Texas Legislation Defines Ownership of Geothermal Energy: In a groundbreaking move, the Lone Star State, Texas, has recently enacted Senate Bill 785, reshaping the energy landscape by officially recognizing the ownership of geothermal energy resources and their associated byproducts. This transformative legislation, effective as of June 18, 2023, has immense implications for landowners, the energy sector, and the environment.

Senate Bill 785

Empowering Landowners

The heart of this legislation lies in its allocation of ownership rights. As per Senate Bill 785, the geothermal energy beneath the land’s surface now belongs to either the landowner or the owner of the surface estate. This bold move gives individuals and entities a direct stake in the vast potential of geothermal energy, a previously underutilized resource.

Unanimous Support

Senate Bill 785 received overwhelming support, securing two-thirds of the votes in each legislative chamber. What sets this bill apart is that it didn’t require the Governor’s signature or a veto; it automatically became law. This underscores its importance and broad appeal.

Navigating the Legal Terrain

Redefining Geothermal Resources

The bill introduces crucial amendments to Section 141.003(5) of the Natural Resources Code, providing a clear definition of heat as a by-product of geothermal energy and its associated resources. Importantly, it distinguishes these resources from mineral, oil, or gas assets, reinforcing their unique status.

Establishing Ownership

Section 141.004 of the Natural Resources Code is a game-changer, as it lays down the foundation for ownership rights. This section unequivocally states that geothermal energy and its associated resources beneath the land’s surface are considered real property. These rights are granted to either the landowner or, in cases where surface and mineral estates have been separated, the surface estate owner.

Drilling for Prosperity

The ownership rights outlined in this legislation empower individuals and their lessees, heirs, or assignees to explore and extract geothermal energy and its associated resources. This move opens up exciting opportunities for renewable energy production and economic growth, positioning Texas at the forefront of the geothermal energy revolution.

Limitations and Clarifications

To maintain clarity, the legislation includes a provision. It clarifies that the ownership rights do not extend to minerals dissolved or otherwise contained in groundwater, including hot brines. This distinction is essential to prevent confusion and disputes over resource boundaries.

Sec. 141.004 OWNERSHIP OF GEOTHERMAL ENERGY AND ASSOCIATED RESOURCES

(a) Except as otherwise expressly provided by a conveyance, contract, deed, reservation, exception, limitation, lease, or other binding obligation, the geothermal energy and associated resources below the surface of land are owned as real property by

(1) the landowner; or

(2) if the surface estate and the mineral estate of the land have been severed, the owner of the surface estate of the land.

(b) Subject to the provisions of this chapter, the property rights described by this section entitle the owner of the geothermal energy and associated resources below the surface of land and the owner’s lessee, heir, or assignee to drill for and produce the geothermal energy and associated resources.

(c) This section does not apply to minerals dissolved or otherwise contained in groundwater, including in hot brines.