Geothermal Amendments

12
53C-2-401
73-22-2
73-22-3
73-22-4
73-22-6
0
Geothermal Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Michael K. McKell
House Sponsor: Carl R. Albrecht
LONG TITLE
General Description:
This bill addresses geothermal resources or fluids.
Highlighted Provisions:
This bill:
addresses the reservation of a geothermal resource on state and institutional trust land;
clarifies the purposes of the geothermal chapter;
addresses definitions;
modifies provisions related to ownership of geothermal resources or fluids;
amends powers of the Division of Water Rights related to confidentiality of information;
addresses bonding requirements; and
makes technical and conforming amendments.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
53C-2-401
, as last amended by Laws of Utah 2003, Chapter 192
73-22-2
, as enacted by Laws of Utah 1981, Chapter 188
73-22-3
, as last amended by Laws of Utah 2016, Chapter 348
73-22-4
, as enacted by Laws of Utah 1981, Chapter 188
73-22-6
, as enacted by Laws of Utah 1981, Chapter 188
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
53C-2-401
is amended to read:
53C-2-401
. Coal and mineral deposits reserved -- Geothermal resource --
Exceptions.
(1)
(a)
(i)
Except as otherwise expressly provided by law, coal and mineral deposits in
trust lands are reserved to the respective trust.
(ii)
The reservation of mineral deposits described in Subsection
(1)(a)(i)
includes
reservation of a geothermal resource as defined in Section
73-22-3
.
(b)
Each
A
certificate of sale and patent issued shall contain
such
a reservation

described in Subsection
(1)(a)
.
(c)
The purchaser of any lands belonging to the trust:
(i)
acquires no right, title, or interest in coal or mineral deposits
, including
geothermal resources
; and
(ii)
is subject to the conditions and limitations prescribed by law providing for the
state and any person authorized by
it
the state
to:
(A)
prospect or mine;
(B)
remove
the
deposits;
and
(C)
develop geothermal resources; and
(C)
(D)
occupy and use as much of the surface of the lands as may be required
for any purpose reasonably incident to
the
mining
and
,
removal of
the
deposits
, or development of a geothermal resource
.
(d)
(i)
Coal
and
,
mineral deposits
, or geothermal resources
in trust lands may be
leased on a rental and royalty basis.
(ii)
The administration may also, with board approval, enter into joint ventures,
farmout agreements, exploration agreements, operating agreements, and other
business arrangements for the disposition of coal
and
,
mineral deposits
, or
geothermal resources
in trust lands.
(iii)
The mineral estate in trust lands may not be sold except as authorized in
Subsection
(2)
.
(iv)
Agreements
An agreement
made under Subsection
(1)(d)(ii)

are
is
not subject
to Subsections
53C-2-405(3)
and
(4)
.
(2)
Except as otherwise prohibited by the Jones Act of January 25, 1927, 43 U.S.C.
Sections 870-871, mineral interests in trust lands may be exchanged for mineral interests
of comparable value or otherwise disposed of, if
their
the
retention would create a
liability exceeding their value.
(3)
(a)
Common varieties of sand, gravel, and cinders are not considered to be minerals
under this section but may be reserved by specific action of the director.
(b)
Common varieties do not include deposits
which
that
are valuable because the
deposit contains characteristics which give
it
the deposit
distinct and special value.
Section 2. Section
73-22-2
is amended to read:
73-22-2
. Purpose of chapter.
It is declared to be in the public interest
The purpose of this chapter is
to
:

(1)
foster, encourage, and promote the discovery, development, production,
utilization
use
,
and disposal of geothermal resources
in the State of Utah
for the purpose of electricity
production
in such manner as will prevent waste, protect correlative rights, and
safeguard the natural environment and the public welfare;
to
and

(2)
authorize, encourage, and provide for the development and operation of geothermal
resource properties
for the purpose of electricity production
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.
Section 3. Section
73-22-3
is amended to read:
73-22-3
. Definitions.
As used in this chapter:
(1)
"Correlative rights" mean the rights of
each
a
geothermal owner in a geothermal area to
produce without waste
his
the geothermal owner's
just and equitable share of the
geothermal resource underlying the geothermal area.
(2)
"Division" means the Division of Water Rights
,
within the
Department of Natural
Resources.
(3)
"Geothermal area" means the general land area
which
that
is underlain or reasonably
appears to be underlain by
a
geothermal
resources
resource
.
(4)
"Geothermal fluid" means water and steam at temperatures greater than
120
100

degrees centigrade naturally present in a geothermal system.
(5)
(a)
"Geothermal resource" means:
(i)
the natural heat of the earth at temperatures greater than
120
100
degrees
centigrade; and
(ii)
the energy, in whatever form, including pressure, present in, resulting from,
created by, or
which
that
may be extracted from that natural heat, directly or
through a material medium
using any type of application including a conventional
hydrothermal, enhanced geothermal, or advanced geothermal system
.
(b)
"Geothermal resource" does not include
a
geothermal
fluids
fluid
.
(6)
"Geothermal system" means
any
a
strata, pool, reservoir, or other geologic formation
containing
a
geothermal
resources
resource
.
(7)
"Material medium" means
a
geothermal
fluids
fluid
, or water and other
substances
substance
artificially introduced into a geothermal system to serve as a heat transfer
medium.
(8)
"Operator" means
any
a
person drilling, maintaining, operating, producing, or in
control of
any
a
well.
(9)
"Owner" means a person who has the right to drill into, produce, and make use of
the
a

geothermal resource.
(10)
"Person" means any individual, business entity (corporate or otherwise), or political
subdivision of this or any other state.
(11)
(10)
(a)
"Waste" means
any
an
inefficient, excessive, or improper production, use,
or dissipation of
a
geothermal
resources
resource
.
(b)
Wasteful practices include
"Waste" includes
:
(i)
a
transporting or storage
methods that cause or tend
method that causes or tends

to cause unnecessary surface loss of
a
geothermal
resources
resource
; or
(ii)
locating, spacing, constructing, equipping, operating, producing, or venting of
any
a
well in a manner that results or tends to result in unnecessary surface loss or
in reducing the ultimate economic recovery of
a
geothermal
resources
resource
.
(11)
"Water right" means:
(a)
a right to use water, including a geothermal fluid, evidenced by a means identified in
Subsection
73-1-10(1)(a)
; or
(b)
a right to use water, including a geothermal fluid, under an approved application:
(i)
to appropriate; or
(ii)
for a change of use.
(12)
"Well" means
any
a
well drilled, converted, or reactivated for the discovery, testing,
production, or subsurface injection of
a
geothermal
resources
resource
.
Section 4. Section
73-22-4
is amended to read:
73-22-4
. Ownership of geothermal resource -- Water right -- Lands subject to
chapter.
(1)
Ownership of a geothermal resource derives from an interest in
the surface of
land
and
not from an appropriative right to geothermal fluids
.
(2)
A person that owns the surface of the land also owns title to the geothermal resources,
notwithstanding the severance or conveyance of the mineral estate, unless the person
that owns the surface of the land expressly conveys or reserves a geothermal resource by
a recorded deed or other instrument conveying title.
(3)
(a)
Subsections
(1)
and
(2)
do not apply to school and institutional trust lands as
defined in Section
53C-1-103
.
(b)
Section
53C-2-401
governs the reservation of a geothermal resource in school and
institutional trust lands.
(c)
For school and institutional trust mineral estate owned as of May 6, 2026, the state
owns title to the geothermal resource unless title to the geothermal resource has been
expressly conveyed by deed to another party by the state in accordance with Section
53C-2-401
.
(4)
Subject to Section
73-22-8
, a person may not use a geothermal fluid without a water
right.
(2)
(5)
This chapter shall apply to
all
lands in the
State of Utah
state
, including federal
and Indian lands to the extent allowed by law. When
these
federal or Indian
lands are
committed to a unit agreement involving lands subject to federal or Indian jurisdiction,
the division may, with respect to the unit agreement,
deem
consider
this chapter
complied with if the unit operations are regulated by the United States and the division
finds that conservation of geothermal resources and prevention of waste are
accomplished under the unit agreement.
Section 5. Section
73-22-6
is amended to read:
73-22-6
. Information required concerning resource development --
Confidentiality -- Regulation of wells -- Surety bonds -- Inspection.
(1)
The division
shall have authority to
may
require
a person to
:
(a)
Identification of
identify
the location and ownership of
all wells and producing
geothermal leases.
a well or producing geothermal lease;
(b)
Filing with the division of
file with the division
a notice of intent to drill, redrill,
renovate,
deepen, permanently alter the casing of,
test, maintain,
or abandon any well
.
Approval
and obtain the division's approval
of the notice of intent
must be obtained
from the division prior to commencement of operations.
before the person
commences operations;
(c)
Keeping of well logs and filing true and correct copies
subject to Subsection
(4)
,
keep a well log or record and file a copy of the well log or record
with the division
.
These records are public records when filed with the division, unless the owner or
operator requests, in writing, that the records be held confidential. The period of
confidentiality shall be established by the division, not to exceed five years from the
date of production or injection for other than testing purposes or five years from the
date of abandonment, whichever occurs first, as determined by the division. Well
records held confidential by the division are open to inspection by those persons
authorized in writing by the owner or operator. Confidential status shall not restrict
inspection by state officers charged with regulating well operations or by authorized
officials of the Utah State Tax Commission for purposes of tax assessment.
;
(d)
The spacing, drilling, casing, testing, operating, producing, and abandonment of
wells
space, drill, case, test, operate, produce, or abandon a well
so as to prevent:
(i)
a
geothermal
resources
resource
, water,
gases
gas
, or other
fluids
fluid
from
escaping into strata
:

(A)
other than the strata in which
they are
the resource, water, gas, or fluid is

found
(
; and
(B)
unless in accordance with a subsurface injection program approved by the
division
)
;
(ii)
pollution of surface and groundwater;
(iii)
premature cooling of
any
a
geothermal system by water encroachment or
otherwise
which
that
tends to reduce the ultimate economic recovery of the
geothermal
resources
resource
;
(iv)
blowouts, cave-ins, and
a blowout, cave-in, or
seepage; and
(v)
unreasonable disturbance or injury to neighboring properties, prior water rights,
human life, health, and the environment
.
;
(e)
The operator to file cash or
subject to Subsection
(2)
, if an operator, file

an
individual surety
bonds
bond
with the division for
each
a
new well drilled
and each
or an
abandoned well redrilled
. The amount of surety required shall be determined
by the division. In lieu of bonds for separate wells, the operator may file a blanket
cash or individual surety bond in an amount set by the division to cover all the
operator's drilling, redrilling, deepening, maintenance, or abandonment activities for
wells in the state. Bonds filed with the division shall be executed by the operator, as
principal, conditioned on compliance with division regulations in drilling, redrilling,
deepening, maintaining, or abandoning any well or wells covered by the bond and
shall secure the state against all losses, charges, and expenses incurred by it to obtain
such compliance by the principal named in the bond.
;
(f)
The geothermal
if an
owner or operator
to
,
measure geothermal production
according to standards set by the division and maintain complete and accurate
production records
. The records, or certified copies of them, shall be preserved on
file by
or certified copies of the records that
the owner or operator
:
(i)
keeps
for a period of five years
and shall be
; and
(ii)
makes
available for examination by the division at
all
reasonable times
.
; and
(g)
Filing
file
with the division any other reasonable
reports which it prescribes
report
that the division requires
regarding geothermal operations within the state.
(2)
(a)
Any
With the consent of the division, a person may terminate or cancel a surety
bond filed with the division in conformance with this chapter
may, with the consent
of the division, be terminated and canceled and the surety be relieved of all
and
relieve the surety of the
obligations under
it
the surety bond
when the well or wells
covered by the
surety
bond have been properly abandoned or another valid
surety
bond has been substituted for
it
the surety bond
.
(b)
The amount of surety bond required by this section shall be determined by the
division to be a reasonable amount.
(c)
In lieu of an individual surety bond for separate wells, the operator may file a blanket
surety bond in an amount set by the division to cover all the operator's drilling,
redrilling, deepening, maintenance, or abandonment activities for wells.
(d)
An operator shall execute a surety bond filed with the division by the operator as
principal and condition the surety bond on compliance with division regulations in
drilling, redrilling, deepening, maintaining, or abandoning a well covered by the
surety bond.
(e)
A surety bond filed with the division shall secure the state against losses, charges,
and expenses incurred by the state to obtain the compliance described in Subsection
(2)(d)
by the principal named in the surety bond.
(3)
The division may enter onto private or public land at any time to inspect
any
a
well or
geothermal resource development project to determine if the well or project is being
constructed, operated, or maintained according to any applicable permits or to determine
if the construction, operation, or maintenance of the well or project may involve an
unreasonable risk to life, health, property, the environment or subsurface, surface, or
atmospheric resources.
(4)
(a)
A well log or record described in Subsection
(1)(c)
is a public record when filed
with the division, unless the owner or operator requests, in writing, that the division
holds the well log or record as protected in accordance with Subsection
63G-2-305(1)

or (2) for a period established by the division, not to exceed the earlier of the
following, as determined by the division:
(i)
five years from the date of production or injection for other than testing purposes;
(ii)
two years from the date of abandonment; or
(iii)
two years from the date of completion of a geothermal monitoring, exploration,
investigation, or test well project that does not directly transition into production
development.
(b)
A well log or record held protected by the division under Subsection
(4)(a)
is open to
inspection by a person authorized in writing to inspect the well log or record by the
owner or operator.
(c)
The status of a well log or record as protected under Subsection
(4)(a)
does not
restrict inspection by:
(i)
a state officer charged with regulating well operations; or
(ii)
an authorized official of the State Tax Commission for purposes of tax
assessment.
Section 6.
Effective Date.
This bill takes effect on
May 6, 2026
.
3-11-26 11:47 AM