Carbon Dioxide Capture, Removal, Or Sequestration Projects - Environmental Protection - CA Public Resources

Section § 71460

This law section defines terms related to projects involving the capture, removal, or storage of carbon dioxide (CO2) in geological formations. A 'carbon dioxide capture, removal, or sequestration project' refers to any project aiming to isolate or use CO2 long-term by storing it in the earth. The term 'project operator' describes anyone who owns or runs such a project. A 'geologic storage complex' is an area equipped for CO2 storage, including necessary infrastructure, while a 'geologic storage reservoir' is a specific underground area suitable for CO2 injection and storage. Lastly, 'Secretary' and 'State board' refer to officials within California’s Natural Resources Agency and Air Resources Board, respectively.

For purposes of this part, the following definitions apply:

(a) “Carbon dioxide capture, removal, or sequestration project” means a carbon dioxide capture project, a carbon dioxide removal project, or a sequestration project that seeks to provide for the long-term isolation or utilization of the carbon dioxide from the atmosphere through storage in a geologic formation.

(b) “Carbon dioxide capture, removal, or sequestration project operator” means a person owning or operating a carbon dioxide capture, removal, or sequestration project.

(c) “Geologic storage complex” means one or more geologic storage reservoirs and any associated facilities or infrastructure necessary to convey, inject, or store carbon dioxide streams at the site of a geologic storage reservoir.

(d) “Geologic storage reservoir” means a portion of a sedimentary geologic stratum or formation containing pore spaces, including depleted oil and gas reservoirs and saline formations, that is suitable for injection and permanent storage of carbon dioxide in the state.

(e) “Secretary” means the Secretary of the Natural Resources Agency.

(f) “State board” means the State Air Resources Board.

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(Added by Stats. 2022, Ch. 359, Sec. 5. (SB 905) Effective January 1, 2023.)

Section § 71461

This section requires that by July 1, 2025, a framework be created to guide agreements on managing carbon dioxide projects involving multiple land parcels over the same storage area. It outlines that any agreement needs approval from a designated state agency, and parties to the agreement must own at least 75% of the interest in the land. The framework must set rules on fair compensation for landowners affected by the project, necessary access for monitoring sites, and liability allocations. Financial responsibilities for project operators need to be clearly defined, covering short-term corrective actions and long-term site management costs, including potential risks to public health. The framework also demands standards for royalty distribution from storage leases and compliance with legal standards. The creation process must involve consultation with various state agencies and experts, review of legal standards, and a public comment period.

(a) On or before July 1, 2025, the secretary, in consultation with the state board, shall publish a framework for governing agreements regarding two or more tracts of land overlying the same geologic storage reservoir or reservoirs for purposes of managing, developing, and operating a carbon dioxide capture, removal, or sequestration project. The framework shall include recommended requirements for the submission of these agreements to, and the review, approval, or denial of these agreements by, an authorized state agency, and shall include, but not be limited to, all of the following:

(1) Identification of the appropriate state agency for submission, review, and approval or denial of the agreements, including any legal authorization or delegation necessary.

(2) A requirement that agreement proponents own title to at least an undivided three-fourths of the total interests subject to the proposed agreement.

(3) Standards to determine fair and reasonable compensation for owners of surface, mineral, and subsurface rights whose use of their property will be infringed upon by the geologic storage reservoir.

(4) A requirement to make a good faith offer of compensation by project proponents to the owners of surface, mineral, and subsurface rights before submission of an agreement.

(5) Standards for the provision of surface site access, to the extent reasonably necessary for postinjection monitoring.

(6) Standards for the allocation of liability related to the geologic storage reservoir, and associated injection wells, including, but not limited to, standards regarding the liability of a surface landowner who has sold or leased all interests in the geologic storage reservoir to a carbon dioxide capture, removal, or sequestration project operator.

(7) Standards for imposing sufficient financial responsibility requirements on carbon dioxide capture, removal, or sequestration project operators, including, but not limited to, the short-term costs of corrective actions, the cost of any liability associated with damage to drinking water supplies or seismic activity triggered by the geologic storage reservoir or damage to public and environmental health and safety, and long-term costs associated with well plugging and abandonment, ongoing site care and monitoring, and site closure of the geologic storage reservoir.

(8) Standards for allocating royalty payments associated with the leasing of a geologic storage reservoir.

(9) Any other requirements necessary to comply with state or federal legal or constitutional standards.

(b) In developing the framework required pursuant to subdivision (a), the secretary shall consult with appropriate state agencies, including, but not limited to, the Attorney General, the Department of Conservation, the Geologic Energy Management Division, the California Geological Survey, the State Lands Commission, the state board, and the State Energy Resources Conservation and Development Commission, as well as industry and legal experts, regarding applicable legal standards. The secretary shall also review other states’ legal standards applicable to carbon dioxide capture, removal, or sequestration projects.

(c) Before publishing the framework pursuant to subdivision (a), the secretary shall provide no less than 90 days for public comment on the framework. The secretary shall consider all comments received during this public comment period in developing the framework.

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(Added by Stats. 2022, Ch. 359, Sec. 5. (SB 905) Effective January 1, 2023.)

Section § 71462

The law outlines who owns geologic storage reservoirs and how they can be transferred. If you own land, you typically own the geologic storage reservoir underneath unless it was already sold separately or mentioned otherwise in a legal document.

When selling land, if a storage reservoir is involved, the transfer must include a detailed description of storage rights, location, and liability terms. Projects capturing, removing, or storing carbon dioxide must inform nearby property owners and note usage on the property deed.

The law mandates operators of these carbon projects to notify neighbors 60 days before starting and be responsible for damages. It doesn't change previous contracts about reservoir use and is meant to support carbon storage projects until 2033, or sooner if the state sets rules.

(a) Title to any geologic storage reservoir is vested in the owner of the overlying surface estate unless it has been severed and separately conveyed.

(b) A conveyance of the surface ownership of real property shall be a conveyance of any geologic storage reservoir below the surface of the real property unless the ownership interest in the geologic storage reservoir previously has been severed from the surface ownership or is explicitly excluded in the conveyance. The ownership of a geologic storage reservoir may be conveyed in the manner provided by law for the transfer of mineral interests in real property. No agreement or instrument conveying a mineral or other interest underlying the surface shall act to convey ownership of a geologic storage reservoir unless the agreement explicitly conveys that ownership interest.

(c)

(1) An instrument that transfers the rights to a geologic storage reservoir under this section shall include all of the following:

(A) A description of the scope of any right of the owner of the geologic storage reservoir to use the surface estate.

(B) A general description of the potential location of the geologic storage reservoir, including a subsurface geologic or seismic survey or a metes and bounds description of the surface overlying the geologic storage reservoir and any depths or portions of the subsurface that are excluded from the geologic storage reservoir being transferred.

(C) An allocation of legal liability from the overlying surface estate owner to the geologic storage reservoir owner consistent with the standards developed in accordance with paragraph (6) of subdivision (a) of Section 71461.

(2) The owner of a geologic storage reservoir right shall have no right to use the surface estate beyond that set out in a properly recorded instrument.

(d) Not less than 60 days before commencing development of a carbon dioxide capture, removal, and sequestration project, the carbon dioxide capture, removal, or sequestration project operator shall provide written notice of the project to each owner of a surface, subsurface, or storage reservoir estate that is adjacent to a geologic storage complex or a geologic storage reservoir that is included in the project.

(e) Each carbon dioxide capture, removal, or sequestration project operator shall record a notation on the deed to the property, or deeds to the properties, where the geologic storage complex or geologic storage reservoir is located, or any other document that is normally examined during a title search, that will notify a potential purchaser of the property, or properties, that the property has, or properties have, been used to sequester carbon dioxide, the volume of carbon dioxide sequestered, the injection zone or zones into which the carbon dioxide was injected, and the dates during which injection occurred.

(f) A carbon dioxide capture, removal, or sequestration project operator shall be liable for any damages caused by the operation of the carbon dioxide capture, removal, or sequestration project.

(g) Nothing in this section shall alter, amend, diminish, or invalidate a right to the use of a geologic storage reservoir that was acquired by contract or lease before the effective date of this part.

(h) This section is enacted for the limited purpose of facilitating the development of carbon dioxide capture, removal, or sequestration projects.

(i)

(1) This section shall remain operative only until January 1, 2033, or until seven years after the date that the state board adopts regulations pursuant to Section 39741.1. of the Health and Safety Code, whichever is sooner.

(2) This section is repealed on January 1 following the date the section becomes inoperative pursuant to paragraph (1).

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(Added by Stats. 2022, Ch. 359, Sec. 5. (SB 905) Effective January 1, 2023. Conditionally inoperative on date prescribed by its own provisions. Repealed on January 1 following the inoperative date.)

Section § 71463

This law requires the State Geologist to report any earthquake activity or carbon dioxide leaks from projects that capture and store carbon dioxide. The State Geologist can advise the state board on how these projects should be adjusted.

If there is a risk to public or environmental health and safety detected through monitoring, such as increased earthquakes or leaks, the state board has the authority to mandate changes in how the project operates. This can include temporarily stopping the project's operations.

The State Geologist shall report seismic activity or leakage of carbon dioxide from a carbon dioxide capture, removal, or sequestration project to the state board and may recommend changes in the operations of the project to the state board. The state board may require changes in operations of a carbon dioxide capture, removal, or sequestration project to ensure public and environmental health and safety, including, but not limited to, a mandatory pause in operation, if the monitoring and reporting detects increased seismicity or carbon dioxide leakage outside of the geologic storage reservoir.

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(Added by Stats. 2022, Ch. 359, Sec. 5. (SB 905) Effective January 1, 2023.)

Section § 71464

This law requires operators of carbon dioxide capture, removal, or sequestration projects to take several steps to ensure safety and environmental protection. They must maintain financial responsibility for at least 100 years after the last CO2 injection to cover various costs, including monitoring and potential liabilities like seismic activity. Operators also need agreements preventing nearby drilling or extraction that could compromise safety. They should submit an air monitoring plan to the state, minimize pollution impacts on nearby residents, comply with related health and safety regulations, and, if pollution can't be avoided, invest in mitigation efforts locally.

A carbon dioxide capture, removal, or sequestration project operator shall do all of the following:

(a) Maintain financial responsibility for a period of time that is sufficiently long enough to demonstrate that the risk of carbon dioxide leakage poses no material threat to public health, safety, and the environment and to achievement of net zero greenhouse gas emissions in California and that terminates no earlier than 100 years after the last date of injection of carbon dioxide into a geologic storage reservoir. The operator shall demonstrate financial responsibility by submitting a plan to the state board to cover the short- and long-term costs associated with corrective action, well plugging and abandonment, geologic storage reservoir monitoring, site care and site closure, emergency and remedial response, liability associated with seismic activity triggered by the reservoir, or loss of carbon dioxide containment by the geologic storage reservoir, and protection of drinking water quality and public and environmental health and safety through financial responsibility instruments as determined by the state board pursuant to Section 39741.5 of the Health and Safety Code, which may include, but is not limited to, bonds.

(b) Show proof to the state board that there is binding agreement among relevant parties that drilling or extraction that may penetrate the geologic storage reservoir are prohibited to ensure public and environmental health and safety for a period of time that is sufficiently long enough to demonstrate that the risk of carbon dioxide leakage poses no material threat to public health, safety, and the environment and to achievement of net zero greenhouse gas emissions in California and that terminates no earlier than 100 years after the last date of injection of carbon dioxide into a geologic storage reservoir.

(c) Create an air monitoring and mitigation plan to measure, track, and minimize potential toxic air contaminants and criteria air pollutants from the site of the carbon dioxide capture, removal, or sequestration project and submit the plan to the state board.

(d) Avoid any significant impact on residents in communities affected by a high-cumulative exposure burden caused by a potential net-increase in air, water, and soil pollution emanating from the site of the carbon dioxide capture, removal, or sequestration project in accordance with all applicable local, state, and federal laws and requirements, including requirements to use best available control technology, as defined in Section 40405 of the Health and Safety Code.

(e) Comply with Section 39741.1 of the Health and Safety Code and the regulations adopted by the state board pursuant to that section.

(f) Where avoidance of increased air pollution on site from such a project is not feasible, invest in mitigation in the community location adjacent to where the carbon dioxide capture, removal, or sequestration project is located which would be exposed to or impacted by any potential increased air pollution if mitigation measures are required pursuant to the California Environmental Quality Act (Division 13 (commencing with Section 21000)) for the project to address significant impacts in local air pollution.

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(Added by Stats. 2022, Ch. 359, Sec. 5. (SB 905) Effective January 1, 2023.)

Section § 71465

This law states that pipelines for transporting carbon dioxide (CO2) can only be used once federal safety rules for CO2 pipeline transport are finalized and the pipeline meets those rules. This applies to CO2 capture or sequestration projects but not within the same permitted facility.

Additionally, by February 1, 2023, a proposal for state rules on the design, operation, and maintenance of CO2 pipelines for public and environmental safety must be submitted to the Legislature. This proposal aims to reduce health and safety risks.

(a) Pipelines shall only be utilized to transport carbon dioxide to or from a carbon dioxide capture, removal, or sequestration project once the federal Pipeline and Hazardous Materials Safety Administration has concluded the rulemaking (RIN 2137-AF60) regarding minimum federal safety standards for transportation of carbon dioxide by pipeline (Parts 190 to 199, inclusive, of Title 49 of the Code of Federal Regulations) and the carbon dioxide capture, removal, or sequestration project operator demonstrates that the pipeline meets those standards. This section shall not apply to carbon captured at a permitted facility and transported within that facility or property.

(b) The Natural Resources Agency, in consultation with the Public Utilities Commission, shall, no later than February 1, 2023, provide a proposal to the Legislature to establish a state framework and standards for the design, operation, siting, and maintenance of intrastate pipelines carrying carbon dioxide fluids of varying composition and phase to minimize the risk posed to public and environmental health and safety. The recommended framework shall be designed to minimize risk to public health and environmental health and safety, to the extent feasible.

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(Added by Stats. 2022, Ch. 359, Sec. 5. (SB 905) Effective January 1, 2023.)