Power Production

Geothermal systems containing high temperature geothermal resources and fluids are utilized for the production of electricity. High Temperature geothermal resources are governed under the Utah Geothermal Resource Conservation Act (Section 73-22 UCA), and administrative rules for Wells Used for the Discovery and Production of Geothermal Energy in the State of Utah (R655-1 UAC). Henceforth, statute section 73-22 will be referred to as the Act and administrative rule R655-1 will be referred to as the Rule. A geothermal system is any strata, pool, reservoir, or other geologic formation containing geothermal resources. Geothermal resources defined in the Act include the energy derived from the earth’s heat at temperatures higher than 120°C (248°F) directly (e.g., traditional geothermal fluid systems such as steam, flash, and binary applications) or indirectly through an artificially introduced material medium that serves as a heat transfer medium (e.g., enhanced geothermal systems (EGS) and deep high temp closed-loop systems). Geothermal fluid or hydrothermal fluid means the water and/or steam at temperatures higher than 120°C (248°F) naturally present in hot fractured rock in a geothermal system. A material medium can include intrinsic hydrothermal fluid such as with a traditional hydrothermal well system or an artificially introduced water/working fluid that serves as a heat transfer fluid such as with EGS/Closed-Loop applications.

The purpose of the Act is as follows: It is declared to be in the public interest to foster, encourage, and promote the discovery, development, production, utilization, and disposal of geothermal resources in the State of Utah in such manner as will prevent waste, protect correlative rights, and safeguard the natural environment and the public welfare; to authorize, encourage, and provide for the development and operation of geothermal resource properties in such manner that the maximum ultimate economic recovery of geothermal resources may be obtained through, among other things, agreements for cooperative development, production, injection, and pressure maintenance operations.

The Act gives state-level regulatory authority to the Division of Water Rights (aka Office of the State Engineer) within the Utah Department of Natural Resources. The Division of Water Rights is given the authority and responsibility to carry out these purposes. The Division of Water Rights is granted jurisdiction and authority over all persons and property, public and private, necessary to enforce the provisions of the Act and shall have the power and authority to adopt and enforce rules, regulations, and orders and do whatever may reasonably be necessary to carry out this Act.

As part of this authority, the Division requires that all wells for the discovery and production of geothermal resources to be used for geothermal energy production in the State of Utah, be drilled, operated, maintained, and abandoned in a manner to safeguard life, health, property, the public welfare, and to encourage maximum economic recovery. The Division of Water Rights administers the issuance of permits and approvals related to the exploration, development, and operation of geothermal resources.

The Act further states that “...geothermal fluids are deemed to be a special kind of underground water resource, related to and potentially affecting other water resources of the state. The utilization or distribution for their thermal content and subsurface injection or disposal of same shall constitute a beneficial use of the water resources of the state”. The Act further defines geothermal fluid as water and steam at temperatures greater than 120°C (248°F).

That Act states that ownership of a geothermal resource is derived from an interest in land and not from an appropriative right to use geothermal fluids. That is, an interest in land (correlative rights consisting of ownership of the land and subsurface geothermal rights or possession of a valid lease for the land and subsurface geothermal rights) are required to utilize the heat and subsequent energy of a geothermal resource. In effect, the right to geothermal resources is based on ownership of the mineral (geothermal) rights or surface rights, which are usually obtained by direct ownership or by leasing. If the mechanism to transfer the energy to the surface is intrinsic geothermal fluid, then an appropriative geothermal water right is also required to beneficially use those fluids for that purpose. If the mechanism to transfer the energy to the surface is artificial (e.g., injected water or working fluid with EGS or Closed-Loop), then a geothermal water right is not required. Water injected into a geothermal well as a material medium for the purpose of heat/energy transfer must be derived from a legitimate source under a valid water right.

In Act, geothermal resource ownership is described in Section 73-22-4 and states that ownership of a geothermal resource derives from an interest in land and not from an appropriative right to geothermal fluids. The statute further defines in Section 73-22-3 that correlative rights mean the rights of each geothermal owner in a geothermal area to produce without waste his just and equitable share of the geothermal resource underlying the geothermal area. Further, an “Owner” means any person who has the right to drill into, produce, and make use of the geothermal resource. The land owner owns the geothermal resource and the rights to utilize that resource resides with the owner. Those rights can be leased to another entity for exploitation. For example on BLM land, the BLM owns the geothermal resource, and they can allow other entities to exploit the resource through leases. This process works the same on state land and private land. This concept does not include the ownership of geothermal water inasmuch as that would be treated like any waters of the state and would require a water right for utilization.

Provisions of the Act apply to all lands within the State of Utah, including private, state, federal, and Indian lands.

The Act defines the relationships between geothermal resources and water resources, and between water appropriations and appropriations of geothermal fluids. The utilization of geothermal fluids is deemed a beneficial use of the water resources of the state and an appropriative water right is required. Priorities exist between water rights and appropriations of geothermal fluids, but not between geothermal owners.

Specifically, the Division of Water Rights is given the authority to permit and regulate all wells (including all exploratory, production, and injection wells), and a Notice of Intent (aka Plan of Operations) must be submitted by the developer and approved by the Division before a well may be drilled, altered or abandoned. The Division of Water Rights also has authority to require the filing of bonds, well logs, and other reports. The Division is empowered to regulate well spacing, design, testing, operation, and abandonment.

As per the Act, the Division of Water Rights is the primary agency for the regulation of geothermal exploration, development, and operation, which allows for a streamlined and efficient permitting and oversight process. Permitting and regulation of geothermal systems is based on the Act and Rules, which encompass the cradle to grave permitting and regulation of drilling, well construction, operation, maintenance and well abandonment. The Rules apply to geothermal production and injection wells in addition to geothermal exploration wells such as temperature gradient wells, test wells, exploration/slim holes, stratigraphic wells, seismometer wells, and monitoring wells.

Through a memorandum of understating between the Division of Water Rights and the Utah Division of Water Quality (UDWQ), the Division of Water Rights also permits and regulates the drilling, construction, and operations of geothermal injection wells, which are considered a Class V injection well under UDWQ and EPA’s underground injection control classification. This allows for a more seamless geothermal project permitting process overall by keeping the jurisdiction at one agency. Although UDWQ does not review and approve geothermal injection wells, operators must still submit information to include geothermal injections wells on the UDWQ UIC program Class V well inventory using forms and fees designated by UDWQ.

Permitting process for geothermal production/injection wells

According to the Act and Rule, a plan of operations must be submitted to the Division of Water Rights for review and approval. Components to be included in this plan include:

• Documentation of correlative rights (ownership and/or leases).
• If the project is a traditional hydrothermal, then documentation of geothermal water rights must be provided. Geothermal water rights are processed under normal water right statute, rule, and processes.
• If the project is EGS/Closed-Loop, then geothermal water rights are not required. However, documentation on the source and water right legitimacy of water used for drilling, stimulation, and operation must be provided.
• If the project is EGS/Closed-Loop, then the plan of operation must be covered by a completed and signed Request for Non-production Well Construction form which allows for the Division to establish the project in their database/GIS system (Hydrothermal projects are established on the Water Rights’ database/GIS system through the geothermal water right application).
• The driller must have a Utah Well Driller License. This license is a special category license for geothermal drillers. The requirements are not the same as for a Water Well Driller license. The licensing requirements for geothermal focus primarily on the protection of established aquifers through which geothermal wells are drilled.
• Proof of Geothermal Bonding ($10k per well or $50k per project).
• Location, well spacing (surface and underground), elevation and layout including maps & schematics.
• Lease identification and well number (Kettleman).
• Tools and equipment description including maximum capacity and depth rating.
• Expected depths (MD and TVD) and geology.
• Drilling, mud, cementing, and casing program.
• Directional drilling plan, if applicable.
• BOPE installation, testing and inspection.
• Logging, coring, cuttings, and testing program.
• Methods for disposal of waste materials.
• Environmental considerations.
• Emergency procedures.
• Record keeping and reporting requirements.
• Other information as the State Engineer may require.

These requirements are much the same as those of Plans of Operation required for drilling on federal land; if the Plan of Operation submitted to the federal government contains the information listed above, usually it is acceptable for submission to the state.

Review of the Plan can take 2-4 weeks. Upon completion, an approval is issued. The approval also lists conditions that may be specific to the project and general conditions such as notifications, licensing, bonding, inspections, BOP, testing, reporting, groundwater protection, lease boundaries, horizontal drilling, stimulation requirements, etc.

An approval can be issued for a single well or for multiple wells depending upon project scope and sequencing. An approval period can be from six months to years also depending upon project scope and sequencing.

Traditional hydrothermal production wells can be drilled under provisional approval prior to geothermal water right approval if requested by the operator and if approved by the State Engineer. In any case, before any hydrothermal production well can be used for production, a valid geothermal water right must be approved. A water right for geothermal use is subject to all of the restrictions and requirements of a standard water right.

Additional Requirements For Geothermal Injection Wells

The Division also has jurisdiction to approve and permit geothermal injection wells. Due to concerns for groundwater protection related to injection wells, additional requirements are imposed upon the drilling and operation of geothermal injection wells. These requirements may be addressed and included in the initial Plan of Operations for the well, and the injection well approval can be issued with the general well approval. Alternatively and preferably, the operator can drill, construct, and test the injection well, then submit the additional information in a request to permit the injection well for operation. Moreover, injection wells related to traditional hydrothermal operation must also be incorporated into the geothermal water right application as Points of Return. The additional information needed to approve a geothermal injection well for operation include:

• Existing reservoir conditions.
• Method of injection.
• Source and nature of injection fluid.
• Estimated injection flows.
• Zones or formations receiving the injectate.
• Impact of injection on aquifers and seismicity.
• Mechanical integrity of casings and seals.
• Proposed downhole and surface equipment.
• Metering facilities.
• Design safety factors to include plans and specs, injectivity surveys,
  seismic surveys, seismic monitoring, and injectate and receiving fluid chemistry.

Water Rights has primacy for permitting, but geothermal injection wells are still permitted by rule by UDWQ and need to be inventoried through UDWQ UIC Program.

Division Regulation During Drilling:

The Division monitors and inspects activities during the drilling, construction, and testing of geothermal wells. Primary components monitored/inspected include initial spudding, casing placement, cementing and sealing, BOP installation and testing, key milestones of horizontal drilling, well logging activities, well development, well testing, stimulation activities, induced seismic activity, flow testing, etc. The frequency and nature of monitoring and inspections are listed in the approval.

Reporting and Record Keeping

The Act and Rules require that accurate records be maintained during drilling and filed with the Division of Water Rights during or at the conclusion of the well (90-days from well completion) as specified in the approval. Records which must be submitted to the Division include drilling logs and core record, BOP testing results, casing and seal integrity test results, temperature logs, seismicity reports, stimulation results, flow test results, well history, well summary report, production records, injection records, electric logs, and directional surveys (if conducted). As per the Act, these records can be held confidential by the Division for up to five years at the request of the owner/operator.

Operation and Maintenance

Operators are required to submit monthly geothermal production and injection reports in a format prescribed by the Division and include such data as plant fluid temp in/out, plant and well production volumes in pounds and gallons, Plant and well injection volumes in pounds and gallons, plant and well pressure in/out, plant hours of operation, surface discharge, blowdown, etc.

Operators are required to maintain geothermal wells and appurtenant equipment in order to prevent loss of or damage to life, health, property, and natural resources. The Division makes periodic inspections to ensure this is the case and require remedial action if necessary.

During operation, various activities related to geothermal wells and plants are performed. The nature and scope of these activities will determine whether notification is required or if notification and approval are required. Those activities requiring notification only include:

1. Make minor changes in the manner in which a well is operated;
2. Conduct temperature or pressure survey;
3. Conduct a flow test; or
4. Perform routine maintenance of a well.

The notice must be submitted to the Division prior to the commencement of work. Minor changes can include installing or changing capillary tubing; pulling or replacing a pump; or any other change for which the Division takes little or no action other than acknowledging the notice and filing it. The Division reserves the right to inspect any of the noticed activities. Those activities requiring notification and approval include:

1. Increasing the depth of a well;
2. Testing of water shut-off;
3. Entering or opening a plugged well;
4. Shooting, acidizing or fracture treating;
5. Deepening in a direction which is not intended to be vertical, including directional drilling;
6. Changing the construction of a hole or well including placing a plug in the hole or well and recovering or altering the casing.
7. Conducting a major work over or cleaning of a well;
8. Changing a well's ownership, status, name, or location'
9. Abandoning and plugging a well

For geothermal injection wells, operators are required to perform both internal and external mechanical integrity tests on each injection well at least once every five years. The operator must submit an MIT plan at least three weeks prior to planned activity to the Division for approval which describes the specific testing methods and procedures to be used. The Division approves the MIT plans and inspects the MIT tests in the field. Injection well monitoring is conducted in such a way as to detect the unintentional escape of fluids through casings, seals, and wellheads. Injection pressures are also monitored to ensure that downhole pressures do not exceed the strength of the injecting formation causing new fractures or fracture propagation. The chemistry of the injected fluid is also monitored regularly. The Division can request this analysis or it must be made any time the injected fluid is modified. These results are submitted to the Division and reviewed to ensure that the injection well permit requirements are being followed.

Geothermal development projects generally involve significant upfront and concurrent research and investigation which often involves the drilling of geothermal exploration wells such as temperature gradient wells, test wells, observation wells, exploration/slim holes, stratigraphic wells, seismometer wells, and monitoring wells to name a few. As per the Act and Rules, the Division also permits and regulates these wells.

Exploratory wells such as these are permitted as non-production wells. A non-production well application with an attached drilling and testing plan must be submitted to the Division for review and approval. A single application may cover a single well or a group of wells, but the wells in a given application should be in the same hydrographic province (aka water right area as designated by the Division). Specific drilling requirements for these wells can be found in the Rules. Depending upon the temperatures and pressures expected to be encountered, additional restrictions on casing, cementing, and BOP may be required.

The time required for approval of a test well permit is minimal, usually ranging from a few days to two weeks. The permits are usually valid for a period of six months, and may be renewed at any time by a letter request. Upon review and approval, a drilling permit is issued which includes start cards (proof of authorization to drill to be given to the driller). Geothermal exploratory wells must also be drilled by a Utah licensed driller holding a standard driller license or a special geothermal driller license.

The driller must notify the Division at the commencement of drilling operations using the start card notification process and must submit a driller's log at the conclusion of the drilling. A separate report summarizing the drilling, construction, and testing data must also be submitted to the Division with the owner/applicant within 90 days of well completion.

Geothermal Well Abandonment and Sealing

The Act and Rules establish requirements for proper well plugging and abandonment to prevent geothermal reservoir damage, groundwater contamination, and to protect life, health, environment and property.

At least five days prior to well abandonment, a notice of intent describing the sealing plan must be submitted to the Division. If acceptable, the Division will issue an approval to plug and abandon, and reserves the right to inspect the plugging activities. Specific sealing requirements can be found in the Rules. The owner must report to the Division within 5-days as to the status of the abandoned well, and a report describing the well abandonment must be submitted within sixty days of abandonment work.