Establish process to regulate carbon capture, storage technology

hb170_05_EN

(136th General Assembly)

(Substitute
House Bill Number 170)

AN
ACT

To amend sections 1509.01,
1509.33, and 1509.99 and to enact sections 1509.71, 1509.72, 1509.73,
1509.75, 1509.76, 1509.77, 1509.78, 1509.79, 5301.57, 5301.58,
5301.59, and 5301.60 of the Revised Code to establish a process to
regulate carbon capture and storage technologies and the geologic
sequestration of carbon dioxide for long-term storage.

Be
it enacted by the General Assembly of the State of Ohio:

Section
1.
That
sections 1509.01, 1509.33, and 1509.99 be amended and sections
1509.71, 1509.72, 1509.73, 1509.75, 1509.76, 1509.77, 1509.78,
1509.79, 5301.57, 5301.58, 5301.59, and 5301.60 of the Revised Code
be enacted to read as follows:

Sec.
1509.01.
As
used in this chapter:

(A)
"Well" means any borehole, whether drilled or bored, within
the state for production, extraction, or injection of any gas or
liquid mineral, excluding potable water to be used as such, but
including natural or artificial brines and oil field waters. "Well"
includes
a
carbon dioxide well, as defined in section 1509.71 of the Revised
Code, and
a
stratigraphic well.

(B)
"Oil" means crude petroleum oil and all other hydrocarbons,
regardless of gravity, that are produced in liquid form by ordinary
production methods, but does not include hydrocarbons that were
originally in a gaseous phase in the reservoir.

(C)
"Gas" means all natural gas and all other fluid
hydrocarbons that are not oil, including condensate.

(D)
"Condensate" means liquid hydrocarbons separated at or near
the well pad or along the gas production or gathering system prior to
gas processing.

(E)
"Pool" means an underground reservoir containing a common
accumulation of oil or gas, or both, but does not include a gas
storage reservoir. Each zone of a geological structure that is
completely separated from any other zone in the same structure may
contain a separate pool.

(F)
"Field" means the general area underlaid by one or more
pools.

(G)
"Drilling unit" means the minimum acreage on which one well
may be drilled, but does not apply to a well for injecting gas into
or removing gas from a gas storage reservoir and does not apply to a
stratigraphic well.

(H)
"Waste" includes all of the following:

(1)
Physical waste, as that term generally is understood in the oil and
gas industry;

(2)
Inefficient, excessive, or improper use, or the unnecessary
dissipation, of reservoir energy;

(3)
Inefficient storing of oil or gas;

(4)
Locating, drilling, equipping, operating, or producing an oil or gas
well in a manner that reduces or tends to reduce the quantity of oil
or gas ultimately recoverable under prudent and proper operations
from the pool into which it is drilled or that causes or tends to
cause unnecessary or excessive surface loss or destruction of oil or
gas;

(5)
Other underground or surface waste in the production or storage of
oil, gas, or condensate, however caused.

(I)
"Correlative rights" means the reasonable opportunity to
every person entitled thereto to recover and receive the oil and gas
in and under the person's tract or tracts, or the equivalent thereof,
without having to drill unnecessary wells or incur other unnecessary
expense.

(J)
"Tract" means a single, individual parcel of land or a
portion of a single, individual parcel of land.

(K)
"Owner," unless referring to a mine, means the person who
has the right to drill on a tract or drilling unit, to drill into and
produce from a pool, and to appropriate the oil or gas produced
therefrom either for the person or for others, except that a person
ceases to be an owner with respect to a well when the well has been
plugged in accordance with applicable rules adopted and orders issued
under this chapter. "Owner" does not include a person who
obtains a lease of the mineral rights for oil and gas on a parcel of
land if the person does not attempt to produce or produce oil or gas
from a well or obtain a permit under this chapter for a well or if
the entire interest of a well is transferred to the person in
accordance with division (B) of section 1509.31 of the Revised Code.

(L)
"Royalty interest" means the fee holder's share in the
production from a well, except a stratigraphic well.

(M)
"Discovery well" means the first well, except a
stratigraphic well, capable of producing oil or gas in commercial
quantities from a pool.

(N)
"Prepared clay" means a clay that is plastic and is
thoroughly saturated with fresh water to a weight and consistency
great enough to settle through saltwater in the well in which it is
to be used, except as otherwise approved by the chief of the division
of oil and gas resources management.

(O)
"Rock sediment" means the combined cutting and residue from
drilling sedimentary rocks and formation.

(P)
"Excavations and workings," "mine," and "pillar"
have the same meanings as in section 1561.01 of the Revised Code.

(Q)
"Coal bearing township" means a township designated as such
by the chief of the division of mineral resources management under
section 1561.06 of the Revised Code.

(R)
"Gas storage reservoir" means a continuous area of a
subterranean porous sand or rock stratum or strata into which gas is
or may be injected for the purpose of storing it therein and removing
it therefrom and includes a gas storage reservoir as defined in
section 1571.01 of the Revised Code.

(S)
"Safe Drinking Water Act" means the "Safe Drinking
Water Act," 88 Stat. 1661 (1974), 42 U.S.C.A. 300(f), as amended
by the "Safe Drinking Water Amendments of 1977," 91 Stat.
1393, 42 U.S.C.A. 300(f), the "Safe Drinking Water Act
Amendments of 1986," 100 Stat. 642, 42 U.S.C.A. 300(f), and the
"Safe Drinking Water Act Amendments of 1996," 110 Stat.
1613, 42 U.S.C.A. 300(f), and regulations adopted under those acts.

(T)
"Person" includes any political subdivision, department,
agency, or instrumentality of this state; the United States and any
department, agency, or instrumentality thereof; any legal entity
defined as a person under section 1.59 of the Revised Code; and any
other form of business organization or entity recognized by the laws
of this state.

(U)
"Brine" means all saline geological formation water
resulting from, obtained from, or produced in connection with
exploration, drilling, well stimulation, production of oil or gas, or
plugging of a well.

(V)
"Waters of the state" means all streams, lakes, ponds,
marshes, watercourses, waterways, springs, irrigation systems,
drainage systems, and other bodies of water, surface or underground,
natural or artificial, that are situated wholly or partially within
this state or within its jurisdiction, except those private waters
that do not combine or effect a junction with natural surface or
underground waters.

(W)
"Exempt Mississippian well" means a well that meets all of
the following criteria:

(1)
Was drilled and completed before January 1, 1980;

(2)
Is located in an unglaciated part of the state;

(3)
Was completed in a reservoir no deeper than the Mississippian Big
Injun sandstone in areas underlain by Pennsylvanian or Permian
stratigraphy, or the Mississippian Berea sandstone in areas directly
underlain by Permian stratigraphy;

(4)
Is used primarily to provide oil or gas for domestic use.

(X)
"Exempt domestic well" means a well that meets all of the
following criteria:

(1)
Is owned by the owner of the surface estate of the tract on which the
well is located;

(2)
Is used primarily to provide gas for the owner's domestic use;

(3)
Is located more than two hundred feet horizontal distance from any
inhabited private dwelling house other than an inhabited private
dwelling house located on the tract on which the well is located;

(4)
Is located more than two hundred feet horizontal distance from any
public building that may be used as a place of resort, assembly,
education, entertainment, lodging, trade, manufacture, repair,
storage, traffic, or occupancy by the public.

(Y)
"Urbanized area" means an area where a well or production
facilities of a well are located within a municipal corporation or
within a township that has an unincorporated population of more than
five thousand in the most recent federal decennial census prior to
the issuance of the permit for the well or production facilities.

(Z)
"Well stimulation" or "stimulation of a well"
means the process of enhancing well productivity, including hydraulic
fracturing operations.

(AA)
"Production operation" means all operations and activities
and all related equipment, facilities, and other structures that may
be used in or associated with the exploration and production of oil,
gas, or other mineral resources that are regulated under this
chapter, including operations and activities associated with site
preparation, site construction, access road construction, well
drilling, well completion, well stimulation, well site activities,
reclamation, and plugging. "Production operation" also
includes all of the following:

(1)
The piping, equipment, and facilities used for the production and
preparation of hydrocarbon gas or liquids for transportation or
delivery;

(2)
The processes of extraction and recovery, lifting, stabilization,
treatment, separation, production processing, storage, waste
disposal, and measurement of hydrocarbon gas and liquids, including
related equipment and facilities;

(3)
The processes and related equipment and facilities associated with
production compression, gas lift, gas injection, fuel gas supply,
well drilling, well stimulation, and well completion activities,
including dikes, pits, and earthen and other impoundments used for
the temporary storage of fluids and waste substances associated with
well drilling, well stimulation, and well completion activities;

(4)
Equipment and facilities at a
wellpad

well
pad
or
other location that are used for the transportation, handling,
recycling, temporary storage, management, processing, or treatment of
any equipment, material, and by-products or other substances from an
operation at a
wellpad

well
pad
that
may be used or reused at the same or another operation at a
wellpad

well
pad
or
that will be disposed of in accordance with applicable laws and rules
adopted under them.

(BB)
"Annular overpressurization" means the accumulation of
fluids within an annulus with sufficient pressure to allow migration
of annular fluids into underground sources of drinking water.

(CC)
"Orphaned well" means a well that has not been properly
plugged or its land surface restored in accordance with this chapter
and the rules adopted under it to which either of the following
apply:

(1)
The owner of the well is unknown, deceased, or cannot be located and
the well is abandoned.

(2)
The owner of the well has abandoned the well and there is no money
available to plug the well in accordance with this chapter and the
rules adopted under it.

(DD)
"Temporarily inactive well" means a well that has been
granted temporary inactive status under section 1509.062 of the
Revised Code.

(EE)
"Material and substantial violation" means any of the
following:

(1)
Failure to obtain a permit to drill, reopen, convert, plugback, or
plug a well under this chapter;

(2)
Failure to obtain, maintain, update, or submit proof of insurance
coverage that is required under this chapter;

(3)
Failure to obtain, maintain, update, or submit proof of a surety bond
that is required under this chapter;

(4)
Failure to restore a disturbed land surface as required by section
1509.072 of the Revised Code;

(5)
Failure to reimburse the oil and gas well fund pursuant to a final
order issued under section 1509.071 of the Revised Code;

(6)
Failure to comply with a final nonappealable order of the chief
issued under section 1509.04 of the Revised Code;

(7)
Failure to submit a report, test result, fee, or document that is
required in this chapter or rules adopted under it.

(FF)
"Severer" has the same meaning as in section 5749.01 of the
Revised Code.

(GG)
"Horizontal well" means a well that is drilled for the
production of oil or gas in which the wellbore reaches a horizontal
or near horizontal position in the Point Pleasant, Utica, or
Marcellus formation and the well is stimulated. "Horizontal
well" does not include a stratigraphic well.

(HH)
"Well pad" means the area that is cleared or prepared for
the drilling of one or more horizontal wells.

(II)
"Stratigraphic well" means a borehole that is drilled
within the state on a tract solely to conduct research or testing of
the subsurface geology, including porosity and permeability.
"Stratigraphic well" does not include geotechnical or soil
borings or a borehole drilled for seismic shot or mining of
industrial minerals or coal.

Sec.
1509.33.
(A)
Whoever violates sections 1509.01 to 1509.31
or
sections 1509.71 to 1509.79
of
the Revised Code, or any rules adopted or orders or terms or
conditions of a permit or registration certificate issued pursuant to
these sections for which no specific penalty is provided in this
section, shall pay a civil penalty of not more than ten thousand
dollars for each offense.

(B)
Whoever violates section 1509.221 of the Revised Code or any rules
adopted or orders or terms or conditions of a permit issued
thereunder shall pay a civil penalty of not more than ten thousand
dollars for each violation.

(C)
Whoever violates division (D) of section 1509.22 or division (A)(1)
of section 1509.222 of the Revised Code shall pay a civil penalty of
not less than two thousand five hundred dollars nor more than twenty
thousand dollars for each violation.

(D)
Whoever violates division (A) of section 1509.22 of the Revised Code
shall pay a civil penalty of not less than two thousand five hundred
dollars nor more than ten thousand dollars for each violation.

(E)
Whoever violates division (A) of section 1509.223 of the Revised Code
shall pay a civil penalty of not more than ten thousand dollars for
each violation.

(F)
Whoever violates section 1509.072 of the Revised Code or any rules
adopted or orders issued to administer, implement, or enforce that
section shall pay a civil penalty of not more than five thousand
dollars for each violation.

(G)
In addition to any other penalties provided in this chapter, whoever
violates section 1509.05, section 1509.21, division (B) of section
1509.22, or division (A)(1) of section 1509.222 of the Revised Code
or a term or condition of a permit or an order issued by the chief of
the division of oil and gas resources management under this chapter
or knowingly violates division (A) of section 1509.223 of the Revised
Code is liable for any damage or injury caused by the violation and
for the actual cost of rectifying the violation and conditions caused
by the violation. If two or more persons knowingly violate one or
more of those divisions in connection with the same event, activity,
or transaction, they are jointly and severally liable under this
division.

(H)
The attorney general, upon the request of the chief of the division
of oil and gas resources management, shall commence an action under
this section against any person who violates sections 1509.01 to
1509.31
or
sections 1509.71 to 1509.79
of
the Revised Code, or any rules adopted or orders or terms or
conditions of a permit or registration certificate issued pursuant to
these sections. Any action under this section is a civil action,
governed by the Rules of Civil Procedure and other rules of practice
and procedure applicable to civil actions. The remedy provided in
this division is cumulative and concurrent with any other remedy
provided in this chapter, and the existence or exercise of one remedy
does not prevent the exercise of any other, except that no person
shall be subject to both a civil penalty under division (A), (B),
(C), or (D) of this section and a fine established in section 1509.99
of the Revised Code for the same offense.

(I)
For purposes of this section, each day of violation constitutes a
separate offense.

Sec.
1509.71.
As
used in sections 1509.71 to 1509.79 of the Revised Code:

"Carbon
dioxide" means naturally occurring, geologically sourced, or
anthropogenically sourced carbon dioxide including its derivatives
and all mixtures, combinations, and phases, whether liquid, gaseous,
solid, stripped, segregated, or divided from any other fluid stream
thereof.

"Carbon
dioxide well" means a well that is used to inject carbon dioxide
into pore space for carbon sequestration under a UIC Class VI permit.

"Carbon
dioxide plume" means the extent, underground, in three
dimensions, of injected carbon dioxide stream.

"Carbon
sequestration" means the underground storage of carbon dioxide
in a geological formation.

"Carbon
sequestration project" means a project that involves the
underground storage of carbon dioxide in a geological formation
pursuant to at least one UIC Class VI permit.

"Owner"
includes, unless the context indicates otherwise, a person who has
the right to drill a carbon dioxide well and to inject carbon dioxide
in an underground geologic formation. "Owner," as defined
in section 1509.01 of the Revised Code, does not apply to sections
1509.71 to 1509.79 or sections 5301.58 to 5301.60 of the Revised Code
unless the context indicates otherwise.

"Pore
space" means subsurface cavities and voids, whether natural or
artificially created, that are used for sequestration.

"Storage
facility" means the pore space in the subsurface area consisting
of the extent of a carbon dioxide plume and the geological seals that
confine the carbon dioxide plume that are required to be delineated
on an approved UIC Class VI permit or an amendment to a UIC Class VI
permit issued to a storage operator.

"Storage
operator" means an individual, corporation, or other legal
entity that operates a carbon sequestration project, regardless of
whether an owner that has the right to drill and store carbon dioxide
in the project area contracts, retains, or allows an individual,
corporation, or other legal entity to conduct operations or provide
other services at the carbon sequestration project.

"UIC
Class VI permit" means an underground injection control program
permit issued by the chief of the division of oil and gas resources
management or the United States environmental protection agency that
allows the operation of a carbon dioxide well.

"Underground
storage of carbon dioxide" means the injection and storage of
carbon dioxide into underground strata and formations under at least
one UIC Class VI permit.

Sec.
1509.72.
The
division of oil and gas resources management has sole and exclusive
authority to regulate carbon sequestration and the operation of
storage facilities within the state, excepting only those activities
regulated under federal laws and for which the state does not have
primacy. The regulation of carbon sequestration activities is a
matter of general statewide interest that requires uniform statewide
regulation, and sections 1509.71 to 1509.79 of the Revised Code and
rules adopted under those sections constitute a comprehensive plan
with respect to all aspects of carbon sequestration within this
state, including storage facility operation and permitting related to
those activities.

In
order to assist the division in the furtherance of its sole and
exclusive authority as established in this section, the chief of the
division of oil and gas resources management may enter into
cooperative agreements with other states that share jurisdiction
regarding carbon sequestration projects and other state agencies
regarding carbon sequestration projects. Such cooperative agreements
do not confer on other state agencies any authority to administer or
enforce sections 1509.71 to 1509.79 of the Revised Code and rules
adopted under those sections. In addition, such cooperative
agreements shall not be construed to dilute or diminish the
division's sole and exclusive authority as established in this
section.

The
division may create a program to incentivize innovation for the use
of and reutilization of captured carbon dioxide.

Nothing
in this section affects the authority granted to the director of
transportation and local authorities in section 723.01 or 4513.34 of
the Revised Code, provided that the authority granted under those
sections shall not be exercised in a manner that discriminates
against, unfairly impedes, or obstructs carbon sequestration projects
regulated under sections 1509.71 to 1509.79 of the Revised Code.

Sec.
1509.73.
(A)
The chief of the division of oil and gas resources management shall
adopt, rescind, and amend rules in accordance with Chapter 119. of
the Revised Code for the administration, implementation, and
enforcement of sections 1509.71 to 1509.79 of the Revised Code.

(B)
Rules adopted under this section shall include provisions regarding
applications for and the issuance of UIC Class VI permits; the terms
and conditions of those permits; entry to conduct inspections and to
examine records to ascertain compliance with sections 1509.71 to
1509.79 of the Revised Code, rules adopted under those sections, and
orders and terms and conditions of permits issued under those
sections; the provision and maintenance of information through
monitoring, recordkeeping, and reporting; and other provisions in
furtherance of the goals of this chapter and the Safe Drinking Water
Act.

(C)
The rules adopted under this section shall establish all of the
following:

(1)
To the extent ground disturbance is necessary, a requirement that
owners review field drainage systems with landowners, determine ways
to mitigate or avoid damage to drainage systems, and promptly repair
or restore drainage conditions;

(2)
Requirements and procedures for statutory consolidation applications
under section 1509.76 of the Revised Code that include any land owned
by the state;

(3)
The amount of the costs estimated to implement the closure plan of
the carbon dioxide well and associated facilities and any post
injection site care and site closure;

(4)
Requirements and procedures that allow a storage operator to seek a
permit to drill a carbon dioxide well while an application for
statutory consolidation submitted under section 1509.76 of the
Revised Code is pending.

(D)
The rules adopted under this section shall include an identification
of the subjects that the chief shall address when attaching terms and
conditions to a UIC Class VI permit. The subjects shall include at
least all of the following:

(1)
Requirements for the operation and monitoring of a carbon dioxide
well;

(2)
Safety concerning the drilling and operation of a carbon dioxide
well;

(3)
Spacing, setback, and any other provisions to prevent storage
facilities and storage operators from impacting the ability of owners
of existing oil and gas well interests to develop those interests;

(4)
Protection of the public and private water supply, including the
amount of water used and the source or sources of the water;

(5)
Fencing and screening of surface facilities of a carbon dioxide well;

(6)
Containment and disposal of drilling and other wastes;

(7)
Construction of access roads for purposes of the drilling and
operation of a carbon dioxide well;

(8)
Noise mitigation for purposes of the drilling of a carbon dioxide
well and the operation of such a well, excluding safety and
maintenance operations;

(9)
Liability insurance to pay damages for injury to persons or property
caused by the construction or operation of the storage facility, to
be maintained for the period of time beginning at the commencement of
construction operations and ending when the chief issues a
certificate of project completion under section 1509.77 of the
Revised Code;

(10)
Liability insurance coverage of at least fifteen million dollars to
cover bodily injury and property damage caused by the construction,
drilling, or operation of the owner's carbon dioxide wells in this
state. The rules shall require the insurance policy to include
additional coverage for an environmental endorsement.

(11)
A financial instrument, including a surety bond, letter of credit,
insurance, escrow, or self-insurance, conditioned on compliance with
all obligations imposed under sections 1509.71 to 1509.79 of the
Revised Code, to be maintained for the period of time beginning at
the commencement of construction operations and ending when the chief
issues a certificate of project completion. The rules shall establish
the required amount of the financial instrument that is not less than
the cost estimate identified in the application. The financial
instrument shall be sufficient to cover corrective actions, plugging,
post-injection site care prior to receipt of a certificate of project
completion, and emergency or remedial response.

(E)
Notwithstanding any provision of section 121.95 of the Revised Code
to the contrary, a regulatory restriction contained in a rule adopted
under this section is not subject to sections 121.95 to 121.953 of
the Revised Code.

Sec.
1509.75.
(A)
Carbon sequestration projects are authorized in the state for the
purposes of injecting carbon dioxide into the pore space of a storage
facility through at least one carbon dioxide injection well under a
UIC Class VI permit.

(B)
To operate a carbon sequestration project under sections 1509.71 to
1509.79 of the Revised Code, a storage operator shall obtain at least
both of the following:

(1)
A UIC Class VI permit, which shall be applied for in the name of the
storage operator;

(2)
Any additional permits required by applicable laws, rules, and
regulations, except that a storage operator is not required to obtain
a permit required under section 1509.05 of the Revised Code.

(C)
Prior to carbon sequestration, the chief of the division of oil and
gas resources management may require a storage operator to deploy a
seismicity monitoring system. The storage operator shall use the
system to determine, to the best of the operator's ability, the
presence or absence, magnitude, and the hypocenter location of
seismic activity within the vicinity of the storage facility as may
be necessary to perform an array and a risk analysis and as required
by the chief. The chief may periodically require the storage operator
to utilize the seismicity monitoring system during carbon
sequestration operations.

(D)
Prior to, or during the operation of, a carbon sequestration project
under sections 1509.71 to 1509.79 of the Revised Code, a storage
operator shall design the project to endeavor to isolate any existing
or future production of oil and gas from above and below the proposed
storage facility.

(E)
Provisions of this chapter codified in sections other than sections
1509.71 to 1509.79 of the Revised Code apply to carbon sequestration
projects to the extent that those provisions are consistent with, and
not specifically excepted from, sections 1509.71 to 1509.79 of the
Revised Code.

Sec.
1509.76.
(A)
If, after good-faith negotiation, the applicant for a UIC Class VI
permit cannot locate or reach an agreement with pore space owners in
the proposed storage facility but has obtained the consent of owners
of at least seventy per cent of the pore space proposed to be used in
a storage facility, the applicant may submit a statutory
consolidation application for the operation of the entire proposed
storage facility to the chief of the division of oil and gas
resources management. In calculating the seventy per cent, a pore
space owner's entire interest in the proposed storage facility,
including any divided, undivided, partial, fee, or other interest in
the pore space, shall be included to the fullest extent of that
interest.

(B)
An applicant shall include the following with the application:

(1)
A list of all persons reasonably known to own oil, gas, or coal
interests above or below the pore space proposed to be used for the
storage facility;

(2)
An application fee in the amount of fifty thousand dollars. The
division shall maintain a record of all costs incurred processing the
application. If the costs of processing the application exceed the
initial application fee, the division shall send the applicant a
final statement of those additional costs. The applicant shall pay
the additional amount before the division issues its final decision
on the application. If the costs of processing the application are
less than the initial application fee, the division shall refund the
difference to the applicant. The division shall send the applicant
the refund after the division issues its final decision on the
application. Except for any portion of the application fee that is
refunded, the applicant shall pay the complete application fee
regardless of whether a permit is issued or denied or the application
is withdrawn.

All
application fees shall be credited to the carbon capture
administrative fund created under section 1509.78 of the Revised
Code.

(3)
Proof of notice provided under division (D) of this section, if
applicable;

(4)
A notarized affidavit listing a minimum of three attempts to contact
all known pore space owners on three separate dates;

(5)
Any additional information reasonably requested by the chief.

(C)
For each application, the chief shall provide notice to all pore
space owners and lessees located within the proposed storage facility
and all owners and lessees of the subsurface areas located above and
below the proposed storage facility of the proposed carbon
sequestration project, as identified by the applicant in the
application. The notice shall be sent not later than thirty days
after the chief determines that the application is complete. The
chief shall not rule on an application until after such notice has
been provided. If, upon receipt of the notice, an owner or lessee of
the subsurface area that is located above or below the proposed
storage facility expresses an objection to the chief regarding the
design of the carbon sequestration project based on the potential
adverse effect to an existing or future oil, gas, coal, or potable
water operation, the storage operator shall demonstrate, to the
satisfaction of the chief, that any such objection has been addressed
as part of the application requirements established under this
section. Such objections are not required to be submitted in the
timeframe required for notifications to the chief under division (D)
of this section, but shall be made not later than thirty days after
receipt of a notification.

(D)(1)
If the proposed storage facility contains pore space for which the
owner is unknown or unlocatable, the storage operator shall do both
of the following:

(a)
Publish one notice in a newspaper of general circulation in each
county in which the carbon sequestration project is located. The
notice shall appear not more than thirty days prior to the date the
application is submitted to the chief.

(b)
Request the chief to post a notice on the division's web site. Upon
receiving the request, the chief shall ensure that such notice is
posted to the division's web site.

(2)
Any notice published in accordance with division (D)(1) of this
section shall:

(a)
State that an application for statutory consolidation will be filed
with the division;

(b)
Describe the proposed storage facility;

(c)
In the case of an unknown pore space owner, state the owner's
interest in the proposed storage facility, and the name of the last
known owner of that interest;

(d)
State that a person claiming an interest in the pore space proposed
to be consolidated shall notify the chief and the applicant at the
published address within twenty days of the notice's publication
date. Within seven days of receiving notice of a claim, the applicant
shall provide information to the claimant, in a form and manner
prescribed by the chief, regarding the right of the claimant to file
an objection and participate in the application proceeding before the
division.

(E)(1)(a)
The chief shall hold a hearing regarding an application submitted
under this section, except as otherwise provided in division
(E)(1)(b) of this section.

(b)
If the chief determines that an application is materially incomplete
before the required hearing date, the chief shall notify the
applicant. If the applicant does not timely correct the application,
the chief may reschedule the hearing date.

(2)
At the hearing, the chief shall consider whether the application is
reasonably necessary to facilitate carbon sequestration.

(F)(1)
The chief shall issue an order approving the application submitted
under this section and providing for the operation of the proposed
storage facility if the chief finds that such operation is reasonably
necessary to facilitate carbon sequestration. The chief shall issue
the order not later than sixty days after the date of the hearing
under division (E) of this section, unless the chief denies the
application by order within that sixty-day period.

(2)
An order approving an application shall be upon terms and conditions
that are just and reasonable and shall prescribe a plan for
operations that include:

(a)
A description of the pore space and storage facility proposed to be
operated;

(b)
The location of and means to access carbon injection wells,
outbuildings, roads, and monitoring equipment;

(c)
A statement of the nature of the operations contemplated;

(d)(i)
An allocation to the separately owned interests in the storage
facility of all economic benefits derived from operation of the
storage facility. The order shall ensure that all pore space owners
are compensated in a fair and reasonable manner.

(ii)
The allocation shall be in accord with the agreement, if any, of the
interested parties. If there is no agreement between the parties, the
chief shall determine the value of each separately owned interest in
the storage facility, exclusive of physical equipment, for
development of the storage facility, and the economic benefits
allocated to each interest shall be the proportion that the value of
each interest so determined bears to the value of all interests in
the storage facility.

(e)
The time when the storage facility operations shall commence and the
manner in which, and the circumstances under which, the operations
shall terminate;

(f)
Any additional provisions as are found to be appropriate for carrying
on the operations, and for the protection or adjustment of
correlative rights.

(3)
The storage operator shall file a certified copy of the order and a
survey of the storage facility in the office of the county recorder
of the county in which all or a portion of the storage facility is
located. The chief shall make the order publicly available, which may
include posting the order on the division's web site.

(G)
Storage facility operations conducted pursuant to an order issued
under this section constitute a fulfillment of all the express or
implied obligations of each lease or contract covering lands in the
storage facility to the extent that compliance with such obligations
cannot be had because of the order of the chief.

Economic
benefits allocated to any interest shall be the property and income
of the several persons to whom, or to whose credit, the same are
allocated or payable under the order providing for storage facility
operations.

(H)
No order of the chief or other contract relating to the pore space
and the storage of carbon dioxide from a separately owned interest
shall be terminated by the order providing for storage facility
operations, but shall remain in force until terminated in accordance
with the provisions thereof.

Except
to the extent that the parties affected so agree, no order providing
for storage facility operations shall be construed to result in a
transfer of any person's title to all or any part of the pore space
in the storage facility. All property, whether real or personal, that
may be acquired for the account of the owners within the storage
facility shall be the property of such owners in the proportion that
the expenses of operations are charged.

(I)(1)
Except as provided in division (I)(2) of this section, the right to
utilize pore space for a storage facility pursuant to this section
does not confer a right to enter upon, or otherwise use, the surface
of the land above such pore space unless authorized by a properly
executed surface use agreement. A statutory consolidation order shall
not grant the storage operator expressed or implied rights of surface
use or access.

(2)
Notwithstanding division (I)(1) of this section, a storage operator
may have a right to enter upon the surface of the land as required by
state or federal law, due to an imminent or emergent threat to public
health, safety, or the environment pursuant to an order from the
chief, or pursuant to any other order from the chief.

Sec.
1509.77.
(A)
After carbon dioxide injection into a storage facility ceases, the
chief of the division of oil and gas resources management may issue a
certificate of project completion upon application by the storage
operator. The chief shall issue a certificate only upon satisfaction
of the conditions imposed under this section and after providing
public notice of the application, an opportunity for public comment,
and if deemed necessary by the chief, a public hearing on the
application.

(B)
A certificate shall not be issued until at least fifty years after
carbon dioxide injections cease or until an established alternative
timeline approved by the chief has elapsed.

(C)
A certificate shall not be issued until the storage operator
establishes with a degree of certainty to the satisfaction of the
chief that all of the following apply:

(1)
The storage operator is in full compliance with all laws governing
carbon sequestration.

(2)
The following apply to the carbon dioxide that has been injected
underground for storage:

(a)
It is not expected to extend or migrate outside of the storage
facility and is not expected to pose a threat to public health or
safety or the environment or underground sources of drinking water.

(b)
It is not likely to cross any boundary vertically from the storage
facility and is not expected to endanger public health or safety or
the environment or underground sources of drinking water.

(3)
All carbon dioxide wells and associated equipment and facilities to
be used in maintaining and managing the stored carbon dioxide,
including any monitoring wells, are in good condition and will retain
mechanical integrity.

(4)
The storage operator has plugged all carbon dioxide wells not used in
maintaining and managing the stored carbon dioxide and has completed
all reclamation required by the division.

(D)
Upon the issuance of a certificate of project completion, the
following shall occur:

(1)
Except as otherwise provided in this section, the former storage
operator is released from all regulatory requirements associated with
continued storage and maintenance of the injected carbon dioxide, and
financial assurance required under rules adopted under section
1509.73 of the Revised Code shall be released to the former storage
operator.

(2)
Primary responsibility and liability for the stored or injected
carbon dioxide shall be transferred to the state, except for criminal
and contractual liability and except under any of the following
circumstances:

(a)
The storage operator violated a duty imposed on the storage operator
by state law or rule prior to the issuance of the certificate of
project completion and any applicable statutes of limitations have
not run out;

(b)
After notice and a hearing, the chief determines either of the
following:

(i)
The storage operator provided deficient or erroneous information that
was material and relied upon by the chief to support the issuance of
the certificate of project completion;

(ii)
There is carbon dioxide migration that threatens public health or
safety or the environment or underground sources of drinking water;

(c)
The balance of the carbon dioxide storage facility fund is
insufficient to cover costs arising from storage facilities and
associated carbon dioxide wells after site closure.

(3)
The storage operator and all individuals who generated, injected, or
stored carbon dioxide shall be forever released from all regulatory
requirements associated with the continued storage and maintenance of
the injected carbon dioxide, except as provided in division (D)(2) of
this section.

Sec.
1509.78.
(A)
Storage operators shall pay the department of natural resources a fee
of five cents for each metric ton of carbon dioxide injected for
storage in a storage facility. The fee shall be paid quarterly and
credited to the carbon dioxide storage facility fund created under
this section.

(B)(1)
The carbon dioxide storage facility fund is created in the state
treasury. Except for fees collected under divisions (C) and (D) of
this section, the fund shall consist of any money collected under
this section in relation to a carbon dioxide well, including money
received by the department from financial responsibility mechanisms
established and penalties imposed for violations of sections 1509.71
to 1509.79 of the Revised Code, rules adopted under those sections,
and orders and terms and conditions of a permit issued under those
sections. All interest earnings of the fund shall be credited to the
fund.

(2)
The chief of the division of oil and gas resources management shall
use the money in the fund for the purpose of defraying expenses of
the division that are associated with post-closure care of
sequestered carbon dioxide in a storage facility, including the
maintenance of carbon dioxide wells, associate surface facilities,
remediation of any environmental impacts from the injected carbon
dioxide, and plugging of monitoring wells associated with the
injection of carbon dioxide in a carbon dioxide well.

(3)
The existence, management, and expenditure of money from the fund do
not constitute a waiver of governmental immunity or an assumption of
any liability by the state for carbon sequestration.

(C)
In addition to the fee established under division (A) of this
section, an owner of a carbon dioxide well, an applicant for a UIC
class VI permit, and the holder of a UIC class VI permit shall pay
fees to defray the department's costs of administering sections
1509.71 to 1509.79 of the Revised Code and the rules adopted under
those sections. The chief, by rule, shall establish the type and
amount of the fees. The fees may include, without limitation,
additional application fees, annual fees, and other fees that the
chief determines are necessary to administer sections 1509.71 to
1509.79 of the Revised Code and the rules adopted under those
sections. The fees shall be credited to the carbon capture
administrative fund created under this section.

(D)
In addition to the fee established under division (A) of this
section, an owner of a carbon dioxide well shall pay to the chief a
fee of three cents for each metric ton of carbon dioxide injected for
storage in a storage facility, for the purpose of supporting the
needs of host communities in which the storage facility is located.
The owner shall pay the fee to the chief quarterly on the basis of
carbon dioxide injected during the calendar quarter. The fees shall
be credited to the carbon capture administrative fund created under
this section.

(E)(1)
The carbon capture administrative fund is created in the state
treasury. The fund shall consist of the fees collected under
divisions (C) and (D) of this section. The chief shall use the funds
collected under division (C) of this section for the sole and
exclusive purpose of administering sections 1509.71 to 1509.79 of the
Revised Code and the rules adopted under those sections. The chief
shall use the funds collected under division (D) of this section in
accordance with division (E)(2) of this section. All investment
earnings of the fund shall be credited to the fund.

(2)
The chief shall provide for payment of the revenue from the fee
collected under division (D) of this section to the county treasurer
of the county in which the storage facility is located. If the
storage facility is located in more than one county, the chief shall
provide for payment of the revenue equally to the county treasurer of
each such county. The county treasurer shall deposit any such payment
into a special fund the treasurer shall create in the county treasury
called the carbon storage host community fund.

(3)
Money in a carbon storage host community fund shall be used by the
board of county commissioners, or disbursed to a township, municipal
corporation, school district, or other subdivision located within the
county, solely and exclusively for one or more of the following
purposes within the county or other subdivision:

(a)
Infrastructure, including roads, bridges, water and wastewater
systems, broadband, and other public works;

(b)
Parks, recreation, and trails;

(c)
Education, including support for primary, secondary, and
career-technical education within the subdivision;

(d)
Public safety, including law enforcement, fire protection, emergency
medical services, and emergency preparedness and response.

Sec.
1509.79.
Any
person adversely affected by an order issued by the chief of the
division of oil and gas resources management under sections 1509.71
to 1509.79 of the Revised Code may appeal to the oil and gas
commission for an order vacating or modifying the order.
Notwithstanding any provision of the Revised Code to the contrary, a
person to whom a permit is issued by the chief may appeal any of the
terms and conditions included in the permit to the commission.

The
person so appealing to the commission shall be known as appellant,
and the chief shall be known as appellee. Appellant and appellee
shall be deemed to be parties to the appeal.

The
appeal shall be in writing and shall set forth the order complained
of and the grounds upon which the appeal is based. The appeal shall
be filed with the commission within thirty days after the date upon
which the person to whom the order was issued received the order and,
for all other persons adversely affected by the order, within thirty
days after the date of the order complained of. Notice of the filing
of the appeal shall be filed with the chief within three days after
the appeal is filed with the commission.

Upon
the filing of the appeal, the commission may decide the appeal, in
whole or in part, without a hearing when, in its judgment, it is
appropriate to do so. If the commission decides to hold a hearing,
the commission promptly shall fix the time and place at which the
hearing on the appeal will be held and shall give the appellant and
the chief at least ten days' written notice thereof by mail. The
commission may postpone or continue any hearing upon its own motion
or upon application of the appellant or of the chief.

The
filing of an appeal provided for in this section does not
automatically suspend or stay execution of the order appealed from,
but upon application by the appellant the commission may suspend or
stay the execution pending determination of the appeal upon such
terms as the commission considers proper.

Either
party to the appeal or any interested person who, pursuant to
commission rules has been granted permission to appear, may submit
such evidence as the commission considers admissible.

For
the purpose of conducting a hearing on an appeal, the commission may
require the attendance of witnesses and the production of books,
records, and papers, and it may, and at the request of any party it
shall, issue subpoenas for witnesses or subpoenas duces tecum to
compel the production of any books, records, or papers, directed to
the sheriffs of the counties where the witnesses are found. The
subpoenas shall be served and returned in the same manner as
subpoenas in criminal cases are served and returned. The fees of
sheriffs shall be the same as those allowed by the court of common
pleas in criminal cases. Witnesses shall be paid the fees and mileage
provided for under section 119.094 of the Revised Code. Such fees and
mileage expenses incurred at the request of appellant shall be paid
in advance by the appellant, and the remainder of those expenses
shall be paid out of funds appropriated for the expenses of the
division of oil and gas resources management.

In
case of disobedience or neglect of any subpoena served on any person,
or the refusal of any witness to testify to any matter regarding
which the witness may be lawfully interrogated, the court of common
pleas of the county in which the disobedience, neglect, or refusal
occurs, or any judge thereof, on application of the commission or any
member thereof, shall compel obedience by attachment proceedings for
contempt as in the case of disobedience of the requirements of a
subpoena issued from that court or a refusal to testify therein.
Witnesses at such hearings shall testify under oath, and any member
of the commission may administer oaths or affirmations to persons who
so testify.

If
a hearing occurs, and at the request of any party to the appeal, a
record of the testimony and other evidence submitted shall be taken
by an official court reporter at the expense of the party making the
request for the record. The record shall include all of the testimony
and other evidence and the rulings on the admissibility thereof
presented at the hearing. The commission shall pass upon the
admissibility of evidence, but any party may at the time object to
the admission of any evidence and except to the rulings of the
commission thereon, and if the commission refuses to admit evidence
the party offering same may make a proffer thereof, and such proffer
shall be made a part of the record of the hearing.

If
the commission finds that the order appealed from was lawful and
reasonable, it shall make a written order affirming the order
appealed from; if the commission finds that the order was
unreasonable or unlawful, it shall make a written order vacating the
order appealed from and making the order that it finds the chief
should have made. Every order made by the commission shall contain a
written finding by the commission of the facts upon which the order
is based.

Notice
of the making of the order shall be given forthwith to each party to
the appeal by mailing a certified copy thereof to each such party by
certified mail.

The
order of the commission is final unless vacated by the court of
common pleas of Franklin county in an appeal as provided for in
section 1509.37 of the Revised Code.

Sec.
1509.99.
(A)
Whoever violates sections 1509.01 to 1509.31
or
sections 1509.71 to 1509.79
of
the Revised Code or any rules adopted or orders or terms or
conditions of a permit issued pursuant to these sections for which no
specific penalty is provided in this section shall be fined not less
than one hundred nor more than one thousand dollars for a first
offense; for each subsequent offense the person shall be fined not
less than two hundred nor more than two thousand dollars.

(B)
Whoever violates section 1509.221 of the Revised Code or any rules
adopted or orders or terms or conditions of a permit issued
thereunder shall be fined not more than five thousand dollars for
each violation.

(C)
Whoever knowingly violates section 1509.072, division (A), (B), or
(D) of section 1509.22, division (A)(1) or (C) of section 1509.222,
or division (A) or (D) of section 1509.223 of the Revised Code or any
rules adopted or orders issued under division (C) of section 1509.22
or rules adopted or orders or terms or conditions of a registration
certificate issued under division (E) of section 1509.222 of the
Revised Code shall be fined ten thousand dollars or imprisoned for
six months, or both for a first offense; for each subsequent offense
the person shall be fined twenty thousand dollars or imprisoned for
two years, or both. Whoever negligently violates those divisions,
sections, rules, orders, or terms or conditions of a registration
certificate shall be fined not more than five thousand dollars.

(D)
Whoever violates division (C) of section 1509.223 of the Revised Code
shall be fined not more than five hundred dollars for a first offense
and not more than one thousand dollars for a subsequent offense.

(E)
The prosecuting attorney of the county in which the offense was
committed or the attorney general may prosecute an action under this
section.

(F)
For purposes of this section, each day of violation constitutes a
separate offense.

Sec.
5301.57.
(A)
As used in sections 5301.57 to 5301.60 of the Revised Code, "carbon
dioxide," "carbon dioxide well," "carbon
sequestration," "carbon sequestration project,"
"owner," "pore space," "storage operator,"
and "storage facility" have the same meanings as in section
1509.71 of the Revised Code.

(B)
As used in sections 5301.58 to 5301.60 of the Revised Code,
"subsurface property interest owner" means a property
interest owner identified by the records of the recorder of deeds for
each county in which a portion of a proposed storage facility is
located who holds a fee simple interest, other freehold interest, or
leasehold interest in the subsurface of the property, which may
include mineral rights, such as coal or oil and gas rights.
"Subsurface property interest owner" does not include an
owner who holds an interest in property consisting solely of an
easement or right-of-way.

Sec.
5301.58.
(A)
The ownership of all pore space in all strata below the surface lands
and waters is vested in the owner of the surface directly above the
pore space.

A
conveyance of the surface ownership of real property shall be a
conveyance of the pore space in all strata below the surface of the
real property unless the ownership interest in the pore space
previously has been expressly excepted and reserved, conveyed, or
otherwise severed from the surface ownership. The ownership of pore
space in the strata may be conveyed in the manner provided by law for
the transfer of real property interests. No agreement conveying
mineral, oil and gas, coal, limestone or similar resource, or other
interests underlying the surface shall convey pore space in the
strata unless the agreement expressly includes conveyance of the pore
space.

(B)
No provision of law or rule requiring notice to be given to a surface
owner, owner of the mineral or oil and gas interest, or both shall be
construed to require notice to individuals holding ownership
interests in pore space in the underlying strata unless the
applicable law specifies notice to the individuals is required or
unless the owner of the pore space also owns an interest in the
surface or in the mineral or oil and gas interests.

(C)(1)
Nothing in sections 1509.71 to 1509.79 and 5301.58 to 5301.60 of the
Revised Code shall be construed to change or alter the common law
existing as of the effective date of this section with respect to the
rights belonging to, or the dominance of, the mineral estate or oil
and gas estate. For the purpose of determining the priority of
surface and subsurface uses between a severed mineral or oil and gas
estate and pore space, the severed mineral or oil and gas estate is
dominant regardless of whether ownership of the pore space is vested
in the owner of the surface or is owned separately from the surface.

(2)
If pore space is severed from the surface ownership, the pore space
estate shall be considered to be dominant over the surface estate
unless the conveyance specifically provides otherwise.

(3)
Nothing in sections 5301.58 to 5301.60 of the Revised Code shall
alter, amend, diminish, or invalidate rights to the pore space that
were acquired by deed, contract, or lease prior to the effective date
of this section.

(D)
An instrument that transfers the rights to pore space shall include a
specific description of the location of the pore space being
transferred. In the event that the instrument uses only a description
of the surface, the transfer shall be considered to include pore
space owned by the transferor at all depths underlying the described
surface area unless specifically excluded. The owner of the pore
space shall have no right to use the surface estate beyond that set
out in a properly recorded instrument due solely to its ownership in
the pore space.

An
instrument that conveys the surface directly above the pore space,
but otherwise seeks to except or reserve the rights to the pore
space, shall include a specific reference to the pore space in the
instrument. In the event of such exception or reserved rights, the
reserved rights to the pore space shall include pore space owned by
the transferor at all depths underlying the described surface area
unless otherwise specifically excluded.

Sec.
5301.59.
All
carbon dioxide injected into a storage facility for carbon
sequestration, and all other substances injected incidental to the
injection of carbon dioxide, shall be presumed to be owned by the
storage operator. This presumption may be rebutted by an individual
claiming contrary ownership by a preponderance of the evidence in an
action to establish ownership.

No
owner of pore space, other individual holding any right to control
pore space, or other surface or subsurface property interest owner,
shall have any liability relating to the injection of carbon dioxide,
or any other substances injected incidental to the injection of
carbon dioxide, for carbon sequestration activities solely by virtue
of their interest in the pore space or their surface or subsurface
rights.

Sec.
5301.60.
(A)
A claim for damages due to injection or migration of carbon dioxide
shall not be recoverable against a storage operator conducting carbon
sequestration in accordance with a valid UIC Class VI permit unless
the claimant proves that the injection or migration of carbon dioxide
has caused direct physical injury to an individual, animal, or real
or personal property.

(B)
A surface or subsurface property interest owner asserting a claim for
injury to personal or real property may recover monetary damages due
to injection or migration of carbon dioxide only for the diminution
in real or personal property value resulting from the injection or
migration of carbon dioxide beyond the storage facility.

(C)
A surface or subsurface property interest owner may not seek punitive
damages due to injection or migration of carbon dioxide if the
storage operator acts in compliance with the requirements of the UIC
Class VI permit.

(D)
Divisions (A), (B), and (C) of this section do not apply to any
claims that may be asserted by owners of oil and gas interests or
owners of class II disposal wells for damages or injuries related to
any of the following:

(1)
The injection or migration of carbon dioxide;

(2)
The construction or operation of a storage facility;

(3)
A carbon sequestration project.

Section
2.
That
existing sections 1509.01, 1509.33, and 1509.99 of the Revised Code
are hereby repealed.

Speaker
___________________ of the House of Representatives.

President
___________________ of the Senate.

Passed
________________________, 20____

Approved
________________________, 20____

Governor.

The section numbering of law
of a general and permanent nature is complete and in conformity with
the Revised Code.

Director, Legislative
Service Commission.

Filed
in the office of the Secretary of State at Columbus, Ohio, on the
____ day of ___________, A. D. 20____.

Secretary of State.

File
No. _________ Effective Date ___________________