1. (a) The commissioner will issue a noncompetitive geothermal lease to a geothermal prospecting permittee if the commissioner determines that the permittee has

   1. (1) submitted information to the commissioner from subsurface test results showing geothermal resources at a temperature and pressure sufficient to meet the requirements of the permittee's proposed development;
   2. (2) discovered geothermal resources in commercial quantities;
   3. (3) complied with the provisions of AS 38.05.181(c) governing conversion from permits to leases; and
   4. (4) received approval of a plan of development under 11 AAC 84.760.
2. (b) If the term of a geothermal prospecting permit expires while the commissioner is reviewing an application for a noncompetitive geothermal lease under this section, the permit is extended until the permittee is either granted or denied a noncompetitive lease.
3. (c) In this section, "commercial quantities" means quantities sufficient to yield a return in excess of operating costs, even if drilling and equipment costs may never be repaid and the undertaking considered as a whole may ultimately result in a loss. Quantities are insufficient to yield a return in excess of operating costs unless those quantities, less the costs of transportation and marketing, would produce sufficient revenue to induce a prudent operator to produce and market those quantities.

(Eff. 8/22/82, Register 83)

Authority: AS 38.05.020, AS 38.05.035, AS 38.05.145, AS 38.05.181