The IOGCC Issues Its Model Program For The Geologic Sequestration of CO2

Posted on November 27, 2007 by David Flannery

 On September 25, 2007, the Interstate Oil and Gas Compact Commission (IOGCC) issued its model program for the storage of carbon dioxide in geologic formations. The full text of the model program can be found here.

          OVERVIEW - Even though USEPA has announced that it will undertake the development of regulatory program for such activities under the Safe Drinking Water Act, the IOGCC model program is premised on the belief that the regulation of CO2 geological storage should be left to regulation by the states, rather than USEPA. Equally significant is the IOGCC view that the storage of CO2 in geological formations should be viewed as the storage of a commodity - not waste disposal. While the IOGCC proposes its CCS program in anticipation of a national program that would constrain the emission of CO2 to the atmosphere, the IOGCC avoids making recommendations about how CO2 should be constrained.

          PROPERTY RIGHTS - The model program provides that an applicant for any such project should acquire the property rights to use pore space in the geologic formation for storage. While much of the IOGCC’s model program addresses the need to acquire property rights through negotiation, eminent domain or unitization of oil and gas rights, the model program specifically states that the IOGCC is less concerned about what mechanism is used to acquire those rights and is more concerned that all necessary property rights be acquired by valid, subsisting and applicable state law. The IOGCC goes on to recognize that states might develop alternative mechanisms to acquire property rights, such as adapting the concept of the forced unitization of oil and gas industry rights to other property interests. An applicant must demonstrate that a good-faith effort has been made to obtain the consent of a major of owners "having property interest affected by the storage facility." The program provides for an applicant to have the power of eminent domain and provides that an applicant will be deemed to have necessary property rights to the extent that the applicant has initiated unitization or eminent domain proceedings and have thereby gained the right a of access to the property.

          COVERED FACILITIES - The definition of "storage facility", includes the reservoir, wells and related surface facilities but apparently not pipelines used to transport carbon dioxide from capture facilities to the storage and injection site. The IOGCC has stated its intent to consider over the next year, how its model program might best be expanded to include pipelines.

          LIABILITY RELEASE - Following completion of the project an operator would be obligated to monitor the project to assure its integrity. At the completion of that period, title to the facility would be transferred to the state and the operator and all generators of CO2 injected would be released for all regulatory liability and any posted performance bonds would also be released. Over the next year, the IOGCC has stated that it will consider the possibility of expanding the liability release to include common law tort liability. As part of the inducement for a state to allow liability transfer, the program establishes a trust fund which would assess a fee on each ton of CO2 injected. The trust fund provides the financial resources for the state to take title to project at the end of its operating life.

          COOPERATIVE AGREEMENTS - Cooperative agreements are authorized for use in connection with projects that extend beyond state boundaries.

          EOR PROJECTS - Enhanced Oil Recovery projects are not covered by the model program, although agencies are encouraged to develop rules on how enhanced recovery operations would be converted to carbon dioxide storage projects.

          PERMIT REQUIREMENTS - The program provides detailed requirements for completing an application for approval of a CCS project. Among other things maps accompanying a permit application would be required to identify existing oil and gas and coal mining operations. Public notice is completed upon mailing. The agency shall issue a permit to drill and operate once it has completed a review of the application. The permit would expire within twelve months from the date of issuance if the permitted well had not been drilled or converted. The program also sets forth detailed well operational standards, including requirements for safety plans, leak detection, and corrosion monitoring and prevention.

This article was authored by David M. Flannery, Jackson Kelly PLLC. For more information on the author see here.

Regional Governors Sign On to Progressive Climate Change Agreement

Posted on November 27, 2007 by Linda Bochert

 On November 15, 2007 the Midwest Governors Association held the Energy Security and Climate Change Summit in Milwaukee, WI. The Summit provided Midwest leaders with the opportunity to come together on an issue of global importance and sign onto the Midwestern Greenhouse Gas Reduction Accord (the Accord). Full signatories to the Accord include Wisconsin, Minnesota, Illinois, Iowa, Michigan, Kansas, and the Canadian Province of Manitoba. Indiana, Ohio, South Dakota signed on as observer states, and although Nebraska and North Dakota did not sign onto the Accord, they did adopt the accompanying Energy Security and Climate Stewardship Platform (the Platform).  

          The Accord cites the lack of national leadership on climate change issues and asserts that Midwestern States are well positioned to take a leadership role in climate change policy. Several specific goals were put forth along with an aggressive timeframe within which to accomplish them. Of particular importance will be establishing targets for GHG emission reductions and implementing a regional cap and trade program.

          The Platform provides policy options and measurable goals to help facilitate the transition to a lower-carbon energy economy. Among its top priorities are the development of widespread energy efficiency programs, utilization of bio-based products and transportation, increased development of local renewable electricity, and increased support for advanced coal technologies. 

More information about the Midwestern Governors Association, the Accord and the Platform is available online here.

Carbon Capture and Sequestration Issues and Debate

Posted on November 27, 2007 by Jeff Thaler

The proposed construction of a 700-megawatt coal-and-biomass-fuel power plant on the site of a former nuclear power plant in Maine has sparked a great deal of analysis into current issues and technologies associated with carbon sequestration, including but not limited to coal power plants. The Twin River Energy Center in Maine proposed an innovative technology to convert coal and wood biomass to a nearly sulfur-and particulate-free gas that would be burned to drive steam turbines, as well as to create a small amount of diesel fuel. 

            As in many parts of the country, the project proposal kindled debate about the use of America’s substantial coal resources in a time of climate change and greenhouse gas concerns.   Consequently, a large conference was recently held by the Chewonki Foundation with participation of experts from around the country, as well as Twin River representatives, to discuss carbon capture and storage technologies and opportunities. The Twin River project would have the technology to capture carbon, but no ready sequestration site nearby presently exists. 

            The general consensus from conference presentations was that (1) carbon capture and sequestration will need to play an important role in reducing carbon dioxide emissions, not only in the United States, but especially in China, India and other parts of the world; (2) at the present time, there is insufficient geological information -- both on land and below the ocean floor -- about the potential for carbon dioxide storage not only in Maine but in the Northeast in general; and (3) it is imperative that government, industry and environmental groups work together in exploring the viability of carbon sequestration. 

            Maine is a member of the Regional Greenhouse Gas Initiative (RGGI), the nation’s first carbon-and-trade program, which involves all Northeast states from Maine to Maryland, with the exception of Pennsylvania. Commencing January 1, 2009, it required reduction of pollution from the region’s largest power plants by 10% by 2019. However, while the region itself is not heavily dependent upon coal-fired generation, it is heavily dependent upon fossil-fuel generation, as well as being downwind of substantial coal-generated power to the west and south.

            During the Chewonki conference, findings were presented from the MIT Future of Coal Study; the U.S. Department of Energy presented on the priorities and challenges of carbon capture and storage; several speakers focused on technological issues of producing low-greenhouse gas liquid fuels, as well as the monitoring and site characterization for carbon storage; and a presentation was made by a Twin River consultant on the mine-to-wheels analysis of projected carbon dioxide emissions from the proposed plant. 

            A link to the carbon capture and storage presentations can be seen here.   After the presentation, local voters in Wiscasset rejected a change in the zoning ordinance concerning height of structures. The project developer is still intending to pursue the project following some refinements.

           In full disclosure, the author is lead environmental permitting attorney for the Twin River project, and his firm generally represents Twin River. For more information on the author, including contact information, please see firm website here.