USA Statutes : oregon
Title : TITLE 41 WILDLIFE
Chapter : Chapter 522 Geothermal Resources
As used in this chapter, unless the context
requires otherwise:

(1) “Board” means the governing board of the State Department of
Geology and Mineral Industries.

(2) “By-product” means any mineral or minerals, exclusive of helium
or of oil, hydrocarbon gas or other hydrocarbon substances, that are
found in solution or in association with geothermal resources and that
have a value of less than 75 percent of the value of the geothermal
resource or are not, because of quantity, quality, or technical
difficulties in extraction and production, of sufficient value to warrant
extraction and production by themselves.

(3) “Completed geothermal well” means a well producing geothermal
resources for which the operator has received the department’s written
assurance that the manner of drilling of and producing geothermal
resources from the well are satisfactory.

(4) “Cooperative agreement” means an agreement or plan of
development and operation for the production or utilization of geothermal
resources in which separate ownership units independently operate without
allocation of production.

(5) “Correlative rights” means the right of each owner in a
geothermal area to obtain that owner’s just and equitable share of the
underlying geothermal resource, or an economic equivalent of that share
of the resource, produced in a manner and in an amount that does not
injure the reservoir to the detriment of others.

(6) “Department” means the State Department of Geology and Mineral
Industries.

(7) “Drilling” includes drilling, redrilling and deepening of a
geothermal well.

(8) “Enhanced recovery” means the increased recovery from a
reservoir achieved by artificial means or by the application of energy
extrinsic to the reservoir. The artificial means include, but are not
limited to, reinjection of hot brine, fluid or water into a reservoir.

(9) “Geothermal area” means any parcel of land that is, or
reasonably appears to be, underlaid by geothermal resources.

(10) “Geothermal reinjection well” means any well or converted well
constructed to dispose of geothermal fluids derived from geothermal
resources into an underground reservoir.

(11) “Geothermal resources” means the natural heat of the earth,
the energy, in whatever form, below the surface of the earth present in,
resulting from, or created by, or that may be extracted from, the natural
heat, and all minerals in solution or other products obtained from
naturally heated fluids, brines, associated gases, and steam, in whatever
form, found below the surface of the earth, exclusive of helium or of
oil, hydrocarbon gas or other hydrocarbon substances, but including,
specifically:

(a) All products of geothermal processes, including indigenous
steam, hot water and hot brines;

(b) Steam and other gases, hot water and hot brines resulting from
water, gas, or other fluids artificially introduced into geothermal
formations;

(c) Heat or other associated energy found in geothermal formations;
and

(d) Any by-product derived from them.

(12) “Geothermal well” includes any excavation made for producing
geothermal resources and any geothermal reinjection well.

(13) “Land” means both surface and mineral rights.

(14) “Operator” means the person:

(a) Who possesses the legal right to drill a geothermal well;

(b) Who has obtained a drilling permit pursuant to ORS 522.135; or

(c) Who possesses the legal right to operate a completed geothermal
well or who has been granted the authority to operate the well by that
person.

(15) “Prospect well” includes any well drilled as a geophysical
test well, seismic shot hole, mineral exploration drilling, core drilling
or temperature gradient test well, less than 2,000 feet in depth, and
drilled in prospecting for geothermal resources. “Prospect well” does not
include a geothermal well.

(16) “Reservoir” means an aquifer or combination of aquifers or
zones containing a common geothermal or ground water resource.
“Reservoir” includes, but is not limited to, a hot dry rock conductive
system.

(17) “Royalty interest” means a right or interest in geothermal
resources produced from land or in the proceeds of the first sale of
those resources.

(18) “Unit agreement” means an agreement or plan of development and
operation developed under the provisions of ORS 273.775, 308A.050 to
308A.128, 522.015, 522.405 to 522.545, 522.815 and 522.990 and this
section for the production or use of geothermal resources in separately
owned interests as a single consolidated unit and that provides for the
allocation of costs and benefits.

(19) “Unit area” means the area described in a unit agreement that
constitutes the land subject to development under the agreement.

(20) “Unit operator” means the person designated in the unit
agreement to manage and conduct the operation involving unitized land.

(21) “Unit production” means all geothermal resources produced from
a unit area from the effective date of a unit agreement approved by the
board under ORS 522.405.

(22) “Waste” means:

(a) Any physical waste, including, but not limited to, underground
waste resulting from the inefficient, excessive or improper use or
dissipation of reservoir energy or resulting from the location, spacing,
drilling, equipping, operation or production of a geothermal resource
well in such a manner that reduces or tends to reduce the ultimate
economic recovery of the geothermal resources within a reservoir; and

(b) Surface waste resulting from the inefficient storage of
geothermal resources and the location, spacing, drilling, equipping,
operation or production of a geothermal resource well in such a manner
that causes or tends to cause the unnecessary or excessive surface loss
or destruction of geothermal resources released from a reservoir.

(23) “Working interest” means an interest in geothermal resources
or in land containing geothermal resources that is held under a lease,
operating agreement, fee title or otherwise and under which, except as
otherwise provided in a unit or cooperative agreement, the owner of the
interest has the right to explore for, develop, produce or utilize the
resources. “Working interest” does not include a right delegated to a
unit operator as such by a unit agreement. [1975 c.552 §3; 1979 c.163 §1;
1981 c.588 §3; 1981 c.694 §4; 1999 c.314 §74; 2005 c.22 §375] (1) The Legislative Assembly hereby finds and
declares that:

(a) The people of the State of Oregon have a direct and primary
interest in the development of geothermal resources situated in this
state.

(b) The State of Oregon, through the State Department of Geology
and Mineral Industries, shall control the drilling, redrilling and
deepening of wells for the discovery and production of geothermal
resources so that such wells will be constructed, operated, maintained
and abandoned in the manner necessary to safeguard the life, health,
property and welfare of the people of this state, to safeguard the air,
water and other natural resources of this state, and to encourage the
maximum economic recovery of geothermal resources therefrom.

(2) It is the policy of the Legislative Assembly that this chapter
be administered:

(a) To prevent damage to and waste of geothermal resources;

(b) To prevent interference with or damage to waters used or to be
used for beneficial purposes that may result from improper drilling,
operation, maintenance or abandonment of geothermal or prospect wells;

(c) To supervise the drilling, operation, maintenance and
abandonment of geothermal or prospect wells in a manner permitting the
operator to utilize all methods known to the industry for the purpose of
increasing the ultimate economic recovery of geothermal resources, that
are suitable, and consistent with protection of the air, water and other
natural resources of the state; and

(d) To provide for the development, management and production of
geothermal resources in a manner that minimizes state involvement,
enhances resource recovery, prevents waste, maximizes economic
development and protects correlative rights of the resource owners.
[Formerly 522.050; 1981 c.588 §4](1)(a) In order to accomplish the policy of
ORS 522.015 all geothermal fluids derived from geothermal resources shall
be reinjected into the same reservoir from which withdrawn unless it is
determined by the State Department of Geology and Mineral Industries that
these policies and the public interest require other disposal of the
fluids.

(b) Subject to the determination in paragraph (a) of this
subsection, injection into other reservoirs or disposal by other means
may be allowed by the department in specific instances where it is shown
that such action is consistent with the policies cited in this section.
Disposal by other means may include any secondary use of geothermal fluid
after the primary use of such fluid for electrical power generation or
for other direct application of the heat or other associated energy
contained in such fluids or for by-product extraction. Secondary uses may
include, but shall not be limited to, use of condensate resulting from
electrical power plant operations for plant-cooling purposes, or use of
such geothermal fluid for agricultural, commercial or industrial purposes.

(2) The State Department of Geology and Mineral Industries shall
adopt rules which govern the disposal by reinjection or other means of
geothermal fluids derived from geothermal resources from wells of 250 or
more degrees Fahrenheit bottom hole temperature or wells 2,000 or more
feet deep. The rules shall include standards whereby contamination may be
determined, construction standards for reinjection wells, testing
procedures for identifying aquifers, standards and procedures for
determining whether adjacent aquifers are being degraded by the
reinjection process, guidelines for conservation of the resource,
criteria for evaluating reservoirs or zones for geothermal fluid disposal
and requirements for prior approval of all geothermal fluid reinjection
proposals.

(3) A water pollution control facilities permit shall be obtained
from the Department of Environmental Quality under ORS 468B.050 before
reinjection is commenced. The Department of Environmental Quality may, by
agreement with the State Department of Geology and Mineral Industries,
waive this requirement for reinjection into the reservoir from which the
fluid came where adequate standards and tests have been adopted to insure
the fluid and its residues are uncontaminated. [1979 c.163 §4; 1979 c.547
§1] (1) The provisions of this chapter relating to
the location and drilling of any well for the production of geothermal
resources do not apply to any wells producing geothermal resources on
July 1, 1975, or wells, other than prospect wells, drilled to a depth no
greater than 2,000 feet where:

(a) The geothermal fluids produced are of less than 250 degrees
Fahrenheit bottom hole temperature; or

(b) Such fluids have been appropriated pursuant to ORS 537.505 to
537.795 and 537.992.

(2) The provisions of this chapter relating to regulation of
production of geothermal resources from a geothermal reservoir apply only
to wells with a bottom hole temperature of at least 250 degrees
Fahrenheit.

(3) If the bottom hole temperature of a well that was initially at
least 250 degrees Fahrenheit falls below 250 degrees Fahrenheit, the
State Geologist and the Water Resources Director, after consulting with
the well owner, shall determine the agency with regulatory responsibility
for that specific well. This determination shall be documented in writing
and shall supersede a determination made under subsection (1) or (2) of
this section. [1975 c.552 §4; 1981 c.589 §1] Ownership rights to geothermal resources
shall be in the owner of the surface property underlain by the geothermal
resources unless such rights have been otherwise reserved or conveyed.
However, nothing in this section shall divest the people or the state of
any rights, title or interest they may have in geothermal resources.
[1975 c.552 §21] Any well drilled under
authority of this chapter from which usable geothermal resources cannot
be derived, or the owner or operator has no intention of deriving usable
geothermal resources, shall be plugged and abandoned as provided in this
chapter or, upon the operator’s written application to the State
Department of Geology and Mineral Industries and with the concurrence and
approval of the Water Resources Director, jurisdiction over the well may
be transferred to the Water Resources Director and, in such case, the
well shall no longer be subject to the provisions of this chapter but
shall be subject to any applicable laws and rules relating to wells
drilled for appropriation and use of ground waters. If an application is
made to transfer jurisdiction, a copy of all logs, records, histories and
descriptions shall be provided to the Water Resources Director by the
applicant. [1975 c.552 §4e]PROSPECT WELLS (1) No person shall engage in
drilling a prospect well without first obtaining a permit issued under
the authority of the State Geologist and without complying with the
conditions of such permit.

(2) An application to drill prospect wells shall contain such
information as the State Department of Geology and Mineral Industries may
require, and shall be accompanied by a nonrefundable fee set by the
governing board of the department but not to exceed $250 to cover all
prospect wells included within the application. A permit shall remain
valid for one year from the date it is issued.

(3) An unused permit may be extended by the State Geologist for a
reasonable period not to exceed one year beyond the initial one-year
period, upon receipt of a written request from the permittee before the
expiration date of the permit. The request shall be accompanied by a
nonrefundable fee set by the board not to exceed $250.

(4) The permittee shall provide an annual nonrefundable fee set by
the board not to exceed $500 on or before the anniversary of the issuance
date of each active permit.

(5) All moneys paid to the department under this section shall be
deposited with the State Treasurer and are continuously appropriated to
the department for the administration of chapter 552, Oregon Laws 1975.
[1975 c.552 §4a; 1991 c.526 §2](1) Upon receipt of
an application to drill prospect wells, the State Geologist shall
circulate copies of the application to the Water Resources Director, the
Director of the Department of Environmental Quality, the Director of the
Department of Land Conservation and Development, and the Director of the
Department of State Lands.

(2) Any public agency desiring to suggest conditions under which a
permit should be granted shall provide such information to the State
Department of Geology and Mineral Industries within 15 days of receipt of
the copy of the application.

(3) Except as provided in ORS 522.075, within 30 days of receipt of
an application to drill prospect wells, the State Geologist shall grant a
permit to drill, subject to such conditions as the State Geologist may
impose. Included among the conditions shall be provision for the proper
and safe abandonment of each prospect well. [1975 c.552 §4b] (1) No
permit for prospect wells shall be granted until the applicant has filed
with the State Department of Geology and Mineral Industries a bond or
alternative form of financial security acceptable to the department in
the sum established by rule by the governing board of the department. The
amount of the bond or security shall be a sum of not less than $10,000
for each hole to be drilled or a blanket bond in the amount of not less
than $50,000 for all prospect wells which are included within the
application and to be drilled by the applicant.

(2) The bond or alternative form of financial security shall be
conditioned upon compliance with the requirements of this chapter and
rules adopted and orders issued pursuant to this chapter and shall secure
the state against all losses, charges and expenses, including court costs
and attorney fees, incurred by it in obtaining such compliance.

(3) With the consent of the department, any bond or acceptable
alternative form of financial security submitted as required by this
section may be terminated or canceled. However, the department shall not
consent to the termination or cancellation of any bond or security until
the prospect wells covered by such bond or security have been properly
and safely abandoned pursuant to the abandonment plan required by the
permit or another bond or security for the prospect wells has been
submitted and approved by the department.

(4) For those applications concerning prospect wells on federal
lands, the department may waive the requirements of subsections (1) to
(3) of this section upon receipt of suitable proof of compliance by the
applicant with federal bond requirements which would, in the opinion of
the department, be unnecessarily duplicated by the requirements of this
section. [1975 c.552 §4c; 1977 c.87 §1; 1979 c.163 §2; 1995 c.146 §1] Upon
completion of all drilling and testing undertaken pursuant to an
application to drill prospect wells, the applicant shall file with the
State Geologist a report certifying the completion of the abandonment
plan required by the permit. [1975 c.552 §4d]GEOTHERMAL WELLS (1) No person shall engage in
the drilling or operating of any geothermal well without first obtaining
a permit issued under the authority of the State Geologist, and without
complying with the conditions of such permit.

(2) An application for a permit shall contain:

(a) The location and elevation of the floor of the proposed derrick.

(b) The number or other designation approved by the State
Department of Geology and Mineral Industries by which the well shall be
known.

(c) The applicant’s estimate of the depths to be drilled.

(d) The nature and character of the geothermal resource sought.

(e) Such other information as the governing board of the department
by rule may require.

(3) An application for a permit shall be accompanied by a
nonrefundable fee set by the board not to exceed $250.

(4) The permittee shall provide an annual nonrefundable fee set by
the board not to exceed $500 on or before the anniversary of the issuance
date of each active permit.

(5) All fees collected by the department under this section shall
be deposited with the State Treasurer and are continuously appropriated
to the department for the administration of chapter 552, Oregon Laws
1975. [1975 c.552 §5; 1977 c.87 §2; 1991 c.526 §3]Note: Legislative Counsel has substituted “chapter 552, Oregon Laws
1975,” for the words “this Act” in sections 5 and 7, chapter 552, Oregon
Laws 1975, compiled as 522.115 and 522.135. Specific ORS references have
not been substituted pursuant to 173.160. These sections may be
determined by referring to the 1975 Comparative Section Table located in
Volume 20 of ORS.(1) Upon receipt of an application for a permit to
drill or operate a geothermal well, the State Department of Geology and
Mineral Industries shall circulate copies of the application to the Water
Resources Director, the State Fish and Wildlife Director, the Director of
the Department of Environmental Quality, the State Parks and Recreation
Director, the Director of the Department of Land Conservation and
Development, the Director of the State Department of Energy, the Director
of the Department of State Lands and the governing body of the county and
the geothermal heating district in which the well will be located.

(2) Any public agency desiring to suggest conditions under which a
permit should be granted shall provide such information to the department
within 30 days of receipt of the copy of the application. [1975 c.552 §6;
1981 c.694 §5; 1989 c.904 §66](1) Within 45 days after
receipt of the application, the State Geologist shall by order issue,
deny, suspend, modify, revoke or not renew a permit pursuant to this
chapter and ORS chapter 183 except that appeal of any order issued
pursuant to this section shall be made to the governing board of the
State Department of Geology and Mineral Industries before any appeal
under ORS 183.480 is allowed.

(2) The State Geologist may issue the permit if, after receipt of
comments from the agencies referred to in ORS 522.125, the State
Geologist determines that issuance thereof would be consistent with the
purposes set forth in ORS 468A.010, 468B.015 and 537.525, rules adopted
pursuant to ORS 468B.030, and the purposes of this chapter.

(3) If the State Geologist issues a permit pursuant to this
section, the State Geologist shall impose such conditions as the State
Geologist considers necessary to carry out the purposes set forth in ORS
468A.010, 468B.015 and 537.525, rules adopted pursuant to ORS 468B.030,
and the purposes of this chapter. The State Geologist shall include in
the permit a statement that issuance thereof does not relieve any person
from any obligation to obtain a permit under ORS 468B.030 or 468B.035.

(4) The State Geologist shall incorporate into the permit
requirements:

(a) Any conditions made by the Water Resources Director necessary
to comply with the purposes set forth in ORS 537.525; and

(b) Any conditions made by the Department of Environmental Quality
necessary to comply with the purposes set forth in ORS 468A.010 and
468B.015.

(5) A drilling, redrilling or deepening operation must begin within
one year after the date of permit issuance or the permit shall expire.
However, the State Geologist may extend the unused permit for a
reasonable period not to exceed one year beyond the initial one-year
period upon receipt of a written request from the permittee before the
expiration date of the permit. The request shall be accompanied by a
nonrefundable fee set by the board not to exceed $250.

(6) Nothing in chapter 552, Oregon Laws 1975, shall be construed to
excuse an operator of a geothermal well from complying with the
provisions of the Federal Water Pollution Control Act amendments of 1972
(Public Law 92-500) or ORS 468B.035 or to dilute the authority of the
Department of Environmental Quality to issue National Pollution Discharge
Elimination Systems Permits.

(7) All fees collected by the department under this section shall
be deposited with the State Treasurer and are continuously appropriated
to the department for the administration of chapter 552, Oregon Laws
1975. [1975 c.552 §7; 1981 c.694 §6; 1991 c.526 §4]Note: See note under 522.115.
(1) Except as waived by rule of the governing board of the State
Department of Geology and Mineral Industries, no permit shall be granted
until:

(a) The applicant has filed with the department a bond or security
acceptable to the department in the sum established by rule by the board.
The amount of the bond or security shall be a sum of not less than
$25,000 for each well to be drilled; or

(b) The applicant to drill more than one geothermal well has filed
with the department a bond or acceptable alternative form of financial
security in the sum established by rule by the board. The amount of the
bond or security shall be a sum of not less than $150,000 for all wells
to be drilled.

(2) The bond or acceptable alternative form of financial security
shall be conditioned upon compliance with the requirements of this
chapter and rules adopted and orders issued pursuant to this chapter and
shall secure the state against all losses, charges and expenses,
including court costs and attorney fees, incurred by it in obtaining such
compliance.

(3) With the consent of the department, any bond or acceptable
alternative form of financial security acceptable to the department
submitted as required by this section may be terminated or canceled.
However, the department shall not consent to the termination or
cancellation of any bond or security until each geothermal well covered
by such bond or security has been:

(a) Lawfully abandoned as a dry hole; or

(b) Properly completed, has ceased production and been lawfully
abandoned.

(4) For those applications concerning geothermal wells on federal
lands, the department may waive the requirements of subsections (1) to
(3) of this section upon receipt of suitable proof of compliance by the
applicant with federal bond requirements which would, in the opinion of
the department, be unnecessarily duplicated by the requirements of this
section. [1975 c.552 §8; 1977 c.87 §3; 1981 c.694 §7; 1995 c.146 §2](1) In addition to any
other liability of the operator of a geothermal well, the operator shall
be liable to any person or public agency that sustains damages from
failure of the operator to comply with a condition in a permit requiring
the operator to provide for the protection of ground water in the area
affected by the well.

(2) The governing board of the State Department of Geology and
Mineral Industries shall adopt by rule standards for blowout prevention,
equipment and casing design and removal, and any other procedures
necessary to shut out detrimental substances from strata containing
ground or surface water usable for beneficial purposes. [1975 c.552 §9](1) The location, number or designation specified for any
geothermal well in a permit issued pursuant to ORS 522.135 shall not be
changed without first obtaining written consent from the State Department
of Geology and Mineral Industries.

(2) No operator shall alter in any manner the casing of a
geothermal well without notifying the department and obtaining its
approval. [1975 c.552 §10](1) No person shall abandon a geothermal well without
first obtaining approval of the State Department of Geology and Mineral
Industries.

(2) A geothermal well shall be considered lawfully abandoned when
the operator has conformed to ORS 522.245 and to rules adopted by the
governing board of the department designed to:

(a) Protect underground and surface water usable for beneficial
purposes from pollution resulting from infiltration or addition of any
deleterious substance;

(b) Prevent the escape of all fluids to the surface;

(c) Close the surface aperture of the well; and

(d) Remove all surface equipment except that necessary to maintain
permanent closure of the well.

(3) When the operator has violated subsection (1) or (2) of this
section or ORS 522.225, or when the department has issued a written
disapproval of abandonment, the board may proceed against the operator
and surety of the operator as provided for in ORS 522.145 and may bring
suit pursuant to ORS 522.810. [1975 c.552 §11; 1981 c.694 §8] Except as excluded by
rule adopted by the governing board of the State Department of Geology
and Mineral Industries, the operator of any completed geothermal well
shall file with the department a monthly statement of the geothermal
resources production from such well during the preceding calendar month.
[1975 c.552 §14](1) Except as
excluded from the provisions of this section by rule of the governing
board of the State Department of Geology and Mineral Industries, any
prospective operator of a geothermal well shall notify the department in
such form as the department may direct of the purchase, assignment,
transfer, conveyance or exchange of such well within 15 days of the
purchase and shall accompany such notice with an application for transfer
of the permit for the particular well. The fee for transfer of a permit
is $25.

(2) Any buyer of land on which a geothermal well is located shall
notify the department of the purchase, assignment, transfer, conveyance
or exchange of the land upon which such well is situated within 15 days
of such purchase. [1975 c.552 §15](1) No operator shall suspend drilling or
operation of a geothermal well without obtaining permission from the
State Department of Geology and Mineral Industries.

(2) The department may authorize an operator to suspend for a
specific period operations or remove equipment from an uncompleted
geothermal well upon such terms as the department may specify, upon
written application of the operator and an affidavit showing good cause
therefor.

(3) Within a period of six months from the ending date specified
for such suspension, the operator may make written application for an
extension of suspension, and file it with an affidavit showing good cause
for such an extension. Upon a finding that the extension is merited, the
governing board of the department may extend the suspension for an
additional specific period.

(4) If, after suspension, operations are not resumed by the
operator within six months from the ending date specified for the
suspension or extension thereof, an intention to abandon and unlawful
abandonment shall be presumed.

(5) Whenever an operator whose operations have been suspended fails
to comply with such terms as the department may specify in its
authorization, the geothermal well shall be presumed unlawfully
abandoned. A well shall also be deemed unlawfully abandoned, if, without
notice to the department, any drilling or producing equipment is removed.

(6) An unlawful abandonment shall be declared by order of the
board, and written notice thereof shall be mailed by registered mail or
by certified mail with return receipt both to such operator at the
last-known post-office address of the operator, to the registered agent
of the operator, if any, and to the operator’s sureties.

(7) After declaration of unlawful abandonment, the board may
proceed against the operator and the surety of the operator as provided
for in ORS 522.145 and may bring suit pursuant to ORS 522.810. [1975
c.552 §16; 1981 c.694 §9; 1991 c.249 §39] (1) Before commencing any
operation to abandon a geothermal well, the operator shall give notice to
the State Department of Geology and Mineral Industries of the intention
to abandon the well and the date upon which the work of abandonment will
begin.

(2) Such notice shall be given at least 24 hours before the
commencement of abandonment operations and shall indicate:

(a) The condition of the well;

(b) The proposed method of the abandonment operation; and

(c) Any additional information that may be required by the
department. [1975 c.552 §17] Before the proposed
date upon which the work of abandonment will begin, the State Department
of Geology and Mineral Industries shall furnish the operator with:

(1) Approval to commence the abandonment operation;

(2) Conditional approval to commence the abandonment operation,
stating what specific work or tests will be necessary before approval of
the abandonment operation will be given; or

(3) A report stating what specific information is required to be
furnished by the operator to the department before the department may
take action upon the proposed abandonment operation. [1975 c.552 §18](1) A
representative of the State Department of Geology and Mineral Industries
may be present during any abandonment operation. If the representative
determines that the abandonment is satisfactory, the representative shall
approve the abandonment of the well.

(2) Within 30 days after the completion of abandonment of any
geothermal well, the operator of the well shall make a written report of
all work done with respect to the abandonment. Within 10 days after the
receipt of such report, the department shall furnish the operator with a
written final approval of abandonment, or a written disapproval of
abandonment setting forth the conditions upon which the disapproval is
based.

(3) Failure to abandon in accordance with the approved method of
abandonment, failure to submit to the department any notice or report
required by this chapter, or failure to furnish the department with any
required information shall constitute sufficient grounds for disapproval
of the abandonment of such well.

(4) When the department has issued a written disapproval of
abandonment, the governing board of the department may proceed against
the operator and the surety of the operator as provided for in ORS
522.145 or may bring suit pursuant to ORS 522.810. [1975 c.552 §19; 1981
c.694 §10]
If interference between an existing geothermal well permitted under this
chapter and an existing water appropriation permitted under ORS chapter
537 is found by either the State Geologist or the Water Resources
Director, the State Geologist and the Water Resources Director shall work
cooperatively to resolve the conflict and develop a cooperative
management program for the area. In determining what action should be
taken, they shall consider the following goals:

(1) Achieving the most beneficial use of the water and heat
resources;

(2) Allowing all existing users of the resources to continue to use
those resources to the greatest extent possible; and

(3) Insuring that the public interest in efficient use of water and
heat resources is protected. [1981 c.589 §8]ADMINISTRATION Subject to policy
direction by the governing board of the State Department of Geology and
Mineral Industries, the State Geologist shall administer this chapter,
the rules and orders made pursuant thereto, and supervise the department
in carrying out the provisions of this chapter. [1975 c.552 §23] In accordance with applicable provisions of ORS
chapter 183, the governing board of the State Department of Geology and
Mineral Industries may make reasonable rules necessary for the
administration of this chapter. [1975 c.552 §22] Whenever
the State Department of Geology and Mineral Industries gives any written
direction concerning any geothermal well and the operator requests in
writing that a final order for purposes of ORS chapter 183 be made, the
department shall, within 15 days after receipt of the notice, deliver
such final written order to the operator. [1975 c.552 §24] (1) The operator of
any geothermal well shall within 15 days from the date of the service of
any order, either comply with the order or file with the State Department
of Geology and Mineral Industries a written statement that the order is
not acceptable, and the reasons therefor, and the statement shall
constitute an appeal from such order to the governing board of the
department.

(2) Any final written order of the board may be appealed in the
manner provided in ORS chapter 183 for appeals from final orders in
contested cases. [1975 c.552 §25]WELL RECORDS
(1) The operator of any geothermal well shall keep, or cause to be kept,
a careful and accurate log, core record and history of the drilling of
the well.

(2) The log referred to in subsection (1) of this section shall
show the character and depth of each formation encountered in the
drilling of the well; the amount, size and weight of casing used; and the
location, depth and temperature of water-bearing strata, including the
temperature, chemical composition and other chemical and physical
characteristics of fluid encountered from time to time, so far as
determined.

(3) The core record referred to in subsection (1) of this section
shall show the depth, character and fluid content of cores obtained, so
far as determined from the study and analysis thereof.

(4) The history referred to in subsection (1) of this section shall
show the location and amount of sidetracked casings, tools or other
material; the depth and quantity of cement in cement plugs; the shots of
dynamite or other explosives used; the results of production and other
tests during drilling operations; and completion data.

(5) The log referred to in subsections (1) and (2) of this section
shall be kept in the local office of the operator and, together with the
tour reports of the operator, shall be subject, during business hours, to
inspection by the governing board of the State Department of Geology and
Mineral Industries, or the department.

(6) The operator of any geothermal well shall, in addition to
furnishing the log, records, and tests required by this section, collect
representative drill cuttings. The operator shall additionally, in the
event cores are taken, collect representative core samples. The drill
cuttings and core samples shall be filed with the department promptly
upon completion or upon its written request, and upon the abandonment or
upon suspension of operations for a period of at least six months. [1975
c.552 §26; 1977 c.87 §4]
(1) Each operator of any geothermal well or the designated agent of the
operator shall file with the State Department of Geology and Mineral
Industries a copy of the log, history and core record, or any portion
thereof, promptly upon completion, or upon the written request of the
department at any time after the commencement of the work of drilling any
geothermal well, and upon the abandonment or upon suspension of
operations for a period of at least six months.

(2) For a period of four years after the receipt of any log,
history, core record, or any portion thereof, such record shall be exempt
from disclosure as a trade secret pursuant to ORS 192.501 unless the
operator gives approval to release the data. [1975 c.552 §27]UNITIZATION OF GEOTHERMAL RESOURCE AREA (1) When
two or more separately owned tracts of land are within an area under
which a reservoir is located or reasonably believed to be located, or
when there are separately owned interests in all or part of such an area,
the governing board of the State Department of Geology and Mineral
Industries, upon its own motion may or upon the application of an
interested person or state or local governmental governing body, special
district or agency, shall review the need for unitization of the area.
The board by rule or order may require the development of a unit
agreement for the geothermal resource area if it finds:

(a) Unitized management, operation and development of the
geothermal resources in a reservoir is necessary to increase the ultimate
recovery of the resources;

(b) The application of unitized methods of operation will prevent
waste and aid efficient production and utilization of the resource; or

(c) Unitization and the unitized method of operation are in the
public interest and reasonably necessary to protect the correlative
rights of owners.

(2) When the board requires the development of a unit agreement
under this section, it shall encourage the development of a voluntary
agreement between the affected parties. In the absence of a voluntary
agreement, the board shall itself develop or cause to be developed a unit
agreement that satisfies the provisions of ORS 273.775, 308A.050 to
308A.128, 522.005, 522.015, 522.405 to 522.545, 522.815 and 522.990. In
adopting a rule or entering an order for a unit agreement, the board
shall consider any plant dedicated area agreement in effect and shall not
contravene or interfere with that agreement unless it finds that a term
or condition of that agreement violates the policies stated in ORS
522.015. The board shall require the development of the resource in
accordance with a proposed unit agreement if it finds that the agreement
conforms with the provisions of ORS 273.775, 308A.050 to 308A.128,
522.005, 522.015, 522.405 to 522.545, 522.815 and 522.990.

(3) The development of a unit agreement under subsections (1) and
(2) of this section shall be conducted as a rulemaking proceeding in
accordance with ORS chapter 183 unless an interested party requests that
it be conducted as a contested case in accordance with ORS chapter 183.
In either event, notice shall be given in accordance with the applicable
provisions of ORS chapter 183.

(4) As used in this section, “plant dedicated area agreement” means
a contractual relationship in geothermal energy development between a
geothermal resource owner and a customer which makes a specific surface
area and related resource base available exclusively to that customer.
[1981 c.588 §8; 1999 c.314 §75] A voluntary or board-sponsored unit
agreement developed in response to a rule adopted or an order issued
under ORS 522.405 shall provide a unit operation plan that includes:

(1) A description of the geothermal reservoir and the overlaying
land to be operated as a unit.

(2) A statement of the nature of the operations contemplated.

(3) A provision for credits and charges to be made in the
adjustment among the owners in a unit area for their respective
investments in geothermal wells, prospect wells, machinery, materials and
equipment used in the unit operation.

(4) The division of interest or a formula for apportionment of unit
production among the separately owned tracts within the unit area which
reasonably permits a person or state or local governing body, special
district or agency otherwise entitled to share in or benefit by
production from a tract to receive an equitable and reasonable share of
the unit production or other benefit. An equitable and reasonable share
of unit production is measured by the proportion the value of the
separately owned tract for geothermal resources recovery bears to the
value of the unit for that purpose, taking acreage into account.

(5) Provisions which state how the costs will be paid, how unit
production is to be measured and when, how and by whom unit production is
to be allocated. The provision shall provide that unit production due to
an owner who does not pay that owner’s share of the cost of unit
operation or that owner’s interest may be sold and the proceeds applied
to the cost.

(6) A provision, if necessary, for making financing available to
any person or state or local governing body, special district or agency
that wishes to obtain financing. The provision shall allow a reasonable
interest charge for the service payable out of that respective share of
production.

(7) A provision for the supervision and conduct of the unit
operation. Each person or state or local governing body, special district
or agency shall have a vote on the provision with a weight corresponding
to the percentage of the cost of unit operation chargeable against that
respective interest.

(8) The time when the unit operation shall begin and the manner and
circumstances under which the unit operation shall terminate.

(9) Provisions, if necessary, for the protection of preexisting
water users within the unit area and for administration of future water
development from the reservoir covered by the unit agreement. [1981 c.588
§9] Any
rule or order of the governing board of the State Department of Geology
and Mineral Industries providing for the unit operation of a geothermal
resource area may include provisions for:

(1) Division of a reservoir into zones;

(2) Establishment of spacing units, including a description of
their location, size and shape;

(3) The integration of separately owned tracts or interests within
a spacing unit, the development and operation of the spacing unit and the
sharing of production;

(4) The protection of existing and future beneficial uses of water;

(5) Maintenance of the renewability of geothermal resources and any
other natural resources; and

(6) Any additional provisions the board considers necessary for
carrying out the provisions of this chapter or for protection of the
public health, safety and welfare. [1981 c.588 §10] Any rule
adopted or order entered under ORS 522.405 shall supersede any right or
privilege previously granted by the governing board of the State
Department of Geology and Mineral Industries to the same person or state
or local governing body, special district or agency with respect to the
reservoir. [1981 c.588 §11](1) No rule or order of the governing board of the State
Department of Geology and Mineral Industries which creates a unit and
prescribes a unitization plan and no applicable unit agreement shall be
effective unless the plan of unit operation required by the board under
ORS 522.405 has been approved in writing by:

(a) The operators who will be required to pay under the board’s
rule or order at least 75 percent of the unit operation costs; and

(b) The persons or state or local governing body, special district
or agency that, at the time of the board rule or order, own record legal
title to 75 percent of the royalties payable with respect to the
geothermal resource produced from the unit area.

(2) If the royalty owners who own the required percentage interest
in the unit area and the operators have not approved the unitization plan
within six months of the date on which the rule or order creating the
unit is adopted or entered, that rule or order shall become ineffective
and shall be considered to have been repealed or revoked by the board.
(1) Any person
or state or local governing body, special district or agency with an
interest in geothermal resources within an area to be designated as a
unit that is adversely affected by any rule or order of the governing
board of the State Department of Geology and Mineral Industries may apply
to the board for a rehearing within 30 days after the adoption of the
rule or entry of the order. The board shall decide within 45 days after
the filing date of the rule or order whether to grant a rehearing. If
granted, the rehearing shall be held without undue delay. Failure to act
within the 45-day period constitutes approval of the rehearing request.

(2) Any person or state or local governing body, special district
or agency that holds a working interest in geothermal resources in a
designated or proposed unit area that is adversely affected by any rule
promulgated or order entered by the board may obtain judicial review of
the rule or order pursuant to ORS chapter 183. [1981 c.588 §13] As part of a proposed rule or
order designating a unit area and approving a unitization plan or as part
of a unit agreement, the working interest owners under the agreement,
within the time specified by the governing board of the State Department
of Geology and Mineral Industries, shall appoint the unit operator. If
the working interest owners do not make the appointment within the
specified time, the board shall appoint the unit operator. [1981 c.588
§14] (1)
Any disagreement with respect to the unit operation between persons or
between persons and state or local governing bodies, special districts or
agencies owning any interest in the geothermal resources in a unit area,
or between persons or state and local governing bodies, special districts
or agencies owning an interest in geothermal resources in a unit area and
a unit operator, including a dispute over replacement of a unit operator,
may be submitted to the governing board of the State Department of
Geology and Mineral Industries for its review and decision.

(2) The board decision under this section may be appealed to the
Court of Appeals. The appeal must be filed within 60 days of the date of
the board’s decision. [1981 c.588 §15] Subject to the same
conditions and limitations provided with respect to the creation of a
unit, the following may occur:

(1) A unit area may be enlarged to include adjoining portions of
the same geothermal resource area, including another unit area, and a new
unit created for the unitized management, operation and development of
the enlarged unit area; or

(2) The unitization plan may be otherwise amended, including, but
not limited to, an amendment reducing unit area size. [1981 c.588 §16] Any operation
on any portion of the unit area, including, but not limited to, the
drilling or operation of a well, is considered for all purposes the
conduct of the same operation on the whole unit area. The portion of unit
production allocated to a separately owned tract in a unit area is
considered for all purposes to actually have been produced from a well
drilled upon that tract. An operation conducted pursuant to a board rule
adopted or order issued under ORS 522.405 constitutes a fulfillment of
all express or implied obligations under each lease or contract covering
lands in the unit area. [1981 c. 588 §17]
(1) The operation of a geothermal well in a unit area by anyone other
than by a person or state or local governing body, special district or
agency acting under the unit’s authority shall be unlawful. That
operation is prohibited from the effective date of the board rule or
order creating the unit and prescribing the unitization plan or the unit
agreement, except in the manner and to the extent provided in the
unitization plan or agreement.

(2) The provisions of ORS 273.775, 308A.050 to 308A.128, 522.005,
522.015, 522.405 to 522.545, 522.815 and 522.990 shall not affect the
ability of a ground water user to exercise a water right that existed
before the initiation of a unit agreement. [1981 c.588 §18; 1999 c.314
§76](1) A unit agreement or unitization plan under a board rule
adopted or order issued pursuant to ORS 522.405 shall not be held or
construed to violate ORS 59.005 to 59.451, 59.660 to 59.830, 59.991 and
59.995 or any state statute relating to trusts, monopolies or contracts
and combinations in restraint of trade if the board has made a finding
that the agreement is in the public interest for the protection of
correlative rights and is necessary to enhance recovery of geothermal
resources or to prevent waste.

(2) Any voluntary unit agreement or plan for unitization between
owners, holders of working interests and holders of royalty interests for
the exploration, development and operation of a unit area shall not be
held or construed to violate ORS 59.005 to 59.451, 59.660 to 59.830,
59.991 and 59.995 or any state statute relating to trusts, monopolies or
contracts and combinations in restraint of trade if the agreement is
approved by the board as being in the public interest for the protection
of correlative rights and necessary to enhance recovery of geothermal
resources or to prevent waste.

(3) A voluntary agreement may be submitted to the board for
approval as being in the public interest for the protection of
correlative rights and necessary to enhance recovery of geothermal
resources or to prevent waste. Board approval constitutes a complete
defense to any proceeding charging violation of ORS 59.005 to 59.451,
59.660 to 59.830, 59.991 and 59.995 or of any state statute relating to
trusts or monopolies on account of operations conducted pursuant to the
agreement.

(4) The failure to submit a voluntary agreement for board approval
does not constitute evidence that the agreement or operation violates ORS
59.005 to 59.451, 59.660 to 59.830, 59.991 and 59.995 or any state
statute relating to trusts or monopolies. [1981 c.588 §19] Board
authority applies to all private, municipal, state and federal land in
the state which is subject to the state’s regulatory authority. When land
subject to federal jurisdiction is committed to a unit agreement or
cooperative agreement the board may suspend the operation of this chapter
or any provision of this chapter if:

(1) The unit operation is regulated by the United States; and

(2) The unit agreement prevents waste and encourages maximum
economic development of the resource. [1981 c.588 §20] (1) The governing board of the State
Department of Geology and Mineral Industries shall establish reasonable
fees by rule pursuant to ORS chapter 183 for the purpose of the
development and administration of a unit agreement to be paid by all
persons or state or local governing bodies, special districts or agencies
with a royalty interest in that unitized development. The fee schedule
shall recognize the reduced workload involved in review of a voluntary
unit agreement that complies with this chapter.

(2) When a person or state or local governing body, special
district or agency with a royalty interest fails to pay a fee imposed by
the board under ORS 522.545 or this section, the board may require that
the fee be paid from the proceeds of the sale of the unit production
attributable to that interest. [1981 c.588 §21] The governing board of the State
Department of Geology and Mineral Industries may make, in compliance with
ORS chapter 183, rules and orders for the following purposes:

(1) To review and enforce voluntary unit agreements governing
production of geothermal resources in a manner that is consistent with
the provisions of this chapter.

(2) To provide application forms and procedures to enable a person
to request the board to initiate a unit agreement.

(3) To develop and enforce, when necessary, unit agreements
satisfying the requirements of this chapter.

(4) To settle disagreements between the parties to a unit agreement
over unit operation.

(5) To change the boundaries of a unit area.

(6) To prevent the drilling and operation of geothermal wells and
the production of geothermal resources in a manner that causes injury to
neighboring leaseholds or property.

(7) To levy fees on any operator, person, state or local governing
body, special district or agency that holds a royalty interest in a unit
area to cover reasonable costs associated with the development and
administration of a unit agreement. [1981 c.588 §22]ENFORCEMENT Whenever it appears that any
person is violating or threatening to violate any provision of this
chapter or any rule or order of the governing board of the State
Department of Geology and Mineral Industries made thereunder, or is
threatening to or committing waste, the board may bring suit against such
person in the circuit court of any county where the violation or waste
occurs or is threatened, to restrain such person from continuing such
violation or waste. In any such suit, the court shall have jurisdiction
to grant to the board, without bond or other undertaking, such temporary
restraining orders or final prohibitory and mandatory injunctions as the
facts may warrant, including any such orders restraining the movement,
disposition or waste of geothermal resources. [1971 c.776 §41; 1973 c.388
§7; 1975 c.552 §29] (1) In accordance
with the rulemaking provisions of ORS chapter 183, the governing board of
the State Department of Geology and Mineral Industries may adopt rules
necessary to conserve geothermal resources or other natural resources, or
to protect the environment, the correlative rights of any person having
an ownership interest in the affected land or resource, or beneficial
uses of water, or to accomplish the efficient and economical development
of a geothermal reservoir. The rules shall include a description of the
geothermal reservoir and the overlying land and may also include
provisions for the following:

(a) Division of a geothermal reservoir into zones;

(b) Establishment of spacing units including a description of the
location, size and shape of such spacing units;

(c) The integration of separately owned tracts or interests within
a spacing unit for the development and operation of the spacing unit and
the sharing of production therefrom;

(d) The protection of existing and future beneficial uses of water;

(e) Maintaining the renewability of geothermal resources and any
other natural resources; and

(f) Any additional provisions the board deems necessary for
carrying out the provisions of this chapter or for protecting the public
health, safety and welfare.

(2) Any rule adopted under this section may in the board’s
discretion supersede any right or privilege previously granted by or
previously entered by the board with respect to such reservoir and may be
amended in accordance with the rulemaking provisions of ORS chapter 183
as appears necessary to the board to further the policy stated in ORS
522.015.

(3) Any proceeding under this section shall be conducted as a
rulemaking proceeding in accordance with ORS chapter 183 unless an
interested party requests that it be conducted as a contested case in
accordance with ORS chapter 183. In either event, notice shall be given
in accordance with the requirements of ORS chapter 183. Notice shall
always be given to the following persons:

(a) Any operator who has a drilling permit issued pursuant to ORS
522.135 or has a legal right to operate a completed geothermal well in
the geothermal reservoir; and

(b) Any person who has an ownership interest in the geothermal
reservoir. [1975 c.552 §43; 1981 c.588 §5; 1981 c.694 §11]PROHIBITED ACTS No person shall knowingly
aid or abet any other person in the violation of any provision of this
chapter or of any rule or order of the governing board of the State
Department of Geology and Mineral Industries made thereunder. [1971 c.776
§40; 1975 c.552 §30]No person shall:

(1) Make or cause to be made any false entry or statement in a
report, record, log, account or other writing required by this chapter or
any rule adopted pursuant thereto;

(2) Omit or cause to be omitted from any such report, record, log,
account or writing, full, true and correct entries as required by this
chapter or any rule or order adopted pursuant thereto;

(3) Destroy, mutilate, alter or falsify any such report, record,
log, account or writing; or

(4) Remove from this state the original copy of any such report,
record, log, account or writing before an abandonment has been approved
pursuant to ORS 522.245 (2). [1975 c.552 §28]PENALTIESSubject to ORS 153.022, violation of any
provision of this chapter or of any rule or order of the governing board
of the State Department of Geology and Mineral Industries made
thereunder, excluding ORS 522.405 to 522.545 and any rule promulgated
thereunder, is punishable, upon conviction, by a fine of not more than
$2,500 or by imprisonment in the county jail for not more than six
months, or both. [1971 c.776 §42; 1975 c.552 §31; 1981 c.588 §6; 1999
c.1051 §316]

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