Geothermal Energy resources are subsurface products of geothermal processes. They are defined by statute to mean:

(A)  products of geothermal processes, embracing indigenous steam, hot water and hot brines, and geopressured water;

(B)  steam and other gasses, hot water and hot brines resulting from water, gas, or other fluids artificially introduced into geothermal formations;

(C)  heat or other associated energy found in geothermal formations;  and

(D)  any by-product derived from them.

"By-product" means any other element found in a geothermal formation which is brought to the surface, whether or not it is used in geothermal heat or pressure inducing energy generation.  The term does not include:

(A)  a mineral, as defined by Section 75.001, Property Code; or

(B)  oil, gas, or a product of oil or gas, as defined by Section 85.001.

Under SB 785 effective June 18,2023 unless otherwise expressly provided by a conveyance, contract, deed, reservation, exception, limitation, lease, or other binding obligation, the geothermal energy, and associated resources below the surface of land are owned as real property by the following:

the landowner; or

if the surface estate and the mineral estate of the land have been severed, the owner of the surface estate of the land.

Similar to mineral rights, geothermal energy resources may be severed from the surface estate and any grant, reservation or lease of a geothermal energy resource or interest found in a chain of title must be specifically excepted in Schedule B of the policy.  

SB 785 also amended Tex. Ins. Code §2703.056 to allow for specific and general exceptions to Geothermal Energy Resources. In addition to any specific exception for any grant, reservation or lease of a Geothermal Energy Resource we generally require a general exception for "All leases, grants, exceptions or reservations of the geothermal energy and associated resources below the surface of the land, together with all rights, privileges, and immunities relating thereto, appearing in the Public Records whether listed in Schedule B or not. There may be leases, grants, exceptions or reservations of the geothermal energy and associated resources below the surface of the land that are not listed."

In 1970 the Geothermal Steam Act became Federal law. Its stated purpose was “to authorize the Secretary of the Interior to make disposition of geothermal steam and associated geothermal resources, and for other purposes.” Beginning in the 1970’s moderate interest in geothermal energy emerged in Texas and in 1977 Texas enacted the Geothermal Resources Act of 1975. Based on this, currently we will allow removal of the general exception for Geothermal Energy Resources if your search goes back to at least 1970 and does not rely on any starter searches, prior commitments or prior policies. A specific Schedule B exception must be included for each grant, reservation or lease of a Geothermal Energy Resource in the chain of title. You may not remove the general geothermal exception if your search does not go back to at least 1970 without underwriter approval. If you are aware of severances of geothermal energy resources in the county where the property is located that occurred prior to 1970 you may not remove the general geothermal exception without underwriter approval. Finally, you also may not remove a specific exception for any grant, reservation or lease of a Geothermal Energy Resource without underwriter approval.

Requirement:

In addition to any general or specific mineral exceptions, add the following exception in Schedule C of each Commitment or Binder unless you secure underwriter approval to remove the exception:

"All leases, grants, exceptions or reservations of the geothermal energy and associated resources below the surface of the land, together with all rights, privileges, and immunities relating thereto, appearing in the Public Records whether listed in Schedule B or not. There may be leases, grants, exceptions or reservations of the geothermal energy and associated resources below the surface of the land that are not listed."