Legal Issues in the Control of Geological Carbon Sequestration

Investigator

Arnold W. Reitze, Jr.

Project Description/Summary

Carbon capture and storage (CCS) in geological formations is a way to reduce emissions of carbon dioxide ("CO₂"). CCS begins by separating CO₂ from other gases, which may be done before or after fuel is combusted. Post-combustion capture is the more important technology because it can be used to capture CO₂ from existing fossil-fueled facilities. After the CO₂ is removed from the exhaust gas stream it must be converted from a gas to a supercritical fluid before it is transported to the injection site by pipeline. This reduces the efficiency of the electric generation process because of the energy required to liquefy CO₂. CCS is projected to increase the cost of producing electricity by about 30% to 60%.

A modern power plant utilizing CCS will need to transport over 1.85 million cubic feet each day of liquid CO₂ to an underground injection site, which is equivalent to the volume of a football field over 32 feet deep. Many Federal agencies have some responsibility for pipeline regulation, but new legislation is needed because it is not clear which agency has jurisdiction over CO₂ transport. Pipelines construction can be expected to face "not in my backyard" (NIMBY) opposition. This issue was addressed in Montana, which grants owners of pipelines transporting carbon dioxide to use eminent domain to acquire private property.

CO₂ under high pressure is injected into underground geological formations at a depth of about 800 meters (2,625 feet). The Energy Independence Act and Security Act of 2007 requires the U.S. Geological Survey to determine the capacity for CO₂ sequestration. Issues of concern to the Geological Survey include the effect of sequestration on mineral extraction and on surface activities as well as a site's potential for injection-induced earthquakes. Sequestration will require dealing with the properties of supercritical CO₂ including its relative buoyancy, its mobility within subsurface formations, the corrosive properties of the gases in water, the effect of the impurities in the flue gas, and the large volume of material that will need to be injected. To have viable carbon storage will require many technical problems to be overcome, but it also will require implementation of a cost effective environmental protection program; ownership issues concerning carbon storage must be settled, and the issue of long-term liability needs to be resolved. While large-scale CCS has not yet occurred, the body of law concerning enhanced oil recovery (EOR) and the use of geological storage for natural gas can be used to help shape an appropriate legal regimen for CCS.

Carbon sequestration in underground reservoirs requires a permit issued under the Safe Drinking Water Act (SDWA) that is administered by the Environmental Protection Agency ("EPA") and by states that have been delegated enforcement authority. The Energy Independence and Security Act of 2007 gave EPA explicit authority under the SDWA to regulate injection and geologic sequestration of carbon dioxide. EPA's proposed rule governing underground injection of carbon dioxide under the SDWA was promulgated July 25, 2008. The proposed rule creates a new category for wells used for CCS in addition to the five classes of wells that already require permits.

Proposed Class VI regulations include requirements to ensure wells are appropriately sited and are constructed to prevent fluid movement. The confining zone for the injected CO₂ must be free of faults or fractures, and the injection may not be above the lowest formation containing a source of drinking water. There are monitoring and reporting requirements including periodic re-evaluation to verify the material injected is moving as predicted. The rule also includes financial responsibility requirements to assure the resources are available for well plugging, site care, closure, and emergency remedial response. Under the proposed rule, well operators remain responsible for post-injection site care many years following the cessation of injections. Migration that endangers underground sources of drinking water is subject to indefinite liability. EPA's proposed rule affects state regulation, but states cannot easily be preempted because legal issues concerning sequestration involve property, tort, and contract law controlled by state law.

Clean Air Act ("CAA") requirements increase the cost and the time required for permitting coal-fired electric power plants, which reduces the cost advantage of coal-fired electric generation and CCS will add to these costs. Separating CO₂ from the gas stream could result in new or additional air pollution, which could trigger additional pollution control requirements. Because of the energy requirements for compressing CO₂, a power plant will have to burn more fuel to achieve the same net generating capacity. This could increase emissions and potentially trigger construction permit requirements. CCS may be ruled to be the best available control technology ("BACT") and therefore be mandated for new or modified electric power facilities. Alternatively, integrated gasification combined cycle ("IGCC") technology, which makes it easier to sequester carbon, but is more costly, may be considered to be BACT.

The Resource Conservation and Recovery Act (RCRA) has stringent requirements for hazardous waste disposal. It is unlikely CCS would be considered hazardous waste disposal, but such a development cannot be ruled out. The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, a.k.a. Superfund) provides for the clean up of contamination by hazardous substances, which potentially could include sequestered electric power waste streams. CERCLA allows the federal government, state and local governments, and private parties to recover the costs associated with a clean up operation. Substances that are hazardous under the major environmental statutes are considered hazardous under CERCLA. EPA's CAA endangerment finding for CO₂ could potentially trigger CERCLA liability. Alternatively, hazardous contaminants in the CO₂ waste stream could trigger CERCLA liability.

For the foreseeable future costs will be the primary barriers to implementing CCS. But if sequestration is to become a viable method of dealing with the need to reduce carbon emissions many legal issues will need to be addressed.