Alaska Drilling and Well Development (5-AK-a)
Drilling and Well Development Process
5-AK-a.1 to 5-AK-a.2 - Has the Environmental Process Been Completed for Drilling
It is necessary to revisit the environmental process at this stage to determine if any other environmental permits are required (air permit, etc) and to determine if if ADNR needs to issue a Best Interest Finding.
5-AK-a.3 to 5-AK-a.4 - Has the Developer Secured the Water Rights Required to Divert and Use a Geothermal Resource < 248F
Relationship of geothermal resources to water (AS 41.06.050):
- (a) An operator shall, before drilling or constructing a geothermal well or group of wells to be operated in concert, file an application with the commissioner for approval to drill the well or wells. The date of filing of the application establishes priority as to later appropriators of nongeothermal fluids. The application must contain sufficient information to enable the commissioner to determine whether the operation of the well or wells will interfere with or impair a prior water right.
- (b) An operator may not begin well drilling or construction without the approval of the commissioner. The commissioner shall approve the well construction upon the conditions necessary to protect the public interest, if
- (1) the proposed geothermal operation will not significantly interfere with or substantially impair a prior water right;
- (2) the geothermal owner has acquired through purchase or condemnation adequate water rights to offset the potential interference or impairment; or
- (3) the geothermal owner has obtained and dedicated to the affected party or parties an equivalent amount of replacement water of comparable quality.
- (c) Geothermal fluid is not subject to appropriation under AS 46.15 and priority may not be established among geothermal owners in a geothermal system.
5-AK-a.5 - Contact AOGCC and Hold Pre-Application Meeting (Optional)
AOGCC suggests that all developers contact their regional office and set up a pre-application meeting before application to ensure all information is correctly included the in application materials. If necessary, a variance is possible from the AOGCC regulations as provided for under 20 AAC 25.715.
5-AK-a.6 - Permit to Drill (Form 10-401)
All wells drilled in support or in search of the recovery or production of geothermal resources must comply with 20 AAC 25.705-.740. The developer should submit a Permit to Drill (Form 10-401) before drilling or redrilling a well or re-entering an abandoned well (20 AAC 25.005). Upon application, the AOGCC will classify a well as:
- development, either oil or gas;
- service; or
- stratigraphic test.
An application for a permit to drill must include the following items:
- a fee of $100 payable to the State of Alaska/AOGCC;
- a plat identifying the property and the property's owners and showing the coordinates of the proposed location of the well referenced to the state plane coordinate system and governmental section lines (and other information required by 20 AAC 25.050(b);
- a diagram and description of the blowout prevention equipment (BOPE);
- information on drilling hazards;
- a description of the procedure to conducting formation integrity tests, as required by 20 AAC 25.030(f);
- a complete proposed casing and cementing program as required by 20 AAC 25.030;
- a diagram and description of the diverter system as required by 20 AAC 25.035;
- a drilling fluid program;
- (for exploratory or stratigraphic test wells) a tabulation setting out depths of predicted abnormally geo-pressurized strata as required by 20 AAC 25.033(f);
- (for exploratory or stratigraphic test wells) a seismic refraction or reflection analysis as required by 20 AAC 25.061(a);
- (for a well drilled from an offshore platform, mobile bottom-founded structure, jack-up rig, or floating drilling vessel) an analysis of seabed conditions as required by 20 AAC 25.061(b);
- evidence showing that the requirements of 20 AAC 25.025 have been mit;
- a copy of the proposed drilling program;
- a general description of how the operator plans to dispose of drilling mud and cuttings.
20 AAC 25.005. Permit to Drill
5-AK-a.7 to 5-AK-a.8 - Review Application Materials for Completeness
The AOGCC will not review application material unless they are complete and include all applicable required documents and fees as described above.
If the application is complete, it is forwarded to the three AOGCC Commissioners for their review.
5-AK-a.9 - Public Notice and Comment Period
Notice of the application is published by AOGCC on their webpage and the public is given an opportunity to comment on applications before they are submitted to the Commissioners for their approval or denial of the proposed permit.
5-AK-a.10 to 5-AK-a.11 - Is a Written Request Filed or Does AOGCC Require a Hearing
The AOGCC will, on its own motion or of a written request, hold a public hearing within the jurisdiction of the proposed well. Hearing procedures are described in 20 AAC 25.540.
5-AK-a.12 - Surety Bond (Form 10-402A); or Personal Bond (Form 10-402B)
A developer proposing to drill a well which requires a permit must file a bond, and if required, security to ensure that each well is drilled, operated, maintained, repaired, and abandoned and each location is cleared in accordance with 20 AAC 25 (20 AAC 25.025).
Bond: The bond must be either:
- a surety bond issued on Form 10-402A; or
- a personal bond of the operator on Form 10-402B accompanied by security guaranteeing the operator’s performance
Security: Security must be in the form of a certificate of deposit or irrevocable letter of credit issued in the sole favor of the Alaska Oil and Gas Conservation Commission by a bank authorized to do business in the state, or must be in another form that the commission determines to be adequate to ensure payment (20 AAC 25.025(a)(2)).
5-AK-a.13 to 5-AK-a.14 - Permit to Drill
If the application is approved by the Commissioners, a letter to the operator is attached to one copy of the application and returned by courier or mail. This letter grants approval for the drilling operations, and it presents any stipulations identified by the Commission concerning operational or environmental safety. It also provides notification that the permit to drill does not exempt the operator from obtaining additional permits or approvals required by law from other governmental agencies, and it does not authorize conducting drilling operations until all other required permits and approvals have been issued.
Every well branch requires a separate Permit to Drill and will be designated by a unique name designated by the operator and a unique API number assigned by the AOGCC.
The regulatory cost of any geothermal well with a valid permit to drill will be subject to regulatory cost as required under 20 AAC 25.720. The cost required is determined by the following formula:
- RCCg = Vgop/Vgot*(Ag-Lg)
- RCCg = the regulatory cost charge for geothermal wells
- Vgop = the total volume of geothermal resources produced from the wells with a permit to drill
- Vgot = the total volume of geothermal resources and all fluids injected into the ground for wells with a permit to drill
- Ag = the appropriation made for the operating costs
- Lg = the lapsed amount of a previous appropriation that is appropriated for this year
For more information, see the appropriate regulation in 20 AAC 25.720. Before the well is completed, regulation in 20 AAC 25.725 will determine what charges will be assessed for each geothermal well paid for during the first quarter using a reasonable estimate.
5-AK-a.15 - Completion and Operations Reports Required Under Specific Permit to Drill
If drilling operations are not commenced with 24 months after the commission approves an application for a Permit to Drill, the Permit to Drill expires (20 AAC 25.005(g)).
Once the drilling operations have ceased or there arises a reason for suspension of operations, the developer must file a Well Completion or Re-Completion Report and Log (Form 10-407). Abandonment procedures fall under 20 AAC 25.105 and suspension of operations procedures fall under 20 AAC 25.110.
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