Land & Renewables Connection

Deep Geothermal Comes to Pennsylvania: Senate Bill 1131

Most people are familiar with geothermal energy from pictures of Iceland and from the heat pumps in their home. But, geothermal energy can be located in much broader geographic areas, and can be useful for large-scale energy projects. And, this can be done with techniques that are frequently employed through oil and gas development in Pennsylvania.

The earth’s core is very hot and temperatures generally increase with depth. Geothermal energy becomes valuable with these temperature differences. In general, the hotter the resource, the greater the geothermal potential, particularly for electricity generation. Deeper, and hotter, depths are accessible via drilling processes employed in the oil and gas sector. Horizontal drilling, a common feature of oil and gas development in Pennsylvania, along with hydraulic fracturing, are techniques that may have a significant role in geothermal energy development.

More specifically, those processes traditionally associated with the oil and gas industry could be useful to develop what are known as “enhanced geothermal systems”. In those types of systems, wells can be drilled vertically to depths with desired temperatures, with the wells then transitioning to the horizontal plane to travel through the hot rock. The surrounding rock can then be fractured in order to expose the rock to fluids that could be injected into the subsurface. The injected fluids circulate in the hot rock, pick up heat, and return to the surface, where that heat energy can be used. Enhanced geothermal systems do not presently have widespread implementation, but there are projects that are exploring the concept for commercial applications.

Active volcanoes are physical features that are most frequently associated with geothermal activity. It is hard to find those in Pennsylvania. However, a 2025 study, The Future of Geothermal in Pennsylvania^[1], suggested that rocks of sufficient heat for generating electricity from geothermal purposes are accessible in Pennsylvania using drilling practices common to oil and gas development. Many of the geographic areas of Pennsylvania that have experienced oil and gas development could also play a potential role in future geothermal activities.

With this potential for economically, and technologically, viable geothermal development in Pennsylvania, the General Assembly has taken a first step to shape the law around the subject with the introduction of Senate Bill 1131, the Geothermal Energy Development Act. While it has many facets, Senate Bill 1131 is not an entirely comprehensive approach to geothermal energy development in Pennsylvania.

The starting point for a discussion of Senate Bill 1131 is its definition of a "geothermal resource". The draft legislation defines “geothermal resource” as:

The natural heat of the earth at temperatures greater than 40º Celsius and the energy, in whatever form, below the surface of the earth present in, resulting from, created by or that may be extracted from, the natural heat and all minerals in solution or other products obtained from naturally heated fluids, brines, associated gases and steam, in whatever form, found below the surface of the earth, exclusive of helium, oil, hydrocarbon gas or other hydrocarbon substances. The term specifically includes:

(1) all products of geothermal processes, including formation steam, hot water and hot brines;

(2) steam and other gases, hot water and hot brines resulting from water, gas or other fluids artificially introduced into geothermal formations;

(3) heat or other associated energy found in geothermal formations; and

(4) any by-product derived from any item listed under paragraph (1), (2) or (3).

Under the draft legislation, “[t]he ownership of all geothermal resources in all strata below the surface lands and waters of this Commonwealth shall be vested in the surface property interest owner above the geothermal resources subject to any preexisting rights.”

In turn, the “surface property interest owner” is “[a] property interest owner identified by the records of the recorder of deeds for each county containing a portion of the proposed geothermal energy project who holds a fee simple interest, other freehold interest or leasehold interest in the subsurface of the property, which may include minerals, including coal, oil and gas rights or pore space rights for carbon or natural gas storage. The term does not include the owner of a right-of-way or an easement.”

With the ownership framework being established, Senate Bill 1131 next addresses wells that are involved in geothermal projects that are subject to the law. A "geothermal well" under the draft legislation is “[a] borehole drilled or being drilled for the purpose of or to be used for production of geothermal resources, including for electricity production, heating and cooling. The term includes a Class V Underground Injection Control well drilled for the purpose of producing geothermal resources. The term does not include a borehole drilled at or less than 5,000 feet below the surface which is primarily intended for geothermal heat pumps to provide heating or cooling to one or multiple buildings.” Finally, Senate Bill 1131 defines a “geothermal system” as “[a]ny strata, pool, reservoir or other geologic formation containing geothermal resources.”

These foundational decisions do not seem unreasonable. The identification that surface owners are also the owners of the geothermal resources (unless there was a prior conveyance) is reasonable and is consistent with the view that we have previously articulated about pore space ownership. Another important component of Senate Bill 1131 is that its definition of “geothermal resources” is not specific to specified geologic formations. Instead, “geothermal resources” is based on the natural heat under the ground: 40º Celsius. That thresholdtemperature is likely not hot enough for all geothermal uses, particularly electricity generation, suggesting that the intent of Senate Bill 1131 is to apply to a wide variety of potential geothermal uses. The use of a minimum temperature, rather than the identification of a geologic formation or depth is sensible because that temperature could be reached at different depths across the state.

Senate Bill 1131 charges the Department of Environmental Protection (“DEP”) with regulating geothermal energy projects and directs the Environmental Quality Board to promulgate regulations addressing the technical and operational requirements for geothermal wells. The scope of these regulations would include things like locations, design, spacing, drilling, casing, testing, plugging, and decommissioning, along with bonding and financial security requirements. The bonding amounts are directed to generally align with those required for conventional or unconventional oil and gas wells unless specific well characteristics justify a different approach.

Before those regulations are promulgated, geothermal wells would generally be treated under the regulatory regime applicable to oil and gas wells. The DEP would have the flexibility to treat geothermal wells as either conventional or unconventional wells and may impose modified permit conditions to account for the differences between geothermal and hydrocarbon production. But, if a geothermal well will be hydraulically fractured, as in an enhanced geothermal system, an unconventional well permit must be obtained.

If geothermal resources have a commercial economic value in Pennsylvania, they join a crowded roster of subsurface interests. Coal, limestone, oil, and gas have been commercially extracted from the ground in Pennsylvania for centuries. Since all of these subsurface resources must be accessed from “somewhere”, tensions arise between competing developmental rights. Senate Bill 1131 mandates geothermal to design projects to avoid interference with commercially valuable minerals. But, that can be easier said than done.

In conjunction with these concepts, there are two specific parts of the Geothermal Energy Development Act that are particularly interesting in their potential incentivization of geothermal energy development. Both of these points involve oil and gas development and may create tension between surface owners and oil and gas owners.

The first point is Senate Bill 1131’s directive that the DEP consider establishing an expedited permitting process for applicants who already hold oil and gas well permits. That seems designed to incentivize oil and gas drillers, who already have the know-how and resources to develop and fracture deep wells, to become involved in geothermal development.

The second point is Senate Bill 1131’s treatment of existing wells, which it calls “repurposed wells”. A “repurposed well” under the Geothermal Energy Development Act is “[a]n existing conventional well, unconventional well or abandoned well originally intended for oil and gas production which is repurposed into a geothermal well for geothermal energy production or for the cogeneration of geothermal energy or geothermal resources with oil and gas production, regardless of formation temperature or depth.” That is significantly different from the rest of the draft legislation and may cause issues.

Recall that a “geothermal resource” must have a temperature greater than 40°Celsius. But, there seems to be an exception in that definition if a “repurposed well” is involved. In the case of a “repurposed well”, geothermal resources can be exploited, even if the threshold temperature otherwise applicable is not obtained. While this recognizes that geothermal processes can provide economic value at lower temperatures, the focus appears to be on the costs of decommissioning wells.

Pennsylvania has no shortage of old oil and gas wells whose plugging responsibility is borne by the taxpayer. Since it is expensive to plug oil and gas wells, the Geothermal Energy Development Act offers a potential second-life to oil and gas wells that are no longer commercially viable for that purpose. Instead of being forced to pay to plug these wells (potentially causing financial issues and resulting in financial resources being unavailable for the task), operators of oil and gas wells could convert them to another economic purpose, geothermal development.

Whether this is a viable plan is unknown, but it appears that Senate Bill 1131 recognizes that benefits could arise from re-using existing infrastructure. Geothermal energy projects (particularly involving lower temperatures) could be more profitable without having costs to drill the wells. And re-using this infrastructure for geothermal purposes could avoid or delay the substantial plugging liabilities that are associated with oil and gas wells.

But, there is a substantial potential problem with a “repurposed well”. That is the authority for the well to exist in the first place and the ownership of the subsurface areas that would be part of the geothermal project. Assume that the ownership of a parcel is split. One individual owns the surface while another individual owns the oil and gas. The oil and gas owner signs an oil and gas lease and then an oil and gas well is drilled pursuant to that lease. That well simply cannot be “repurposed” for geothermal activities. Instead, consent would have to be obtained from the surface owner for geothermal activities. This is a substantial point that Senate Bill 1131 does not substantively address with the necessary level of detail.

Senate Bill 1131 has been referred to the Senate Environmental Resources and Energy Committee. Companion legislation, House Bill 2076, has been introduced in the House. Whether Senate Bill 1131 passes in its current form remains to be seen. But the technology and its utility are becoming more apparent. But, like all things when dealing with property rights in Pennsylvania, there is no “one size fits all” scheme that can avoid tension between competing property interests. How that will play out is unclear at the moment.

If you have questions regarding this post, contact the author, Brendan A. O’Donnell at 412-288-2226 or odonnellba@hh-law.com

1. Edited by Dave Grossman, Trent McFadyen, and Drew Nelson.

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This article is for informational purposes only and does not constitute legal advice. Senate Bill 1131 is pending legislation that may be amended or may not pass. If you have questions about how geothermal development might affect your property rights, please consult with qualified legal counsel.

[1] Edited by Dave Grossman, Trent McFadyen, and Drew Nelson.