Carbon capture and sequestration.

WORKING DRAFT

ORIGINAL HOUSE

BILL

NO.
0090

ENROLLED ACT NO. 25, HOUSE OF REPRESENTATIVES

FIFTY-NINTH LEGISLATURE OF THE STATE OF
WYOMING
2008 BUDGET SESSION

AN ACT relating to carbon sequestration; providing f
or

regulation
by the department of environmental quality
of
the injection
of carbon dioxide
and associated constituents;
providing for an appropriation;
and providing for an effective date.

Be It Enacted by the Legislature of the State of
Wyoming
:

Section 1.

W.S.
30
‑
5
‑
501 and 35
‑
11
‑
313 are
created to read:

ARTICLE 5
GEOLOGIC SEQUESTRATION ACTIVITIES

30
‑
5
‑
501.

Oil and gas activities at geologic sequestration sites.

Nothing in W.S. 35
‑
11
‑
313 shall be deemed to affect the otherwise lawful right of a surface or mineral owner to drill or bore through a geologic sequestration site as defined by W.S. 35
‑
11
‑
103(c)(xxi), if done in accordance with the commission rules for protecting the geologic sequestration site against the escape of carbon dioxide.

35
‑
11
‑
313.

Carbon sequestration; permit requirements.

(a)

The geologic sequestration of carbo
n dioxide is prohibited unless
author
ized by a permit issued by the d
epartment.

(b)

The injection of carbon dioxide for purposes of a project for enhanced recovery of oil or other mi
nerals approved by the
Wyoming
oil and gas c
ons
ervation c
ommission shall not be subject to the provisions of this chapter.

(c
)

If an oil and gas operator converts to geologic sequestration upon the cessation of oil and gas recovery operations, then regulation of the geologic sequestration facility and the geologic sequestration site shall be transferred to the department. If the oil and gas operator does not convert to geologic sequestration, the wells shall be plugged and abandoned accordi
ng to the rules of the
Wyoming
oil and gas conservation c
ommission.

(d
)

Temporary time limited permits for pilot scale te
sting of technologies for geologic
seques
tration shall be issued by the d
epartment based upon current rules and regulations.

(e
)

Permit requirements
for geologic sequestration of carbon dioxide
shall
be as defined by
d
epartment rules
.

(f
)

The administrator
of the water quality division of the department of environmental quality
, after receiving public comment and after consultation with the state geologist and the advisory board
created under this act
, shall recommend to the director rules,
regulations and standards for:

(i)

The creation of subclasses of wells within the existing
Underground Injection Control (UIC)
program
administered by the United States Environmental Protection Agency

under Part C of the Safe Drinking Water Act
to protect human health, safety and the environment and allow for the permitting of the geologic sequestration of carbon dioxide;

(ii)

Requirements for the conten
t of applications for geologic sequestration permits
. Such applications shall include
:

(A)

A description of the general geology
of the area to be affected by the injection of carbon dioxide
including geochemistry, structure
and
faulting, fracturing and seals
, stratigraphy and lithology including petrophysical attributes;

(B)

A characterization of the injection zone a
nd aquifers above and below
the injection zone
which
may be affected including applicable pressure and fluid chemistry data to descri
be the projected effects of
injection activities;

(C)

The identification of all other drill holes and operating wells that exist within and adjacent to t
he proposed sequestration site;

(D)

An assessment of the impact
to fluid resources
,
on
subsurface structures and the surface of
lands that may reason
ably be expected to be impacted
and the measures required to mitigate such impacts;

(E)

Plans and procedures for environmental surveillance and excursion detection, prevention and control programs.
For purposes of this section
,

"
excursion
"
shall mean the detection of
migrating
carbon dioxide a
t or beyond
the
boundary of the geologic
sequestration site;

(F)

A s
ite
and facilities description
,
including
a description of the proposed geologic sequestration facilities and
documentation sufficient to demonstrate that the applicant has
all
legal right
s, including but not limited to the right to surface use, necessary
to sequester carbon dioxide and associated constituents into t
he proposed
geologic sequestration site
;

(G)

Proof that
the proposed
injection w
ell
s

are designed at a minimum to the
construction standards
set fort
h by the department and the
Wyoming
oil and gas conservation commission
;

(H)

A plan
for
periodic
mechanical integrity testing
of all
wells
;

(J
)

A monitoring plan to assess the migration of the
injected
carbon dioxide and to insure the retention of the carbon dioxide in the geologic sequestration
site
;

(K
)

Proof of bonding
or
financial assurance to ensure that geologic sequestration sites and facilities will be constructed, operated and closed in accordance with the purposes and provisions of this act and the rules and regulations promulgated pursuant to this act;

(M
)

A detailed plan
for post-closure monito
ring, verification, maintenance
and mitigation;

(N
)

Proof of notice to surface owners
,

mineral claimants,
mineral owners
, lessees
and other owners of record of subsurface interests as to
the contents of such notice. Notice requirements shall at a
minimum
require:

(I)

The publishing of notice of the application in a newspaper of gen
eral circulation in each
county
of
the
proposed operation at weekly intervals for
four (
4
)
consecutive weeks;

(II)

A copy of the notice shall also be mailed to all surface owners,
mineral claimants,
mineral owners
,
lessees
and other owners of record of subsurface interests which are
located within
one

(
1
)
mile of the proposed boundary of
the geologic sequestration site
.

(iii)

Requirements for the operator to provide immediate verbal notice
to the department
of any excursion
a
fter the excursion is
discovered,
followed by
written
notice
to all surface owners,
mineral claimants,
mineral owners
, lessees
and
other
owners of record of subsurface
interests
within thirty (30) days of when the excursion is discovered
;

(iv)

Procedures for the te
rmination or modification of an
y
applicable

Underground Injection Control (UIC)
permit
issued under Part C of the Safe Drinking Water Act
if an excursion can
not be controlled or mitigated;

(v
)

Such other conditions and requirements
as necessary
to carry out this
section
.

(g
)

As soon as practical
and prior to September 30, 2009,
the
state oil and gas supervisor
, the state geologist and the director
shall
convene a working group for the purpose of developing an appropriate bonding procedure and
other financial assurance methods
to assure
that adequate financial resources are provided to pay for any mitigation or reclamation costs that the state may incur as a result of default by the permit holder. The bond
or other financial assurance
shall be required during the operating life
of the sequestration project and
throughout the post-closure care period
in order
to abate or remedy any violation of a permit, standard or rule established under the provisions of this act.
The working group shall recommend to the
joint minerals, business and economic development and joint judiciary interim committees,
on or before September 30, 2009,
the duration of the
post-c
losure care period.
At a minimum, the bond
or other financial assurance
shall provide assurance for closure and reclamation costs, post-closure inspection and maintenance costs a
nd environmental monitoring,
v
erification and
control costs.

(h
)

At the time
a
permit application
is filed
, an applicant shall pay a fee to be determined by the director based upon the estimated costs of review
ing, evaluating, processing,
serving notice of an application and holding any hearings
.
The fee shall be credited to a separate account and shall be used by the division as required to complete the tasks necessary to process, publish and reach a decision on the permit application. Unused fees shall be returned to the applicant.

(j
)

The director shall
recommend to the council any changes that may be required to provide consistency and equivalency
between the rules or regulations promulgated under this
section
and any
promulgated for the regulation of carbon dioxide sequestration by the
U
nited States
environmental protection a
gency.

(k
)

The
Wyoming
oil and gas conservation commission
shall have jurisdiction over any subsequent extraction of sequestered carbon dioxide that is intended for comm
ercial or industrial purposes.

(m)

Nothing in this section shall be construed to create any liability by the state for failure to comply with this
section
.

Section 2.

W.S. 35
‑
11
‑
103(c) by
creating
new subparagraphs (xx
) through (xxii)
is amended
to read:

35
‑
11
‑
103.

Definitions.

(c)

Specific definitions applying to water quality:

(
x
x)

"
Geologic sequestration
"
means the injection of carbon dioxide and associated constituents into subsurface geologic formations intended to prevent its release into th
e atmosphere;

(xx
i
)

"
Geologic s
equestration site
"
means the underground geologic formation
s
where the carbon d
ioxide is intended to be stored;

(xxii
)

"
Geologic s
equestration facilities
"
mean
s
the surface equipment used for transport, storage and injection of carbon dioxide.

Section 3.

There is appropriated
two hundred fifty thousand dollars ($250,000.00) f
rom the
general
fund to the
d
epartment
of environmental quality
for use by the working group
created by W.S. 35
‑
11
‑
313(g)
for expenses related to performing the tasks assigned it
pursuant
to this act.
Expenses may include the costs to secure expert consultation.

This appropriation shall be for the period beginning with the effective date of this act and ending June 30, 2010.

Notwithstanding any other provision of law, this appropriation shall not be transferred or expended for any other purpose and any unexpended, unobligated funds remaining from this appropriation shall revert as provided by law on
June 30,
2010.
This appropriation shall not be included in the
d
epartment's s
tandard biennial budget request.

Section 4.

Nothing in this act is intended to impede or impair the ability of an oil and gas operator to inject carbon dioxide through an approved enhanced oil or gas recovery project and establish, verify, register and sell emission reduction credits associated with the project.

Section 5.

The department of environmental q
ual
ity and the oil and gas conservation c
ommission shall submit a joint written report, on or before November 1 of each year, to the
joint minerals, business and economic development and joint judiciary interim committees as
to all aspects of compliance with this legislation including, but not limited to, the promulgation of rules and regulations, the formation of the working group, permitting and changes to pertinent federal regulations affecting the same.

Section 6
.

Thi
s a
ct
is
effective July 1, 2008.

(END)

Speaker of the House

President of the Senate

Governor

TIME APPROVED: _________

DATE APPROVED: _________

I hereby certify that this act originated in the House.

Chief Clerk

1