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SB 940

Geologic Energy Management Division: New Technology Program: oil and gas wells: geothermal wells.

2025-2026 Regular Session Introduced by Shannon Grove

SB 940 creates a New Technology Program to repurpose existing oil, gas, and geothermal wells for renewable energy storage/generation, with up to 250 experimental wells and a new an

May 14 hearing: Held in committee and under submission.
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Bill Summary · SB 940

Summary of SB 940 (2025-2026) — Geologic Energy Management Division: New Technology Program for oil, gas, and geothermal wells

Purpose and intent

SB 940, as amended, would create a New Technology Program within the Geologic Energy Management Division (GEMD) of the Department of Conservation. The program aims to evaluate and facilitate repurposing existing oil and gas wells or geothermal wells for renewable energy storage or generation, including projects involving synthetic geothermal resources. The bill seeks to modernize regulatory frameworks to capture emerging uses of wells that were originally intended for fossil fuel production, with the potential to lower energy costs and expand renewable energy opportunities in California.

Key provisions and changes

  • New Technology Program (Chapter 8, Division 3, Public Resources Code):

    • Establishes the New Technology Program to evaluate repurposing wells for renewable energy storage/generation.
    • Capped at no more than 250 experimental wells statewide at any time.
    • Division must publish guidelines on eligible projects; Class VI underground injection control wells are ineligible.
    • Operators may submit proposals to repurpose wells; program staff assess eligibility as underground injection projects if applicable.
    • Supervisory approval is required to designate projects; approved wells become “experimental wells” for the project duration.
    • Program staff assist with necessary permits within the division’s authority.

  • Experimental wells and regulatory funding:

    • Introduces an annual regulatory cost charge on operators of experimental wells (oil and gas wells and geothermal wells) to defray state regulatory costs, with costs allocated based on the number of experimental wells.
    • Proceeds from the charge go to the Oil, Gas, and Geothermal Administrative Fund.

  • Definitions and scope:

    • Expands “geothermal resources” definition to include oil or gas reservoirs used principally for thermal energy storage or geothermal energy generation.
    • Defines terms such as “experimental well,” “synthetic geothermal resources,” and “program.”

  • Reporting and oversight:

    • The division must provide an annual report to the appropriate legislative policy and budget committees on the program’s activities for the preceding calendar year, including accomplishments and recommendations for statutory/regulatory changes.
    • Reports are to be prepared in compliance with Government Code guidelines.

  • Coordination and compliance:

    • The program must coordinate with water boards (State Water Resources Control Board and regional boards) and invite relevant federal agency participation.

  • Prohibitions and eligibility:

    • Proposals involving Class VI underground injection control wells are not eligible.

Who would be affected

  • Oil and gas operators and geothermal operators with existing wells that may be repurposed for energy storage or generation.
  • Owners/operators of experimental wells would incur ongoing regulatory charges to fund state oversight.
  • State agencies (GEMD, State Water Resources Control Board, regional boards) and relevant federal agencies would interact to implement and oversee the program.
  • Public and environmental stakeholders may benefit from expanded renewable energy opportunities and regulated testing of new technologies.

Procedural and timeline notes

  • SB 940 was amended and sent to the Assembly Committee on Appropriations for consideration, with prior committee activity noted in spring 2026.
  • The bill sets annual reporting requirements beginning after implementation and ongoing thereafter, with unspecified dates for certain milestones (e.g., transition guidelines to be developed by the division “on or before” a specified date).
  • Funding for the program comes from new annual charges on experimental wells, deposited into the Oil, Gas, and Geothermal Administrative Fund.

Overall, SB 940 seeks to unlock potential uses of existing wells for renewable energy, while creating a structured regulatory pathway and dedicated funding to oversee such projects.

Compiled from official sources — confirm details with the bill’s official record.

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