Vol. 31, No. 1, #2. Carbon Sequestration: A Lawyer's Cornucopia or Pandora's Box?.

• Author: Author: Governor Dave Freudenthal

Wyoming Bar Journal

2008.

Vol. 31, No. 1, #2.

Carbon Sequestration: A Lawyer's Cornucopia or Pandora's Box?

Wyoming Bar Journal Issue: February, 2008 Author: Governor Dave Freudenthal Carbon Sequestration: A Lawyer's Cornucopia or Pandora's Box?

If you enjoyed first year Property with the Rule in Shelley's Case and Springing Executory Interests, you will absolutely love thinking about the legal and practical issues surrounding carbon capture and sequestration. While I enjoyed Professor Maxfield, I barely survived the weekly embarrassment of Pete's labyrinth of arcane, (but incredibly important) concepts. Just as law school students cannot avoid property, Wyoming and its elected leaders cannot avoid the complexities of carbon capture and sequestration. Consider the following scenario, which reads like an exam question, but is real:

Rancher Smith, who owns 1,500 acres of Wyoming land and leases an additional 1,000 acres, is approached by Company Y with an offer to store carbon dioxide for the long term deep in the earth underneath his ranch. The gas would be pulled from the production of electricity at a coal-fired power plant 120 miles away, and pumped into a vast space deep in a geologic formation underneath Smith's ranch.

Now attempt to answer these questions:

Does Smith have the authority and the right to lease that void under his fee and leased lands?

Once it is pumped underground, whose responsibility is that carbon dioxide?

Does Company Y have the authority to force Smith to accept this storage?

What federal and state regulations would apply?

Who is liable if the CO2 doesn't stay where it is supposed to?

What other parties may possess rights that may be impacted by this transaction?

As Smith's attorney, what form of indemnification would you require?

The answer to all of these questions at present is - we don't know. The new process of carbon sequestration has opened up a Pandora's Box of regulatory and statutory questions that must be answered - and quickly.

Coal provides about 50 percent of our nation's electricity. Even with as-yet undefined Herculean efforts to pursue alternative sources of power, coal should and will play an essential role in meeting the world's energy needs in the future.

In order to manage the carbon dioxide that is produced in the generation of electricity from coal and other fossil fuels, Wyoming must tackle two strategic issues - carbon sequestration and coal gasification...