CCS IN THE AMERICAS | April & May 2023 Recap

UPDATE - Please kindly refer to this corrected version of the April/May newsletter, not the version that was sent out yesterday. Our apologies! 

3. Canada – (Policy/Legislation/Regulation)

4. Americas Institute Events

5. Areas to Watch - U.S. 

6. Other News

• Carbon Markets and Carbon Credits 
•  Environmental Justice 
•  Reports

CALIFORNIA

• Report
  • The Fire Marshall issued a, Proposal to the Legislature for Establishing a State Framework andStandards for Intrastate Pipelines Transporting Carbon Dioxide . This report fulfils one requirement of SB905, that is to report to the Legislature on a proposal for establishing a state framework and standards for intrastate pipelines transporting carbon dioxide (Proposal). SB 905 requires the California Natural Resources Agency (CNRA), in consultation with the California Public Utilities Commission (CPUC), to “provide a proposal to the Legislature to establish a state framework and standards for the design, operation, siting, and maintenance of intrastate pipelines carrying carbon dioxide fluids of varying composition and phase to minimize the risk posed to public and environmental health and safety….This Proposal is not provided to the Legislature as regulations or draft regulations. Instead, it is intended to inform the development of state safety policies for intrastate pipelines carrying carbon dioxide and provides recommendations on next steps.”
• Active Legislation
  • S.B. 438:Carbon sequestration:  Carbon Capture, Removal, Utilization and Storage Program: incidental and unintentional residual oil production. Existing law prohibits a well operator from injecting a concentrated carbon dioxide fluid produced by a carbon dioxide capture, removal, or sequestration project into a Class II injection well for purposes of enhanced oil recovery, including the facilitation of enhanced oil recovery from another well.This bill would exclude from the above prohibition the incidental and unintentional residual oil brought to the surface produced at the surface from a Class VI well, as defined, resulting from the injection of a concentrated carbon dioxide fluid into a Class VI well that has been deemed emptied of oil before injection during the execution of a carbon dioxide capture, removal, or sequestration project. The bill would prohibit the production of carbon dioxide by a carbon capture, removal, or sequestration project. The bill would require any oil produced from a Class VI well to be reported to the State Air Resources Board and the United States Environmental Protection Agency, Region 9, within 60 days of its occurrence.  For bill status see here.
  •  S.B. 308: Carbon Dioxide Removal Market Development Act This bill would enact the Carbon Dioxide Removal Market Development Act that would require the state board, no later than December 31, 2027, to adopt a regulation to require certain emitting entities to purchase negative emissions credits equal to a specified amount of their greenhouse gas emissions, as determined by the state board, in each calendar year beginning in the 2028 calendar year in accordance with specified requirements. The bill would require the state board, no later than December 31, 2027, to establish rules and processes for certifying carbon dioxide removal processes that may be used to create negative emissions credits and for tracking negative emissions credits in accordance with certain criteria. The bill would also require negative emissions resulting from the use of negative emissions credits to be included in the calculation of the state’s net greenhouse gas emissions, as specified.  For bill status and latest action see here.

COLORADO

• DOE May 17th announcement impact
  • Colorado School of Mines (Golden, Colorado) plans to develop a regional carbon dioxide storage hub to address emissions from cement, hydrogen, and power plants, including geologic characterization efforts at two sites in Colorado’s Pueblo region. (Award Amount: $32,671,554)
• Enacted Legislation
  • HB23-1071: Study Workforce Transitions To Other Industries. The bill requires the office of future of work (office) to contract with a third party to study workforce transitions in Colorado's economy. The workforce transitions study (study) must:
    • Evaluate the skill transferability of workers in the oil and gas industry and in occupations in Colorado that are facing the most disruption due to automation;
    • Explore training availability, skills needed, and transition strategies; and
    • Provide recommendations for programs and policies to prepare the workforce for these transitions.
    • Bill was signed by the governor on May 17, 2023.
• Active Legislation
  • HB23-1210: Carbon Management. "Carbon management" is defined by the bill as any combination of carbon dioxide removal, carbon storage, carbon capture, and carbon utilization. The bill ensures that carbon management projects, except for agricultural, forestry, and enhanced oil recovery projects, are eligible for money under the industrial and manufacturing operations clean air grant program. The bill also requires the Colorado energy office (office) and the office of economic development to contract with an organization for the development of a carbon management roadmap for the state.  The bill was sent to the governor.

ILLINOIS

• DOE May 17th announcement impact
  • University of Illinois (Champaign, Illinois) plans to complete site characterization efforts for the Cambrian Mt. Simon Sandstone/Eau Claire Formation storage complex, for storage of carbon dioxide from the Dallman Power Generation Plant in Springfield, Illinois and about 50 million metric tons of total carbon dioxide storage capacity. (Award Amount: $17,736,972)

• Active legislation
  • S.B. 2421 Creates the Carbon Dioxide Transport and Storage Protections Act. Defines terms. Provides that (i) title to pore space belongs to and is vested in the surface owner of the overlying surface estate, (ii) a conveyance of title to a surface estate conveys title to the pore space in all strata underlying the surface estate, and (iii) title to pore space may not be severed from title to the surface estate.  For status or last action see here.
  • H.B. 2202: Creates the Underground Carbon Dioxide Storage Act. Provides that the Act applies to the underground storage of carbon dioxide but does not apply to extractable mineral resources, and the rights and requirements of the Act are subordinate to the rights pertaining to oil, gas, and coal resources. For status or last action see here.
  • H.B. 3119: Carbon Transport and Storage Protection Act. Provides that a sequestration operator may not exercise any authority to take or acquire any easement or title to any pore space or any portion of an area of review pursuant to the Eminent Domain Act. Provides that the sequestration operator is solely liable for any and all damage caused by the carbon dioxide transported to the sequestration facility for injection or sequestration, or otherwise under the sequestration operator's control, including damage caused by carbon dioxide released from the sequestration facility, regardless of who holds title to the carbon dioxide, the pore space, or the surface estate.  For status or last action see here.
  • S.B. 1916:  Creates the Safety Moratorium on Carbon Dioxide Pipelines Act. Provides that no certificate of authority for the construction and operation of a pipeline intended for transportation of carbon dioxide shall be issued by the Illinois Commerce Commission before the federal Pipeline and Hazardous Materials Safety Administration (PHMSA) has adopted its revised federal safety standards for transportation of carbon dioxide.  For status or last action  see here.
  • S.B. 1920: Enhanced Oil Recovery Ban Act. Creates the Enhanced Oil Recovery Ban Act. Provides that a person shall not inject a concentrated carbon dioxide fluid produced by a carbon dioxide capture project or carbon dioxide capture and sequestration project into a Class II well for purposes of enhanced oil recovery, including the facilitation of enhanced oil recovery from another well. Provides that an individual who violates the Act is subject to a fine of $20,000 for each violation. Defines terms. Effective immediately  For status and more information see here.
  •  S.B. 1550: Property-Carbon Sequestration.  Amends the State Property Control Act. Provides that Marquis Carbon Injection, LLC, is granted the right to inject and sequester carbon dioxide and other greenhouse gases for fair market value consideration as set by the Director of Central Management Services, as administrator, but not to exceed $0.25 per ton, on specified real property owned by the State of Illinois and managed by the Department of Natural Resources. Specifies the Parcel Identification Numbers of the properties concerned.  For status and more information see here.
  • S.B. 1547:  Energy-Generation Task Force   Provides that the Carbon Capture Infrastructure Fund is created as a special fund in the State treasury and shall be administered by the Illinois Power Agency. Provides that $10,000,000 shall be transferred from the Illinois Power Agency Renewable Energy Resources Fund to the Carbon Capture Infrastructure Fund. Provides that the Agency shall award grants from the fund to carbon producing power plants for the construction of new carbon capture storage systems. Amends the State Finance Act to create the Carbon Capture Infrastructure Fund. Effective immediately. For status and more information see here.

INDIANA

• Legislation signed into law
  • SB 451.  Carbon Sequestration Project. Defines the term "pore space". Provides that the pilot project will construct, operate, or use not more than two (2) carbon dioxide pipelines and will maintain operations only in Vigo and Vermillion counties. Requires the director of the department of natural resources to designate the operator of the carbon sequestration pilot project not more than 30 days after the Class VI well permit authorizing the operation of carbon dioxide injection wells at the site of the pilot project is issued by the U.S. Environmental Protection Agency. Provides that, for purposes of the pilot project, the title to pore space is vested in the person who holds in fee simple the surface interest in the land or water, as identified by the property records of the county, except in case of an explicit conveyance, exception, or reservation through a recorded conveyance to another person.  Signed by governor on 4/20/2023, see here.
• Active legislation
  • S.B. 0247:  Provides that a carbon sequestration project may not be undertaken unless the project is approved by the county legislative body (for a project located in the unincorporated area of a county) or the city or town legislative body (for a project located in a city or town).  For status, see here.

• Active legislation 
  • H.B. 571.  Energy:  Provides relative to carbon capture and sequestration. Proposed law establishes regulations and redistributes fees for various aspects of carbon capture and sequestration. Requires notice be given to parish governing authorities on applications for class V or VI well permits and for applications to conduct geophysical surveys in their respective parish. For status see here.
  • H.B. 10.  Energy/Conservation:  Removes eminent domain authority of storage facility operators.  For status, see here.
  • H.B. 35:  Energy Conservation: Prohibits carbon dioxide sequestration projects in St. Helena Parish.  For status, see here.
  • H.B. 454:  Energy Conservation:  Requires a local election for the approval of carbon dioxide sequestration within a parish.  For status, see here.

TEXAS

• DOE May 17th announcement impact
  • Bluebonnet Sequestration Hub LLC (Houston, Texas) plans to complete the site characterization, permitting, and environmental approvals for the Bluebonnet Sequestration Hub along the Texas Gulf Coast, with potential for more than 350 million metric tons of total carbon dioxide storage capacity. (Award Amount: $16,480,117)
  • BP Corporation North America Inc. (Houston, Texas) will focus on the characterization and permitting of two commercial-scale storage sites along the Texas Gulf Coast with the capacity to ultimately store up to 15 million metric tons of carbon dioxide per year. (Award Amount: $33,411,193)
  • Magnolia Sequestration Hub, LLC (Houston, Texas) intends to complete the site characterization, permitting, and environmental approvals for the Magnolia Sequestration Hub in Allen Parish, Louisiana, with an estimated 300 million metric tons of total carbon dioxide storage capacity. (Award Amount: $21,570,784)
  • Timberlands Sequestration, LLC (Houston, Texas) intends to complete site characterization efforts to develop a biomass carbon removal and storage project for the Alabama River Cellulose pulp and paper mill located in Monroe County, Alabama. (Award Amount: $23,779,020)
  • Howard Midstream Energy Partners LLC (San Antonio, Texas) will perform a study for a system capable of moving up to 250 million metric tons of carbon dioxide per year from multiple sources to multiple storage locations on the Gulf Coast from the Port of Corpus Christi, Texas to the Mississippi River. (Award Amount: $3,000,000)
• Active bills
  • H.B. 1158: Relating to advanced clean energy projects and certain other projects that reduce or eliminate carbon dioxide emissions. For status see here.
  • S.B. 2107: Relating to ownership of pore space, transfer of long-term liability, and lease integration.  For status see here.
  • H.B. 4484:  Relating to the ownership of the pore space underlying the surface of land and to the use of that space for the geologic storage of carbon dioxide; authorizing a fee.  For status see here.
  • H.B.4557:  Relating to liability for capturing and storing carbon dioxide.  For status see here.

WYOMING 

• DOE May 17th announcement impact
  • University of Wyoming (Laramie, Wyoming) plans to advance a commercial, multi-source, large-scale carbon capture and storage hub in Greater Green River Basin, Wyoming, with carbon dioxide sourced from trona mining and direct air capture facilities. (Award Amount: $40,504,935)

STATE RESOURCES 

• Class VI Permit Tracker. Hunton Andrews Kurth’s Class VI Program Permit Tracker is the first centralized source for tracking state applications for primacy over Class VI permitting programs, as well as the status of Class VI permit applications nationwide. 

• Interactive Tracker Launched by Arnold & Porter and Columbia’s Sabin Center.  The Arnold & Porter law firm developed a new  CCUS Legislative Tracker, releasing it on the Carbon Dioxide Removal Law webpage of Columbia Law School’s Sabin Center for Climate Change Law.  The interactive tracker “Helps track legislative and significant state CCUS actions nationwide. Through January 2023, the tracker identified 15 states with significant CCUS legislation. In addition, eight states have enacted new legislation or amended existing CCUS frameworks since 2021."  At its initial publication, the Tracker focused on six types of state actions:
  • Statutory clarifications of pore space ownership
  • Mechanisms to combine ownership interests within a potential storage facility
  • Long-term state stewardship programs
  • Trust funds and associated fee mechanisms used to defray various costs incurred by the state
  • State assumption of UIC primary enforcement authority (known as primacy)
  • Inclusion of CCUS in published state climate action plans

• The Great Plains Institute has State Legislative Tracker which can be accessed here

globalccsinstitute.com