Advanced BioFuels USA

by Nicholas Kusnetz (Inside Climate News)  As companies propose storing carbon dioxide in depleted oil fields or saline aquifers, some states are putting themselves on the hook for future problems with the projects. —  As states rush to enact rules and regulations for the underground storage of carbon dioxide, a key question is who will hold long-term responsibility for projects that could require monitoring for decades.

The question is increasingly important, as a host of companies have proposed dozens of projects over the last two years that would pull climate-warming emissions from the smokestacks of ethanol plants, fertilizer factories and fossil-fueled power plants. If the projects move forward, they’ll need to pump millions of tons of captured carbon dioxide deep underground into depleted oil fields or saline aquifers, where the gas would need to be stored permanently.

The energy industry and others insist the practice is safe, but nonetheless some companies, including ExxonMobil and BP, have been seeking protections from long-term liability. And increasingly, state lawmakers are responding by putting governments, rather than industry, on the hook.

At least four states have passed laws over the last year that allow companies to transfer responsibility for carbon storage projects to state governments after the operations are shut down. At least three other states have similar statutes on the books, enacted years earlier.

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The proposals appear to be dividing companies involved in carbon storage, people familiar with the bills said. Some of the legislation has drawn support from oil companies, including BP in Indiana and Denbury Inc. in Wyoming. While there is no evidence that ExxonMobil, which calls itself a leader in carbon capture and storage, has supported any of the bills, the company has separately identified liability as an important concern for carbon storage.

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The bills generally establish funds, paid for by industry, to cover costs associated with fixing or re-plugging old injection wells if problems arise. As a result, Fry said, taxpayers won’t have to pay when things go wrong.

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The environmental advocacy group (Environmental Defense Fund) urged the EPA to deny states the ability to regulate their own carbon dioxide injection wells if they adopt such statutes, and to revoke that right if they have already received it. So far, only Wyoming and North Dakota have secured so-called “primacy” from the EPA to regulate their own carbon dioxide injection wells. Louisiana is in the process of applying.

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Shannon Anderson, staff attorney at the Powder River Basin Resource Council, a Wyoming environmental group, said her organization did not take a position on the bill, but that it addressed the problem of who will be responsible for projects if companies go bankrupt or disappear.

“You can’t expect a company to hang on forever,” she said. “It’s maybe not be the best solution, but at least it is a solution.”

Brad Whitmarsh, a Denbury spokesman, said Wyoming “has provided rigorous regulatory standards that must be followed for the development of a carbon storage site,” and noted that the transfer cannot take place until at least 20 years after a project is closed. The bill would help reduce the state’s carbon dioxide emissions, he added.  READ MORE

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