Recent years have seen an explosion of interest in “deep” geothermal development – projects targeting energy extracted from heat sources hundreds of meters below the surface and available 24/7 as a baseload power source. As geothermal innovators seek to prove viability of their technologies and heat resources, driving down the per megawatt cost to be comparable to existing energy sources, legislatures in North Dakota and New Mexico have stepped in this year to encourage the use of existing infrastructure and know-how from the oil and gas sector for geothermal energy development.
This past March, New Mexico enacted House Bill 361, known as the “Well Repurposing Act”, which permits the New Mexico Energy, Minerals, and Natural Resources Department to convert oil and gas wells for geothermal energy and carbon storage purposes and authorizes the Department to establish financial assistance requirements for operators undertaking such conversions.[1] The bill’s sponsors specifically targeted New Mexico’s nearly 2,000 orphaned wells (unplugged oil and gas wells which have no responsible owner or operator) – identifying the potential for geothermal energy producers to leverage existing, drilled wells, while mitigating the public’s exposure to environmental risks and plugging liabilities such orphaned wells pose.[2]
Meanwhile, North Dakota passed Senate Bill 2360 in April 2025, pursuant to which the legislative management shall consider a feasibility study to evaluate the state’s potential for geothermal energy production, including the potential application of geothermal energy to nonproductive oil and gas wells.[3] Prairie Public Broadcasting later reported that the University of North Dakota’s Energy and Environmental Research Center has been engaged to study the possibility of generating up to 600 megawatts of power from geothermal energy coupled with oil production or CO2 storage.[4]
Proponents of co-locating geothermal and hydrocarbon production see potential synergies in leveraging the deep expertise in subsurface drilling developed for oil and gas industries to better access and produce from deeper – and hotter – energy sources. All while reducing drilling costs to make geothermal power economically competitive compared to both traditional and renewable energy sources. Meanwhile, legislatures are hoping these solutions can alleviate their states’ concerns regarding orphaned well liabilities while pushing the energy transition forward.
[2] New Mexico House Democrats, “House Passes Environmental Protection and Clean Energy Bills”, March 14, 2025
[3]: North Dakota Senate Bill 2360
[4] Dave Thompson, “EERC to undertake a study of geothermal energy (audio)”, Prairie Public Broadcasting, July 2, 2025