This week, on September 30 and October 2, 2008, the US Environmental Protection Agency (EPA) will hold two public hearings on its proposed rule regulating the underground injection and storage of carbon dioxide (CO2). The proposed rule is the first step in establishing a regulatory framework for large-scale carbon capture and storage (CCS), which may be a critical component in reducing US greenhouse gas (GHG) emissions. Squire Sanders lawyers are well-versed in climate change issues and are experienced in advising clients on the impact of proposed regulations and the drafting of comments to federal rulemakings.

EPA proposes to regulate CO2 injection through the Underground Injection Control (UIC) program of the Safe Drinking Water Act (SDWA). EPA has tailored the existing UIC regulations, which control the underground injection of industrial wastewater and hazardous waste among other things, to address the specific chemical properties of captured CO2 including its relative buoyancy, corrosiveness in water, potential contamination with industrial impurities, mobility within subsurface formations and large injection volumes. Importantly, however, the proposed rule is limited solely to control of underground wells – it does not regulate CO2 capture and transport, property rights including use of real property for CCS and controlling carbon credits, liability allocation among CO2 generators and storage facilities, certification of GHG reductions or any of the many other issues that CCS presents.

CCS, which EPA describes as part of a portfolio of options for controlling GHGs, works by capturing CO2 stack emissions from fossil-fueled power plants and industrial facilities. The CO2 is typically compressed to convert it from a gas to a "supercritical fluid," which is then transported to the underground storage site, usually by pipeline. The CO2 is then injected into deep subsurface rock formations through one or more wells, using technologies developed and refined over the past several decades. The CO2 is injected more than 2,600 feet underground, where pressure and temperature are sufficient to keep the CO2 in a supercritical state.

According to EPA, the United States has abundant CO2 storage capacity in salt domes, depleted oil and gas fields, and deep, unmineable coal seams. These storage formations are spread across the country, and 95 percent of the nation's largest stationary sources are located within 50 miles of a potential CO2 storage site. Estimates indicate that the United States has potential storage capacity for 3,000 gigatons of CO2 – approximately a thousand years' worth of CO2 emissions from nearly 1,000 coal-fired power plants.

EPA's proposed rule, published at 73 Fed. Reg. 43492 on July 25, 2008, establishes a new class of injection well – Class VI – and addresses the following:

  • geologic site characterization to ensure that storage wells are appropriately sited;
  • construction of wells with compatible materials and in a manner that prevents fluid movement into unintended areas;
  • periodic re-evaluation of the area of review around the injection well to incorporate monitoring and operational data and verify that the CO2 is moving as predicted within the underground formation;
  • testing of the mechanical integrity of the injection well, ground water monitoring and tracking of the location of the injected CO2 to ensure protection of underground sources of drinking water;
  • extended post-injection monitoring and site care to track the injected CO2 and monitor subsurface pressures; and
  • financial responsibility requirements to ensure that funds will be available for well plugging, site care, closure, and emergency and remedial response.

As described in a recent announcement, published at 73 Fed. Reg. 50740 on August 28, 2008, the EPA will hold public hearings and accept comments on the proposed rule on Sept. 30, 2008 at the EPA Region 5 Office in Chicago, Illinois and on Oct. 2, 2008 at the Colorado Convention Center in Denver, Colorado. EPA will also accept written comments on the proposed rule through November 24, 2008.