Section 11.84.740. Noncompetitive geothermal leases.

	(a)  The commissioner will issue a noncompetitive geothermal lease to a geothermal prospecting permittee if the commissioner determines that the permittee has  
		(1) submitted information to the commissioner from subsurface test results showing geothermal resources at a temperature and pressure sufficient to meet the requirements of the permittee's proposed development;  
		(2) discovered geothermal resources in commercial quantities;  
		(3) complied with the provisions of AS 38.05.181(c) governing conversion from permits to leases; and  
		(4) received approval of a plan of development under 11 AAC 84.760.  
	(b)  If the term of a geothermal prospecting permit expires while the commissioner is reviewing an application for a noncompetitive geothermal lease under this section, the permit is extended until the permittee is either granted or denied a noncompetitive lease.  
	(c)  In this section, "commercial quantities" means quantities sufficient to yield a return in excess of operating costs, even if drilling and equipment costs may never be repaid and the undertaking considered as a whole may ultimately result in a loss. Quantities are insufficient to yield a return in excess of operating costs unless those quantities, less the costs of transportation and marketing, would produce sufficient revenue to induce a prudent operator to produce and market those quantities.  

Authorities

38.05.020;38.05.035;38.05.145;38.05.181

Notes

Reference

11 AAC 84.760

Authority

AS 38.05.020 AS 38.05.035 AS 38.05.145 AS 38.05.181

History

Eff. 8/22/82, Register 83