2 CCR 402-10
RULE 1 TITLE The title of these rules and regulations is “Rules and Regulations for Permitting the Development and Appropriation of Geothermal Resources through the Use of Wells”. The short title for these rules and regulations is “Geothermal Well Rules”. They may be referred to herein collectively as the “Rules” and individually as a “Rule”.
RULE 2 AUTHORITY These rules and regulations are promulgated pursuant to the authority granted the State Engineer in Sections 37-80-102(1)(g) and (k), 37-90-138, and 37-90.5-106 and 108, C.R.S. (1990 Repl). RULE 3 SCOPE AND PURPOSE 3.1 All subsurface geothermal fluids are part of the ground water resources of the State of Colorado and shall be administered by the State Engineer. The State Engineer recognizes that these fluids are developed for their thermal attributes and that management of these resources is necessary to maximize their beneficial use. The rules promulgated herein are required to enable the State Engineer to carry out the provisions of the Colorado Geothermal Resources Act, Sections 37- 90.5-101 et seq, C.R.S. (1990 Repl).
3.2 Geothermal resources often are developed through the construction of wells. These rules and regulations apply to the permitting and construction of geothermal wells and for the assessment of application fees pursuant to Section 37-90.5-106, C.R.S. (1990 Repl). Their purpose is to make the submission, consideration and evaluation of permit applications more uniform and certain. The granting of permits also provides the State Engineer the means to monitor and record the development and uses of geothermal resources.
3.3 These rules establish minimum standards for the construction, testing, operation, and abandonment of geothermal wells, and the reinjection of geothermal fluids in order to protect the public health, safety and welfare, and to prevent the contamination of the environment and the waste of geothermal resources.
3.4 Pursuant to Section 37-90.5-107, C.R.S. (1990 Repl), the diversion of geothermal fluids to recover geothermal resources is recognized as a beneficial use of ground water. These rules provide for the submission and evaluation of permit applications to appropriate geothermal fluids from wells in order to prevent injury to prior water and geothermal rights. These rules also provide for the recording of existing wells used for the extraction of geothermal resources.
3.5 These rules define the State Engineer's authority to monitor and observe the use of geothermal resources and to require the installation of measuring devices, in order to prevent injury to prior rights and waste of the resource, and to provide the means for enforcing these rules.
3.6 These rules establish procedures for the formation of geothermal management districts as provided for in Section 37-90.5-108, C.R.S. (1990 Repl), and for the setting of standards for controlling well spacing, production rates and requiring reinjection of produced fluids in such districts.
3.7 These rules do not apply to the diversion of waters from natural surface streams, naturally flowing springs or to the discharge of geothermal fluids.
3.8 These rules do not apply to water wells permitted pursuant to Articles 90 and 92 of Title 37, C.R.S. (1990 Repl), nor to those wells subject to the jurisdiction of the Oil and Gas Conservation Commission pursuant to Article 60 of Title 34, C.R.S. (1984 Repl), nor to those wells subject to the jurisdiction of the Mined Land Reclamation Board pursuant to Articles 32 (minerals) and 33 (coal) of Title 34, C.R.S. (1984 Repl).
RULE 4 DEFINITIONS 4.1 Statutory Definitions - The terms listed below are defined by statute and have the identical meaning as in the referenced statutes:
4.1.1 Colorado Geothermal Resources Act, Section 37-90.5-103, C.R.S. (1990 Repl): Geothermal By-Products, Geothermal Fluid, Geothermal Resource, Hot Dry Rock, and Material Medium.
4.1.2 Section 37-91-102, C.R.S. (1990 Repl): Board, Ground Water, Installation of Pumping Equipment, Person, Repair, Well Construction Contractor, and Well Seal.
4.1.3 Colorado Ground Water Management Act, Section 37-90-103, C.R.S. (1990 Repl): Nontributary Ground Water, and Waste.
4.2 Definitions from Other Rules - The terms listed below are defined in the Water Well Construction and Pump Installation Rules, 2 CCR 402-2, (1988), and have the identical meaning as in the referenced rules: Aquifer, Casing, Confining Layer, Contaminant, Contamination, Grout, Grouting, and Well Owner.
4.3 Specific Definitions - Unless expressly stated otherwise, the following terms shall have the meaning indicated in this Rule. Words used in the present tense include other tenses; words used in the masculine gender include the feminine and neuter genders.
4.3.1 “Closed-Loop Ground Source System” means a heat pump or heat exchange system having a closed-loop portion consisting of pipe buried in trenches and wells. The purpose of the buried pipe is to provide for the transfer of heat between the circulating fluid and the surrounding earth.
4.3.2 “Completed Well” means a well that has been drilled to its total depth, has been cased as required and has been ready to be placed into service for more than thirty (30) days.
4.3.3 “Designated Agent” when used herein shall mean the representative of an owner of a geothermal well who has been authorized in writing by the owner to act in his behalf.
4.3.4 “Discharge” means the disposal of geothermal fluids after use by a geothermal well owner.
4.3.5 “Field or Geothermal Field” means the general area which is or appears to be underlain by a geothermal resource, including hot dry rock. The terms “field” and “reservoir” have the same meaning if only one reservoir is involved; however, “field”, unlike “reservoir”, may relate to two or more reservoirs.
4.3.6 “Flow Test” means the testing of a geothermal well to determine the geologic and hydrologic parameters of the reservoir, the physical and chemical properties of the geothermal fluids, or the production or reinjection rates for a well.
4.3.7 “Geothermal Well” means any well which is constructed for the purpose of exploring for, monitoring of, or using geothermal resources, or reinjecting geothermal fluids. The term “Geothermal Well” does not include wells subject to the provisions of Articles 90 and 92 of Title 37, C.R.S. (1990 Repl); wells subject to the jurisdiction of the Oil and Gas Conservation Commission pursuant to Article 60 of Title 34, C.R.S. (1984 Repl); or wells subject to the jurisdiction of the Mined Land Reclamation Board pursuant to Articles 32 and 33 of Title 34, C.R.S. (1984 Repl).
4.3.8 “Horizontal Closed-Loop System” means a closed-loop ground-source heat pump system where the buried pipe is installed horizontally in trenches.
4.3.9 “Mechanical Integrity Test” means a procedure to determine if the casing, tubing, or packers leak or if fluid movement occurs in or adjacent to the well other than in the reservoir.
4.3.10 “Notice” means a written statement submitted to the Office of the State Engineer of an applicant's intent to perform work on a well or change the proposed construction of a well.
4.3.11 “Operator” means the person supervising or in control of constructing, maintaining, operating, or producing a geothermal well whether or not such person is the owner of the well.
4.3.12 “Plugged Well” means a well which has been plugged and sealed to prevent entry of fluids into the well and isolate subsurface fluids to the formations in which they are encountered in the well.
4.3.13 “Production Equipment” means any pump, down-hole heat exchanger, fluid circulating system, or other device used or intended for extracting geothermal resources from a well. Production equipment includes well seals and well heads and control devices and couplings appurtenant thereto.
4.3.14 “Reinjection” means discharging geothermal fluids through a well bore into the same reservoir from which they were produced, whether by pressure at the surface or by gravity flow.
4.3.15 “Replacement Geothermal Well” means a new well constructed to replace an existing geothermal well.
4.3.16 “Reservoir” means a subsurface geologic unit or aquifer which contains a common geothermal resource or hot dry rock. Each reservoir in a field, which is hydrologically separated from any other reservoir is covered by the term “reservoir” in these rules.
4.3.17 “Shut-in Well” means a well which is temporarily not being used with the intent of initiating or resuming the use of the well at a later date or preserving the structure for other potential uses.
4.3.18 “Special Field Rules” shall mean those rules promulgated for and which are limited in their application to geothermal management districts.
4.3.19 “Suspension of Construction Operations” means the cessation of all well construction operations or all installation of production equipment before a well is officially plugged or placed into service.
4.3.20 “Type A Geothermal Well” means any geothermal well which has a total depth not exceeding 2500 feet or encounters geothermal fluids having a temperature not exceeding 212°F.
4.3.21 “Type B Geothermal Well” means any geothermal well which has a total depth greater than 2500 feet or expects to encounter geothermal fluids having a temperature greater than 212°F.
4.3.22 “Vertical Closed-Loop System” means a closed-loop ground-source heat pump system where the buried pipe is installed in one or more wells which are subsequently backfilled.
4.3.23 “Well Construction Operations” means any act undertaken at the well site for the establishment or modification of a geothermal well including the installation and cementing of casing and the installation of production and well head equipment. Well construction operations do not include surveying actions and site preparations prior to installing construction equipment.
4.4 Other Definitions - All other words used herein shall be given their usual customary and accepted meanings. All words of a technical nature specific to the well drilling industry shall be given the meaning which is generally accepted in that industry.
RULE 5 GENERAL RULES 5.1 Protection of Life, Health, and the Environment - All geothermal exploration, construction, flow testing, production and reinjection shall be conducted in a manner that will:
a. Afford reasonable protection for human life and health and for the environment;
b. Contain underground fluids to the reservoirs in which they occur with the exception of the producing reservoir; and c. Prevent the waste of the geothermal resource.
5.2 Knowledge of Rules - It shall be the responsibility of all geothermal well owners or operators to obtain information pertaining to the regulation of geothermal resources before beginning construction operations. These Rules provide minimum standards for the construction and operation of geothermal wells and they do not preclude a well owner or operator from using higher standards or better grade materials. The owner or operator shall be responsible for knowing and complying with applicable federal, state, and local statutes and rules.
5.3 Priorities for Geothermal Resources - Permits or certificates issued by the State Engineer pursuant to these Rules do not grant priorities for geothermal rights. Priorities for geothermal resources are subject to the provisions of Articles 90 and 92 of Title 37, C.R.S. (1990 Repl).
5.4 Entry upon Property - The State Engineer and his duly authorized representatives have the authority and duty to enter upon, and to order the well owner or operator to permit the entry upon, private property at any reasonable time to inspect the various means or proposed means of diversion, transportation, reinjection, and extraction; to observe well construction and plugging and the uses or proposed uses of the geothermal resource; to read meters, gauges, and other measuring devices; and to inspect records.
5.5 Liability - The owner of any geothermal well, shall be liable and responsible for the plugging thereof in accordance with these rules and regulations within ninety (90) days of the expiration of a permit or certificate, or in any shorter period when required by the State Engineer.
5.6 Well Identification - All geothermal wells constructed pursuant to these rules shall be marked by the owner in a conspicuous place with the owner's or operator's name, name of lease (if applicable), permit number or numbers of the well, name of the reservoir, the well designation given by the owner (if used), and legal description of the well. He shall take all necessary means and precautions to preserve and maintain these markings. A permanent sign shall be installed within sixty (60) days after the completion of the well. For closed-loop ground source systems the permanent sign shall identify the point where the buried portion of the system begins.
5.7 Well Testing - The flow testing of any geothermal well shall not exceed a cumulative total of seven (7) days unless prior written approval for additional testing has been granted by the State Engineer. Copies of any temperature records and any fluid sample analyses obtained from the testing of geothermal wells shall be submitted with the Notice of Well Completion or the Plugging Report.
5.8 Discharge of Geothermal Fluids - Owners or operators of geothermal wells are responsible for being knowledgeable about discharge regulations. All geothermal fluids produced by a well shall be disposed of in such a manner as to protect the environment and the health and safety of the people of Colorado. The well owner shall be responsible for obtaining and maintaining any discharge permits required by the Colorado Water Quality Control Division. (Note: Disposal of geothermal discharges to a sanitary or storm sewer may require approval from the owner or operator of the sewer system. Disposal of geothermal discharges into an individual sewage disposal system requires that the system has been specifically designed and approved for such disposal).
5.9 Waste Prohibited - The production or handling of geothermal resources, or the handling of products thereof, in such a manner or under such conditions or in such an amount as to constitute or result in waste is hereby prohibited.
5.10 Installation of Measuring Devices - The State Engineer and his authorized representatives have the authority to order the owner of a geothermal well to install and maintain meters, gauges, or other measuring devices and to report at reasonable times the readings of such meters, gauges, or measuring devices.
5.11 Tests and Surveys - When deemed necessary or advisable, the State Engineer shall require the well owner or operator to test for waste or contamination from geothermal wells. When calling for such tests or surveys, the State Engineer shall designate the time allowed for compliance, which provisions as to time shall prevail over any other time provisions in these rules.
5.12 Corrective Action - The State Engineer shall require corrections in a manner or method approved by him of any condition which is causing or is likely to cause waste or contamination, or is threatening the public health and safety, and the environment.
5.13 Multiple Completion of Geothermal Wells - The construction of a geothermal well for the simultaneous extraction of geothermal resources from more than one reservoir shall not be approved by the State Engineer unless the following conditions are met:
a. An application is submitted to the State Engineer setting forth all material facts involved and the proposed manner and method of construction. The application shall include a diagram of the mechanical installations showing how each reservoir will be produced separately and its diversions measured;
b. Prior to submitting an application, the applicant shall give notice of the proposed multiple completion to the owners or operators, on record with the State Engineer, of any decreed naturally flowing spring and all water and geothermal wells which produce from the same reservoirs and are located within 1/2 mile of the proposed well. The notice shall be sent by certified mail return receipt requested and shall include a copy of the permit application. The notice shall instruct the owners or operators that they must submit a written objection to the State Engineer within thirty (30) days of their receipt of the notice if they are opposed to the proposed multiple completion. Evidence that this notice was shall be submitted with the permit application;
c. If no objection to the multiple completion is filed within thirty (30) days and if the State Engineer finds that the production from the different reservoirs can be identified and measured and that circumstances in a particular instance so warrant, he shall issue the permit. If an objection is filed, the State Engineer shall hold a hearing to determine whether circumstances in the particular instance warrant issuing a permit.
5.14 Shut-in Well - Approval shall be obtained from the State Engineer prior to shutting-in a completed well which will not be used for more than one (1) year. Requests for shut-in status shall be submitted to the State Engineer as a Sundry Notice. If the State Engineer finds the request justified, he shall approve the shut-in status for a period not to exceed one year. Additional shut-in periods may be granted by the State Engineer for good cause shown upon submission of a written request. A shut-in well shall be capped and sealed in a manner which prevents the migration of fluids through the well. The well shall be exempt from plugging requirements during the period it is shut-in. The well identification sign shall remain in place. Wells shut-in due to special field rules are exempt from obtaining shut-in approvals.
5.15 Well Repairs - All well repairs shall comply with the standards for new wells as established by these Rules. The State Engineer shall be notified in writing and approval shall be obtained prior to the removal of casing from a geothermal well.
5.16 Omitted Information - When a well owner or operator becomes aware that he failed to submit any relevant facts in a permit application or report to the State Engineer, he shall submit such facts or information within five (5) working days of such discovery.
5.17 Noncompliant Well Conditions - The well owner or operator shall notify the State Engineer within five (5) working days after the discovery of noncompliant well conditions, or a violation of the terms and conditions of a permit. Notice shall be given to the State Engineer in the event of fires, breaks or leaks when the public health and safety or the environment are endangered and the noncompliant condition or violation shall be corrected immediately. The notice shall contain the following information:
a. Permit number or numbers and name of the well;
b. A description of the violation and its cause;
c. The duration of the violation, including dates and times; if not corrected or use of the well discontinued, the anticipated time of correction; and d. Steps being taken to reduce, eliminate, and prevent recurrence of the violation.
5.18 Unattended, Open Wells - All geothermal wells, when unattended during construction or repair, shall be securely capped, covered or sealed to prevent objects or fluids from entering the well.
5.19 Training and Safety Equipment - When hazardous conditions or contaminants are known or suspected to be encountered during well construction, the well owner or operator shall be responsible for ensuring that personnel are adequately trained and that proper safety equipment is provided to handle and contain the hazard.
RULE 6 PERMIT TO CONSTRUCT A GEOTHERMAL WELL 6.1 Permit Required - Prior to beginning construction operations, the well owner or operator shall obtain a permit to construct from the State Engineer. A legible copy of the permit shall be prominently displayed at the well site. A permit to construct is required for the following operations:
a. Constructing a new geothermal well or a replacement for an existing geothermal well;
b. Converting an existing well, which was originally constructed for some other purpose, to a geothermal well;
c. Installing the initial production equipment for recovering geothermal resources;
d. Increasing the production from, expanding the use of, changing the producing interval of, or changing the type of use from an existing geothermal well.
6.2 Application for a Permit to Construct - Permit applications shall be submitted on forms prescribed by the State Engineer. A permit to construct authorizes the construction of one well unless specifically permitted for additional structures as provided for in these rules. The number of individual wells in a system shall be limited as specified in the permit. Single copies of applications shall be submitted for all Type A wells and triplicate copies for all Type B and reinjection wells.
6.2.1 When the subsurface geologic or hydrologic conditions are not known or understood, an application to construct a geothermal well shall be supplemented with a summary of geophysical, geological and hydrological information of the area. Such report shall identify all water and geothermal rights and wells on record with the State Engineer which are located within 1/2 mile of the proposed well.
6.2.2 The construction of closed-loop ground-source systems shall be applied for as the construction of a single geothermal well. The application shall specify the location of one point of the system and the spacing and direction of the loops. For vertical closed-loop systems, the application shall specify the number, the diameter, and the depths of all wells to be constructed. The application shall be supplemented with a plot plan showing the location of the wells and piping system in relation to buildings and property boundaries. The location specified in the application shall be identified on the plot plan.
6.2.3 An application for the construction of several monitoring and observation wells may be submitted as an application to construct a single geothermal well under the following conditions: all such structures are located on a single tract of land less than forty (40) acres in size, all wells will be located in the same 1/4, 1/4 section of land, have similar construction, and the wells will be completed in the same reservoir or aquifer. The application shall be supplemented by a plat showing the locations of the individual structures and a description of the proposed construction for each well.
6.2.4 Applications for permits to construct geothermal wells with proposed injection rates exceeding fifteen (15) gpm or anticipated injection pressures greater than one hundred
6.3 Application Fees - The application fee for a permit to construct a geothermal well shall be sixty (60) dollars. Departments and agencies of the State of Colorado shall be exempt from the payment of application fees.
6.4 Permit to Construct - If a permit application meets the requirements of Section 37-90.5-106, C.R.S. (1990 Repl) and the provisions of these rules, the State Engineer shall issue the permit, subject to protective terms and conditions. For Type A geothermal wells the State Engineer shall act on a permit application within forty five (45) days of its receipt. For Type B and reinjection wells the State Engineer shall act on a permit application within one hundred five (105) days of its receipt. A permit to construct a geothermal well does not grant a right for the well owner or operator to enter upon lands not owned by him.
6.5 Well Location - When selecting sites for geothermal wells, the well owner or operator shall consider the topography, surface drainage, access for maintenance and repair, and the proximity of the well site to sources of contamination, such as leach fields, sewer lines, land fills, etc. The well owner or operator shall comply with federal, state and local regulations concerning set-backs from structures and property lines.
6.5.1 Any well constructed within two hundred (200) feet of the permitted location shall be deemed to be at the approved location provided it meets the well spacing requirements of this rule and any permit conditions.
6.5.2 No geothermal well shall be located closer than one hundred (100) feet to the nearest source or potential source of contamination unless written approval has been obtained from the State Engineer. For the purpose of this Rule, geothermal wells completed in the same reservoir shall not be considered as sources of contamination.
6.5.3 Geothermal wells with proposed production or injection rates greater than fifteen (15) gpm shall be located more than six hundred (600) feet from any existing or permitted geothermal or water well completed in the same reservoir or any decreed naturally flowing spring.
6.5.4 Geothermal wells with proposed production rates of fifteen (15) gpm or less shall be located not less than ten (10) feet from any property or lease lines, or twenty (20) feet from an existing or permitted geothermal or water well, or a decreed naturally flowing spring.
6.5.5 Geothermal reinjection wells, whose injection rates will not exceed fifteen (15) gpm, shall not be located within seventy five (75) feet of any existing geothermal well producing from the same reservoir or decreed naturally flowing spring, unless the existing spring or wells are owned by the same person.
6.5.6 Proposed well locations closer than the minimum distances specified in these Rules shall not be permitted by the State Engineer unless the following conditions are met:
6.6 Vertical Well Bores - Unless directional drilling has been specifically approved by the State Engineer, all wells shall be constructed so that the horizontal deviation of the well bore from its surface location is a practical minimum at all times. The sidetracking of the well due to adverse drilling conditions shall not be considered as directional drilling as long as the borehole does not deviate more than two hundred (200) feet from the permitted surface location and meets the spacing constraints of these Rules.
6.7 Directional Drilling - Notice shall be given to and approval obtained from the State Engineer prior to any directional drilling operations intended to deflect the well horizontally from the surface location of the well. The notice shall clearly state the exact surface location of the well, the proposed depth, the proposed direction of deflection, and the proposed course of the deviated well. Within sixty (60) days after constructing the well, the owner or operator shall submit to the State Engineer an accurate and complete directional survey.
6.8 Replacement Wells - Replacements for geothermal wells shall be constructed in close vicinity of the original well to produce from the same reservoir and serve the same purposes as the original well. In the event the original well does not meet the spacing requirements specified in these rules, the construction of the replacement well shall not worsen the current non-compliant conditions. The original well shall be plugged and sealed within ninety (90) days of the completion of the replacement well.
6.9 Sundry Notices - Written notice shall be given on a form provided, and written approval shall be obtained from the State Engineer prior to:
a. Change of well location greater than two hundred (200) feet;
b. Change of permitted well construction plans including suspension of well construction operations;
c. Repair other than the replacement of production equipment;
d. Any well treatment; or e. Any alteration which does not conform with the permit; The sundry notice may also be used to request permit extensions, approval to plug Type B and reinjection wells, and shut-in status. A sundry notice shall also be used to notify the State Engineer within ten (10) working days of any downhole problem or mechanical failure in a geothermal well.
6.10 Notice to Other Agencies - Notice of applications, permits, orders, or other actions, received or issued by the State Engineer may be given to any other government agency which may have information, comments, or jurisdiction over the activity involved. The State Engineer may enter into a memorandum of understanding with other agencies to eliminate duplication of applications or other efforts. Copies of applications will be submitted to the following agencies:
a. Construction of Type B geothermal wells to the Colorado Oil and Gas Conservation Commission;
b. Construction of geothermal reinjection wells to the Colorado Water Quality Control Commission and the U.S. Environmental Protection Agency;
c. Construction and appropriations located in designated ground water basins to the Colorado Ground Water Commission.
6.11 Expiration of Permit to Construct - A Permit to Construct shall expire one year after being issued unless, prior to such expiration, the permit is extended by the State Engineer for good cause shown. A written extension request shall be submitted and shall provide the reasons for not completing the well construction, an estimate of the time necessary to complete the construction of the well and a fee of sixty (60) dollars. A permit to construct may be extended for a cumulative total of not more than one year.
6.12 Completion of Well Construction - Completion of well construction operations shall be conditioned upon protection of underground formations and the environment, the sealing of all permeable formations encountered in the well bore other than the producing reservoir, the removal of all construction equipment from the well site, and the submission of the reports required pursuant to these Rules.
6.13 Suspension of Construction Operation - All suspensions of well construction operations exceeding thirty (30) days must be authorized by the State Engineer.
6.14 Well Head and Protection Equipment - When temperatures greater than 120°F or flowing conditions are encountered during the construction of a geothermal well, the owner or operator shall install, and maintain in good working order, blowout preventers and equipment to prevent the uncontrolled discharge of fluids and to provide protective equipment for the personnel. RULE 7 MINIMUM STANDARDS FOR TYPE A GEOTHERMAL WELLS 7.1 Licensed Contractors - All well construction, repair, modification or plugging and all installation, repair or modification of producing equipment for Type A wells shall be performed only by a contractor, a direct employee of a contractor, or a person under the supervision of a contractor having a valid license issued by the State Board of Examiners of Water Well Construction and Pump Installation Contractors. Horizontal closed-loop systems are exempt from being constructed by licensed water well contractors.
7.2 Well Construction Standards - All Type A wells shall conform with the well construction, pump installation, well abandonment, and disinfection standards of the Water Well Construction and Pump Installation Rules, 2 CCR 402-2 (1988), unless specifically modified by these Geothermal Rules.
7.3 Closed-Loop Ground-Source Systems - Closed-loop ground-source systems shall be installed in such a manner as to confine underground fluids in the aquifers in which they are encountered and to prevent contamination of surface or ground water.
7.3.1 Vertical closed-loop systems may be backfilled with clean gravels, clean sand, or drill cuttings removed from the well. A minimum of ten (10) vertical feet of grout shall be placed in the top of each individual well constructed. A minimum of twenty (20) feet of grout shall be placed opposite each confining layer encountered by the well or wells.
7.3.2 The circulating pipes installed below ground level for closed loop systems shall consist of polyethylene (PE) or polybutylene (PB) meeting the standards specified in Appendix C of the “Closed-Loop Ground Source Heat Pump Systems: Installation Guide”, Oklahoma State University, 1988. All buried connections, joints and fittings shall be heat fused. Threaded connections or clamps shall not be used below ground level unless the joint is a service outlet which can be visually observed and inspected.
7.3.3 All piping, connections, joints and fittings which will be installed underground shall be tested at the designed working pressure prior to installation and visually inspected for leaks. Once installed, the underground portion of the closed loop shall be pressure tested at 150 per cent of the designed working pressure for a minimum of thirty (30) minutes. Pressures shall not decline by more than ten (10) per cent during the test.
7.3.4 Only non-toxic fluids shall be used in a closed loop geothermal system. Fluids approved by the State Engineer are: potable water, aqueous solutions of sodium or calcium chloride, aqueous solutions of potassium acetate containing less than one (1) per cent corrosion inhibitors, and food grade propylene glycol.
7.4 Limits of Type A Geothermal Well Exceeded - All well construction operations shall be suspended and the State Engineer shall be notified immediately when geothermal fluid temperatures greater than 212°F are encountered during the construction of a Type A geothermal well. No further construction shall be allowed unless a permit for a Type B geothermal well has been applied for and approved by the State Engineer and the well complies with the construction standards for Type B wells.
RULE 8 MINIMUM STANDARDS FOR TYPE B GEOTHERMAL WELLS 8.1 Well Construction - The construction standards of the Water Well Construction and Pump Installation Rules, 2 CCR 402-2 (1988), shall also apply to the construction of Type B geothermal wells, with the additions and modifications stated in this Rule. Type B geothermal wells need not be constructed by or under the supervision of contractors licensed by the Board of Examiners of Water Well Construction and Pump Installation Contractors.
8.2 Surface Casing - Steel surface casing must be set at least twenty five (25) feet into impervious and competent bedrock to insure a solid anchor for blowout prevention equipment. Sufficient cement shall be used to seal the entire length of the surface casing. If the cement does not circulate to the top of the hole or falls back, the surface casing must also be cemented at the surface.
8.2.1 In areas where subsurface formations and pressures are not known, surface casing shall not be set less than ten (10) percent of the proposed total depth of the well or a minimum of fifty (50) feet, whichever is greater.
8.2.2 In areas where subsurface conditions have been established by prior well construction, the surface casing shall be set at a depth to protect all known and potential aquifers and to prevent blowouts or uncontrolled flows.
8.3 Protection or Production Casing - The setting depths and cementing intervals for each proposed well shall be designed and selected to prevent fluids from migrating through the casing-borehole annulus. All well casings shall be selected and designed to protect against failure due to internal pressures, collapse due to external pressures, or corrosion.
8.4 Cementing Practices - Only cement shall be used to grout Type B geothermal wells, unless other grouts have been specifically approved by the State Engineer. Cements and additives shall be selected to withstand anticipated temperatures and corrosive fluids. Cement slurries shall be emplaced by positive displacement in one continuous operation from the bottom of each interval or stage.
8.4.1 A minimum of two hundred (200) feet of cement shall be placed above the top of any potential producing geothermal reservoir.
8.4.2 A minimum of fifty (50) vertical feet of cement shall be placed opposite each confining layer encountered.
8.4.3 All cemented casing strings shall stand under pressure until the cement reaches a compressive strength of five hundred (500) psi. The condition “under pressure” will be complied with if a “float” or back pressure valve is used or if pressure is otherwise held on the casing and no back flow is observed.
8.4.4 All casing and cements shall be tested prior to resuming well construction operations. The test shall consist of applying a minimum pressure of five hundred (500) psi to the casing and holding that pressure for thirty (30) minutes. Test details shall be recorded and reported by the operator to the State Engineer.
8.5 Blowout Preventers - As soon as surface casing is set, all Type-B geothermal wells shall have blowout preventers or control heads installed. This equipment shall be selected and designed to contain reasonably anticipated pressures and maintain control of the well at all times, and shall be maintained in good working order. This requirement for blowout preventers may be waived by the State Engineer if the owner or operator can show from prior experience in the area that this equipment is not necessary.
RULE 9 MINIMUM STANDARDS FOR GEOTHERMAL REINJECTION WELLS 9.1 Well Construction - Geothermal reinjection wells shall be classified as Type A or Type B depending on the projected well depths and reservoir fluid temperatures. The respective construction and plugging standards for Type A and Type B geothermal wells shall also apply to the construction and plugging of reinjection wells with the specific additions and modifications provided in this Rule.
9.2 Mechanical Integrity Test - Fluids shall not be injected into a geothermal reinjection well until a mechanical integrity test has been performed showing that the injected fluids will be confined to the designated reservoir. At least ten (10) working days prior to performing a mechanical integrity test, the owner or operator shall notify the State Engineer, in writing, of the scheduled date on which the test will be performed.
9.2.1 The mechanical integrity test shall include at least one of the following procedures to determine whether the casing, injection pipe, or packer leak:
9.2.2 In order to verify that fluids will not escape vertically through the bore hole, the mechanical integrity test shall be supported by one of the following procedures:
9.3 Well Head Equipment - The well head equipment installed on a reinjection well shall be capable of controlling and monitoring expected injection and annulus pressures.
9.4 Testing of Geothermal Reinjection Wells - A flow test shall be performed on all geothermal reinjection wells for a period of at least one (1) hour, and the results shall be reported to the State Engineer. The test shall be designed to provide data for the determination of hydraulic parameters of the injection interval and its suitability for the proposed reinjection.
9.5 Maximum Injection Pressures - Reinjection pressures for geothermal wells shall not exceed the maximum pressures approved by the State Engineer or a bottom hole pressure which will fracture the reservoir.
RULE 10 PLUGGING OF GEOTHERMAL WELLS 10.1 Well Owner Liability - The owner of any geothermal well, whether cased or not, shall be liable and responsible for the plugging of the well in accordance with these Rules.
10.2 Plugging Standards - Geothermal wells shall be plugged at or near ground level to prevent contaminants from entering and moving through the well bore. In order to confine subsurface fluids to the aquifers and reservoirs in which they were encountered, grout seals shall also be placed at each confining layer penetrated by the well bore.
10.3 Non-flowing Type A Geothermal Wells - All Type A geothermal wells, which do not flow at the surface, shall be plugged according to the provisions of the Water Well Construction and Pump Installation Rules, 2 CCR 402-2 (1988). The plug lengths and placements and the grout materials used shall be the same as specified in those Rules.
10.4 Flowing Type A, Type B and Reinjection Wells - Prior to plugging and sealing flowing Type A, all Type B and all reinjection wells the owner or operator shall give notice on a prescribed form and receive approval from the State Engineer. The notice shall describe in detail the equipment and materials to be removed from the well, the depth to the top of all plugs to be placed in the hole, the type and amount of cement to be used for each plug and the type and amount of materials to be placed between plugs. A minimum of 50 feet of cement shall be placed at each confining layer separating aquifers. All cement plugs shall have sufficient strength to withstand reservoir pressures.
RULE 11 CERTIFICATE TO OPERATE 11.1 Application - A Certificate to Operate shall be obtained from the State Engineer prior to placing a nondiversionary geothermal well or a geothermal monitoring well into service or injecting geothermal fluids into a reinjection well. An application fee shall not be required for a Certificate to Operate.
11.2 Nondiversionary Uses of Geothermal Energy - If the State Engineer finds that the construction of the well has been completed, that the well can be placed into service, that geothermal fluids will not be diverted, and that other geothermal users will not be injured by a reduction of reservoir temperatures, he shall issue the Certificate to Operate within forty five (45) days after the well owner or operator has submitted an acceptable Notice of Well Completion.
11.3 Geothermal Reinjection Wells - If the State Engineer finds that the construction of the well has been completed, that the mechanical integrity test shows the well is capable of limiting fluid injection to the specified reservoir, and that the well owner or operator has submitted a copy of an approved injection permit from the EPA's Underground Injection Control program, he shall issue the Certificate to Operate. This Certificate to Operate shall be subject to additional mechanical integrity tests being performed on the reinjection well at least once every five (5) years. The first five-year period shall commence on the date of the initial mechanical integrity test. Failure to maintain mechanical integrity of the well or to perform the additional mechanical integrity tests shall expire the certificate to operate.
RULE 12 PERMIT TO APPROPRIATE 12.1 Application for Permit to Appropriate - Approval shall be obtained from the State Engineer prior to producing geothermal fluid from a well, other than for flow testing purposes. An application for a permit to appropriate shall be submitted to the State Engineer on a prescribed form. The application shall be supplemented with evidence showing that the proposed appropriation will comply with the provisions of Subsection 37-90.5-107(3) or (4), C.R.S. (1990 Repl). Any secondary uses of geothermal fluids or recovery of by-products shall be included in the application to appropriate. The State Engineer shall provide a copy of all applications to appropriate goethermal fluids to the Water Quality Control Division.
12.2 Approval of Permit to Appropriate - A permit to appropriate geothermal fluids shall be approved by the State Engineer if he finds that the appropriation meets the provisions of Section 37-90.5- 107(3) or (4), C.R.S. (1990 Repl), and the following criteria:
a. If the fluid diverted is nontributary as defined by Subsection 37-90-103(10.5), C.R.S. (1990 Repl), and the appropriation complies with the Statewide Nontributary Ground Water Rules, 2 CCR 402-7 (1986);
b. If the well is located in the Denver Basin, the appropriation complies with the Denver Basin Rules, 2 CCR 402-6 (1985); or c. If the well is located in a Designated Ground Water Basin, the appropriation complies with the Ground Water Commission Rules, 2 CCR 410-1 (1992).
12.3 Permit Conditions and Required Reinjection - The permit to appropriate shall set forth such conditions for equipping and operating geothermal wells as are reasonably necessary to prevent waste, contamination of the aquifers or material injury to existing water and geothermal rights. The State Engineer may require the well owner or operator to reinject geothermal fluids if necessary for the maintenance of underground pressures and temperatures, the prevention of subsidence, or the disposal of brines.
12.4 Expiration of Permit to Appropriate - Any permit to appropriate issued prior to completing the construction of the well shall expire one year from the date issued unless the well owner or operator submits a Notice of Well Completion, including evidence that geothermal resources were appropriated and put to use. The permit to appropriate is limited to the rate and annual diversions which are actually withdrawn and placed to beneficial use or the permitted amount, whichever is less.
RULE 13 PERMIT, CERTIFICATE AND DENIAL PROCEDURES 13.1 Owner's Signature - The owner or designated agent shall sign and date the permit application, certifying that the information set forth thereon is true to the best of his knowledge.
13.2 Substitution of Forms - All applications and notices required by these rules shall be submitted on prescribed forms, a legible reproduction thereof, or on computer generated forms patterned after the prescribed forms upon prior approval by the State Engineer. The State Engineer shall reject any form which cannot be legibly reproduced. Drawings, maps, and data supplementing a form shall not be larger than 24 × 36 inches.
13.3 Incomplete Forms - Permit applications and notices submitted without the required information, fees or signature shall be returned as incomplete. The State Engineer shall inform the applicant or designated agent of the deficiencies within thirty (30) days of receipt of the application or notice. If the applicant fails to correct the deficiencies and resubmit the application or notice within an additional thirty (30) days, the State Engineer shall consider the application withdrawn, and the application fee shall be forfeited.
13.4 Distribution of Permits or Certificates - The application and original permit or certificate shall be filed and preserved by the State Engineer to be useful in determining the extent of the uses made of the various geothermal resources. A copy of the permit or certificate shall be sent to the applicant's mailing address.
13.5 Permit Denial - If the State Engineer is unable to approve a permit, the application shall be denied and he shall state his reasons for the denial in writing. The application and the original of the denial order shall be filed and preserved by the State Engineer. A copy of the denial shall be sent by the State Engineer to the applicant's mailing address.
13.6 Replacement Wells - Once a replacement well has been constructed and the Notice of Well Completion has been submitted to and accepted by the State Engineer, the Certificate to Operate or the Permit to Appropriate for the original well shall be amended to apply to the replacement well. The same protective terms and conditions for the original well shall then apply to the replacement well.
13.7 Ownership of Permit or Certificate - A geothermal permit or certificate shall be valid only for the owner of record in the State Engineer's Office. The permit or certificate shall expire sixty (60) days after a new owner takes possession of a geothermal well unless the new owner notifies the State Engineer of the change on a prescribed form.
13.8 Expiration of Permit or Certificate - A permit to appropriate or a certificate to operate is presumed to have expired when:
a. The well is in such disrepair that it is not operable; or b. The use of the well has been discontinued for more than one year without obtaining shut-in approval. This presumption does not apply to wells not operating due to special field rules.
13.9 Reinstatement of Permits to Appropriate and Certificates to Operate - Upon his own initiative or within thirty (30) days of receiving notice from the State Engineer, the well owner or designated agent may submit an application for reinstatement of an expired permit or certificate, a sixty (60) dollar application fee, and written proof that the expiration resulted from excusable neglect, inadvertence or mistake. If the State Engineer determines the proof to be acceptable and satisfactory, he shall reinstate the permit.
13.10 Plugging of Wells with Expired Permits - All wells shall be plugged within ninety (90) days after the permit or certificate expired unless the permit or certificate is re-instated by the State Engineer, or a new permit or certificate for the use of the well has been approved.
13.11 Recording of Existing Geothermal Wells - Geothermal wells existing prior to July 1, 1983, not of record in the office of the State Engineer, may be recorded by the State Engineer by submitting a notice of well completion with a sixty (60) dollar filing fee and an application to appropriate if applicable. A well shall be considered to exist if it was actually operating and being used or was undergoing significant construction activities prior to operations on July 1, 1983, and subsequently was put to use without delay. All available data for the well, including construction and completion data, shall be submitted in support of the application.
13.12 Hearings and Appeals - Any person aggrieved by a decision of the State Engineer granting or denying a certificate or a permit pursuant to these rules may, within sixty (60) days after such decision, petition for a hearing in accordance with the State Engineer's Procedural Regulations, 2 CCR 402-5 (1984). Denials of permits to appropriate shall be appealed to the appropriate Water Court without requiring a hearing before the State Engineer. In adjudicatory matters concerning geothermal wells, the final action of the State Engineer shall be subject to judicial review by the water court having authority over the area in which the well is located. RULE 14 RECORDS AND REPORTING REQUIREMENTS 14.1 Certification - All reports, notices or applications shall be signed by the person responsible for the work performed or making the claim, certifying the truthfulness and accuracy of the document. The original document shall be submitted to the State Engineer and a copy shall be provided to the well owner or his designated agent.
14.2 Format of Reports - All application, notices and reports shall be submitted on forms prescribed by the State Engineer, legible reproductions thereof, or computer generated forms patterned after the prescribed form upon prior approval by the State Engineer. “As-Built” drawings may be included but shall not be larger than 24 × 36 inches. All of the applicable data requested on the form shall be accurately reported.
14.3 Data Confidentiality - In the event that the information submitted falls within the purview of Section 24-72-204(3)(a)(IV), C.R.S. (1988 Repl), and upon written request by the owner or designated agent, the State Engineer shall deny the right of inspection of such data to any person and keep the data confidential for not more than one (1) year after submittal of the well construction report.
14.4 Construction Reports - The licensed contractor, or the well owner or operator, when these rules do not require licensed contractors, shall maintain detailed records during the construction and completion of all geothermal wells. The data to be reported shall include the following: a detailed and accurate lithologic log; diameter, type, grade and depth of all casing; amounts, type, depths and placement method of all grouts used; construction and completion history; types of fluids and temperatures encountered; type and depths of production equipment installed; and copies of data from any flow testing. This information shall be submitted by the operator or well construction contractor to the State Engineer on a prescribed form within sixty (60) days of completing the well, or seven (7) days after the expiration of the permit to construct, whichever occurs sooner.
14.4.1 A separate well construction report shall be submitted for each well constructed in a well system.
14.4.2 For closed-loop systems, the notice shall provide the location of the boreholes and the piping where actually installed.
14.4.3 Unless a well construction report is submitted within sixty (60) days after casing has been set, sundry notice shall be given to the State Engineer indicating the size, type, weight and depth of the casing installed and amount, type and placement method of the grout materials. The well construction report shall be submitted as required after well construction operations have been completed.
14.5 Sundry Reports - The owner or operator shall submit a report to the State Engineer within sixty (60) days after completing the following operations: plugging and sealing, acidizing, shooting, hydraulic fracturing, squeezing, setting a liner, mechanical integrity test or other similar operations not specifically covered herein, or when requested by the State Engineer. Such report shall present a detailed account of the work done and the manner in which such work was performed; the quantity and type of materials used in the operation, and any other pertinent information or operations which affect the production or use of the well.
14.6 Notice of Well Completion - The owner or designated agent shall submit a notice of well completion, on a form prescribed by the State Engineer, within sixty (60) days after a geothermal well has been completed or seven (7) days after the permit to construct expired, whichever is sooner. For monitoring wells constructed pursuant to a well system permit, the notice of well completion shall be submitted when the last structure in the well system has been completed, but not more than seven (7) days after the permit expired.
14.7 Production Records - In order to quantify the geothermal energy extracted, the well owner or operator shall maintain permanent records of the amounts of fluids diverted and areas heated. These records shall be collected at least monthly and shall be submitted to the State Engineer upon the conclusion of each calendar year. For wells diverting geothermal fluids these records shall include as a minimum the diversion rates and volumes and inflow and outflow temperatures. Geothermal wells serving one (1) single family dwelling are exempt from this reporting requirement.
14.8 Injection Records - The owner or operator of any geothermal reinjection well shall maintain permanent records of injection rates, injection volumes, injection pressures, and annulus pressures. These records shall be collected at least monthly and shall be submitted to the State Engineer upon the conclusion of each calendar year.
14.9 Fluid Sample Analyses - The owner or operator shall submit to the State Engineer copies of analysis reports for fluid samples obtained during the construction and testing of geothermal wells.
14.10 Geophysical Logs, Surveys and Well Tests - Any geophysical logs, down-hole surveys, and the results of flow tests obtained during the construction of a well shall be submitted to the State Engineer within sixty (60) days of completing the well.
14.11 Supplemental Reports - The owner or operator shall furnish the State Engineer any information which the State Engineer may request to determine compliance with the permit.
14.12 Plugging Reports - The owner or operator shall submit a plugging report on a Sundry Notice form for each well that is plugged and sealed. The report shall identify the well which was plugged by location and permit number or numbers and provide a detailed description of the manner in which the well was plugged, including quantities and nature of materials used; and the method of placement, depth to, and the depth intervals of plugs installed in the well. If the staff of the State Engineer cannot witness the plugging of a Type B or reinjection well, the owner or operator shall submit a copy of the report or bill from the person installing the plugs, verifying the placement depths, and the types and amounts of materials used.
RULE 15 GEOTHERMAL MANAGEMENT DISTRICTS 15.1 Proposal for Geothermal Management District - At the request of any person owning an interest in the land or a geothermal right within the area of a proposed geothermal management district, or on his own initiative, the State Engineer may establish a geothermal management district. The purpose of the district would be to prevent the waste of the geothermal resource, maximize the economic recovery of the geothermal resources and to protect vested or correlative water and geothermal rights. In such district the State Engineer has the authority to control well spacing, to control the quantity of geothermal fluids extracted, to require the reinjection of the produced fluids, and to adopt plans for the most efficient use of geothermal energy.
15.2 Required Information - The petition by a person or notice by the State Engineer for the establishment of a proposed geothermal management district shall include the following:
a. A description of the geothermal field to be managed, identifying the geothermal resources, its known geology and hydrology, and the energy which may be extracted;
b. A legal description and map of the geothermal field and the overlying land to be included in the management district;
c. A list of the owners and location of geothermal rights which will be included or which may be affected by the proposed district and a list of the owners of land on which those rights are located;
d. A comprehensive plan for the use of the geothermal resources and the type or nature of the administrative controls contemplated to maximize the economic recovery and prevent the waste of the resource. Such controls could consist of well spacing, allocation of production, or reinjection requirements;
e. A comprehensive plan for the equitable apportioning of the geothermal resources among the separately owned geothermal interests in the reservoir. The plan shall allocate an equitable and reasonable share of the geothermal resource to each owner;
f. Requirements necessary for monitoring the extraction of the geothermal resource and for the protection of existing water and geothermal rights in the area;
g. The time when the management district shall become effective, and the manner and circumstances under which the management district shall terminate;
h. Provisions for amending the area and the operating criteria of the management district; and i. Proposed name for the management district.
15.3 Creation of Geothermal Management District - Following the submittal of a proposal to create a geothermal management district, the State Engineer shall evaluate the extent, geology and hydrology of the geothermal resource and the proposed district boundaries. Upon completion of the study, the State Engineer shall publish the creation of the proposed district and hold a hearing. After completing the hearing procedures, the State Engineer shall enter a written order based on the factual information presented.
15.4 Delegation of Authority - Any geothermal management district desiring to assume some or all of the State Engineer's authority for the administration of a geothermal resource shall submit a request in writing to the State Engineer. Such request shall document to the satisfaction of the State Engineer that the district has the organization, capability and resources to carry out the administration.
15.5 Special Field Rules - Specific rules adopted by the State Engineer pursuant to Rule 15.3 for the operation of wells in geothermal management districts shall take precedence over a general rule promulgated herein.
RULE 16 VARIANCES 16.1 Written Requests - Variances to these rules may be granted by the State Engineer upon written request and a showing by the owner or operator that the requested variance will comply with the intent of these rules to protect the public safety, health and environment, and prevent the waste or contamination of surface or ground waters, and geothermal resources.
16.2 Consultation Required - No variance to these rules concerning Type B and reinjection wells will be granted by the State Engineer without prior consultation with the Oil and Gas Conservation Commission or the Water Quality Control Division.
16.3 Written Response - The State Engineer shall respond in writing to a variance request in a reasonable amount of time stating the reasons for the decision and imposing conditions necessary to implement the intent of these rules.
RULE 17 EMERGENCIES 17.1 Notification and Approval - In the event of an emergency, well construction or repair requiring approval pursuant to these rules, may begin only after the well owner or designated agent has given notice to and approval is granted by the State Engineer, either orally or by telecopier. The required application or notice forms shall be submitted by the well owner or designated agent within ten (10) working days. Work reports shall also be submitted as required by these Rules.
17.2 Expiration of Verbal approval - Verbal approvals granted pursuant to this rule shall expire sixty (60) days from the date they were issued. Construction operations performed after the expiration of a verbal approval shall be considered as work performed without a permit. RULE 18 SEVERABILITY If any portion of these rules is found to be invalid, the remaining portion of the rules shall remain in force and not be affected.
RULE 19 REVISIONS These rules may be revised in accordance with Section 24-4-103, C.R.S. (1988 Repl). RULE 20 STATEMENT OF BASIS AND PURPOSE INCORPORATED BY REFERENCE The Statement of Basis and Purpose for these Geothermal Rules is incorporated by reference as part of these Rules.
RULE 21 EFFECTIVE DATE These rules shall become effective on May 1, 1994.