Eleven proposals from ten geothermal operators expressing interest in 576,000 acres of Colorado state trust lands arrived at the State Land Board between September and December 2025, launching the agency’s most significant energy transition initiative since oil and gas development dominated revenue generation.
Ormat and Eavor—the two largest geothermal operators globally—submitted responses to the Request for Information. Staff anticipates the first Request for Proposals in Q1 2026, with production beginning on or after 2030 if exploration proves resources viable.
The interest focuses on Enhanced Geothermal Systems technology that creates artificial reservoirs in hot dry rock rather than relying on naturally occurring underground water. EGS drilling reaches 20,000 feet—double typical oil and gas depth—and produces five to ten times more megawatts than traditional geothermal wells. Occidental Petroleum currently tests a 20,000-foot well in Colorado demonstrating the technology’s feasibility.
Staff excluded the Maxwell Park/Mt. Princeton property from the geothermal RFI due to ongoing litigation. Mt Princeton Geothermal LLC sued State Land Board in Denver District Court (Case No. 2025CV33341). The board discussed the case in executive session January 21 but made no public statement after the 30-minute closed meeting. The property sits in prime geothermal territory near Buena Vista’s hot springs.
Ben Teschner, Solid Minerals Manager, presented RFI results to commissioners January 21. He cautioned that when large acreages get nominated, operators often shield actual target parcels from competition. “Staff believes that operators may not be interested in all parcels listed on RFI responses,” Teschner explained. Real interest likely falls well below the 576,000-acre figure.
The technology discussion revealed why EGS changes Colorado’s geothermal potential. Traditional geothermal requires naturally occurring underground hot water reservoirs—limiting development to specific geological areas like Pagosa Springs. EGS creates reservoirs by injecting water into hot dry rock formations, opening vast new territories for development.
The process works by drilling to hot rock formations, fracturing the rock, injecting water to create heated underground reservoirs, then pulling heated water to the surface to run turbines and generators. Closed-loop advanced systems keep fluid entirely in pipes running through hot rock, heating without underground injection.
Commissioner questions focused on water usage, depth requirements, and site selection. Staff addressed concerns about water competition with agricultural and municipal uses. “They are able to use degraded water,” Teschner explained. “So they don’t have to use fresh water—they can use brackish water, wastewater. It’s not competing with the traditional drinking water sources, it’s not competing for agriculture.”
The deeper drilling and complex wellbore construction makes EGS three to five times more expensive than traditional geothermal. But wells produce substantially more power. At 20,000 feet, operators access heat levels impossible at oil and gas depths below 10,000 feet.
Repurposing old oil and gas wells for geothermal development remains uncertain. Teschner said it “depends on the type of well that was originally drilled, the integrity of the pipe, because this is a lot hotter, a lot deeper.” Operators are exploring the option but haven’t proven reliability.
Staff attended the Geothermal Solutions Symposium at Colorado School of Mines on December 2, 2025. Kyle Haustveit, Assistant Secretary of Fossil Energy in the Trump administration, delivered the keynote. Presenters included Fervo, Quaise, Occidental, and Cyrq Energy—major players in EGS development.
The timeline stretches years. Operators anticipate production on or after 2030 if exploration confirms resource quality. Staff plans a phased RFP approach starting with smaller parcels to test lease terms and royalty structures before committing large holdings.
Commissioner questions revealed the revenue uncertainty driving caution. Most operators requested BLM rent and royalty rates. Staff has no existing Colorado geothermal leases for benchmarking and limited active leases in other states to review. They’re developing pricing structures without market data.
“If Staff enters into agreements that eventually prove to be below market rate and/or if Staff negotiates provisions that end up being unfavorable to the State Land Board,” staff materials explained, “Staff can adapt and correct them in later offerings.” Translation: We don’t know what appropriate rates are, so we’re testing small first to avoid locking in bad deals.
Scoring criteria for RFP evaluation prioritizes operator experience in geothermal operation and production, availability of financing for exploration, bids on rent/royalty/bonus, project surface footprint and compatibility with layered leasing, and community and public relations plans.
The surface footprint matters. At 20,000 feet, drilling operations require massive rigs, extensive road networks, and substantial infrastructure. Layered leasing—allowing geothermal development while maintaining surface uses like grazing—depends on minimizing disturbance. But deep drilling inherently disturbs more than traditional energy development.
Oil and gas currently generates 80-plus percent of State Land Board revenue. Mineral royalties produced $175 million in FY 2021-22 versus $26 million from surface and agricultural uses. Any significant shift from oil and gas to geothermal reshapes the trust’s economic foundation.
Staff presented geothermal as supporting “state’s larger goals around renewable energy and reducing greenhouse gases.” Director Nicole Rosmarino emphasized alignment with Governor Polis’s energy transition priorities. The agency hired a Renewable Energy Program Manager—interviews ongoing with Q1 2026 target hire date.
But the transition carries risk. Oil and gas revenue is proven and immediate. Geothermal revenue is speculative and distant. Operators need until 2030 to begin production if exploration succeeds. If hot rock proves insufficient or wells underperform, years of effort produces no return.
The State Land Board’s 2023 Board Resolution urged legislators to broaden allowable investments to include asset classes typically held by endowments. The Permanent Fund workshop January 21 discussed shifting from fixed income to equities, increasing from 41 percent to a 50 percent target. Asset allocation changes and energy transition policies both aim to modernize trust management for long-term sustainability.
Commissioner questions about federal tax credits revealed timing pressures. Staff mentioned “newly-truncated timeline for claiming federal solar tax credits” when discussing the Taelor Solar road access permit. Federal incentives drive urgency in renewable energy development including geothermal.
The geothermal symposium’s keynote by a Trump administration fossil energy official suggests bipartisan support for domestic energy production regardless of source. Geothermal positions as bridge technology—using oil and gas drilling expertise for renewable energy production.
Whether that bridge generates equivalent revenue remains unproven. State Land Board commits to exploring 576,000 acres worth of geothermal potential without knowing appropriate royalty rates, production timelines, or market demand for power generated 2030 or later.
The Maxwell Park litigation clouds the picture. Mt. Princeton represents prime geothermal territory excluded from statewide development because of a lawsuit the board won’t discuss publicly. Whatever dispute led to litigation could signal problems in lease negotiations with other operators.
Staff recommended proceeding with smaller RFPs to test the market. Commissioners asked good questions about water, depth, repurposing, and financial sustainability. No votes were required—the January 21 presentation was informational only.
But the direction is set. State Land Board transitions from oil and gas dependence toward renewable energy development with geothermal as centerpiece. Whether that transition generates comparable revenue or leaves beneficiaries shortchanged depends on decisions in Q1 2026 RFPs and beyond.
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