• Climate Change

EPA Announces Plans to Develop Regulations for the Geologic Sequestration of Carbon Dioxide

Beveridge & Diamond, P.C., October 16, 2007

On October 11, 2007, EPA announced its plans to develop regulations for the geologic sequestration of carbon dioxide (CO₂).  Geologic sequestration is a key part of carbon capture and storage (CCS) technology, which many view as a critical element of any climate change regulatory regime.[1]  The Department of Energy (DOE) and a consortium of states have been involved in research in this field for many years.  Recently, DOE awarded $197 million to three large-scale geologic sequestration projects.[2]  The federal and state governments are now turning their attention to regulating this technology in both research and industrial-scale settings at the same time as they evaluate its efficacy. 

The regulation of geologic sequestration of CO₂ is not subject to a uniform, comprehensive framework in the United States, and is currently in flux.  To date the states have taken the lead on this issue.  At least one state has passed legislation to establish a regulatory regime for the geologic sequestration of CO₂ and there are federal legislative proposals pending as well.[3]  The Interstate Oil and Gas Compact Commission recently published a report concluding that states are best suited to regulate geologic sequestration of CO₂ and proposing a model state statute and regulations.[4]  Many of the petroleum-producing states have regulations that address enhanced oil recovery (EOR), natural gas storage, and acid gas disposal, which cover some of the same issues that will arise in the context of long-term storage of CO₂.[5] 

Federal authorities have recently increased their attention to CCS issues, however.  In March 2007, EPA issued draft guidance to state regulators on issuing permits to pilot geologic sequestration projects as Class V Experimental Technology Wells under the Safe Drinking Water Act, through the underground injection control (UIC) program.[6]  EPA’s October 11 announcement reflects the agency’s intent to address the regulation of geologic sequestration of CO₂ under this existing statutory authority.

As geologic sequestration moves to an industrial scale and becomes part of a climate change regulatory regime, however, it is clear that EPA will face significant hurdles in any effort to comprehensively regulate long-term storage of CO₂ under the UIC program.  The UIC program is designed to address one issue -- potential contamination of drinking water.  As such, there are serious questions about whether it can provide a framework to address many of the more complex issues that long-term storage of CO₂ will raise, such as underground property rights, property rights to the stored CO₂ in a carbon trading regime, long-term liability from a carbon trading perspective, and long-term liability for other potential environmental impacts (other than potential ground water contamination).  Furthermore, regulating stored CO₂ under the UIC program as a “waste” fails to recognize its potential as a resource for EOR.[7]  Given the awkward relationship between the UIC program and the legal and regulatory issues that need to be addressed with respect to geologic sequestration projects, those with an interest in CCS would do well to closely follow the new EPA regulatory proceeding.

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      Beveridge & Diamond, PC has an active climate change practice and is also well-versed in EPA's UIC program.  Over the last several years, we have counseled and represented clients on significant UIC issues in proceedings at EPA and in litigation at the Agency's Environmental Appeals Board, in federal district and federal appeals courts, and in several state courts.  As new issues arise in connection with the potential expansion of carbon storage in the United States and in offshore and sub-seabed areas, the Firm’s experience with existing environmental regulatory frameworks has uniquely positioned it to advice companies interested in following or participating in the new EPA rulemaking process.  For more information about CCS issues, the UIC rulemaking, or the firm’s climate change practice more generally, please contact Tom Richichi (trichichi@bdlaw.com) at (202) 789-7026 or K. Russell LaMotte (rlamotte@bdlaw.com). at (202) 789-6080.

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[1] See, e.g., IPCC Special Report on Carbon Dioxide Capture and Storage (September 26, 2005), at http://arch.rivm.nl/env/int/ipcc/pages_media/SRCCS-final/IPCCSpecialReportonCarbondioxideCaptureandStorage.htm.

[2] See Dept. of Energy Press Release (Oct. 9, 2007), at http://fossil.energy.gov/news/techlines/2007/07072-DOE_Awards_Sequestration_Projects.html.

[3] See, e.g., Kansas, Carbon Dioxide Reduction Act (HB2419) (approved by governor 3/28/2007); Climate Stewardship and Innovation Act, S. 280, 110th Congress, § 354.

[4] The Interstate Oil and Gas Commission (IOGC), A Legal and Regulatory Guide for States and Province, (September 25, 2007) at http://www.iogcc.state.ok.us/docs/MeetingDocs/Master-Document-September-252007-FINAL-(2).pdf (hereinafter, “IOGC Regulatory Guide”).

[5] Id.

[6] EPA, UIC Program Guidance #83 Using the Class V Experimental Technology Well Classification for Pilot Geologic Sequestration Projects (March 1, 2007), at http://www.epa.gov/safewater/uic/pdfs/guide_uic_
carbonsequestration_final-03-07.pdf.  

[7] See IOGC Regulatory Guide.