HB 25-1165

House Bill 25-1165, which has been signed into law in Colorado, establishes a new program called the Geologic Storage Stewardship Enterprise within the Department of Natural Resources. This program will collect annual fees from companies that inject carbon dioxide underground for storage, using these funds to manage and clean up abandoned or orphaned sites if necessary. The bill also updates regulations related to geothermal energy operations, making it easier for some types of geothermal projects to proceed without state permits while ensuring oversight for others. This law affects businesses involved in carbon capture and storage as well as those working with geothermal resources, aiming to ensure long-term environmental safety and regulatory compliance.

Official Summary

The act creates the geologic storage stewardship enterprise (enterprise) in the department of natural resources (department) for the purpose of: Determining the amount of annual stewardship fees; Funding the long-term stewardship of geologic storage facilities in the state; Funding the plugging, abandoning, reclaiming, and, as necessary, remediating of orphaned geologic storage facilities in the state if the energy and carbon management commission (commission), after notice and a hearing, determines that available financial assurance is insufficient; and Ensuring that costs associated with long-term stewardship of geologic storage facilities are borne by geologic storage operators in the form of stewardship fees. The act creates the geologic storage stewardship enterprise board (enterprise board) to administer the enterprise. The act requires each geologic storage operator to pay an annual stewardship fee for each ton of injection carbon dioxide that the geologic storage operator injects in the state. The commission collects the stewardship fee on the enterprise's behalf. All money collected as stewardship fees is credited to the geologic storage stewardship enterprise cash fund (fund), which is created in the act. Money in the fund is continuously appropriated to the enterprise. The enterprise shall adopt rules as necessary to implement the act and the commission may adopt rules to implement its collection of stewardship fees on behalf of the enterprise. The willful violation of a commission rule, regulation, permit, or order concerning class VI injection wells used for injecting carbon dioxide for underground storage is a misdemeanor subject to a fine of $5,000 to $7,000 per day for each act of violation. To approve a geologic storage operator's request to close a site, the commission must first determine that the geologic storage operator has contributed money to the fund. Upon the commission's approval of a site closure: Ownership of the injection carbon dioxide and ownership of any remaining facilities transfer to the state without payment of additional compensation; Except in specified circumstances, the geologic storage operator is released from all regulatory liability associated with the continued storage of the injection carbon dioxide and the long-term stewardship of the associated geologic storage facility; and The enterprise undertakes long-term stewardship of the injection carbon dioxide and any associated geologic storage facility. The act makes several updates to laws concerning the administration of underground geothermal resources, including: Clarifying that "nontributary groundwater" does not include "designated groundwater", as these terms are defined in current law; Exempting certain geothermal operations from needing a well permit from the state engineer; Requiring the state engineer to notify the operator of a prior geothermal operation of an application for a proposed well, and allowing the operator the opportunity to request a hearing if the application causes concern for material injury to the prior geothermal operation; Renaming the state board of examiners of water well construction and pump installation contractors as the "state board of examiners of water well and ground heat exchanger contractors" (state board of examiners); Establishing that the authority to regulate shallow geothermal operations is shared by the state engineer and the state board of examiners; and Regulating ground heat exchanger contractors in the same manner that currently exists for water well construction contractors and pump installation contractors.(Note: This summary applies to this bill as enacted.)

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