Regulations for CCS/CO2-EOR

Overview of CCS and CO2-EOR

Carbon capture and storage (CCS) is the process of capturing carbon dioxide (CO2) emissions from power plants and industrial facilities and transporting the CO2 via pipeline to a location where it is injected into an underground reservoir for permanent geologic storage. While CO2 may be injected underground to meet an emissions regulation, it also may be injected for enhanced oil recovery (CO2-EOR). Such projects involve injecting CO2 into existing oil fields to recover additional oil left behind. 

The Role of State-Level Regulations

States issue rules to meet federal requirements for underground CO2 injection and storage (see overview below), and also permit and oversee CO2 injection and storage projects. Several states have long-established regulations for overseeing CO2-EOR, while others are just establishing requirements for CO2-EOR and CCS. Overall, states have a variety of requirements to ensure clear and comprehensive regulatory frameworks for CO2 injection and storage projects. State regulations are displayed on each of the maps below:

  1. Designated Regulatory Authorities for CCS/CO2-EOR
  2. Rules for Long-term CO2-EOR Storage
  3. Rules for CO2 Transport and Storage Space
  4. Rules for Clarifying the Purpose of CO2 Injection


 

Designated regulatory authorities – Some states have not yet designated regulatory agencies to permit and oversee CO2 injection projects. States with existing CO2-EOR operations may have to designate additional regulatory authorities to oversee geologic storage-only projects. A state’s oil and gas agency typically permits and oversees CO2-EOR projects and could do the same for geologic storage projects, though state environmental agencies may become involved given that CO2 is being injected with environmental benefits in mind.

Declared CO2 storage to be in the public interest – A state can declare CO2 storage to be in the public interest. This designation can provide clarity in other state-level rulemakings, such as granting eminent domain authority for the construction of CO2 pipelines. 

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Established a CO2 storage trust fund – Several states have established a public trust fund to pay for a state’s long-term oversight of CO2 injection and storage. In some cases, these funds are also intended for mitigation of any environmental damage arising from CO2 injection. Typically, CO2 project operators are assessed a fee for each ton of CO2 injected, which is deposited into the trust fund.

Specified rules for CO2 ownership In most cases, the party that captures CO2 is responsible for its safe disposal. Some states have clarified in law who will be considered the legal owner of captured CO2 and how parties can transfer ownership of CO2.

Established requirements for CO2 responsibility – Federal Underground Injection Control (UIC) rules provide flexibility to states in establishing specific requirements for CO2 injection and storage at the state level. States therefore may designate specific pathways for projects to meet federal requirements. 

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Established rules regarding pore space – A state must establish in law that the subsurface area, or pore space, where CO2 is injected can be owned and designate an owner, usually the owner of surface land. Given that CO2 migrates beyond an injection well, states also need to specify rules for transferring the title of pore space to the party performing CO2 injection. Several states have laws for the unitization of pore space, which is a process whereby a state will recognize the ownership of a unit of pore space once a certain percentage of ownership interests (potentially 50 percent to 80 percent) in that area of pore space agree to aggregate their ownership interests or manage that area as one unit.

Established rules for CO2 pipelines and/or eminent domain - Eminent domain refers to the legal authority to acquire privately-held land for public use without the landowner’s consent; the state government or a third party must compensate the landowner.[1]  A state’s decision to grant eminent domain for CO2 pipelines can be tied to whether the pipeline will serve as a “common carrier,” meaning it would be open for parties other than the pipeline’s owner to access and use.

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Clarified rules on CO2 injection for EOR and geologic storage – Some states have declared that CO2-EOR projects do not have to meet the same federal UIC requirements as projects that inject CO2 solely for geologic storage, which often include more stringent regulatory requirements. A state also may recognize CO2 injected through EOR as geologically stored, though this recognition may not apply in other states or at the federal level.

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Overview of Federal Regulations for CCS and CO2-EOR

The U.S. Environmental Protection Agency (EPA) administers two programs that establish regulatory requirements for CO2 injection and storage: the Underground Injection Control Program (to protect groundwater) and the Greenhouse Gas Reporting Program (to report air emissions). The requirements of each differ in stringency depending on whether CO2 is being injected for enhanced oil recovery (CO2-EOR) or solely for geologic storage.

The Underground Injection Control (UIC) program ensures that underground CO2 injection does not endanger underground drinking water resources. UIC Class II well requirements cover oil and gas production, while UIC Class VI cover CO2 injection for solely for geologic storage. A state can apply to the EPA for primacy in administering the UIC program within its jurisdiction instead of the EPA. Currently, 41 states have primacy or share primacy with the EPA for permitting Class II wells. No state has applied for primacy to administer Class VI wells to date, but several are expected to do so.

The Greenhouse Gas Reporting Program (GHGRP) creates a framework for reporting CO2 delivered to projects, and for monitoring CO2 that is injected for geologic storage. The GHGRP’s Subpart UU applies to CO2-EOR projects and requires them to report how much CO2 is delivered for underground injection. The GHGRP’s more stringent Subpart RR applies to CO2 injected for geologic storage. In comparison to Subpart UU, Subpart RR requires project operators to report the amount of CO2 actually injected for geologic storage and to develop and implement an EPA-approved plan for ongoing monitoring, reporting, and verification of injected CO2. CO2-EOR operators may opt to report under Subpart RR.

Currently, under the GHGRP, project operators report directly to the EPA, instead of a state agency.

Also see map of state financial incentives for CCS.

 

[1] For more on the definition of eminent domain - http://www.law.cornell.edu/wex/eminent_domain