Title of Regulation: 4VAC25-170. Geothermal Energy Regulations (amending 4VAC25-170-10, 4VAC25-170-30 through 4VAC25-170-80).

Statutory Authority: § 45.1-179.7 of the Code of Virginia.

Public Hearing Information: No public hearings are scheduled.

Public Comment Deadline: July 12, 2017.

Effective Date: July 27, 2017.

Agency Contact: Michael Skiffington, Regulatory Coordinator, Department of Mines, Minerals and Energy, 1100 Bank Street, 8th Floor, Richmond, VA 23219-3402, telephone (804) 692-3212, FAX (804) 692-3237, TTY (800) 828-1120, or email mike.skiffington@dmme.virginia.gov.

Basis: The Department of Mines, Minerals and Energy has the authority to promulgate this regulation under §§ 45.1-161.3 and 45.1-179.6 of the Code of Virginia. Section 45.1-161.3 provides the authority to promulgate regulations necessary or incidental to the performance of duties or execution of powers conferred under Title 45.1 of the Code of Virginia and other relevant chapters, which regulations shall be promulgated by the department, the chief, or the director, as appropriate, in accordance with the provisions of Article 2 (§ 2.2-4006 et seq.) of Chapter 40 of the Administrative Process Act. Section 45.1-179.6 authorizes the department to make and enforce rules, regulations, and orders and do whatever may reasonably be necessary to carry out the provisions of Chapter 15.1 (§ 45.1-179.1 et seq.) of Title 45.1 of the Code of Virginia.

Purpose: The purpose of this action is to ensure that the department's Geothermal Energy Regulations are up to date, consistent with existing law, and easy to understand. The minor amendments to the regulation accomplish these goals. These clarifying amendments will have no direct effect on public health, safety, or welfare.

Rationale for Using Fast-Track Rulemaking Process: The department is using the fast-track rulemaking process because this rulemaking is noncontroversial. The proposed changes bring this regulation in line with the Virginia Gas and Oil Act (§ 45.1-361.1 et seq. of the Code of Virginia) and attendant regulations, as well as allowing for permit applications to be filed electronically. Other amendments are made for clarity.

Substance: Bonding requirements are amended to clarify and match requirements in § 45.1-361.31 of the Virginia Gas and Oil Act. Requirements are also amended to match existing fee structure for gas and oil wells resulting in a fee increase; however, the department has not received any permit applications for geothermal energy. The regulations are also amended to require electronic submissions to the department to reflect Division of Gas and Oil's electronic permitting system and current business practices. Language was amended for clarity, the removal of unnecessary or redundant regulations, and to align with existing Gas and Oil regulations.

Issues: The primary advantage to this action to the Commonwealth is increased efficiency and clarity that result from these largely technical amendments. There is no impact on or advantage to the public. There are no disadvantages to the public or the Commonwealth.

Small Business Impact Review Report of Findings: This fast-track regulatory action serves as the report of the findings of the regulatory review pursuant to § 2.2-4007.1 of the Code of Virginia.

Department of Planning and Budget's Economic Impact Analysis:

Summary of the Proposed Amendments to Regulation. As the result of a periodic review,¹ the Department of Mines, Minerals and Energy (DMME) proposes to: 1) raise the geothermal exploration, production, and injection well permit application fee from $75 to $600, 2) allow professional engineers to do work that currently only registered surveyors may do, 3) increase the required lengths for cement plugs of wells, 4) require that the permanent sign marking the location of each abandoned well include the date the well was plugged, 5) give owners and operators additional time to submit documents and notifications, 6) require that all documents and notifications be submitted electronically, and 7) amend other language for improved clarity. There is no geothermal energy development in the Commonwealth currently.²

Result of Analysis. The benefits likely exceed the costs for all proposed changes.

Estimated Economic Impact

Background

Unlike most energy sources that require heat to be manufactured by humans, geothermal energy utilizes the natural heat of the earth and its tectonic processes. In order to access this energy, wells are drilled into areas below the earth's crust where there are aquifers of already heated water, or steam. As pressure increases deeper into the earth, water is unable to turn into steam as it is heated because there is so much pressure. As a result, 'superheated water' is produced at very deep depths of the earth. As wells are drilled into the rock that houses this water, its steam is converted into mechanical energy for utilization.³

The utilization of energy from geothermal wells releases greenhouse gases trapped in the earth core such as carbon dioxide, hydrogen sulfide, methane, and ammonia.⁴ These emissions are lower than those associated with the use of fossil fuels, for which the adoption of geothermal energy sources is considered to have the potential to mitigate global warming and have a favorable impact on the environment.⁵ An analysis by the Argonne National Laboratory concluded that geothermal waters pose a large potential risk to water quality, if released into the environment, due to high concentrations of toxics including antimony, arsenic, lead, and mercury, but that the risk of release can be virtually eliminated through proper design and engineering controls.⁶

Application Fee

DMME proposes to raise the geothermal well permit application fee (currently $75) to match the $600 fee charged for oil and gas well permit applications. Unlike for oil and gas, the agency has never received a permit application for geothermal energy. Thus the cost in terms of staff time of processing a geothermal energy well permit application, as well as regulating the industry for environmental protection, would likely be equal or greater per permit processed than for oil and gas staff. Raising the geothermal fee to match oil and gas well permit application fee would better reflect the cost incurred.  

There is the possibility that the higher fee might discourage the pursuit of some geothermal energy drilling for some potentially marginally profitable wells; but given the overall cost (at least tens of thousands of dollars) of drilling, the higher fee would not likely be the deciding factor in most cases. Additionally, the benefit of helping ensure adequate protection of the water supply and air quality through paying for DMME staff to check that proper procedures and designs are followed likely exceeds the cost.

Surveying and Plat Certification

Under the current regulation, the location of production and injection wells must be surveyed and the plat certified by a registered surveyor. DMME proposes to allow professional engineers (PEs) to do this work as well. PEs are allowed to do such work for gas and oil permit applications under the Virginia Gas and Oil Board Regulations. Allowing PEs to do this work may be beneficial in that it expands the pool of qualified people who may be available. This could perhaps save time and cost for a firm seeking to extract geothermal energy.

Cement Plug Lengths

The regulation requires that any drilling well completed as a dry hole from which the rig is to be removed be cemented. This is for environmental protection. As described in the Background section of this document, geothermal waters pose a large potential risk to water quality, if released into the environment, due to high concentrations of toxics including antimony, arsenic, lead, and mercury. The cement plugs help prevent this contamination from occurring from wells that are no longer in use.

Under the current regulation, a cement plug not less than 50 feet in length must be placed immediately above each producing formation; and a plug not less than 20 feet in length must be placed at or near the surface of the ground in each hole. DMME proposes to require that both plug lengths be 100 feet in order to reduce the risk of pollutants entering the water supply. The agency estimates that the additional cost per plug of the longer required lengths would be less than $200 per plug. To the extent that the longer required plugs would significantly improve environmental protection, then the benefits likely exceed the costs of this proposal.

Abandoned Well Signage

The exact location of each abandoned well must be marked by a piece of pipe not less than four inches in diameter securely set in concrete and extending at least four feet above the general ground level. A permanent sign of durable construction must be welded or otherwise permanently attached to the pipe, and shall contain the well identification information. DMME proposes to require that the permanent sign specify the date the well was plugged. This proposal has inconsequential cost and may provide valuable information. Thus it likely produces a net benefit.

Document Submission

Under the current regulation, each well operator, owner, or designated agent, within 30 days after the completion of any well, shall furnish to DMME a copy of the drilling log. The agency proposes to allow up to 90 days for the delivery of drilling log. The extra time may allow potential geothermal well operator and owners to use staff time more efficiently.

Additionally, DMME proposes to require that all documents and notifications be submitted electronically. It is very likely that any potential firm that has the financial wherewithal to invest at least tens of thousands of dollars to pursue geothermal energy would have the capability and preference for electronic submissions. Thus this proposal would likely not have significant impact.

Businesses and Entities Affected. DMME has never received a permit application for geothermal drilling or well construction. The proposed amendments would apply to businesses, which engage in drilling for geothermal resources or construction of a geothermal well in Virginia, or those that operate, own, control or are in possession of any geothermal well.

Localities Particularly Affected. There have been no known geothermal wells in Virginia, and there are no known locations currently considered likely for development.⁷ Thus, there are no localities known to be particularly affected.

Projected Impact on Employment. There is no current employment in the Commonwealth associated with geothermal energy. The proposed amendments are unlikely to significantly affect that.

Effects on the Use and Value of Private Property. The proposed amendments are unlikely to significantly affect the use and value of private property.

Real Estate Development Costs. The higher permit application fee and the increased required lengths for cement plugs would moderately increase the cost of developing land for geothermal energy extraction. The proposal to allow PEs to do surveying and plat certification may moderately reduce such costs.

Small Businesses:

Definition. Pursuant to § 2.2-4007.04 of the Code of Virginia, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

Costs and Other Effects. No small businesses in the Commonwealth currently participate in the geothermal energy industry. The proposals to increase the permit application fee and to increase the required cement plug lengths would moderately increase costs for any potential future businesses that did choose to drill for geothermal energy in Virginia. The proposal to allow PEs to do surveying and the plat certification could moderately reduce costs.

Alternative Method that Minimizes Adverse Impact. There is no alternative method that would minimize the adverse impact while still maintaining the intended level of safety and environmental protection.

Adverse Impacts:

Businesses. No businesses in the Commonwealth currently participate in the geothermal energy industry. The proposals to increase the permit application fee and to increase the required cement plug lengths would moderately increase costs for any potential future businesses that did choose to drill for geothermal energy in Virginia.

Localities. The proposed amendments do not adversely affect localities.

Other Entities. The proposed amendments do not adversely affect other entities.

References:

Axtmann RC. "Environmental Impact of a Geothermal Power Plant." Science. 1975;187(4179):795-803.

Berrizbeitia, Luis D. "Environmental impacts of geothermal energy generation and utilization." Indiana University, 2014.

Clark CE, Harto CB, Sullivan JL, Wang MQ. "Water use in the development and operation of geothermal power plants." Argonne National Laboratory, 2011.

Glassley WE. "Geothermal energy: renewable energy and the environment." Boca Raton: CRC Press; 2010.

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¹See http://townhall.virginia.gov/l/ViewPReview.cfm?PRid=1540

²Source: Department of Mines, Minerals and Energy

³Berrizbeitia, Luis D. "Environmental impacts of geothermal energy generation and utilization.” Indiana University, 2014.

⁴Axtmann RC. “Environmental Impact of a Geothermal Power Plant.” Science. 1975;187(4179):795-

803.

⁵Glassley WE. "Geothermal energy: renewable energy and the environment." Boca Raton: CRC

Press; 2010.

⁶Clark CE, Harto CB, Sullivan JL, Wang MQ. "Water use in the development and operation of geothermal power plants." Argonne National Laboratory, 2011.

⁷Source: Department of Mines, Minerals and Energy

Agency's Response to Economic Impact Analysis: The Department of Mines, Minerals and Energy concurs with the economic impact analysis conducted by the Department of Planning and Budget.

Summary:

The amendments (i) update the bonding requirements for consistency with § 45.1-361.31 of the Code of Virginia, (ii) increase the geothermal exploration, production, and injection well permit application fee from $75 to $600, (iii) allow professional engineers to do work that currently only registered surveyors may do, (iv) increase the required lengths for cement plugs of wells, (v) require that the permanent sign marking the location of each abandoned well include the date the well was plugged, (vi) give owners and operators additional time to submit documents and notifications, and (vii) require that all documents and notifications be submitted electronically.

4VAC25-170-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Bottom hole temperature" means the highest temperature measured in the well or bore hole. It is normally attained directly adjacent to the producing zone, and commonly at or near the bottom of the borehole.

"Casing" means all pipe set in wells.

"Conservation" means the preservation of geothermal resources from loss, waste, or harm.

"Correlative rights" means the mutual right of each overlying owner in a geothermal area to produce without waste a just and equitable share of the geothermal resources. Just and equitable shares shall be apportioned according to a ratio of the overlying acreage in a tract to the total acreage included in the geothermal area.

"Department" means the Virginia Department of Mines, Minerals and Energy.

"Designated agent" means that person appointed by the owner or operator of any geothermal resource well to represent him.

"Director" means the Director of the Department of Mines, Minerals and Energy or his authorized agent.

 "Division director" means the Director of the Division of Gas and Oil, also known as the Gas and Oil Inspector as defined in the Virginia Gas and Oil Act of 1990, Chapter 22.1 (§ 45.1-361.1 et seq.) of Title 45.1 of the Code of Virginia or his authorized agent.

"Drilling log" means the written record progressively describing all strata, water, minerals, geothermal resources, pressures, rate of fill-up, fresh and salt water-bearing horizons and depths, caving strata, casing records and such other information as is usually recorded in the normal procedure of drilling. The term shall also include the downhole geophysical survey records or logs if any are made.

"Exploratory well" means an existing well or a well drilled solely for temperature observation purposes preliminary to filing an application for a production or injection well permit.

"Geothermal area" means the general land area that is underlaid or reasonably appears to be underlaid by geothermal resources in a single reservoir, pool, or other source or interrelated sources, as such area or areas may be from time to time designated by the department.

"Geothermal energy" means the usable energy produced or that can be produced from geothermal resources.

"Geothermal reservoir" means the rock, strata, or fractures within the earth from which natural or injected geothermal fluids are obtained.

"Geothermal resource" means the natural heat of the earth at temperatures 70°F or above with volumetric rates of 100 gallons per minute or greater and the energy, in whatever form, present in, associated with, or created by, or that may be extracted from, that natural heat. This definition does not include ground heat or groundwater resources at lower temperatures and rates that may be used in association with heat pump installations.

"Geothermal waste" means any loss or escape of geothermal energy, including, but not limited to:

1. Underground loss resulting from the inefficient, excessive, or improper use or dissipation of geothermal energy; or the locating, spacing, construction, equipping, operating, or producing of any well in a manner that results, or tends to result, in reducing the quantity of geothermal energy to be recovered from any geothermal area in Virginia; provided, however, that unavoidable dissipation of geothermal energy resulting from oil and gas exploration and production shall not be construed to be geothermal waste.

2. The inefficient above-ground transportation and storage of geothermal energy; and the locating, spacing, equipping, operating, or producing of any well or injection well in a manner causing or tending to cause, unnecessary or excessive surface loss or destruction of geothermal energy;

3. The escape into the open air of steam or hot water in excess of what is reasonably necessary in the efficient development or production of a well.

"Geothermal well" means any well drilled for the discovery or production of geothermal resources, any well reasonably presumed to contain geothermal resources, or any special well, converted producing well, or reactivated or converted abandoned well employed for reinjecting geothermal resources.

"Injection well" means a well drilled or converted for the specific use of injecting waste geothermal fluids back into a geothermal production zone for disposal, reservoir pressure maintenance, or augmentation of reservoir fluids.

"Monitoring well" means a well used to measure the effects of geothermal production on the quantity and quality of a potable groundwater aquifer.

"Operator" means any person drilling, maintaining, operating, producing, or in control of any well, and shall include the owner when any well is operated or has been operated or is about to be operated by or under the direction of the owner.

"Owner" means the overlying property owner or lessee who has the right to drill into, produce, and appropriate from any geothermal area.

"Permit" means a document issued by the department pursuant to this chapter for the construction and operation of any geothermal exploration, production, or injection well.

"Person" means any individual natural person, general or limited partnership, joint venture, association, cooperative organization, corporation whether domestic or foreign, agency or subdivision of this or any other state or the federal government, any municipal or quasi-municipal entity whether or not it is incorporated, receiver, trustee, guardian, executor, administrator, fiduciary, or representative of any kind.

"Production casing" means the main casing string which protects the sidewalls of the well against collapse and conducts geothermal fluid to the surface.

"Production record" means written accounts of a geothermal well's volumetric rate, pressure and temperature, and geothermal fluid quality.

"Sequential utilization" means application of the geothermal resource to a use with the highest heat need and the subsequent channeling of the resource to other uses with lower temperature requirements before injection or disposal of the geothermal fluid.

"Surface casing" (water protection string) means pipe designed to protect the freshwater sands.

"Unitized drilling operation" means the management of separately owned tracts overlying a geothermal area as a single drilling unit.

"Water protection string" means a string of casing designed to protect groundwater-bearing strata.

4VAC25-170-30. Bonds, permits and fees.

A. 1. Before any person shall engage in drilling for geothermal resources or construction of a geothermal well in Virginia, such person shall file with the division director a completion bond with a surety company licensed to do business in the Commonwealth of Virginia in the amount of give bond with surety acceptable to the division director and payable to the Commonwealth. At the election of the permit applicant, a cash bond may be given. The amount of bond required shall be sufficient to cover the costs of properly plugging the well and restoring the site, but in no case shall the amount of bond be less than $10,000 for each exploratory and injection well, and $25,000 for each production well. Blanket bonds of $100,000 may be granted at the discretion of the division director.

2. The return of such bonds shall be conditioned on the following requirements:

a. Compliance with all statutes, rules, and regulations relating to geothermal regulations and the permit.

b. Plugging and abandoning the well as approved by the division director in accordance with 4VAC25-170-80.

3. A land stabilization bond of $1,000 per acre of land disturbed shall be required. Such bond will be released once drilling is completed and the land is reclaimed in accordance with 4VAC25-170-40.

4. Liability under any bond may not be terminated without written approval of the division director.

B. Each exploration, production, and injection well permit application shall be accompanied by payment of a $75 $600 application fee.

1. Applications will not be reviewed until the operator or designated agent submits proof of compliance with all pertinent local ordinances.

Before commencement of exploratory drilling operations on any tract of land, the operator or designated agent shall file an exploration permit application with the department. An accurate map of the proposed wells on an appropriate scale showing adjoining property lines and the proposed locations using the Virginia Coordinate System of 1983 (Chapter 17 (§ 55-287 et seq.) of Title 55 of the Code of Virginia), and the depths and surface elevations shall be filed with the application. The application also shall include an inventory of local water resources in the area of proposed development.

2. Before commencement of production or injection well drilling, an application to produce and inject geothermal fluids shall be filed in the form of a notice of intent to proceed in accordance with the provisions of 4VAC25-170-40.

3. New permit applications must be submitted if, either prior to or during drilling, the operator desires to change the location of a proposed well. If the new location is within the boundaries established by the permit or within an unitized drilling operation, the application may be made orally and the division director may orally authorize the commencement or continuance of drilling operations. Within 10 days after obtaining oral authorization, the operator shall file a new application to drill at the new location. A permit may be issued and the old permit cancelled canceled without payment of additional fee. If the new location is located outside the unitized drilling unit covered by the first permit, no drilling shall be commenced or continued until the new permit is issued.

4. All applications, requests, maps, reports, records, notices, filings, submissions, and other data (including report forms) required by or submitted to the department shall be signed by the owner, operator, or designated agent submitting such materials in electronic form or a format prescribed by the director.

5. The department will act on all permit applications within 30 days of receipt of an application or as soon thereafter as practical.

4VAC25-170-40. Notification of intent to proceed.

The notification of intent to proceed with geothermal production or injection as required by 4VAC25-170-30 must be accompanied by (i) an operations plan, (ii) a geothermal fluid analysis, and (iii) a proposal for injection of spent fluids.

1. The operations plan shall become part of the terms and conditions of any permit that is issued, and the provisions of this plan shall be carried out where applicable in the drilling, production, and abandonment phase of the operation. The department may require any changes in the operations plan necessary to promote geothermal and water resource conservation and management, prevent waste, protect potable groundwater drinking supplies, or protect the environment, including a requirement for injection or unitization. The operations plan shall include the following information:

a. An accurate plat or map, on a scale not smaller than 400 feet to the inch, showing the proposed location using the Virginia Coordinate System of 1983 (Chapter 17 (§ 55-287 et seq.) of Title 55 of the Code of Virginia), and surface elevation of the production and injection wells as determined by survey, the courses and distances of such locations from two permanent points or landmarks on said tract, the well numbers, the name of the owner, the boundaries and acreage of the tract on which the wells are to be drilled, the location of water wells, surface bodies of water, actual or proposed access roads, other production and injection wells on adjoining tracts, the names of the owners of all adjoining tracts and of any other tract within 500 feet of the proposed location, and any building, highway, railroad, stream, oil or gas well, mine openings or workings, or quarry within 500 feet of the proposed location. The location must be surveyed and the plat certified by a professional engineer or registered surveyor and bear his certificate number.

b. A summary geologic report of the area, including depth to proposed reservoir; type of reservoir; anticipated thickness of reservoir; anticipated temperature of the geothermal resource; anticipated porosity, permeability and pressure; geologic structures; and description of overlying formations and aquifers.

c. The method of meeting the guidelines of the Erosion and Sediment Control Regulations as adopted by the Virginia Soil and State Water Conservation Control Board pursuant to §§ 10.1-561 to 10.1-564 § 62.1-44.15:52 of the Code of Virginia.

d. The method of disposing of all drilling muds and fluids, and all cement and other drilling materials from the well site; the proposed method of preventing such muds, fluids, drillings, or materials from seeping into springs, water wells, and surface waters during drilling operations.

e. The method of construction and maintenance of access roads, materials to be used, method to maintain the natural drainage area, and method of directing surface water runoff from disturbed areas around undisturbed areas.

f. The method of removing any rubbish or debris during the drilling, production, and abandonment phases of the project. All waste shall be handled in a manner that prevents fire hazards or the pollution of surface streams and groundwater.

g. The primary and alternative method of spent geothermal fluid disposal. All disposal methods shall be in accordance with state and federal laws for the protection of land and water resources.

h. The methods of monitoring fluid quality, fluid temperature, and volumetric rate of production and injection wells.

i. The method of monitoring potable drinking water aquifers close to production and injection zones.

j. The method of monitoring for land subsidence.

k. The method of plugging and abandoning wells and a plan for reclaiming production and injection well sites.

l. The method of cleaning scale and corrosion in geothermal casing.

m. A description of measures that will be used to minimize any adverse environmental impact of the proposed activities on the area's natural resources, aquatic life, or wildlife.

2. Geothermal fluid analysis.

a. A geothermal fluid analysis shall be submitted with the operations plan, and annually thereafter.

b. Acceptable chemical parameters and sampling methods are set forth in 4VAC25-170-70 B.

3. Proposal for injection of geothermal fluids.

a. Geothermal fluid shall be injected into the same geothermal area from which it was withdrawn in the Atlantic Coastal Plain. Plans for injection wells in this area shall include information on:

(1) Existing reservoir conditions.

(2) Method of injection.

(3) Source of injection fluid.

(4) Estimate of expected daily volume in gallons per minute per day.

(5) Geologic zones or formations affected.

(6) Chemical analyses of fluid to be injected.

(7) Treatment of spent geothermal fluids prior to injection.

b. Exemptions to the injection rule for geothermal fluid shall be approved by the department. Such requests shall be accompanied by a detailed statement of the proposed alternative method of geothermal fluid disposal; the effects of not injecting on such reservoir characteristics as pressure, temperature, and subsidence; and a copy of the operator's or designated agent's no-discharge permit.

4VAC25-170-50. Well construction and maintenance.

A. Every person drilling for geothermal resources in Virginia, or operating, owning, controlling or in possession of any well as defined herein, shall paint or stencil and post and keep posted in a conspicuous place on or near the well a sign showing the name of the person, firm, company, corporation, or association drilling, owning, or controlling the well, the company or operator's well number, and the well identification number thereof. Well identification numbers will be assigned to all approved permits according to the USGS groundwater site inventory system. The lettering on such sign shall be kept in a legible condition at all times.

B. The division director shall receive notice prior to the commencement of well work concerning the identification number of the well and the date and time that well work is scheduled to begin. Telephone notice will fulfill this requirement.

C. 1. Drilling-fluid materials sufficient to ensure well control shall be maintained in the field area and be readily accessible for use during drilling operations.

2. All drilling muds shall be used in a fashion designed to protect freshwater-bearing sands, horizons, and aquifers from contamination during well construction.

3. Drilling muds shall be removed from the drilling site after the well is completed and disposed of in the method approved in the operations plan.

4. Operations shall be conducted with due care to minimizing the loss of reservoir permeability.

D. All wells must be drilled with due diligence to maintain a reasonably vertical well bore. Deviation tests surveys must be recorded in the drilling log for every 1000 feet drilled.

E. 1. A well may deviate intentionally from the vertical with written permission by the division director. Such permission shall not be granted without notice to adjoining landowners, except for side-tracking mechanical difficulties.

2. When a well has been intentionally deviated from the vertical, a directional survey of the well bore must be filed with the department within 30 days after completion of the well.

3. The department shall have the right to make, or to require the operator to make, a directional survey of any well at the request of an adjoining operator or landowner prior to the completion of the well and at the expense of said adjoining operator or landowner. In addition, if the department has reason to believe that the well has deviated beyond the boundaries of the property on which the well is located, the department also shall have the right to make, or to require the operator to make, a directional survey of the well at the expense of the operator.

F. 1. Valves approved by the division director shall be installed and maintained on every completed well so that pressure measurements may be obtained at any time.

2. Blow-out preventers during drilling shall be required when the working formation pressure on the wellhead connection is or could be greater than 1000 psi.

G. 1. Geothermal production wells shall be designed to ensure the efficient production and elimination of waste or escape of the resource.

2. All freshwater-bearing sands, horizons, and aquifers shall be fully protected from contamination during the production of geothermal fluids.

3. a. Surface casing The water protection string shall extend from a point 12 inches above the surface to a point at least 50 feet below the deepest known groundwater aquifer or horizon.

b. The operator, owner, or designated agent shall use new casing. Only casing that meets American Petroleum Institute specifications, as found in API 5AC, Restricted Yield Strength Casing and Tubing, March, 1982, API 5A, Casing Tubing, and Drill Pipe, March, 1982, and API 5AX, High-Strength Casing, Tubing, and Drill Pipe, March, 1982, (and all subsequent revisions thereto), shall be used in geothermal production wells.

c. Cement introduced into a well for the purpose of cementing the casing or for the purpose of creating a permanent bridge during plugging operations shall be placed in the well by means of a method approved by the division director. In addition:

(1) Each surface string shall be cemented upward from the bottom of the casing to the surface.

(2) Cement shall be allowed to stand for 24 hours or until comprehensive strength equals 500 psi before drilling.

d. The department may modify casing and cementing requirements when special conditions demand it.

4. a. The owner, operator, or designated agent shall use new casing. Only production casing that meets American Petroleum Institute specifications, as found in API 5AC, Restricted Yield Strength Casing and Tubing, March, 1982, API 5A, Casing Tubing, and Drill Pipe, March, 1982, and API 5AX, High-Strength Casing, Tubing, and Drill Pipe, March, 1982, (and all subsequent revisions thereto), shall be used in geothermal production wells.

b. Each well shall be cemented with a quantity of cement sufficient to fill the annular space from the production zone to the surface. The production casing shall be cemented to exclude, isolate, or segregate overlapping and to prevent the movement of fluids into freshwater zones.

c. Cement shall be allowed to stand for 24 hours or until compressive strength equals 500 psi before drilling.

d. Cement introduced into a well for the purpose of cementing the casing or for the purpose of creating a permanent bridge during plugging operations shall be placed in the well by means of a method approved by the division director.

e. The department may modify casing requirements when special conditions demand it.

f. The division director may require additional well tests if production or monitoring records indicate a leak in the production casing. When tests confirm the presence of a production casing leak, the division director may require whatever actions are necessary to protect other strings and freshwater horizons.

H. 1. The owner, operator, or designated agent shall use new casing. Only casing that meets American Petroleum Institute specifications, as found in API 5AC, Restricted Yield Strength Casing and Tubing, March, 1982, API 5A, Casing Tubing, and Drill Pipe, March, 1982, and API 5AX, High-Strength Casing, Tubing, and Drill Pipe, March, 1982, (and all subsequent revisions thereto), shall be used in geothermal injection wells.

2. The casing program shall be designed so that no contamination will be caused to freshwater strata. Injection shall be done through production casing adequately sealed and cemented to allow for monitoring of the annulus between the injection string and the last intermediate string or water protection string, as the case may be. Injection pressure shall be monitored and regulated to minimize the possibility of fracturing the confining strata.

3. Production casing shall be cemented through the entire freshwater zone.

4. The rate of injection of geothermal fluid shall not exceed the production rate.

5. Adequate and proper wellhead equipment shall be installed and maintained in good working order on every injection well not abandoned and plugged, so that pressure measurements may be obtained at any time.

I. 1. The division director or a departmental representative shall have access to geothermal well sites during business reasonable hours.

2. The state geologist or his designated representative shall have access to any drilling site for the purpose of examining whole cores or cuttings as may be appropriate.

J. At least 10 days prior to any chemical cleaning of production casing, the operator shall notify the division director in writing of the type and amount of chemical to be used and obtain approval for its use.

K. The well operator, or his designated agent, shall file a completion report within 60 90 days after well work is completed. The completion report shall be accompanied by copies of any drilling logs required under 4VAC25-170-40.

4VAC25-170-60. Records, logs and general requirements.

A. 1. During the drilling and production phases of every well, the owner, operator, or designated agent responsible for the conduct of drilling operations shall keep at the well an accurate record of the well's operations as outlined in subsection C of this section. These records shall be accessible to the division director at all reasonable hours.

2. The refusal of the well operator or designated agent to furnish upon request such logs or records or to give information regarding the well to the department shall constitute sufficient cause to require the cessation or shutting down of all drilling or other operations at the well site until the request is honored.

3. Drilling logs supplied to the department will be kept in confidence in accordance with § 40.1-11 of the Code of Virginia.

4. 3. Copies of all drilling logs and productions records required by this chapter shall be sent electronically or mailed submitted to: the division director.

Virginia Gas and Oil Division Director Department of Mines, Minerals and Energy Division of Gas and Oil P.O. Box 159 Lebanon, VA 24266

5. 4. Samples representative of all strata penetrated in each well shall be collected and furnished to the Commonwealth. Such samples shall be in the form of rock cuttings collected so as to represent the strata encountered in successive intervals no greater than 10 feet. If coring is done, however, the samples to be furnished shall consist, at a minimum, of one-quarter segments of core obtained. All samples shall be handled as follows:

a. Rock cuttings shall be dried and properly packaged in a manner that will protect the individual samples, each of which shall be identified by the well name, identification number, and interval penetrated.

b. Samples of core shall be boxed according to standard practice and identified as to well name and identification number and interval penetrated.

c. All samples shall be shipped or mailed, charges prepaid, to:

Department of Mines, Minerals and Energy Division of Mineral Resources Fontaine Research Park 900 Natural Resources Drive P.O. Box 3667 Charlottesville, VA 22903

B. Each well operator, owner, or designated agent, within 30 90 days after the completion of any well, shall furnish submit to the division director a copy of the drilling log. Drilling logs shall list activities in chronological order and include the following information:

1. The well's location and identification number.

2. A record of casings set in wells.

3. Formations encountered.

4. Deviation tests for every one thousand feet drilled.

5. Cementing procedures.

6. A copy of the downhole geophysical logs.

C. The owner, operator, or designated agent of any production or injection well shall keep or cause to be kept a careful and accurate production record. The following information shall be reported to the division director on a monthly basis for the first six months and quarterly thereafter, or as required by permit, unless otherwise stated:

1. Pressure measurements as monitored by valves on production and injection wells.

2. The volumetric rate of production or injection measured in terms of the average flow of geothermal fluids in gallons per minute per day of operation.

3. Temperature measurements of the geothermal fluid being produced or injected, including the maximum temperature measured in the bore-hole and its corresponding depth, and the temperature of the fluid as measured at the discharge point at the beginning and conclusion of a timed production test.

4. Hydraulic head as measured by the piezometric method.

4VAC25-170-70. Groundwater monitoring.

A. 1. Groundwater shall be monitored through special monitoring wells or existing water wells in the area of impact, as determined by the department.

2. Monitoring shall be performed and reported to the division director daily on both water quality and piezometric head for the first 30 days of geothermal production. Thereafter, quarterly tests for piezometric head and for water quality shall be reported to the division director.

3. The monitoring of groundwater shall meet the following conditions:

a. A minimum of one monitoring well per production or injection well is required. Monitoring wells shall monitor those significant potable aquifers through which the well passes as required by the department.

b. The monitoring wells shall be located within the first 50% of the projected cone of depression for the geothermal production well.

c. The well(s) wells shall be constructed to measure variations in piezometric head and water quality. Groundwater shall be chemically analyzed for the following parameters: mineral content (alkalinity, chloride, dissolved solids, fluoride, calcium, sodium, potassium, carbonate, bicarbonate, sulfate, nitrate, boron, and silica); metal content (cadmium, arsenic, mercury, copper, iron, nickel, magnesium, manganese, and zinc); and general parameters (pH, conductivity, dissolved solids, and hardness).

d. The department may require additional analyses if levels of the above parameters in subdivision 3 c of this subsection indicate their necessity to protect groundwater supplies.

B. 1. Chemical analyses of geothermal fluids shall be filed with the division director on an annual basis.

2. Samples for the chemical fluid analysis shall be taken from fluid as measured at the discharge point of the production well at the conclusion of a two-hour production test.

3. The production fluid shall be chemically analyzed for the following parameters: mineral content (alkalinity, chloride, dissolved solids, fluoride, calcium, sodium, potassium, carbonate, bicarbonate, sulfate, nitrate, boron, and silica); metal content (cadmium, arsenic, mercury, copper, iron, nickel, magnesium, manganese, and zinc); gas analyses (hydrogen sulfide, ammonia, carbon dioxide, and gross alpha); and general parameters (pH, conductivity, and dissolved solids).

4. The department may require additional analyses if levels of the above parameters in subdivision 3 of this subsection indicate follow-up tests are necessary.

C. 1. Subsidence shall be monitored by the annual surveys of a professional engineer or certified surveyor from vertical benchmarks located above the projected cone of depression, as well as points outside its boundaries. The surveys shall be filled filed with the division director by the operator or designated agent.

2. The department may order micro-earthquake monitoring, if surveys indicate the occurrence of subsidence.

D. 1. The operator, owner, or designated agent shall maintain records of any monitoring activity required in his permit or by this chapter. All records of monitoring samples shall include:

a. The well identification number.

b. The date the sample was collected.

c. Time of sampling.

d. Exact place of sampling.

e. Person or firm performing analysis.

f. Date analysis of the sample was performed.

g. The analytical method or methods used.

h. Flow-point at which sample was taken.

i. The results of such analysis.

2. The operator, owner, or designated agent shall retain for a period of five years any records of monitoring activities and results, including all original strip chart recordings of continuous monitoring installations. The period of retention will automatically be extended during the course of any litigation regarding the discharge of contaminants by the permittee until such time as the litigation has ceased or when requested by the division director. This requirement shall apply during the five-year period following abandonment of a well.

4VAC25-170-80. Abandonment and plugging of wells.

A. Notification of intent to abandon any exploration, production, or injection well must shall be received by submitted to the division director during working hours at least one day 48 hours before the beginning of plugging operations. When notification of intent to abandon an exploratory, production, or injection well is received, the division director may send a departmental representative to the location specified and at the time stated to witness the plugging of the well.

B. 1. Any drilling well completed as a dry hole from which the rig is to be removed shall be cemented unless authorization to the contrary has been given by the division ] director.

2. The bottom of the hole shall be filled to, or a bridge shall be placed at the top of, each producing formation open to the well bore. Additionally, a cement plug not less than 50 100 feet in length shall be placed immediately above each producing formation.

3. A continuous cement plug shall be placed through all freshwater-bearing aquifers and shall extend at least 50 feet above and 50 feet below said aquifers.

4. A plug not less than 20 100 feet in length shall be placed at or near the surface of the ground in each hole.

5. The interval between plugs shall be filled with a nonporous medium.

6. The method of placing cement in the holes shall be by any method approved by the division director in advance of placement.

7. The exact location of each abandoned well shall be marked by a piece of pipe not less than four inches in diameter securely set in concrete and extending at least four feet above the general ground level. A permanent sign of durable construction shall be welded or otherwise permanently attached to the pipe, and shall contain the well identification information required by 4VAC25-170-50 A and the date the well was plugged.

8. When drilling operations have been suspended for 60 days, the well shall be plugged and abandoned unless written permission for temporary abandonment has been obtained from the division director.

9. Within 20 days after the plugging of any well, the responsible operator, owner, or designated agent who plugged or caused the well to be plugged shall file a notice of intent to plug or abandon and an affidavit with the department indicating the manner in which the well was plugged.