Carbon capture, use and sequestration (CCUS) projects are regarded as a viable means to reach the ambitious goal of net zero CO2 emissions by 2050.
Many have claimed that CCUS provides the only means to achieve that goal.
CCUS captures CO2 at its source, such as a petrochemical facility or a power plant using coal or natural gas. Captured CO2 has been used for enhanced oil recovery projects for decades, without major incident. Alternatively, captured CO2 may be injected for permanent sequestration thousands of feet underground in deep rock formations.
The benefits of sequestering CO2 would seem obvious. At the very least, CCUS will reduce the amount of CO2 in the atmosphere and create millions of dollars in investments and thousands of good jobs. However, many environmental groups oppose CCUS because it allows the continued use of fossil fuels and slows the growth of renewable energy, such as wind and solar. Despite the decades long use of CO2 in enhanced oil recovery, claims of possible groundwater contamination and accidental leaks when CO2 is transported have been used to oppose a project. Further, under the Biden Administration, claims are now being made that CCUS creates a disproportionate impact on minority, indigenous and poor communities.
Texas and Louisiana are moving toward obtaining primacy so that projects can more easily move forward.
For the most part, CCUS projects must be approved by the EPA and the state in which the project is located. Dual permitting is inefficient and hinders the prompt permitting of sequestration projects. However, EPA may grant a state "primacy" which will allow the state in which the project is located to become the sole permitting and enforcement authority. This is beneficial to the proponent of the project as only one permit application needs to be filed and one permit obtained.
According to EPA’s website, Wyoming and North Dakota are the only two states to achieve primacy over carbon sequestration (Class VI wells) permitting and enforcement. However, Texas and Louisiana are moving toward obtaining primacy so that projects can more easily move forward.
In 2021, the Texas Legislature passed House Bill 1284, which gave the Railroad Commission (RRC) sole jurisdiction over CCS Class VI injection or CO2 injection projects. In August 2022, the RRC approved bringing the Texas regulations closer in line with federal standards. These changes are expected to help expedite the EPA’s processing of Texas’ forthcoming primacy application. EPA’s website identifies Texas as engaged in "pre-application activities."
Meanwhile, Louisiana is farther along in the process. Louisiana submitted its primacy application in September 2021. EPA published a proposed rule in May 2023 that would grant primacy to Louisiana for the Class VI program. A 60-day public comment period was established and a public hearing was held in Baton Rouge, Louisiana. Over 17,000 comments were received and dozens spoke at the public hearing. After reviewing the comments, it is expected that the EPA will issue a final rule granting primacy by the end of the year.
Louisiana has also made several important statutory revisions to its state program. For example, each application for a Class VI injection permit must include a National Environmental Policy Act-like environmental analysis that addresses whether environmental effects have been avoided to the maximum extent possible, and whether a cost-benefit analysis shows that the social and economic benefits of the proposed activities outweigh the environmental impact costs. Additionally, the time to obtain a certificate of completion of injection operations, which serves to transfer liability to the state, has been lengthened from 10 years to 50 years. Finally, the recordation of a notice of a geologic storage agreement, in lieu of the actual agreement, is allowed.
Obtaining primacy should foster more efficient and timely permitting, unlocking the potential for economic growth and reaching climate goals. Hopefully, the EPA will act promptly on primacy applications so all states may receive the benefits.
For more information, visit bswenviroblog.com or email jbk@bswllp.com
