Read the full stored bill text
SB174 ENROLLED
Page 0
SB174
I3DGF66-2
By Senator Albritton
RFD: Transportation and Energy
First Read: 20-Jan-26
1
2
3
4
5
SB174 Enrolled
Page 1
First Read: 20-Jan-26
Enrolled, An Act,
Relating to natural resources; to authorize the State
Oil and Gas Board to regulate alternative energy wells and
associated operations and facilities, to adopt rules for
regulation of the operation and abandonment of alternative
energy wells and associated operations, to set fees and
charges to defray expenses of the board in relation to
regulation of alternative energy operations, to allow an oil
or gas well and associated infrastructure to be converted into
an alternative energy facility, to amalgamate alternative
energy rights for an alternative energy facility under certain
circumstances; to require alternative energy facility
operators to adhere to certain conduct; to amend Section
9-17-60, Code of Alabama 1975, to add the exploration and
production of energy sources and related uses to the purposes
for which the Commissioner of Conservation and Natural
Resources may lease state lands; and to authorize the
commissioner to modify such leases.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. (a) For purposes of this section, the
following terms have the following meanings:
(1) ALTERNATIVE ENERGY FACILITY or FACILITY. An
alternative energy well and associated infrastructure used for
developing, producing, or supporting alternative energy
resources.
(2) ALTERNATIVE ENERGY RESOURCES. a. The earth's
natural heat and the energy, in whatever form, which is below
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
SB174 Enrolled
Page 2
natural heat and the energy, in whatever form, which is below
the earth's surface and which is present in, results from, or
is created by, or which may be extracted from, the earth's
natural heat.
b. The term includes:
1. All products of geothermal processes and byproducts
derived therefrom such as indigenous steam, hot water, and hot
brines;
2. Steam, gases, hot water, and hot brines resulting
from water, gas, or other fluids artificially introduced into
geothermal formations;
3. Heat or other associated energy found in geothermal
formations; and
4. Other forms of energy, energy generation, energy
capture, energy storage, and related uses, including
hydropower derived from natural underground water flows or
from injecting water into lower pressure reservoirs with water
processed at the surface or by using the energy potential
between two subsurface formations within a wellbore.
c. The term does not include the heating and cooling
capacity of the earth which may be used for heating and
cooling buildings through an on-site heat pump or similar
on-site system.
(3) ALTERNATIVE ENERGY WELL. A well that has been
permitted pursuant to the board's authorization to produce or
support the production of alternative energy resources.
(b)(1) The State Oil and Gas Board, after providing
notice and a public hearing, may authorize the development and
operation of an alternative energy facility or the conversion
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
SB174 Enrolled
Page 3
operation of an alternative energy facility or the conversion
of an existing oil and gas well and associated infrastructure
into an alternative energy facility, so long as any
alternative energy well extends 5,000 feet or more below the
surface of the land, regardless of whether the land is
submerged.
(2) As determined by rule of the board, an applicant
seeking approval to operate an alternative energy facility
shall submit a petition fee, a well permit fee, and financial
security instruments specific to the proposed uses of the
alternative energy facility.
(c) An alternative energy facility operator shall do
all of the following:
(1) Adhere to all rules adopted by the board relating
to alternative energy wells and facilities.
(2) Make a good faith effort to obtain the consent of
all persons that own the facility's alternative energy
resources.
(3) Obtain the consent of persons that own not less
than 66 and two-thirds percent of the facility's alternative
energy resources.
(4) Upon an order of the board to amalgamate pursuant
to subsection (d), compensate all nonconsenting owners on
terms deemed equitable and reasonable by the board.
(5) Employ commercially reasonable efforts to limit the
adverse impacts to surface uses of lands owned by the
nonconsenting owners of the alternative energy resources of
the facility.
(6) If seeking approval to operate a facility within a
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
SB174 Enrolled
Page 4
(6) If seeking approval to operate a facility within a
10-mile radius of a coal mine operation, obtain the written
consent of the coal mine operator and mineral owner with an
operation or mineral interest within the radius, provided
consent shall not be unreasonably withheld or delayed.
(d) Upon an alternative energy facility operator
obtaining the consent of persons that own not less than 66 and
two-thirds percent of a facility's alternative energy
resources, the board, after providing notice and a public
hearing, may enter an order to amalgamate and pool the
alternative energy resources owned by nonconsenting owners
into the facility.
(e)(1) The board shall require the owner or operator of
an alternative energy facility that has ceased alternative
energy production for 12 months or more to properly plug and
abandon the facility and take any other appropriate action as
deemed necessary by the board. When completed, the facility
shall be deemed abandoned.
(2) Upon the board's order approving the conversion of
an oil and gas well and associated infrastructure into an
alternative energy facility, the approved well shall not be
considered an inactive or abandoned oil or gas well.
(f) The board may adopt rules to administer this
section, including regulating the operation and abandonment of
alternative energy facilities and associated operations.
(g) The board may set fees and charges to defray
expenses incurred by the board in regulating alternative
energy facilities pursuant to this section. All well permit
fees, filing fees for petitions, and other fees paid to the
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
SB174 Enrolled
Page 5
fees, filing fees for petitions, and other fees paid to the
State Treasurer pursuant to this section shall be paid into
the Alabama State Oil and Gas Board Special Fund established
by Section 9-17-24, Code of Alabama 1975, and disbursed by the
State Treasurer upon warrants drawn by the Comptroller for the
purpose of defraying expenses incurred by the board in the
performance of its duties.
(h) Nothing in this section shall:
(1) Be construed to amend, repeal, enlarge, or
otherwise affect any provision of Title 37 of the Code of
Alabama 1975, including, but not limited to, Chapters 1, 4,
and 14 of that title;
(2) Notwithstanding the use of the term "hydropower,"
apply to any hydropower project that is subject to the
licensing jurisdiction of the Federal Energy Regulatory
Commission under Subchapter 1 of Chapter 12 of Title 16 of the
United States Code;
(3) Apply to coal mines or coal mining, or operations
related to coal mines or coal mining, except as provided in
subsection (c)(6); or
(4) Apply to active or prospective oil and natural gas
exploration and production or gas storage operations regulated
by the board pursuant to Articles 1, 3, or 6 of Chapter 17,
Title 9, Code of Alabama 1975, and any rules adopted by the
board pursuant these articles.
Section 2. Section 9-17-60, Code of Alabama 1975, is
amended to read as follows:
"§9-17-60
(a) The Commissioner of Conservation and Natural
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
SB174 Enrolled
Page 6
(a) The Commissioner of Conservation and Natural
Resources, on behalf of the state, is hereby authorized to
lease any lands or interest therein under the jurisdiction of
the Department of Conservation and Natural Resources for the
exploration, development , and production of oil, gas , and
other minerals , energy sources and related uses, or any one or
more of them, on, in , and under such lands.
(b) The term "energy sources and related uses"
includes, but is not limited to, energy generation, energy
capture, energy storage, and transmission of geothermal
energy, solar energy, and hydropower.
(c) The commissioner may modify the renewal or
extension terms of a lease entered into pursuant to subsection
(a). If the lease under consideration is an existing lease
authorized under subsection (a), the commissioner's actions
and negotiations shall be exempt from the requirements of
Section 9-17-65. This subsection shall not be construed to
authorize the commissioner to sell any lands.
(d) Nothing in this section shall be construed to
amend, repeal, enlarge, or otherwise affect any provision of
Title 37, including, but not limited to, Chapters 1, 4, and 14
of that title. "
Section 3. This act shall become effective immediately.
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
SB174 Enrolled
Page 7
Section 3. This act shall become effective immediately.
________________________________________________
President and Presiding Officer of the Senate
________________________________________________
Speaker of the House of Representatives
SB174
Senate 03-Feb-26
I hereby certify that the within Act originated in and passed
the Senate, as amended.
Senate 08-Apr-26
I hereby certify that the within Act originated in and passed
the Senate, as amended by Conference Committee Report.
Patrick Harris,
Secretary.
House of Representatives
Passed: 02-Apr-26, as amended.
House of Representatives
Passed: 09-Apr-26, as amended by Conference Committee Report.
By: Senator Albritton
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202