Pa. Taking First Steps toward Primacy in Carbon Storage Regulation

Pennsylvania has taken the first legislative step toward establishing primary authority to regulate underground carbon storage facilities in the state, a move that is seen as necessary in order for a proposed clean hydrogen hub to move forward.

The state Senate Environmental Resources and Energy Committee recently approved S.B. 831, which outlines ownership of underground “pore space”, spells out rights and liabilities of property owners and operators and gives the state Department of Environmental Protection authority to enforce federal regulations and conduct monitoring. The legislation will now go to the full Senate.

Carbon capture and sequestration is the process of capturing carbon dioxide (CO2) air emissions and storing them in underground geological formations for the long term. The technology is in its formative stages, but is seen as necessary to help reduce the climate and environmental effects of CO2, a harmful greenhouse gas. The gas is injected deep underground into a Class VI well, which is now regulated by the federal Environmental Protection Agency.

CCS is integral to proposals being put forward for a clean hydrogen hub in the Appalachian region that would use “blue hydrogen” created from the abundant natural gas supply in the area with the CO2 emissions stored underground. The U.S. Department of Energy will award $7 billion from the bipartisan infrastructure to fund up to 10 regional clean hydrogen hubs, defined as “a network of clean hydrogen producers, potential clean hydrogen consumers and connective infrastructure located in close proximity” to be sited across the country. At least one hub is expected to be located in Appalachia.

One of the groups seeking funding is led by Team PA Foundation, which last year recommended that the state create a regulatory framework to take primacy in CCS regulation to help attract projects to the state. A recent Great Plains Institute study said that regulatory and permitting programs are essential to scale geologic storage opportunities.

S.B. 831 defines pore space as “Subsurface strata, formations, cavities or voids, whether natural or artificially created, that can be used as a storage space for carbon dioxide or other media.” The bill designates that ownership of the pore space lies with the surface owner of the property. The developer of a project must reach an agreement with all property owners for the construction and operation of the underground facility. If, after good-faith negotiation, the operator cannot reach an agreement with all necessary pore space owners but has secured written agreement from the owners of at least 60%, all of the pore space for which an agreement has not been reached can be included within the proposed storage facility by order of the DEP secretary.

The bill would allow the state to impose a fee on storage operators to help cover regulatory and monitoring costs, and state regulations would follow those of the federal government. No sooner than 10 years after a project is completed, an operator can ask the state for a certificate of completion. At that time that is granted, the state assumes ownership and liability for the injected CO2.

The DEP announced earlier this year that it planned to send a letter to the EPA seeking primary authority on regulation. Just two states, North Dakota and Wyoming, have so far been granted primacy, but a number of others are in the process of doing so. Some environmental groups have expressed concerns about the potential health and safety risks, liability issues, and the thoroughness of state reviews.