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Panelists and agencies back HB 11‑65 to create geologic storage stewardship enterprise and clarify geothermal rules
Summary
The Senate Transportation and Energy Committee advanced House Bill 11‑65 to the Committee of the Whole after testimony from state agencies, local officials, industry and environmental groups describing a fee‑funded state enterprise to oversee long‑term stewardship of Class VI carbon storage sites and statutory clarifications for geothermal regulation.
The Senate Transportation and Energy Committee advanced House Bill 11‑65 to the Committee of the Whole with a favorable recommendation after extended testimony from state agencies, local officials and industry and environmental advocates.
Senator Sarah Simpson, the lead sponsor, and co‑sponsor Senator Kipp said the bill creates two related policy tracks: (1) an enterprise funded by fees on geologic storage operators to provide long‑term monitoring and stewardship of Class VI carbon storage sites after operators meet strict closure requirements; and (2) statutory clarifications for geothermal development and regulation to reduce dual permitting, protect existing water users, and provide licensing and oversight for closed‑loop geothermal installers.
State agencies described the bill as a follow‑through on prior policy actions. Aaron Ray, assistant director for energy at the Department of Natural Resources, said HB 11‑65 is a DNR priority and implements recommendations from a December 2024 interagency study and the Colorado Carbon Management Roadmap. Michael Rigby of the Energy and Carbon Management Commission (ECMC) described proposed statutory revisions intended to reduce dual permitting by clarifying when the Division of Water Resources (DWR) permit is not required for deep geothermal operations that use nontributary groundwater only for heat extraction.
Kevin Donegan, chief of the Hydrogeology Section at DWR, said the bill expands protections for existing geothermal operations, creates a notification process allowing existing operators to engage in permitting, and gives the Board of Examiners of Water Well Construction and Pump Installation licensing and enforcement authority over closed‑loop geothermal systems.
On the long‑term stewardship enterprise, Senator Kipp and witnesses said operators would have to meet stringent conditions before the State assumes responsibility: reclamation completed, wells properly plugged, demonstration that the CO2 plume is stable and does not pose further risks, and sufficient fees contributed to the stewardship fund. The enterprise would be governed by a five‑member board with authority to set fees per ton of CO2 sequestered; sponsors said fee levels would be modeled on other states and intended to protect taxpayers from future liabilities.
Environmental groups, local officials and industry groups supported the bill with amendments. Conservation Colorado, the Environmental Defense Fund and the Colorado Communities for Climate Action urged support, noting the bill preserves civil, contractual and criminal liability while waiving only regulatory liability upon transfer of stewardship. The Colorado Energy Office testified that operators provide staged financial assurance and that CEO staff do not expect orphan Class VI projects, but recommended a backstop to protect taxpayers.
The committee adopted three sponsor amendments (L‑15, L‑16 and L‑17). Amendment L‑15 aligns state authority with federal primacy requirements for Class VI wells, citing 40 C.F.R. §145.13 and the need for criminal enforcement authority; L‑16 and L‑17 adjusted definitions and board membership following stakeholder conversations. Senator Simpson moved HB 11‑65 as amended to the Committee of the Whole; the roll call recorded eight affirmative votes and one negative vote, and the motion passed 8‑1.
Key unresolved technical matters and procedural clarifications noted in testimony include the statutory cutoff for DWR vs. ECMC oversight that originated in SB 23‑285 (discussed as 2,500 feet), specifics of fee‑setting formulas for the enterprise, staged financial assurance release schedules and how the enterprise would address any future orphaned Class VI sites. Sponsors and agency witnesses said the bill sets up mechanisms for the enterprise board to adjust fees and for regulators to require ongoing oversight prior to transfer of responsibility.
HB 11‑65 will proceed to the Committee of the Whole for further consideration.
