Haw. Code R. § 13-183-58 - Waste prevention, offset wells and geothermal by-products
(a) All mining leases shall be subject to the
condition that the lessee shall, in conducting exploratory development and
producing operations, use all reasonable precautions to prevent waste and
conserve and provide for optimum use of geothermal resources and other natural
resources found or developed in the leased lands.
(b) If any waste of geothermal resources or
by-products result from the willful misconduct or negligence of the operator or
if the operator fails to take corrective action within a reasonable time after
being notified in writing by the chairperson, the board shall determine the
value of the loss or waste and the compensation due to the board, using the
method for computing royalties set out in § 13-183-31(b) (c). Payment for
the losses will be paid when billed. The board s determination of the value of
the waste may be appealed as provided in § 13-183-5.
(c) In the event any well located on other
than state or reserved land is draining geothermal resources in commercial
quantities from any land leased from the State, the board may notify the lessee
in writing to drill an offset well thereto, and within one hundred twenty days
from the date of the notice or the additional time as may be allowed by the
chairperson, the lessee shall commence operations for the drilling of an offset
well on the leased land to the same zone as that zone from which the well is
producing geothermal resources or shall unitize with the well that is draining
state land or pay to the State compensatory royalty. For the purpose of this
section an offset well shall mean a well which a reasonably prudent geothermal
operator would drill under similar circumstances. There shall be no obligation
to unitize or pay compensatory royalty. To the extent provided by law, the
board may require unitization of leases and lands involved.
(d) Subject to lessee's right to surrender a
mining lease, where the board determines that production, use, or conversion of
geothermal resources is susceptible of producing a by-product or by-products,
including demineralized water contained in or derived from the geothermal
resources and deemed suitable for beneficial use in accordance with chapter
177, Hawaii Revised Statutes, the board may require substantial production or
use thereof unless the board determines that beneficial production or use would
not be in the interest of conservation of natural resources, nor economically
feasible or would not otherwise be in the public interest.
Notes
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