Hawaii Administrative Rules › Title 13 - DEPARTMENT OF LAND AND NATURAL RESOURCES › Subtitle 7 - WATER RESOURCES › Chapter 183 - RULES ON LEASING AND DRILLING OF GEOTHERMAL RESOURCES › Subchapter 3 - LEASES GENERALLY › Section 13-183-29 - Term of mining leases

Current through June, 2024
(a) The term of all
				  mining leases shall consist of a primary ten-year period and continuation
				  periods which shall be as provided herein, except that the sum of primary and
				  all continuation periods of the leases shall not exceed sixty-five years from
				  the effective date of the initial lease. The effective date of all leases shall
				  be the first day of the month following the board's signing of the
				  lease.
(b) If during the primary
				  period of a mining lease, geothermal resources or by-products are being
				  produced or utilized in commercial quantities, that lease shall continue for so
				  long thereafter as geothermal resources or by-products are produced or utilized
				  in commercial quantities subject to the limitation of subsection (a) herein.
				  Production or utilization of geothermal resources in commercial quantities for
				  purposes of this subsection shall be deemed to include the completion of one or
				  more wells producing or capable of producing geothermal resources for delivery
				  to or utilization by a facility or facilities not yet installed but scheduled
				  for installation not later than fifteen years from the date of commencement of
				  the primary term of the lease.
(c)
				  If, at the end of the primary term of a mining lease, geothermal resources are
				  not being produced from the leased land, but the lessee is actively engaged in
				  drilling operations under said lease below the depth of 1,000 feet or at a
				  lesser depth of productive zone in a diligent manner, that lease may be
				  continued, at the discretion of the board, for a period of not more than five
				  years and for as long thereafter as geothermal resources are being produced or
				  utilized in commercial quantities subject to the sixty-five year limit provided
				  in subsection (a) herein.
(d) If
				  the board determines that the lessee has voluntarily shut in production for
				  lack of a market but is proceeding diligently to acquire a contract to sell or
				  to utilize the production or is progressing with installations needed for
				  production, the lease shall be continued in force for the duration of the
				  primary term or for five years after shut-in, whichever is longer, upon payment
				  of rentals, or the lease may be terminated by the board. The chairperson shall
				  continue to review shut-in leases at least once every five years until
				  production in commercial quantities occurs, the lease is terminated by the
				  board for lessee's lack of due diligence, or surrender by the lessee.
(e) If production of geothermal resources
				  under a lease ceases from any cause after expiration of the primary term or
				  before the end of the primary term if production has commenced, that lease
				  shall continue so long as the lessee actively and continuously engages in
				  drilling or reworking operations which shall be commenced within one hundred
				  eighty days after cessation of production. Continuous drilling of reworking
				  operations shall be deemed to have occurred if no more than one hundred eighty
				  days elapses between cessation of operations on one well and commencement of
				  operations on the same or another well. If the operations are successful, the
				  lease shall continue for so long thereafter as geothermal resources are
				  produced or utilized in commercial quantities, subject to subsection (a)
				  herein.
(f) If the lessee is
				  rendered unable wholly or in part by force majeure to carry out its obligations
				  under a lease, lessee shall give to lessor prompt written notice of the force
				  majeure. Any obligations of the lessee to perform so far as they are affected
				  by the force majeure shall be suspended during the continuance of the force
				  majeure and the primary term or any continuation period shall be extended for a
				  period equal to the period of suspended performance caused by the force
				  majeure. Lessee shall use all possible diligence to remove or correct the force
				  majeure; provided, however, that any cure shall not require the settlement of
				  strikes, lockouts or other labor difficulties. In no event shall any extension
				  affect the sixty-five year term of any lease.