US EPA Must Do More to Ensure Captured Carbon Stays Underground -Report

by Leah Douglas (Reuters) The U.S. environment regulator does not sufficiently verify that carbon capture and storage (CCS) projects keep emissions trapped underground and should boost its requirements to ensure companies receiving CCS tax credits provide an actual environmental benefit, a watchdog group said on Thursday.

CCS is a pillar of U.S. President Joe Biden's climate plan, but has been criticized by environmental groups for prolonging the use of fossil fuels. Biden's cornerstone climate law, the Inflation Reduction Act, includes lucrative CCS tax credits.

The non-profit group Environmental Integrity Project (EIP) reviewed 21 CCS plans approved by the Environmental Protection Agency (EPA) and found that the agency does not require any specific monitoring strategies or technologies, that companies wrote their own guidelines for addressing leaks, and that ambiguity within the plans makes them difficult to enforce.

Another 61 CCS applications are under review by EPA according to the agency's website, most of which were submitted after the IRA became law. The IRA includes tax credits of $60 per metric ton of carbon captured for a purpose like pushing oil out of aging reservoirs and $85 per ton of carbon captured and permanently stored.

Of the 21 plans reviewed by EIP, 16 are from oil and gas companies, three from ethanol plants, and one each from a coal-fired power plant and a coal gassification plant.

EPA regulates most of the country's so-called Class VI wells where carbon emissions are stored, though some states regulate their own wells.

Excerpt from Environmental Integrity Project: The Environmental Integrity Project examined one central component of carbon capture and sequestration regulation in the U.S.: monitoring, reporting, and verification (MRV) plans required by the EPA’s Greenhouse Gas Reporting Program. These plans describe the monitoring strategies in place at each site to validate that the carbon dioxide is securely stored underground and is not leaking or migrating in an unexpected manner. If approved by EPA, the plans can also be used to qualify for tax subsidies. However, the 21 plans that EPA approved as of October 31, 2023, are ambiguous and lack key elements to ensure safe and long-term carbon sequestration. READ MORE

Excerpt from Environmental Integrity Project: The U.S. Environmental Protection Agency’s rules for monitoring and verifying that sequestered carbon dioxide stays underground fail to ensure safe and long-term carbon storage, according to a new report by the Environmental Integrity Project.

Federal regulations require companies seeking billions of dollars in federal subsidies to capture and bury carbon dioxide – a key part of the Biden Administration’s climate policy – to have monitoring, reporting, and verification (MRV) plans approved by EPA under its Greenhouse Gas Reporting program.

The effectiveness of these monitoring and verification plans are important because increased subsidies for carbon capture projects approved by Congress last year, which could cost taxpayers $30 billion over the next decade, inspired a wave of industry announcements about new carbon capture projects and hubs. EPA is currently reviewing 58 applications for 169 carbon disposal wells of one variety, called “Class VI” wells, which are designed for the long-term sequestration of climate-warming waste generated by petrochemical plants and other industries.

“Before this flood of carbon capture and sequestration projects becomes operational, EPA needs to enact strong industry regulations that can protect the environment while combating climate change,” said Eric Schaeffer, Executive Director of the Environmental Integrity Project. “EPA must ensure the monitoring plans contain comprehensive and clearly defined monitoring strategies that can adequately detect leaks, prevent environmental harm, and confirm that carbon is successfully stored long-term.”

Congress first created a tax credit for carbon sequestration in 2008. Lawmakers then expanded it in 2018 and again with the Inflation Reduction Act, which was signed by President Biden on August 16, 2022.

The oil, gas and ethanol industries reported capturing and sequestering nearly 8 million metric tons – about the same as what would be emitted by two coal-fired power plants – of carbon dioxide in 2022, an amount worth an estimated $213 million in federal tax credits that year, according to EPA data. Sequestering the same amount in 2023 could be worth up to $504 million, thanks to a sharp increase in the value of tax credits in the Inflation Reduction Act.

Sixteen of the 21 monitoring and verification plans approved by EPA as of October 31, 2023, were submitted by oil and gas companies, which stand to benefit the most from the push for carbon sequestration. Ten of the sites are using carbon dioxide for enhanced oil recovery, a method of freeing up hard-to-reach oil by injecting carbon dioxide into the oil field. Six are disposing of waste from gas processing plants by injecting carbon dioxide-laden acid gas into the ground.

“Enhanced oil recovery and acid gas projects should not be eligible for tax credits,” said Preet Bains, author of the report and research analyst for the Environmental Integrity Project. “Carbon injected at these sites is secondary to the production of more fossil fuels. This undermines the primary goal of carbon sequestration and puts taxpayer money into misguided efforts to confront climate change.”

The need for comprehensive, accurate monitoring of buried carbon is compounded by the huge number of old wells at some of the disposal sites, especially oil fields which have been active for decades. These wells present a huge challenge to permanent storage of carbon because they are holes through which CO2 can leak.

For example, the Wasson San Andres Field in the West Texas Permian Basin, where oil production has been ongoing for at least 50 years, has nearly 4,700 known wells perforating the area. Buried carbon could leak out through these thousands of openings.

The Environmental Integrity Project is a nonprofit organization, based in Washington, D.C., and Austin, Texas, that is dedicated to enforcing environmental laws and strengthening policy to protect public health and the environment. READ MORE