PA House Energy — 2026-03-24

Thank you. All right.

Chair Fiedler.

Representative Boyd. On leave. Representative Brown. On leave. Representative Serrato. Representative Davidson. On leave. on leave representative Duduhue on leave the president Freel on leave the Crist Industrial on leave representative Ingalls on leave or sende McAndrew on leave representative unterstützen on leave representative Russnoy on leave representative Mikat here

Representative Armanini On Leave Representative Barton On Leave Representative Cook On Leave Representative Ham On Line Representative Koeil On Leave Representative Keparth On Leave Representative Mihalyc On Leave Representative Rapp On Leave Representative Standbaugh On leave. Representative Warner. On leave. Representative Williams. Here. Attendance is recorded. Proceed, Madam Chair.

Thank you, Madam Chair. I'm looking forward to the information presented today because I've been able to learn some about geothermal, but I'm looking forward to the information presented, so I'm looking forward to proceeding. Thank you.

Thank you, Chair Fiedler, and thank you to Representative Williams for partnering on this legislation. I think we're all in agreement that we need to bring more energy sources onto our grid, and geothermal is a win-win opportunity for us. It is an always-on clean energy source that can meet much of the heating and cooling demands in the state, as well as some degree of energy production, given our geology. With next-generation technologies that we've learned about, this is an opportunity for us to come together in a bipartisan basis to generate more energy for our fellow Pennsylvanians. And I think the most important issue with the legislation is that it recognizes property rights related to geothermal energy. It sets up a predictable regulatory framework so that the market can develop these energy sources. And it allows a structure for using our abandoned oil and gas wells in order to generate energy for this purpose. I look forward to the testimony today, again, partnering with Representative Williams and Chair Fiedler on this legislation. I think there's a real opportunity here, and I thank the committee for the discussion of this legislation.

All right. Thank you, Madam Chair. And I think I want to start out my remarks with all of the thank yous that need to be said publicly. And just as I started out yesterday, Madam Chair, you and Chairman Causer are doing a splendid job of setting up a number of these hearings so that we can have this open debate before we actually get to the legislative process. I think it's been entirely constructive. As we've said a number of times in our hearings, we are on the precipice. We're actually already there in terms of our need for additional generation in the state of Pennsylvania as hyperscale data centers are now our new reality. And that new reality is already being priced into our energy market by way of the capacity market. So there's no time to lose in developing new electricity generation in Pennsylvania by any reasonable source. And I was so proud that Representative Venkat reached out to me. This is at least the third time I think that you and I partnered on legislation because to steal an adage from our fearless leader, we get stuff done in a bipartisan way because we're not terribly concerned about credit. We're concerned about getting good things done. And I'm, again, proud to work with you. We've been doing some important things. I regret a little bit that our original bill was splintered up into so many different pieces because I think it's going to be harder and less effective to get done. But this regulatory framework envisioned in this bill is absolutely necessary. I think we'll have to, by amendment, pull those other pieces back in so that it holistically makes sense. But again, I'm in the southeast. I think there's a retail component of making use of geothermal that makes sense for us. In the west, it makes sense to start thinking about this in the utility scale. There are end-to-end benefits of making use of geothermal. and I look forward to learning more about it today. Thank you so much, Madam Chair.

Good morning, Chair Fiedler, Chair Khauser, and members of the Pennsylvania House Energy Committee. On behalf of Pennsylvania DEP, I first and foremost want to thank you for this opportunity to discuss the importance of geothermal energy in the Commonwealth and talk a little bit about the oversight that's envisioned by this draft legislation when it comes to this industry development that we're anticipating. I will summarize my submitted testimony, obviously, to be timely here and to allow for the dialogue that I think is so important as part of this process. The first topic I'd like to start with is the future potential for geothermal energy development here in the Commonwealth. If you look at what's happened domestically, there's been a lot of focus in western states. This is for obvious reasons. The geology lends itself to that low-hanging fruit development, if you will. But what I would say about the eastern United States is we, at this point, just don't know the full potential of this resource. And I think that's why it's really important and critical to get started. There have been some analyses that have been completed recently that indicate in the northeastern part of the United States that the Commonwealth has a lot of potential to be a leader when it comes to geothermal energy generation. The legislation certainly has a role in helping that, helping realize that potential. And I'd say the first important thing that it does is it really establishes certainty. It establishes that regulatory framework, and that's critical for investment opportunities and to begin this exploratory phase of geothermal energy in the Commonwealth. I think it will also help us really start to understand the scale of this opportunity. When it comes to geothermal energy, we haven't had much in terms of deep opportunities yet, so we really need to understand the commercial viability, and this legislation will help us get started there. The next thing I'd like to talk a little bit about is just the traditional impacts, or the impacts to traditional energy resources in Pennsylvania. We have a vibrant energy industry here in the Commonwealth right now when it comes to oil and gas development. We're extracting coal resources as well. And the proposed legislation is important because it has language that requires coordination between geothermal operators and the interests of oil and gas, mining, and other poor space rights here in the Commonwealth. These provisions will serve to establish reasonable access to subsurface resources for all parties. And in time, I believe they will contribute to the diverse energy portfolio that we all strive for that will ultimately help with energy grid resiliency and cost-effectiveness over the longer term. I will also say that the agency has a long history of coordinating extractive energy resources in Pennsylvania. You need only look at the interaction between the natural gas industry, the oil industry, and coal, where all of these resources overlap or are co-located. This legislation, I believe, will help us build on that solid foundation when it comes to a new energy resource opportunity. I'd like to talk a little bit about permitting authority. Obviously, the state has a primary role in issuing permits. We have a lot of capable staff that issue well permits on a routine basis, on a timely basis. But there's not currently a defined regulatory framework when it comes to geothermal well permitting. And I think there are key provisions in the legislation that are really important. They offer clarity with regard to regulatory oversight and energy development activity. And they also established the necessary statutory authority for the Environmental Quality Board to develop, promulgate comprehensive regulations. And this is an important part of the process. There's another provision in the draft legislation that offers DEP or authorizes DEP to have immediate permitting authority. And I think that's really important because we can then look toward a parallel development where we're not only developing regulations, but we're also able to issue permits from day one, and that will help stand up this industry in an efficient manner. When it comes to resource needs, what I would say, as with any new development, there is some uncertainty. We don't know at this point the full scale of this opportunity. We can't really assess the commercial viability at full scale at this point either. But the significance of the legislation in this context is that it will ultimately allow DEP as the regulatory agency to develop new revenue streams and those streams will be important for standing up a program to effectively regulate deep geothermal operations in the Commonwealth. The last thing I'd like to touch on is really striking a balance between investment and resource development and environmental protection. We all have experience. We know that the most effective environmental laws and regulations find that balance. They support economic development, but they do so in tandem with superior environmental protection standards. And if you look toward this legislation, it's no departure from that standard. I will say by establishing this rulemaking authority, it will help the agency transition into that rulemaking process. And the rulemaking process is really defined by public engagement. We will get an opportunity to hear from all stakeholders who can weigh in on this role in an informed manner, and ultimately that will help us balance environmental health and safety considerations appropriately with business development opportunities here in Pennsylvania. There is also a carve-out for shallow heating and cooling geothermal systems. We know there's a strong presence for these sort of small commercial and residential systems, and it was important not to be overly burdensome with regard to that historical development in the state. So that summarizes my testimony today. On behalf of DEP, I'd like to thank all of you again for the opportunity to provide testimony, and I'm happy to answer any questions you might have.

Thank you. Good morning. Chair Fiedler, Chair Couser, members of the Energy Committee, I want to thank you for holding this hearing and allowing us to offer comments on House Bill 2076. My name is John Walliser. I'm a senior vice president with PEC, a statewide organization that for more than 50 years has worked with all stakeholders to advance solutions for the Commonwealth. As was mentioned by the sponsors, Geothermal presents the opportunity to deliver zero-emitting, firm, and distributed power for a range of uses, enhancing grid diversification and resiliency, and helping to offset the need for new centralized power generation and infrastructure build-out. And with our skilled workforce and industry knowledge base, Pennsylvania is well-positioned to benefit from this technology. We believe House Bill 2076 sets a framework that can position our state to succeed in developing these resources, while also protecting against any undue environmental or community impacts. For Pennsylvania to obtain primacy from the Environmental Protection Agency for permitting enhanced geothermal wells, the Department of Environmental Protection needs to demonstrate that it has sufficient legal authority and agency resources to properly manage its program. House Bill 2076 provides this foundation, and I would like to highlight a few key elements of the bill, many of which mirror legislation that was passed by the General Assembly to pursue primacy for carbon sequestration. So first, the legislation grants the department the authority to establish permit or management fees, as well as operator financial security requirements necessary to maintain the integrity of its program. This authority is not unbounded, however. If the department proposes a fee structure or security amounts different from those set for similar activities, the legislation requires the department to justify that variance. Further, fee and security amounts would be established through existing rulemaking procedure, which allows for review and input from the regulated community, the public, and the general assembly. As we have already experienced, allowing only a one-time upfront permit fee creates a situation where the department cannot sustain its long-term responsibilities. Shifting to a management fee structure, if needed, is more appropriate and can help keep initial cost reasonable. encouraging project development, and a robust program also uplifts agency responsiveness. The same adequacy rationale holds true for financial assurance requirements. Setting strict limitations in legislation precludes adjustments for changes in technology, materials, cost inflation, and other factors. At present, average well plugging costs for certain wells incurred by the Department for addressing improperly abandoned wells exceed statutorily constrained security amounts placed on operators, leaving the public to bear the shortfall. We have learned a lesson from our orphan well legacy to know that the accumulation of sites and costs escalate quickly. House Bill 2076 would help ensure that won't happen for geothermal development. This legislation also takes appropriate steps to ensure the department can set protection standards that still encourage geothermal resource production. For example, the bill provides that when hydraulic fracturing is utilized for development or in the repurposing of existing wells that involve fracturing, the department may set additional protections or performance criteria irrespective of drilling depth. This avoids any unwarranted confusion about characterization of a well as conventional or unconventional, where different regulatory standards might traditionally apply. Focus should be on the technologies and practices used on site, and we believe this legislation rightly accomplishes that. The legislation also directs the department to consider an expedited permitting process for conversion of existing gas wells. We support this concept, provided the well integrity, financial assurance, and other compliance safeguards established in this legislation are followed. Our hope is that any conversion or co-production will not only bring more energy resources to the table with minimal impact, but also create incentives to ensure that end-of-life wells are properly managed, tested, and ultimately plugged and decommissioned. So in conclusion, we are enthusiastic about the opportunities presented by this development and believe House Bill 2076 strikes the right balance in making sure Pennsylvania gets it right. We thank Representatives VanCat and Williams for sponsoring this legislation and the co-sponsors. We again express our appreciation to the committee for holding this hearing. Thank you so much.

Good morning, Madam Chair, Chair Causer, members of the committee. Thank you for the opportunity to be with you this morning. My name's Ben Seabree. I'm an energy and natural resources attorney from Austin, Texas. Thanks for welcoming me up here. If you remember nothing else, here's the main point of my testimony. If you get nothing else out of my seven minutes, here's the one thing I hope you remember. Your bill does three things that are critical for any energy legislation to be successful. One, it provides clarity of ownership of the resource. Who owns the heat? Two, it provides business and regulatory certainty. And three, it provides for protection of public and environmental interests. Those three things are what allow capital to flow, projects to be built, and for industries to develop responsibly. In my professional experience, I think your bill nails it extremely well. So why geothermal now? What has happened recently to make geothermal such a hot topic, if you will? Well, the geothermal energy industry is at the same point that the oil and gas shale revolution was about the year 2000. See, we always knew that there are huge amounts of oil and gas trapped in shale rock, known it forever. The problem, of course, was how to get the oil and gas out economically. Well, we figured that out. Well, we've always known that there's tremendous amounts of heat in the earth. In fact, there's so much heat, we could power all of the power that we use and are projected to use millions of times over because it emanates perpetually. The problem has been how do we harness this heat and generate electricity economically? Well, we figured it out, just like we figured out how to take oil and gas out of shale rock. And two things have happened that are allowing us to now advance geothermal, technology and economics. Technology advances are changing the economic equation. It used to be for geothermal that we had to drill for heat and where there was also co-located geologically abundant sources of water. So you had both. essentially steam underground. But places like that are relatively rare around the world, like Iceland, Yellowstone, the geysers in California. That's why there's not that much geothermal, relatively speaking, power in the world. But now that's changed. We no longer have to find heat and water together. Instead, we drill for heat, for hot rock, and we bring the water to the heat or, even better, more efficient working fluids that can transfer that heat into electricity. So in simple terms, we're drilling for hot rock and we bring the fluid to the heat. This means the geothermal is now dispatchable, always on. It's a 24-7 source of power. It's independent of weather. It doesn't matter whether the sun shines or the wind doesn't blow. The power is there, and it's always on. It's emissions-free. I'm a big supporter of oil and gas, but this is a pretty cool thing. And it's available virtually worldwide. See, the center of the Earth is as hot as the surface of the sun, and it emanates perpetually. It's always emanating to the surface of the earth across the planet. Basically, it'll be here for purposes of all humanity. And we have a small surface footprint. So real quickly, I'd like to compare some recent Texas legislation with House Bill 2076. In the last two legislative sessions in Texas, we've passed a series of bills, and I've participated in all of them, to advance geothermal energy. And the purpose was to create a clear legal and regulatory framework, provide business certainty while also protecting the public and the environment. So, for example, our series of legislation really does what most of 2076 does in one bill. We provided clarity of the ownership. In Texas, we said that the surface estate owns the heat. And this makes sense in my view under both Texas and Pennsylvania law because a mineral is a substance, right? It's something oil, coal, gold, silver, you can touch. But heat is an intangible quality of the earth itself. So we kind of view non-mineral earth as belonging to the surface estate and mineral earth as belonging to the mineral estate. And that's what your bill does. We provided regulatory certainty and one-stop shop permitting. We consolidated jurisdiction in one agency. We call it the Railroad Commission of Texas. But it allows Texas to apply what they know about oil and gas regulation to geothermal because from a regulatory and permitting standpoint, they're extremely similar, and that's what you all can do with your expertise that you already have for oil and gas. And, like has been mentioned, we encourage the repurposing of abandoned oil and gas wells. One thing that Texas and Pennsylvania has in common is a mature oil and gas industry. You guys started the petroleum industry in Titusville. And sadly, we also both have a lot of abandoned oil and gas wells. So our legislation encourages using abandoned oil and gas wells, as was testified. So 2076 clarifies the ownership of the resource. It provides business and regulatory certainty, and it directs the department to issue responsible regulations for siding, spacing, casing, et cetera. Real quickly, will it interfere with oil and gas? The short answer is no. We can discuss it more if you like, but they can coexist in the same areas. and it's actually helpful that you already have so much knowledge and expertise for oil and gas. So in conclusion in my view in my three and a half decades of doing this your bill hits the main points I think you got a great bill and I be happy to answer questions at the appropriate time Thank you so much Thank you to all of our testifiers

We've learned quite a few. I'll try to think of the most important ones. The first, I really think, is how you can use oil and gas regulations for geothermal activity. They're not going to be a perfect fit every time, But they're both underground natural resources of energy, and they both will be able to follow the same framework. In fact, we actually have a fastball right across the plate sentence in our statute that orders the Railroad Commission. It says, you will regulate geothermal the same way you regulate oil and gas. Now, that doesn't mean it has to be word for word, dot for dot, but it means apply the same format. And the interesting thing is that even though it belongs to the surface estate, and we normally think of the mineral estate as having dominance in terms of rights over the surface estate, it's not so a geothermal. It belongs to the surface estate, but the geothermal and the mineral estate have equal rights with each other in terms of development and regulation. Interesting.

Thank you very much for your testimony. I guess my questions are more technical in nature and when I look at this legislation that's before us it gives me a lot of thought about our oil and gas regulations and your comments Mr. Seabree about regulating them similar to our oil and gas regulations gives me a lot of pause to be honest with you because our oil and gas regs in Pennsylvania have been very controversial in how we regulate what we call conventional versus unconventional wells and the different regulatory processes and, quite honestly, different regulations for different types of wells. And so I'm interested in the interaction, and I guess, Mr. Plepko, maybe you can answer this. I'm interested in the interaction between our oil and gas regulations and what would be future regulations on geothermal. Because as I look at this bill, you know, the declaration that geothermal would be the surface owner, as has been stated, it gives pretty broad discretion to the eqb which has been controversial does not set bonding bonding requirements in statute it gives that to the eqb it gives really broad discretion to the to the department creates pretty broad discretion on setbacks community impact analysis penalties. How do you see the oil and gas regulations that we have, the oil and gas statutes that we have, how do you see that all interacting with what would be proposed in this

It's just there are many provisions in this bill that are very broad, and things that in the oil and gas realm we've had to clarify even in statute because of ambiguity with oil and gas law. So I'm just wondering if this is a recipe in some ways for litigation or additional legislation down the road because of some of that broad discretion that obviously has been written into the bill.

Thank you.

I'm also an energy attorney and Mr. Seabree will tell you when the judge is about to rule in your favor you sit down and shut up and I'm about to violate that rule. So I very much appreciate all the kind comments about the bill and the concern also, Chairman Causer, about some of its ambiguity that I hope we can fix. Two generalized comments. I used to serve on legal staff for the Chairman of the Joint Chiefs of Staff, and in preparing memos for him for issues, we did the bottom line up front, which had to be in a box at the top of the page so that he knew what our conclusion was before he read our analysis. So I very much like seeing the main message right in your testimony, and I promise I read the rest also, but the main message got me on alert. The second related story is I was recently talking to a state senator from Wyoming who's very versed on the data center issue, and his message was this to a larger working group. So we passed a law in Wyoming that said if you're going to build hyperscale data centers in Wyoming, you've got to pay for the whole thing end-to-end, including building your own generation. And he says, as a consequence, we're building three dozen data centers. I was like, how did they agree to that? And he says, because they were so bought in by the fact that they knew exactly what the problem was. They had regulatory certainty. And that's what I want to talk to you about very briefly. we passed in our budget last year by an overwhelming majority in the budget, our inclination to be done with RGGI in Pennsylvania so that we could move forward with the development of generation. And I expected to see this outpouring of lowercase e energy to start these projects. And I recently asked, why hasn't that happened? Why are we not in the middle of conversations about building hyperscale generation in Pennsylvania? And the answer was we still don't trust you. And sure enough, we're going to run a bill today on the floor that turns the clock back. And they pointed to that bill as evidence of the distrust. So I would like for you to please just dive a little bit deeper into why business needs regulatory certainty to engage in risk, in business risk.

Thank you, Madam Chair. Thank you. Representative Boyd.

Thank you for the question. And as it pertains to the total potential, from my area of expertise, I don't think I can provide a precise answer on that right now. I think that is something we could take back to the agency and get maybe some numbers together. I think part of that is we're at the beginning of the journey, and I did talk a little bit about that in the testimony. But I think what we really need now is some of the exploratory work to start to take place. And I know there are grant opportunities out there, one in which we're pursuing as a partner, a private-public partnership. to really start to test the potential. There's a new grant funding opportunity that the Department of Energy just released, up to $171 million. So I think although we may be able to provide a broad number when it comes to potential based on research that's been completed to date, I think that will become more narrow and more focused geographically as we hope to see some of this exploratory phase work under the support of grants get kicked off. I think that also gets back to your question of regional opportunities. I know there are, again, I don't have them in my head and that I can recite them perfectly at this point, but I know there have been resource potential maps that have been generated that show the geothermal gradient, for instance, in different parts of the Commonwealth. wealth. And I do believe our team could assemble some of that information and return it to you as soon as possible to really help inform those questions that you have.

Sure. Thank you for the question. So as I reflected in my submitted comments, we do believe that there is potential. We don't know with certainty yet what it is. There have been analyses done by Penn State as well as the Joint Government Commission did some good analysis on this. And there's great teams at DEP and DCNR that can dive deeper into this. But, you know, our hope is that you're looking at the potential. It may not be electric generation scale. In most of the Commonwealth, maybe there's one or two areas that that could be the case. But you're looking at much more distributed use, which then reduces infrastructure-related build-out and those sorts of impacts. So there's that benefit. And also, again, the fact that this is low to no emitting and is firm and dispatchable. So those really are the benefits. And then also the lifeline that it would offer for the abandoned orphan marginal wells in terms of repurposing or co-production.

Thank you. And when you're talking about distributed, are you thinking of like a factory that might be a heavy user of energy, or is it too soon to know what would be possible in Pennsylvania?

About distributed energy and the potential.

That's all right.

Mr. Walliser, did you have something you wanted to add on the distributed energy front? And then we'll go to the prime sponsor of the bill.

Great. Thank you. And I think our final question for the day comes from the prime sponsor, Representative Venkat.

You may.

Thank you so much. Thank you to all of the members who joined us. Thank you to the panelists. There is much more to talk about. I saw in your comments the geothermal energy storage wells, which we didn't even touch on. But I believe that tackling this issue and learning more about new sources, nascent sources of energy is something that we need to do. We all know people's bills are going high already and only anticipate they'll go higher. So everything we can do to make our grid more reliable, to keep people's bills down as much as possible, I believe we must do, and that's the work of this committee. So thank you so much for joining us. Chairman Causer.

Thank you.

And with that, this hearing is adjourned at 1054.