Yesterday Wyoming Governor Dave Freudenthal signed into law HB 89 and HB 90, which, in reverse order, create a statutory framework for carbon dioxide injection and geologic storage and address property rights issues potentially implicated by geologic storage projects.
HB 89, which will take effect on July 1, 2008, addresses property rights associated with subsurface storage space. Going forward, it purports to vest ownership of the subsurface pore space, which is defined as subsurface space which can be used as storage space for carbon dioxide or other substances, with the owner of the surface lands and waters above the pore space. Pore space ownership would run with surface space ownership unless the two estates had previously been severed or one is explicitly excluded from a transaction. Conveyances of mineral rights do not include any pore space that may be in the stratum unless explicitly stated. For past transactions, the law establishes a presumption that pore space ownership sits with the surface owner, which is rebuttable by a preponderance of the evidence. All transfers of pore space ownership must be accompanied by a description of the scope of any associated rights to use the surface estate; the law states that the owner of pore space "shall have no right to use the surface estate beyond that set out in a properly recorded instrument."
HB 90 establishes a permitting framework for CO2 injection and storage projects, granting the state's environmental agency, the Department of Environmental Quality (WYDEQ), permitting authority over injection and storage projects. The statute directs WYDEQ's water quality division, with consultation from the state geologist and an advisory board created under the statute, to develop regulations for injection and storage projects within the existing underground injection control (UIC) program. The regulations are to create "subclasses" of wells under the UIC program; include a requirement for operators to demonstrate that they have the “legal right to sequester;” require wells to meet, at a minimum, construction standards set by the oil and gas conservation commission and WYDEQ; and include bonding and financial assurance requirements for well closure and post-closure care (the scope and duration of the latter is to be determined by the advisory board by September 30, 2009). EOR projects are to remain subject to existing programs, under the auspices of the state's oil and gas conservation commission; however, if an EOR project "converts" to a storage project, jurisdiction over the project is to transfer to WYDEQ.