, when the rental amount of $2,400 was not received by Jan. 1, officials with the Office of Natural Resources Revenue issued a notice to 3E Geothermal giving the company 15 days to pay. When the company did not respond to that notice, Adamic said officials issued a second notice giving the company 45 days from the anniversary date to pay the rental amount plus a 10-percent late fee. When 3E Geothermal failed to pay within the 45-day period, Adamic said, the lease was terminated.
Adamic said the company then had 30 days from the time they received the termination letter to appeal the termination to the Interior Board of Land Appeals. Terry Swanson, Young Life vice president of communications, said failure to pay the lease was “an administrative oversight” by Young Life that is “being corrected.”
Adamic said, if 3E Geothermal loses the appeal, the company would have to place the winning bid at another lease sale in order to retain the lease. BLM officials are “reviewing what, if anything, we will do with the area in question. We may or may not offer it for lease again,” Adamic said. She added that BLM officials are investigating whether or not a new lease-sale nomination would be required to offer the parcel for lease again.
Adamic said the BLM had not received a plan of development for the lease and that 3E Geothermal had not begun any ground-disturbing work on developing the lease.
This geothermal lease was the first sold in Colorado since the 1980s.