While oil and gas leases are commonplace for the BLM, the Mt. Princeton parcel is likely to be the first lease in Colorado involving geothermal development. No other properties in Colorado have thus far been nominated for inclusion in the lease program on the basis of geothermal energy production.

According to BLM spokesman Jim Sample, the State asked for deferment of the geothermal lease in part because federal subsurface mineral rights underlie state and private property. “There’s always a concern where federal mineral rights get involved with state or private surface rights, and federal traditionally trumps state and private, but we do our best to work with the parties here in Colorado whenever that situation exists,” said Sample.

A lease will authorize a company or individual to produce geothermal energy from the public mineral estate under management by the BLM, but development is not automatically approved. “There are several hoops [operators] have to jump through before they get a drilling permit,” said Sample, including the completion of an environmental impact statement or environmental assessment.

Leaseholders have a 10-year timeframe in which to begin meaningful development or they lose their rights to the lease, according to Sample.

While geothermal energy is generally considered to be environmentally-friendly, especially compared to fossil fuels or nuclear power, not everyone is sanguine about the prospect of a generating plant nestled at the base of the Collegiate Peaks. In a recent Chaffee County Times article, Buena Vista resident Steve Glover was critical of the proposal, suggesting that viewsheds and property values would be impacted if the Mt. Princeton parcel were to be developed for energy production. “These guys are going to want to put a factory somewhere,” Glover said.

John Graham, co-founder of Chaffee Citizens for Sustainability, said that CCFS has not taken a position on the geothermal lease.

The Mt. Princeton parcel is likely to be included in the BLM’s next quarterly sale, to be held in February.

The announcement follows a steady stream of news about geothermal development in Chaffee County. A recent presentation by Mount Princeton Geothermal LLC to the Upper Arkansas Valley Conservancy District suggested that a 10 megawatt geothermal plant could provide for 85 percent of the electrical needs in the Upper Arkansas Valley.

Geothermal resources, such as steam and hot water, are used directly to heat buildings and in greenhouses and aquaculture, and indirectly to generate electric power. Half of the nation’s geothermal energy production occurs on federal land, much of it in California and Nevada, and 90 percent of potential geothermal resources are located on public lands as well, according to the BLM. The earth’s crust may be slightly thinner in Colorado between Leadville and Paonia, a phenomenon known as the Aspen Anomaly, making this region more promising for geothermal development.

Chaffee County stands to benefit materially from the Mount Princeton lease, as geothermal lease revenues and royalties are shared with the states and counties where the leases are located, with 50 percent going to the state and 25 percent to the county. A competitive auction of lease parcels for geothermal energy resources on federal public lands in California, Nevada and Utah earlier this year generated a top per-acre bid of $3,800. Bidding for the Mount Princeton lease will start at $2 per acre.

The quarterly competitive oil and gas lease sale by the BLM will take place November 12 in Denver.

Brown’s Canyon

On this issue, the candidates’ positions are pretty clear cut on whether or not to pursue federal Wilderness designation. The short story: Mallett for; Holman against. Backstory: both men consider themselves sportsman. Mallett still actively hunts and fishes. Holman said he hasn’t hunted for a while because he simply found it increasingly hard to pull the trigger. Mallett says the 21,000 acres proposed wilderness provides key winter habitat for many large animal species, includes unique geologic formations and offers one of the few low-elevation wilderness areas in the Rockies. Holman says Wilderness permanently restricts access to public land for those not able-bodied enough to access it without motorized assistance.

Energy

Both candidates conceptually support development of renewable energy in Chaffee County but they differ in emphasis. Although Holman attended, Mallett had the higher profile at last month’s Sustainability Showcase hosted by Colorado Mountain College. Mallett also converted an old VW bug to electric power. Mallett also takes credit for installing solar panels at the county fairgrounds, establishing a local Energy Star program and working with the private sector to evaluate and develop biodiesel, woody biomass, solar photovoltaic (PV) farms, wind generation and low-head hydropower.

Mallett has noticeably been absent from all the public meetings by the folks up Chalk Creek Canyon who are pursuing development of a geothermal energy project. Holman has been at them all and expressed optimism and encouragement for geothermal energy development. Mount Princeton Geothermal LLC shows promise for becoming the first geothermal energy project in the state. Early modelling indicates geothermal-generated power could provide enough electricity to supply most households in Chaffee County. Holman favors encouraging the development of renewable energy through incentives vs. government funding.

Fred Henderson, Chalk Creek canyon resident, partner and leading proponent of the geothermal project, led the discussion and fielded questions during a public meeting held Sept. 9 at Frontier Ranch.

Henderson explained what he called the perfect storm that makes the development of geothermal power more viable today than ever before. The perfect storm ingredients include an energy marketplace increasingly seeking alternatives to fossil fuels and a state law mandating that the state’s largest utilities obtain 20 percent their power from renewable energy sources by 2020.

In addition, advances in technology make it easier to harvest geothermal energy. Current projections envision a 10-megawatt power plant that could provide electricity to upwards of 4,000 homes. Initial cost to build such a plant is estimated at $30 – $40 million.

After more than 90-minutes of highly technical reporting from experts from the Colorado School of Mines and the Colorado Geological Survey, residents asked decidedly non-technical questions about the prospect of a geothermal energy plant becoming their new neighbor.

Among those in the audience were Republican county commissioner candidates Dennis Giese and Frank Holman. In comments after the meeting, Holman said he believed the project could be “done well” and was really excited and supportive of it. “It’s a great example of private enterprise working to create clean, sustainable, alternative energy,” Holman said.

Also in the audience was Joani Matranga, Western Regional Representative for the Governor’s Energy Office and Dave Blackwell a renowned geothermal researcher from Southern Methodist University’s Geothermal Lab.

Neighbors were less concerned with the benefits of developing renewable energy for the valley than possible impacts to the tranquility of their neighborhood and property values. Questions centered around whether further geologic testing and the eventual geothermal facility would degrade private geothermal and water wells. A number of others asked about possible noise and light pollution as well as the aesthetics of the facility.

Steve Lundgren, speaking on behalf of Frontier Ranch/Young Life, assured the 50 residents at the meeting that the owners and managers of the Christian camp had run Henderson “through the hoops” and were satisfied the project would not create noise or light pollution and would be constructed to be architecturally “harmonious” with the mountain environment. Frontier Ranch is a partner in Mount Princeton Geothermal LLC, the company trying to bring the project to life. In addition to Frontier Ranch and Henderson, other partners in the energy development company are Mount Princeton Hot Springs Resort and John “Hank” Held, whose grandmother bought the family cabin in the hot springs—rich canyon west of Nathrop.

Next step for the project is to drill four to six additional test holes to hone in on the best, economically viable, deep geothermal reservoir targets. The drill holes will be 4-1/2 inches in diameter and 300 feet deep. Henderson assured the audience that once testing was complete, there would be little sign the drilling ever took place except for a small cement plug over the hole. Neighbors have until late October to formally object to the test drilling.

Could the same forces that heat the water at Mount Princeton and Cottonwood hot springs resorts, be harnessed to power nearly half of all Chaffee County households?

That’s the question being posed by a local development and investors group in tandem with researchers from the Colorado School of Mines.

A team of students from Mines will be in the area through the month, collecting detailed geophysical information to better understand the area’s deep gravity, magnetic and seismic profile as it relates to the deep underground reservoir potential for geothermal energy.

If the remaining geophysical data continues to point in the right direction, a $40 million geothermal power transmission plant could be built in or near Chalk Creek Canyon, a hotbed of geothermal activity along CR 162 in Chaffee County.

The envisioned geothermal power plant could generate 10 megawatts of electricity, enough to power roughly 10,000 homes.

Heading up the research and potential development of such a facility is Mount Princeton Geothermal LLC. The speculative renewable energy company recently held an open house at Frontier Ranch to explain what’s known and what’s yet to understand about the capacity for local geothermal electricity.

An all-star cast of some of the state’s most knowledgeable experts on geothermal potential turned out for the mini-conference at Frontier Ranch. Guests included a team of researchers from the Colorado School of Mines Department of Geophysics; Joani Matranga, Western Regional Representative for the Governor’s Energy Office; and Michael Hayter, Director Geothermal Development for Raser Technologies.

The remainder of the 80 or so folks in attendance included a handful of investment bankers as well as local homeowners, government and business leaders including Sangre De Cristo Electric Association’s Bill Bennett. Sangre De Cristo has expressed interest in incorporating geothermal into its energy portfolio.

Interest in the development of alternative energy has been propelled by Gov. Bill Ritter’s pledge to make developing a new energy economy a key part of his administration’s focus.

Matranga told the group the state is supportive of small-scale local renewable energy production adding that geothermal seems very promising.

Indeed, over the past year, newspaper reports indicate geothermal power is enjoying popularity among leading state and local energy experts. Tom Plant, Director of the Colorado Office of Energy Management and Conservation said a year ago that geothermal electrical generation should “serve as a cornerstone in Colorado’s renewable energy future.”

At the state’s first geothermal working group meeting last year, Curtis Framel, US Department of Energy, said geothermal could “help secure the nation’s energy future while diversifying the country’s energy portfolio.” Framel also noted that geothermal represents a “tremendous economic development benefit for rural Colorado” by creating jobs, diversifying the local economy, and increasing the tax base.

Contrasted against wind and solar, geothermal energy is the lowest impact and most consistent source of round-the-clock power, according to Raser’s Hayter. Raser, which is already exploring geothermal energy opportunities in Nevada and Utah, has its eye on Colorado too.

Closer to home, the Frontier Ranch meeting offered a time to share questions and answers about the project and its potential impact on neighbors in the area.

Fred Henderson, an owner in Mount Princeton Geothermal LLC, said that quite a bit is already known about the geophysics of the area around Chalk Creek Canyon thanks to exploratory research conducted in the 1970′s. At that time, Amax Mining Co., sought new energy sources to make energy self-reliant its molybdenum mine north of Leadville.

Henderson explained the leading system the investors group has been looking at to convert geothermal energy to electricity is a “non-consumptive pump and dump” system. Hot water would be pumped up through the ground from a deep hot water (hydrothermal) reservoir and once the heat from it is extracted at the power plant, the water would be returned directly back into the deep reservoir.

Community issues include the project’s affect on the water table, ground pollution, as well as visual, noise and heat impacts. Henderson said that these issues will be monitored in collaboration with the community, but using the non-consumptive system above, he expects these impacts will be minimal or non-existent.

Henderson, who conducted his own geological study of the area, said he concluded the Chalk Creek Canyon area is a pretty good area to look for a site to produce geothermal energy since four of the hottest wells in the state can be found here. The very hottest known springs are the Hortense and Wright Hot Springs, just west of Mount Princeton resort, where the water temperature is around 185 degrees Fahrenheit. In addition, the Colorado Geological Survey just issued a state-wide heat flow map that shows the Mt. Princeton area has the highest geothermal heat flow in Colorado.

A team of Colorado School of Mines professors and students are in the area to conduct research that will help fill in the blanks that will complete the geothermal energy capacity assessment of the area. Mines geophysics profs Michael Batzle and Andre Revil described their methods, including a 30-ton vibrator truck used to examine the “deep seismic geometry” of the area, as the equivalent of medical resonance imagining (MRI) only for the earth rather than the human body.

A public review of the initial data will be held May 22 at Deer Valley Ranch.

About Mount Princeton Geothermal LLC

Ownership stake in the LLC is being divided as follows: Frontier Ranch and Mount Princeton Holdings (parent company of the Mt. Princeton Hot Springs Resort) each will hold 40 percent interest in the company. The remaining 20 percent is divided evenly between two local geothermal landowners in the canyon, Hank Held and Fred Henderson.

Stanford and Harvard educated, Henderson is the resident expert on economic geology and geochemistry. He is an expert in satellite remote sensing systems for global geology. He is also member of the National Advisory Council of Environmental Policy and Technology for the US Environmental Protection Agency. He and Adams own their own Deadhorse Lake (renamed Lake Angelie) property, another area of geothermal activity. Henderson is happy to answer questions about the project. Email him at hendcos@msn.com.

Denver attorney Hank Held fondly recalls childhood visits to the family cabin his grandmother bought up Chalk Creek Canyon. Held said he originally considered retiring to the area to start a geothermally heated greenhouse for growing hydroponic tomatoes but after meeting Henderson, he said his thoughts turned toward the possibility of developing geothermal power. Held said the company is considering opening up ownership to additional investors and equity partners.

To learn more about geothermal energy, check out these web sites:

• US Department of Energy Geothermal Technologies
  
• National Renewable Energy Lab
• Geothermal Heat Center