How 1041 Regulations are Impacting Geothermal Development A discussion of how counties are applying 1041 regulations to geothermal development and the challenges it creates for government and business © 2012 By Todd M. Starr

First a Word about County’s “As a political subdivision, a county, and its commissioners, possess only such powers as are expressly conferred upon them by the constitution and statutes, and such incidental implied powers as are reasonably necessary to carry out such express powers.” Board of County Com'rs of Dolores County v. Love 172 Colo. 121, 470 P.2d 861 (Colo. 1970).

1041 C.R.S. § (2) It is the purpose of this article that: (b) Local governments shall be encouraged to designate areas and activities of state interest and, after such designation, shall administer such areas and activities of state interest and promulgate guidelines for the administration thereof; and (c) Appropriate state agencies shall assist local governments to identify, designate, and adopt guidelines for administration of matters of state interest.

“Mineral” does not include surface or groundwater subject to appropriation for domestic, agricultural, or industrial purposes, nor does it include geothermal resources. _________ On Federal lands Geothermal = Mineral Other lands Geothermal = Water 1041 C.R.S (10):

1041 C.R.S Responses of State Agency or Commissions …such agency or commission shall establish a reasonable time period, which shall not exceed sixty days following receipt of such permit …if additional information is required, said agency or commission shall set a reasonable time period for response following the receipt of such information

1041 C.R.S Areas of State Interest (1) Subject to the procedures set forth in part 4 of this article, a local government may designate certain areas of state interest from among the following: (a) Mineral resource areas; (b) Natural hazard areas; (c) Areas containing, or having a significant impact upon, historical, natural, or archaeological resources of statewide importance; and (d) Areas around key facilities in which development may have a material effect upon the key facility or the surrounding community

1041 C.R.S Activities of State Interest (f) Site selection and construction of major facilities of a public utility; (h) Efficient utilization of municipal and industrial water projects; (j) The use of geothermal resources for the commercial production of electricity.

1041 C.R.S Regulations (1)The local government shall develop guidelines for administration of the designated matters of state interest. (2) A local government may adopt regulations interpreting and applying its adopted guidelines in relation to specific developments in areas of state interest and to specific activities of state interest.

1041 C.R.S Technical and financial assistance (1)Appropriate state agencies shall provide technical assistance to local governments in order to assist local governments in designating matters of state interest and adopting guidelines for the administration thereof.

1041 $$$SHOW ME THE MONEY$$$ (2)(a) The department of local affairs shall oversee and coordinate the provision of technical assistance and provide financial assistance as may be authorized by law.

1041 C.R.S (1)(a) Any person desiring to engage in development in an area of state interest or to conduct an activity of state interest shall file an application for a permit with the local government in which such development or activity is to take place. A reasonable fee determined by the local government sufficient to cover the cost of processing the application, including the cost of holding the necessary hearings, shall be paid at the time of filing such application.

Current Status Most Counties have 1041 Regulations None have Geo Thermal Specific

Current Status Archuleta County (a/k/a God’s County) is developing Geothermal specific 1041 Regulations. Involving Chafee County, Ouray County and Dolores County Consistency across the state should promote development and lower costs

Why Why would a county develop 1041Regulations specific to Geothermal? Better-suited to address environmental impacts of land use than zoning regulations because the statute is a very specific grant of authority over environmental impacts associated with matters of state interest regulations are rarely preempted. We know that 1041 regulations apply to projects funded by or authorized by special districts, colleges, and municipalities, whereas, after the Hygiene case, it is clear that zoning regulations are preempted by (1)110(c). California Coastal Commission v. Granite Rock : 1041 applies to state agencies and on federal land.

Why (cont’d) Ability to draw upon State resources Consistency (Activity & Elected Official) Economic Development Local Control

On With The Show How counties are applying 1041 regulations to geothermal development and the challenges it creates for government and business? They Are Not!......yet

Challenges it creates for government Expertise in smaller rural areas (DOLA) Crafting Regulations that can respect the emerging nature of industry Budgetary constraints Stress to respond, monitor and enforce

Challenges it creates for business? Compliance Risk of Public Disclosure As with any permitting process, denial

Why Care About The Impacts of Geothermal? Impacts cannot be predicted as they are very site specific and depend a lot on the technology, (elsewhere impacts have included loss of wildlife habitat from down- wind deposition zones, subsidence, odor, CO2 and Sulphur dioxide emissions, and of special importance to areas like Pagosa, there are potential negative impacts on production rates at nearby tourist hot springs and spas. Requires large amounts of water for injecting underground. "Flowback fluids" are highly contaminated (but probably will require under ground injection permits which minimize the impact to water quality.)