The Future Is Now... Or Is It?

• Author: Stephanie M. Haggerty
• Position: Corporate Counsel in Pfizer's Environment, Health & Safety Legal Group in New York, New York
• Pages: 51-51

SEPTEMBER/OCTOBER 2011 ❧ Page 51

Copyright © 2011, Environmental Law Institute®, Washington, D.C. www.eli.org.

Reprinted by permission from The Environmental Forum®, Sept./Oct. 2011

Th e fo r u m

e Future

Is Now . . .

Or Is It?

S M. H

A

few years ago, I wrote an

article for the Pace En-

vironmental Law Review

about sequestering carbon

dioxide in oil and gas res-

ervoirs for long-term storage and the

corresponding process of enhanced

oil recovery.

At that time, there were a few

published reports of projects in

the United States analyzing the ef-

fectiveness of long-term sequestra-

tion of CO2. Given the dearth of

reported projects, lawmakers and

agencies had limited information to

draw from to create a legal frame-

work regulating carbon capture

and sequestration. But now, nearly

eight years later, with the increased

number of CCS projects and its

enabling technologies, knowledge

has undeniably increased, but the

U.S. regulatory framework is still in

its nascent stages. Lawmakers and

agencies have been slow to capital-

ize on valuable information from

sequestration projects to implement

regulations that address signif‌icant

issues, such as liability allocation.

A recent project announced in

June 2011 by Mitsubishi Heavy

Industries America, Inc., is an ex-

ample of CCS technology in action.

Mitsubishi launched operations of a

carbon capture facility at Southern

Company’s Plant Barry. It appears

to be the world’s largest CCS facility

attached to a coal-f‌ired power plant

and will be using state-of-the-art

technology that Mitsubishi believes

ef‌fectively captures carbon dioxide.

e CO2 will then be transported

by pipeline for sequestration in a

geologic formation. U.S. lawmakers

and agencies would be wise to con-

tinue to study this, and other large-

scale projects, because they likely

hold a cache of valuable information

regarding the technologies employed

and the issues involving piping and

sequestering CO2 underground. In

turn, this information and insight

will further enable lawmakers and

agencies to transform the current

regulations into a more comprehen-

sive statutory scheme.

Recently, there have been signs of

progress. At the end of 2010, EPA

f‌inalized two rules related to CCS

activities. First, EPA developed a

new class of wells, Class VI, under

the authority of the Safe Drinking

Water Act’s Underground Injection

Control Program. e Class VI rule

builds on the existing UIC program,

but of‌fers tailored requirements that

address CO2 injection for long-term

sequestration to ensure that wells

used for geologic sequestration are

appropriately sited, constructed,

tested, monitored, funded, and

closed. Importantly, the rule also

provides some clarif‌ication concern-

ing f‌inancial responsibility for well

closure, emergency and remedial

action, and post-injection site care.

Second, under the Clean Air Act,

EPA f‌inalized reporting require-

ments under the Greenhouse Gas

Reporting Program for facilities that

inject CO2 underground. e rule

requires sequestration sites to report

basic information on CO2 received

for injection, including amounts be-

ing sequestered, and to develop and

implement EPA-approved moni-

toring, reporting, and verif‌ication

plans.

ese rules do not address liabil-

ity if injected CO2 were to leak and

contaminate drinking water sources,

but this liability issue appears to be

on EPA’s radar and is preliminarily

being addressed. In April, EPA sent

a draft proposed rule to the Of‌f‌ice of

Management and Budget for review,

which includes provisions for ex-

empting sequestered CO2 from the

Resource Conservation and Recov-

ery Act and purportedly addresses

liability for well owners in the event

of a leak that contaminates drinking

water supplies. e proposed rule

may attempt to f‌ill some of the per-

ceived regulatory gaps, but it is dif-

f‌icult to evaluate EPA’s proposal as

it is not publicly available pending

OMB review.

ese two f‌inalized rules are

certainly a step toward widespread

implementation of CCS. But, as

with many other issues surrounding

climate change and energy options

in the United States, the federal gov-

ernment has been slow to act, forc-

ing some states to implement regula-

tory regimes appropriate for their ju-

risdiction; states are considering sig-

nif‌icant legal CCS-related matters,

such as surrounding property rights,

pore space rights, liability allocation,

and funding for long-term liabili-

ties. is state-by-state approach,

however, may prove problematic as

it may create a disjointed patchwork

of regulatory requirements.

Whether you view CCS as part

of a clean coal technology initiative

(coal continues to be ranked as one

of the top fuel choices in the United

States) or as part of an overall ef‌fort

to minimize anthropogenic impacts

on the atmosphere, and despite

continued legal uncertainty, CCS

continues to be an option for reduc-

ing greenhouse gas emissions. Wide-

spread implementation of CCS will

be dif‌f‌icult, however, without f‌irst

capitalizing on knowledge garnered

from sequestration projects and us-

ing it to develop a robust regulatory

framework that provides more cer-

tainty and an allocation regime for

related liabilities.

Stephanie M. Haggerty is Corporate

Counsel in Pzer’s Environment, Health &

Safety Legal Group in New York, New York.