Summary:

 House Bill 361 (HB 361) provides that the Energy, Minerals and Natural Resources Department may authorize the conversion of an oil or gas well into a facility that provides
energy storage or develops geothermal energy. 

 

Legislation Overview:

 House Bill 361 (HB 361) creates a new section of Chapter 71, the Well Repurposing Act, which allows the Energy, Minerals and Natural Resources Department to authorize the conversion of an oil or gas well into a facility that provides or supports energy storage or geothermal energy development.  The EMNRD may establish fees and financial assurance requirements specific to the energy storage or geothermal development uses under this Act.
HB 361 directs that repurposed wells under this section will not be considered an inactive or abandoned well unless that well ceases operation for twelve months or longer. Then the well must be plugged and abandoned according to the law and the rules issued by the Oil Conservation Division of the EMNRD. 
HB 361 would be effective 1 July 2025
 

Current Law:

 Background:
According to EMNRD, this bill has the potential to address some of the infrastructure development, storage, and reliability concerns that may accompany the large-scale electrification that is currently being planned for the Permian Basin.  EMNRD will most likely initiate rulemaking through both the Energy Conservation & Management Division and the Oil Conservation Division to define how the transition of oil wells between the two divisions will occur when a well is being repurposed for geothermal purposes. This rulemaking will primarily address logistical concerns, as the resulting well types are already regulated by both agencies
The Attorney General’s analysis indicates there may be conflict between the conversion of an oil and gas well into a geothermal well and the Oil and Gas Act’s prohibition on waste.