Last month, the New York State Department of Environmental Conservation (NYSDEC) published an Advanced Notice of Proposed Rule Making (ANPRM) to solicit stakeholder input on future proposed regulations for closed-loop geothermal boreholes and closed-loop stratigraphic test wells drilled deeper than 500 feet.
As we previously discussed, Governor Kathy Hochul signed a law in 2023 exempting closed-loop geothermal boreholes deeper than 500 feet “installed for the purpose of facilitating a geothermal heating or cooling system” from certain regulatory requirements applicable to oil and gas wells that NYSDEC had historically applied to both closed-loop and open-loop geothermal boreholes deeper than 500 feet. In February 2024, Governor Hochul signed legislation (S.8060/A.8565) directing NYSDEC to promulgate regulations no later than December 31, 2024 to address closed-loop geothermal boreholes drilled deeper than 500 feet. A year and a half later, NYSDEC has released an advanced notice of proposed regulations, a Draft Scope for a Generic Environmental Impact Statement, and other supplemental materials for initial review and input by stakeholders.
The ANPRM is the first step in NYSDEC’s process of considering proposed regulations for such geothermal boreholes. Despite the industry’s anticipation of proposed regulations, the ANPRM is not a rulemaking activity. NYSDEC is gathering feedback to inform proposed regulations to be formally proposed for notice and comment at some future date.
Concurrently with the ANPRM, NYSDEC is conducting its review of the future proposed closed-loop regulations under the New York State Environmental Quality Review Act (SEQRA), and is soliciting comments on the Draft Scope for its forthcoming Generic Environmental Impact Statement (GEIS).
We summarize the proposed rules and the specific questions posed by NYSDEC for stakeholder comment below.
ANPRM – New Regulatory Provisions
Revisions to Sections of 6 NYCRR Part 550
- NYSDEC proposes to explicitly incorporate new definitions and references to geothermal and stratigraphic wells in the general sections of its existing Part 550 regulations for wells regulated under Article 23 of the Environmental Conservation Law, including key definitions for “closed loop geothermal borehole,” “closed loop stratigraphic test well,” “commence operations,” “decommissioning,” and “qualified contractor.” These new and revised definitions are featured prominently in the proposed Parts 561 and 563 discussed below.
- While the ANPRM includes proposed definitions for other types of geothermal boreholes and stratigraphic wells (i.e., open-loop and standing column geothermal wells) as well as standard definitions for “borehole,” “wellbore,” “geothermal well,” and “stratigraphic test well,” the proposed regulations are focused on specific requirements for closed-loop geothermal boreholes and closed-loop stratigraphic wells. All other stratigraphic well types will be subject to the requirements of 6 NYCRR Parts 550-556.
NEW – 6 NYCRR Part 561: Closed Loop Geothermal Boreholes
- In this new section, NYSDEC proposes to enact comprehensive regulations for closed-loop geothermal boreholes drilled deeper than 500 feet. These boreholes are explicitly drilled for the purpose of facilitating geothermal heating and cooling projects.
- Topics covered include:
- Permit application, application fee, and elimination of financial security;
- Qualified Contractor eligibility, application requirements, and permit issuance;
- Borehole siting;
- Design and construction of boreholes;
- Drilling and completion procedures;
- Identification and marking requirements;
- Reporting requirements;
- Waste disposal and site restoration;
- Operating practices and requirements;
- Decommissioning; and
- Ongoing operations (on the effective date of the rule).
NEW – 6 NYCRR Part 563: Closed Loop Stratigraphic Test Wells
- Stratigraphic test wells are designed and constructed like closed-loop geothermal boreholes but have the sole purpose of testing downhole characteristics to determine suitability for a potential geothermal energy project and are not part of a larger planned geothermal project at the time of drilling. If it is later determined that a site is suitable for geothermal, a stratigraphic test well can be administratively converted to a closed-loop geothermal borehole.
- NYSDEC currently has regulatory authority to permit closed-loop stratigraphic wells deeper than 500 feet but has proposed new applicable regulations.
- The new Part 563 would impose permit application requirements and substantive standards similar to the proposed Part 561, though Part 561 is more comprehensive. Part 563 would also create identification and marking requirements specific to stratigraphic test wells and rules regarding inactivity, plugging, abandonment, and reporting obligations.
NEW – 6 NYCRR Part 569: Materials Incorporated by Reference
- NYSDEC is considering incorporating relevant industry standards by reference into the proposed Part 561, which would be cited in the new Part 569, as follows:
- API Specification 5CT, Specification for Casing and Tubing;
- API Specification 10A, Specification for Cements and Materials for Well Cementing;
- ASTM A500/A500M-20, Standard Specification for Cold-Formed Welded and Seamless Carbon Steel Structural Tubing in Rounds and Shapes;
- ASTM C150/C150M-24, Standard Specification for Portland Cement; and
- ANSI/CSA/IGSHPA C448 Series-16, Design and Installation of Ground Source Heat Pump Systems for Commercial and Residential Buildings.
Until new regulations go into effect, closed-loop geothermal boreholes exempted by the 2023 law will remain largely unregulated by NYSDEC. The advanced proposed rules do not address:
- Drilling of geothermal wells shallower than 500 feet regulated by NYSDEC’s Division of Water under ECL Article 15;
- Open-loop or standing column wells deeper than 500 feet regulated pursuant to ECL Article 23 and 6 NYCRR Parts 550-559; or
- Specific requirements regarding disposal of fluids and wastes generated during geothermal drilling and completion activities.
Questions for Stakeholder Comment
NYSDEC has specifically asked stakeholders to provide comments on the following items:
- NYSDEC’s proposal to require qualified contractors responsible for the on-site supervision of permitted closed-loop geothermal activities to obtain and maintain certain certifications/accreditations. Two organizations with certifications under consideration are the National Ground Water Association (NGWA) and the International Ground Source Heat Pump Association (IGSHPA).
- NYSDEC’s proposal to require the installation of permanent surface casing in geographic areas where there is increased risk of encountering hydrocarbons or other geologic hazards in the subsurface.
- Costs associated with mitigating noise, visual, and community disturbances to sensitive environments for large-scale projects.
- Economic and technological feasibility issues related to proposed borehole setback and construction requirements based on drilling risks tied to geographic area and geologic setting, as well as estimated costs associated with compliance.
- The rulemaking’s impacts on local governments, small businesses, and employment opportunities.
Further information on NYSDEC’s stakeholder outreach information request can be found
here.
Draft Scope of GEIS
Under the New York State Environmental Quality Review Act (SEQR), a generic environmental impact statement (GEIS) is a type of environmental impact statement that is used to consider broad-based actions or related groups of actions that agencies may approve, fund, or directly undertake. As required by SEQR, NYSDEC has prepared a scope of the topics and analyses of potential environmental impacts that will be addressed in its forthcoming draft GEIS on closed-loop geothermal. The GEIS will evaluate the potential environmental impacts specific to the drilling and installation of closed-loop geothermal boreholes and closed-loop stratigraphic wells and will make recommendations on ways to reduce or avoid adverse environmental impacts.
One topic covered by the draft GEIS scope that isn’t specifically addressed in the advanced proposed regulations is that the new rules will encompass both small-scale projects (residential and commercial projects requiring one to several boreholes) and large-scale projects (industrial and large commercial projects, including district geothermal systems and utility-scale thermal energy networks, that may require several hundred boreholes). The GEIS will aim to consider the effects of project scale on potential environmental impacts and proposed mitigation measures. Stakeholders should assess the draft GEIS scope and confirm that its proposed evaluation of environmental impacts adequately addresses areas of concern for geothermal projects of all sizes.
Next Steps
Importantly, the July 23, 2025 advanced rulemaking package released by NYSDEC is a feedback-gathering exercise, not a regulatory action. Stakeholders are invited to submit comments on the ANPRM, draft GEIS scope, and supplemental documents until August 22, 2025. Details on how to submit comments can be found here. After the initial stakeholder input and comment period ends on August 22, the NYSDEC is expected to release additional materials for public comment, including a draft rule package and a draft GEIS, before it issues final rules.
We will continue to monitor this space for important updates on the regulation of geothermal projects in New York State and beyond.
