Gov. Jared Polis visited Colorado Springs Tuesday to sign a bill aimed at bolstering the state's geothermal energy production.
Polis signed House Bill 1165, sponsored by Reps. Amy Paschal, D-Colorado Springs, and Matt Soper, R-Delta, and Sens. Cleave Simpson, R-Alamosa, and Cathy Kipp, D-Fort Collins, creates the geologic storage stewardship enterprise in the Department of Natural Resources. The enterprise will manage and fund the oversight of underground "geologic storage sites," where carbon dioxide is injected and stored in rock formations. The process aims to reduce greenhouse gas emissions by trapping carbon dioxide underground, rather than releasing it into the atmosphere.
The bill requires facility operators to pay annual stewardship fees based on CO2 volumes and releases operators from any regulatory liability associated with the continued storage of CO2. It also updates several laws regarding the administration of underground geothermal resources and exempts certain facilities from needing a well permit from the state engineer.
"Colorado's abundant geothermal energy-the heat beneath our feet-can reduce heating and energy costs and save Coloradans and businesses money," said Paschal. "This bipartisan law will boost geothermal energy production while establishing strong protections for geologic carbon storage facilities. We're taking steps today to bring low-cost renewable energy sources to market in Colorado to save consumers and businesses money on energy costs."
Geothermal energy uses heat extracted from water and steam reservoirs in the Earth's crust to create power and is considered a renewable energy source. In absolute terms, the U.S. is among its biggest producers, although 0.4% of the country's electricity is generated by geothermal energy.
In Colorado, places like Pagosa Springs have been using geothermal heating for about half a century in a number of ways, such as heating buildings and melting snow on sidewalks. The state is also home to over 30 hot springs resorts.
While geothermal energy can cost around $70 per megawatt hour, twice the cost of solar energy, it's cheaper in the long run because it can be generated 24/7. That's cheaper than coal, gas and nuclear, experts said.
Given the limitations of solar and wind energy, that matters to utilities looking for more reliable and cheaper energy sources.
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Geothermal has been a success story in both urban and rural settings. It already provides a significant share of electricity demand in Iceland, El Salvador, New Zealand, Kenya and the Philippines, and meets more than 90% of the heating demand in Iceland, no small feat where the average summer temperatures rarely exceed 60 degrees and winters seldom break 32 degrees.
Utilities around the state have expressed concerns about their ability to reach the governor's goal of 100% clean energy by 2050. In February, Colorado Springs Utilities asked the state to give them more options to meet those goals, saying it would not be able to achieve them with wind and solar alone.
"We will look at everything," Steve Berry, senior public affairs specialist for Colorado Springs Utilities, said, referring to the company's goal of an integrated resource plan, which means geothermal, nuclear, and hydrogen.
While utilities supported the measure, some environmental groups pointed to issues dealing with carbon sequestration, the process of removing carbon dioxide, a greenhouse gas, from the air and converting it to solid or liquid form.
The Sierra Club's Ramesh Bhatt told the House Energy and Environment that the first commercial underground storage facility, in Decatur, Illinois, is leaking and that the Environmental Protection Agency forced it to stop that carbon injection.
He also said the bill lacks a definition of site closure and what would be required for the operator to avoid liability. The storage fee is also a concern, he said, and since the state is projecting costs for years down the road, there should be an actuarial analyst on the five-member enterprise board envisioned in the bill.
Another environmental organization, Conservation Colorado, originally opposed the bill, but switched to a supportive position following several amendments they believed would help mitigate financial risks.
The bill passed on a 42-22 vote in the House and a 28-6 vote in the Senate. Read more about HB 1165 here.