Ala. Code § 9-17-36 (2026)

(a) For purposes of this section, the following terms have the following meanings:

(1) ALTERNATIVE ENERGY FACILITY or FACILITY. An alternative energy well and associated infrastructure used for developing, producing, or supporting alternative energy resources.

(2) ALTERNATIVE ENERGY RESOURCES. a. The earth’s natural heat and the energy, in whatever form, which is below the earth’s surface and which is present in, results from, or is created by, or which may be extracted from, the earth’s natural heat.

b. The term includes:

1. All products of geothermal processes and byproducts derived therefrom such as indigenous steam, hot water, and hot brines;

2. Steam, gases, hot water, and hot brines resulting from water, gas, or other fluids artificially introduced into geothermal formations;

3. Heat or other associated energy found in geothermal formations; and

4. Other forms of energy, energy generation, energy capture, energy storage, and related uses, including hydropower derived from natural underground water flows or from injecting water into lower pressure reservoirs with water processed at the surface or by using the energy potential between two subsurface formations within a wellbore.

c. The term does not include the heating and cooling capacity of the earth which may be used for heating and cooling buildings through an on-site heat pump or similar on-site system.

(3) ALTERNATIVE ENERGY WELL. A well that has been permitted pursuant to the board’s authorization to produce or support the production of alternative energy resources.

(b)(1) The State Oil and Gas Board, after providing notice and a public hearing, may authorize the development and operation of an alternative energy facility or the conversion of an existing oil and gas well and associated infrastructure into an alternative energy facility, so long as any alternative energy well extends 5,000 feet or more below the surface of the land, regardless of whether the land is submerged.

(2) As determined by rule of the board, an applicant seeking approval to operate an alternative energy facility shall submit a petition fee, a well permit fee, and financial security instruments specific to the proposed uses of the alternative energy facility.

(c) An alternative energy facility operator shall do all of the following:

(1) Comply with all rules adopted by the board relating to alternative energy wells and facilities.

(2) Make a good faith effort to obtain the consent of all persons that own the facility’s alternative energy resources.

(3) Obtain the consent of persons that own not less than 66 and two-thirds percent of the facility’s alternative energy resources.

(4) Upon an order of the board to amalgamate pursuant to subsection (d), compensate all nonconsenting owners on terms deemed equitable and reasonable by the board.

(5) Employ commercially reasonable efforts to limit the adverse impacts to surface uses of lands owned by the nonconsenting owners of the alternative energy resources of the facility.

(6) If seeking approval to operate a facility within a 10-mile radius of a coal mine operation, obtain the written consent of the coal mine operator and mineral owner with an operation or mineral interest within the radius, provided consent shall not be unreasonably withheld or delayed.

(d) Upon an alternative energy facility operator obtaining the consent of persons that own not less than 66 and two-thirds percent of a facility’s alternative energy resources, the board, after providing notice and a public hearing, may enter an order to amalgamate and pool the alternative energy resources owned by nonconsenting owners into the facility.

(e)(1) The board shall require the owner or operator of an alternative energy facility that has ceased alternative energy production for 12 months or more to properly plug and abandon the facility and take any other appropriate action as deemed necessary by the board. When completed, the facility shall be deemed abandoned.

(2) Upon the board’s order approving the conversion of an oil and gas well and associated infrastructure into an alternative energy facility, the approved well shall not be considered an inactive or abandoned oil or gas well.

(f) The board may adopt rules to administer this section, including regulating the operation and abandonment of alternative energy facilities and associated operations.

(g) The board may set fees and charges to defray expenses incurred by the board in regulating alternative energy facilities pursuant to this section. All well permit fees, filing fees for petitions, and other fees paid to the State Treasurer pursuant to this section shall be paid into the Alabama State Oil and Gas Board Special Fund established by Section 9-17-24, and disbursed by the State Treasurer upon warrants drawn by the Comptroller for the purpose of defraying expenses incurred by the board in the performance of its duties.

(h) Nothing in this section shall:

(1) Be construed to amend, repeal, enlarge, or otherwise affect any provision of Title 37, including, but not limited to, Chapters 1, 4, and 14 of that title;

(2) Notwithstanding the use of the term “hydropower,” apply to any hydropower project that is subject to the licensing jurisdiction of the Federal Energy Regulatory Commission under Subchapter I of Chapter 12 of Title 16 of the United States Code;

(3) Apply to coal mines or coal mining, or operations related to coal mines or coal mining, except as provided in subdivision (c)(6); or

(4) Apply to active or prospective oil and natural gas exploration and production or gas storage operations regulated by the board pursuant to this article or Articles 3 or 6 and any rules adopted by the board pursuant these articles.

(Act 2026-534, §1.)