**DRAFT Proposed Carbon Geologic Sequestration Legislation**

**(July 2008)**

**Prepared by The Program to Facilitate Interagency Environmental
Cooperation, with the**

**Interagency Environmental Cooperation Class**

**in connection with The Environment, Energy and Natural Resources
Center at**

**The University of Houston Law Center**

Table of Contents

Subchapter I. General Provisions [1](#subchapter-i.-general-provisions)

> 101 Congressional Findings and Objectives
> [1](#congressional-findings-and-objectives)
>
> 102 Definitions [1](#definitions)
>
> 103 Administration [3](#administration)
>
> 104 Risk Assessment and Management
> [5](#risk-assessment-and-management)

Subchapter II. Authorities [6](#authorities)

> 201 Agency Authority Over Storage Facilities
> [6](#agency-authority-over-storage-facilities)
>
> 202 State Consultation for Storage Facilities
> [6](#state-consultation-for-storage-facilities)
>
> 203 Commission Regulatory Authority Over Capture Facilities and
>
> Carbon Dioxide Pipelines
> [7](#commission-regulatory-authority-over-capture-facilities-and-carbon-dioxide-pipelines)
>
> 204 OSHA Regulatory Authority Over Capture Facilities and Storage
> Facilities
> [7](#osha-regulatory-authority-over-capture-facilities-and-storage-facilities)
>
> 205 PHMSA Regulatory Authority Over Carbon Dioxide Pipelines
> [7](#phmsa-regulatory-authority-over-carbon-dioxide-pipelines)
>
> 206 Rates and Charges for Owners and Operators
> [7](#rates-and-charges-for-owners-and-operators)
>
> 207 Federal Jurisdiction Savings Clause
> [8](#federal-jurisdiction-savings-clause)
>
> 208 State Jurisdiction Savings Clause
> [8](#state-jurisdiction-savings-clause)

Subchapter III. Permits [9](#permits)

> 301 Permits for Siting of Capture Facilities
> [9](#permits-for-siting-of-capture-facilities)
>
> 302 Permits for Carbon Dioxide Pipelines
> [11](#permits-for-carbon-dioxide-pipelines)
>
> 303 Permits for Storage Facilities
> [13](#permits-for-storage-facilities)
>
> 304 Permits for Third--Party Injectors
> [15](#permits-for-thirdparty-injectors)

Subchapter IV. Standards [17](#standards)

> 401 Capture Facility and Carbon Dioxide Pipeline Standards
> [17](#capture-facility-and-carbon-dioxide-pipeline-standards)
>
> 402 Geologic Sequestration and Storage Facility Standards
> [17](#geologic-sequestration-and-storage-facility-standards)

Subchapter V. Liability of Owners and Operators of Capture Facilities,
Carbon Dioxide Pipelines and Storage Facilities
[18](#liability-of-owners-and-operators-of-capture-facilities-carbon-dioxide-pipelines-and-storage-facilities)

> 501 Liability of Owners and Operators for Specified Harms
> [18](#liability-of-owners-and-operators-for-specified-harms)
>
> 502 Source of Compensation Fund [18](#source-of-compensation-fund)
>
> 503 Administrative Hearings [19](#administrative-hearings)
>
> 504 Compensable Injuries and Compensation Amount
> [19](#compensable-injuries-and-compensation-amount)
>
> 505 Source of Compensation [19](#source-of-compensation)
>
> 506 Claims Exempt From Compensation Fund Coverage
> [20](#claims-exempt-from-compensation-fund-coverage)

Subchapter VI. Property Rights [21](#property-rights)

> 601 Effects on State Law [21](#effects-on-state-law)
>
> 602 Ownership Requirements and Eminent Domain Authority
> [21](#ownership-requirements-and-eminent-domain-authority)

Subchapter VII. Trust Fund, Liability Release and Transfer of Ownership
[21](#trust-fund-liability-release-and-transfer-of-ownership)

> 701 Establishment of Trust Fund [21](#establishment-of-trust-fund)
>
> 702 Transfer of Ownership [22](#transfer-of-ownership)
>
> 703 Liability Release [22](#liability-release)

Subchapter VIII. Tribal Lands and Geologic Sequestration
[23](#tribal-lands-and-geologic-sequestration)

> 801 Tribal Ownership [23](#tribal-ownership)

Subchapter IX. Offshore Sequestration [24](#offshore-sequestration)

> 901 Definitions [24](#definitions-1)
>
> 902 Coordination of Leasing and Permitting Activities
> [25](#coordination-of-leasing-and-permitting-activities)
>
> 903 Ownership of Sub‑Seabed Geological Formation
> [26](#ownership-of-subseabed-geological-formation)
>
> 904 Method of Disposal [26](#method-of-disposal)

Subchapter X. Interaction With Other Federal and State Laws
[27](#interaction-with-other-federal-and-state-laws)

> 1001 Interaction with the Clean Air Act
> [27](#interaction-with-the-clean-air-act)
>
> 1002 Interaction with the Clean Water Act, Safe Drinking Water Act,
> Resource Conservation and Recovery Act, and Comprehensive
> Environmental Response Compensation and Liability Act
> [27](#interaction-with-the-clean-water-act-safe-drinking-water-act-resource-conservation-and-recovery-act-and-comprehensive-environmental-response-compensation-and-liability-act)
>
> 1003 Interaction with State Environmental Laws
> [28](#interaction-with-state-environmental-laws)
>
> 1004 Integration with Federal Agency Consultation Laws
> [29](#integration-with-federal-agency-consultation-laws)
>
> 1005 Construction with Other Federal Laws
> [29](#construction-with-other-federal-laws)

Subchapter XI. Interaction with other Federal Agency Consultation Laws
[31](#__RefHeading___Toc77861751)

> 1101 Integration with Federal Agency Consultation Laws
> [31](#__RefHeading___Toc77861752)

Subchapter XII. Enforcement [31](#enforcement)

1201 Citizens
suits..............................................................................\...31

> 1202 Federal Enforcement [34](#federal-enforcement)
>
> 1203 Imminent Hazard [Error! Bookmark not
> defined.](#__RefHeading___Toc77861755)

Subchapter XIII. Miscellaneous Provisions
[38](#miscellaneous-provisions)

> 1301 Petition for Regulations; Public Participation
> [38](#petition-for-regulations-public-participation)
>
> 1302 Separability [38](#separability)
>
> 1303 Review of Federal Agency Action
> [38](#review-of-federal-agency-action)

# Subchapter I. General Provisions {#subchapter-i.-general-provisions .unnumbered}

## 101 Congressional Findings and Objectives {#congressional-findings-and-objectives .unnumbered}

### [Findings]{.underline}.

The Congress finds---

#### the geologic sequestration of carbon dioxide will benefit the citizens and environment of the United States by reducing greenhouse gas emissions; and

#### as disclosed in reports of the Department of Energy and other reports made pursuant to the authority of Congress, it is declared that the business of geologic sequestration, capture by capture facilities, and transportation of carbon dioxide is affected with the public interest, and that Federal regulation in matters relating to the geologic sequestration, capture by capture facilities, and transportation of carbon dioxide in interstate and foreign commerce is necessary in the public interest.

### [Objective]{.underline}.

The objective of this chapter is to encourage the implementation of
geologic sequestration of carbon dioxide while protecting health and the
environment.

## Definitions

When used in this chapter---

a.  The term \"Administrator\" means the Administrator of the
    Environmental Protection Agency.

b.  The term \"Agency\" means the Environmental Protection Agency.

c.  The term \"capture facility\" means electric generating or other
    facilities which employ carbon dioxide capture technology to capture
    carbon dioxide stream and any associated byproducts, excluding
    hazardous substances (defined in 40 CFR, Part 261) for geologic
    sequestration.

d.  The term \"carbon dioxide\" means carbon dioxide (CO2) and
    associated materials produced as a byproduct of combustion in the
    industrial process (including carbon dioxide generated from oil and
    gas production and processing operations) of sufficient purity and
    quality as to not compromise the safety and efficiency of the
    reservoir to effectively contain the carbon dioxide, or otherwise
    create a health or environmental risk.

e.  The term \"carbon dioxide pipelines\" means pipelines dedicated to
    transporting carbon dioxide from one or more capture facilities to
    the storage and injection site for geologic sequestration, not
    wholly contained within a joint capture and storage facility.

f.  The term \"Clean Air Act\" means the Clean Air Act, as codified at
    42 U.S.C. § 7401 *et seq.*

g.  The term \"Clean Water Act\" means the Clean Water Act, as codified
    at 33 U.S.C. § 1251 *et seq.*

h.  The term \"Commission\" means the Federal Electric Regulatory
    Commission.

i.  The term \"Commissioner\" means a Commissioner of the Federal
    Electric Regulatory Commission.

j.  The term \"Comprehensive Environmental Response Compensation and
    Liability Act\" shall mean the Comprehensive Environmental Response
    Compensation and Liability Act, as codified at 42 U.S.C. § 9601 *et
    seq.*

k.  The term \"Federal agency\" means any department, agency, or
    instrumentality of the United States.

### The term \"geologic sequestration\" means underground storage or containment in a reservoir for at least 1,000 years of at least 90% of a gaseous liquid or super-critical carbon dioxide stream emitted from a capture facility, with a storage failure rate of no more than 1% volume loss in 1000 years (as determined by the Administrator based on the best scientific evidence).

l.  The term \"greenhouse gases\" means those gases, including carbon
    dioxide, methane, nitrous oxide, chlorofluorocarbons, and ozone,
    whose presence in the atmosphere results in the capture of radiation
    from sunlight by preventing radiative heat from reflecting back into
    space.

m.  The term \"Indian tribe\" means any Indian tribe, band, nation, or
    other organized group or community, including any Alaska Native
    village, which is Federally recognized as eligible for the special
    programs and services provided by the United States to Indians
    because of their status as Indians.

n.  The term \"injection well\" means a well used to inject carbon
    dioxide into and/or withdraw carbon dioxide from a reservoir.

o.  The term \"OSHA\" means the Occupational Safety and Health
    Administration.

p.  The term \"oil or gas\" means oil, natural gas, or gas condensate.

q.  The term \"owner or operator\" means any person who owns, leases,
    operates, controls, or supervises a capture facility, carbon dioxide
    pipeline or storage facility.

r.  The term \"PHMSA\" means the Pipeline and Hazardous Materials Safety
    Administration of the Department of Transportation.

s.  The term \"person\" includes an individual, corporation,
    partnership, association, State, municipality, political subdivision
    of a State, and any agency, department, or instrumentality of the
    United States and any officer, agent, or employee thereof.

t.  The term \"reservoir\" means any subsurface sedimentary stratum,
    formation, aquifer, or cavity or void (whether natural or
    artificially created), including oil and gas reservoirs, saline
    formations and coal seams, suitable for or capable of being made
    suitable for the injection and storage of carbon dioxide therein.

u.  The term \"Resource Conservation and Recovery Act\" means the
    Resource Conservation and Recovery Act, as codified at 42 U.S.C. §
    6991 *et seq.*

v.  The term \"Safe Drinking Water Act\" means the Safe Drinking Water
    Act, as codified at 42 U.S.C. § 300f *et seq.*

w.  The term \"Secretary\'\' means the Secretary of Energy.

x.  The term \"site\" means the land or water area where any storage
    facility is physically located, including adjacent land used in
    connection with the storage facility.

y.  The term \"State\" means a State, the District of Columbia, the
    Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American
    Samoa and includes the Commonwealth of the Northern Mariana Islands.

z.  The term \"storage facility\" means the underground reservoir,
    underground equipment, and surface buildings and equipment utilized
    in the storage operation, excluding pipelines used to transport the
    carbon dioxide from one or more capture facilities to the storage
    and injection site, not wholly contained within a joint capture and
    storage facility. The underground reservoir component of the storage
    facility includes any necessary and reasonable areal buffer and
    subsurface monitoring zones designated by the Agency for the purpose
    of ensuring the safe and efficient operation of the storage facility
    for the storage of carbon dioxide and shall be chosen to protect
    against pollution, invasion, and escape or migration of carbon
    dioxide.

a.  The term \"third--party injector\" means any person who geologically
    sequesters carbon dioxide at a storage facility owned or operated by
    another person.

b.  The term \"unitization\" means the process of combining separately
    owned portions of a common reservoir or field into a large,
    fieldwide unit.

## Administration

### [Regulations; delegation of powers and duties; regional officers and employees]{.underline}.

#### The Administrator, the Commission, OSHA, and PHMSA are authorized to prescribe such regulations as are necessary to carry out their respective functions under this chapter. Each may delegate to any officer or employee of its respective Federal agency such of its powers and duties under this chapter as it may deem necessary or expedient.

#### Not later than 12 months after the date of enactment of this chapter, the Administrator, the Commission, OSHA, and PHMSA shall promulgate regulations establishing general applicable procedures and policies for their respective officers and employees to follow in carrying out a delegation under paragraph (a), if any. Such regulations shall be designed---

##### to assure fairness and uniformity in the criteria, procedures, and policies applied in implementing and enforcing the chapter; and

##### to provide a mechanism for identifying and standardizing inconsistent or varying criteria, procedures, and policies being employed by such officers and employees in implementing and enforcing the chapter.

### [Authorities]{.underline}.

#### In carrying out this chapter, the Administrator, the Commission, OSHA and PHMSA are authorized to---

A.  prescribe, in consultation with Federal, State, and regional
    authorities, such regulations as are necessary to carry out each of
    their respective functions under this chapter;

B.  consult with or exchange information with other Federal agencies
    undertaking research, development, demonstration projects, studies,
    or investigations relating to the capture, transport and geologic
    sequestration of carbon dioxide;

C.  consult with representatives of science, industry, agriculture,
    labor, environmental protection and consumer organizations, and
    other groups, as each deems advisable;

D.  utilize the information, facilities, personnel and other resources
    of Federal agencies, including the National Energy Technology
    Laboratory, on a reimbursable basis, to perform research and
    analyses and conduct studies and investigations related to the
    capture, transport and geologic sequestration of carbon dioxide and
    to otherwise carry out each of the Federal agencies\' respective
    functions under this chapter; and

E.  to delegate to the Secretary of Transportation the performance of
    any inspection or enforcement function under this chapter relating
    to the transportation of carbon dioxide for purposes of geologic
    sequestration where such delegation would avoid unnecessary
    duplication of activity and would carry out the objectives of this
    chapter.

#### [Revision of regulations]{.underline}.

Each regulation promulgated under this chapter shall be reviewed and,
where necessary, revised not less frequently than every three years.

## Risk Assessment and Management

The Administrator shall examine, in consultation with the Secretary, the
risks associated with geologic sequestration of carbon dioxide on a
large scale as anticipated by this legislation and incorporate findings
and determinations in the permitting process as necessary to protect
public health, welfare and the environment.

# Authorities

## Agency Authority Over Storage Facilities

The Administrator shall have exclusive authority to approve or deny an
application for the siting, construction, expansion, or operation of a
storage facility. Except as specifically provided in this chapter,
nothing in this chapter is intended to affect otherwise applicable law
related to any Federal agency\'s authorities or responsibilities related
to storage facilities.

## State Consultation for Storage Facilities

### [State consultation]{.underline}.

The Governor of a State in which a storage facility is proposed to be
located shall designate the appropriate State agency for the purposes of
consulting with the Administrator regarding an application under
section III02 or III04 of this chapter. The Administrator shall consult
with such State agency regarding State and local safety considerations
prior to issuing a permit pursuant to section III02 or III04. For the
purposes of this section, State and local safety considerations
include---

#### the type and use of the storage facility;

#### the existing and projected population and demographic characteristics on and near the site;

#### the existing and proposed land uses near the site;

#### the natural and physical aspects of the site;

#### the emergency response capabilities near the site; and

#### the need to encourage remote siting.

### [Advisory report]{.underline}.

The State agency may furnish an advisory report on State and local
safety considerations to the Agency with respect to an application no
later than 30 days after the application was filed with the Agency.
Before issuing a permit authorizing an applicant to site, construct,
expand, or operate a storage facility, the Administrator shall review
and respond specifically to the issues raised in the advisory report
furnished by the State agency described in subsection (a) of this
section.

## Commission Regulatory Authority Over Capture Facilities and Carbon Dioxide Pipelines

Except as set forth in sections 204, 205, and subchapter X of this
chapter, the Commission shall have the exclusive authority to promulgate
regulations for the siting, construction, expansion, or operation of
capture facilities and carbon dioxide pipelines. Except as specifically
provided in this chapter, nothing in this chapter is intended to affect
otherwise applicable law related to any Federal agency\'s authorities or
responsibilities related to capture facilities and carbon dioxide
pipelines.

## OSHA Regulatory Authority Over Capture Facilities and Storage Facilities

### Except as set forth in this chapter, OSHA shall have authority to promulgate regulations governing worker safety at capture facilities and storage facilities.

### Not later than 12 months after the date of enactment of this chapter, OSHA shall propose regulations addressing worker safety requirements for the siting, construction, expansion, or operation of capture facilities and storage facilities.

## PHMSA Regulatory Authority Over Carbon Dioxide Pipelines

### Except as set forth in this chapter, PHMSA shall have authority to promulgate regulations governing worker safety for carbon dioxide pipelines 

### Not later than 12 months after the date of enactment of this chapter, PHMSA shall propose regulations addressing worker safety requirements for the siting, construction, expansion, or operation of carbon dioxide pipelines.

## Rates and Charges for Owners and Operators

### Market power.

In exercising its authority under this chapter, the Commission may
authorize an owner or operator of a storage facility or carbon dioxide
pipeline to provide storage and transport services at market-based rates
for new storage and transport capacity related to a specific storage
facility placed in service after \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
notwithstanding the fact that the owner or operator is unable to
demonstrate that it lacks market power, if the Commission determines
that----

#### market-based rates are in the public interest and necessary to encourage the construction of the storage capacity in the area needing geologic sequestration services; and 

#### customers are adequately protected.

### The Commission shall ensure that reasonable terms and conditions are in place to protect consumers.

### If the Commission authorizes an owner or operator of a storage facility or carbon dioxide pipeline to charge market-based rates under this section, the Commission shall review periodically whether the market-based rate is just, reasonable, and not unduly discriminatory or preferential. 

## Federal Jurisdiction Savings Clause

Except as specifically provided in this chapter, nothing in this chapter
shall be construed to limit the authority or functions of any Federal
agency under any otherwise applicable Federal law or regulation not
inconsistent with this chapter.

## State Jurisdiction Savings Clause

Except as specifically provided in this chapter, nothing in this chapter
shall be construed to limit the authority or functions of any State or
local authorities under any otherwise applicable State or local law or
regulation not inconsistent with this chapter.

# Permits

## Permits for Siting of Capture Facilities

### [Permit requirements]{.underline}.

The Commission shall promulgate within 18 months after the date of
enactment of this chapter regulations requiring each person owning or
operating an existing capture facility or planning to site, construct,
expand, or operate a new capture facility to have a permit issued
pursuant to this section.

### [Permit application requirements]{.underline}.

Each application for a permit under this section shall contain such
information as may be required under regulations promulgated by the
Commission, including but not limited to information respecting---

#### estimates of the percentage and total quantity of carbon dioxide proposed to be captured;

#### the site at which the capture facility will be located; and

#### risk characterization and risk management of any risks identified by the Administrator in accordance with section I04.

### [Permit issuance]{.underline}.

#### [Procedure]{.underline}.

Upon the filing of any application to site, construct, expand, or
operate a capture facility, the Commission shall, within \_\_\_\_
days---

##### set the matter for hearing;

##### give reasonable notice of the hearing to all interested persons, including the State electric regulatory commission and State environmental protection agency of the State in which the capture facility is or will be located and, if not the same, the Governor-appointed State agency described in section 202 (a) of this chapter;

##### decide the matter in accordance with this subsection; and

##### issue or deny the appropriate permit accordingly.

#### The Commission must consider the following factors in determining whether to approve or deny an application:

##### for a capture facility that is a coal-fired power generation facility, the efficiency of the capture and geologic sequestration of carbon dioxide; and

##### with respect to the environmental impacts of the siting of a capture facility, the nature of the area where the capture facility is to be sited, including, but not limited to:

###### the proximity of critical habitats designated under the Endangered Species Act;

###### the proximity of drinking water aquifers or supplies;

###### the proximity to identified State or Federal natural areas;

###### the nature of the community, including its racial, ethnic and socioeconomic makeup; and

###### the impact of increasing the ambient concentration of other pollutants.

#### The Commission\'s consideration of the factors set forth in paragraph (ii)(B) of this subjection does not preempt other consideration required by Federal law not inconsistent with this statute.

#### In order to issue a permit to site, construct, expand, or operate a capture facility, after public notice and hearing as described in subsection (c)(i) of this section, the Commission must find as follows:

##### that the operation of the capture facility will comply with the standards set out in and promulgated in accordance with section 401**;**

##### in the case of siting or construction, that the capture facility site is consistent with the public interest in light of the considerations set out in subsection (c)(ii)(B);

##### in the case of siting or construction, that a good faith effort has been made to obtain the consent of a majority of the owners having property interests affected by the capture facility and that the owner or operator intends to acquire any remaining interest by eminent domain or as otherwise allowed by this chapter; and

##### that the operation of the proposed capture facility is in the public interest.

#### Except as provided in this section, the Commission may approve an application described in subsection (b) of this section, in whole or part, with such modifications and upon such terms and conditions as the Commission finds necessary or appropriate.

#### [Certificate of Operation]{.underline}.

Prior to commencing construction of a capture facility, the owner or
operator of the capture facility shall record with the Commission a
certificate, entitled \"Certificate of Operation of Carbon Dioxide
Capture Facility,\" which shall contain a statement that the owner or
operator has acquired by eminent domain or otherwise all necessary
ownership rights with respect to the capture facility, and the date upon
which the capture facility shall be effective.

## Permits for Carbon Dioxide Pipelines

### Permit requirements.

The Commission shall promulgate within 18 months after the date of
enactment of this chapter regulations requiring each person owning or
operating an existing carbon dioxide pipeline as defined in
section 102(e) or planning to site, construct, expand, or operate a new
carbon dioxide pipeline as defined in section 102(e) to have a permit
issued pursuant to this section.

### [Permit application requirements]{.underline}.

Each application for a permit under this section shall contain such
information as may be required under regulations promulgated by the
Commission, including but not limited to information respecting---

#### engineering design data;

#### surveyed route data;

#### risk characterization and risk management of any risks identified by the Administrator in accordance with section I04; and

#### all other materials deemed necessary by the Commission to fulfill the requirements of this chapter.

### [Permit issuance]{.underline}.

#### [Procedure]{.underline}.

Upon the filing of any application to site, construct, expand, or
operate a carbon dioxide pipeline, the Commission shall, within \_\_\_\_
days---

##### set the matter for hearing;

##### give reasonable notice of the hearing to all interested persons, including the State electric regulatory commission and State environmental protection agency of the State or States in which the carbon dioxide pipeline is or will be located and, if not the same, the Governor-appointed State agency described in section 202(a) of this chapter;

##### decide the matter in accordance with this subsection; and

##### issue or deny the appropriate permit accordingly.

#### The Commission must consider, in determining whether to approve or deny an application, with respect to the environmental impacts of the siting of a carbon dioxide pipeline, the nature of the area or areas where the carbon dioxide pipeline is to be sited, including:

##### the proximity of critical habitats designated under the Endangered Species Act;

##### the proximity of drinking water aquifers or supplies;

##### the proximity to identified State or Federal natural areas; and

##### the nature of the community, including its racial, ethnic and socioeconomic makeup.

#### In order to issue a permit to site, construct, expand, or operate a carbon dioxide pipeline, after public notice and hearing as described in subsection (c)(i) of this section, the Commission must find as follows:

##### that the operation of the carbon dioxide pipeline will comply with the standards set out in section 401;

##### in the case of siting or construction, that the carbon dioxide pipeline site is consistent with the public interest in light of the considerations set out in subsection (c)(ii);

##### in the case of siting or construction, that a good faith effort has been made to obtain the consent of a majority of the owners having property interests affected by the capture facility and that the owner or operator intends to acquire any remaining interest by eminent domain or as otherwise allowed by this chapter; and

##### that the operation of the proposed carbon dioxide pipeline is in the public interest.

#### Except as provided in this section, the Commission may approve an application described in subsection (b) of this section, in whole or part, with such modifications and upon such terms and conditions as the Commission finds necessary or appropriate.

#### [Certificate of Operation]{.underline}.

Prior to commencing construction of a carbon dioxide pipeline, the owner
or operator of the carbon dioxide pipeline shall record with the
Commission a certificate, entitled \"Certificate of Operation of Carbon
Dioxide Pipeline,\" which shall contain a statement that the owner or
operator has acquired by eminent domain or otherwise all necessary
ownership rights with respect to the carbon dioxide pipeline, and the
date upon which the carbon dioxide pipeline shall be effective.

## Permits for Storage Facilities

### Permit requirements.

The Administrator shall promulgate within 18 months after the date of
enactment of this chapter regulations requiring each person owning or
operating an existing storage facility for the geologic sequestration of
carbon dioxide or planning to site, construct, expand, or operate a new
storage facility for the geologic sequestration of carbon dioxide to
have a permit issued pursuant to this section.

### [Permit application requirements]{.underline}.

Each application for a permit under this section shall contain such
information as may be required under regulations promulgated by the
Administrator, including but not limited to information respecting---

#### estimates of the quantity of carbon dioxide proposed to be sequestered;

#### estimates of the quantity of carbon dioxide which can safely be sequestered in the reservoir;

#### the site at which the storage facility will be located;

#### the horizontal and vertical boundaries of the storage facility;

#### the means proposed for transporting the carbon dioxide to the storage facility; and

#### risk characterization and risk management of any risks identified by the Administrator in accordance with section I04.

### [Permit issuance]{.underline}.

#### [Procedure]{.underline}.

Upon the filing of any application to site, construct, expand, or
operate a storage facility, the Administrator shall, within
\_\_\_\_ days---

##### set the matter for hearing;

##### give reasonable notice of the hearing to all interested persons, including the State environmental protection agency of the State in which the storage facility is located and, if not the same, the Governor-appointed State agency described in section 202(a) of this chapter;

##### decide the matter in accordance with this subsection; and

##### issue or deny the appropriate permit accordingly.

#### The Administrator must consider, in determining whether to approve or deny an application, with respect to the environmental impacts of the siting or expansion of a storage facility, the nature of the area where the storage facility is to be sited, including:

##### the proximity of critical habitats designated under the Endangered Species Act;

##### the proximity of drinking water aquifers or supplies;

##### the proximity to identified State or Federal natural areas; and

##### the nature of the community, including its racial, ethnic and socioeconomic makeup.

#### In order to issue a permit to establish a storage facility, after public notice and hearing as described in subsection (c)(i) of this section, the Administrator must find as follows:

##### that the operation of the storage facility will comply with the standards set out in section 402; and the definition of "geologic sequestration" in 102(1);

##### that the storage facility and reservoir are suitable and feasible for the injection and storage of carbon dioxide;

##### that the storage facility site is consistent with the public interest in light of the considerations set out in subsection (c)(ii);

##### that a good faith effort has been made to obtain the consent of a majority of the owners having property interests affected by the storage facility and that the owner or operator intends to acquire any remaining interest by eminent domain or as otherwise allowed by this chapter;

##### that the use of the storage facility for the geologic sequestration of carbon dioxide will not materially impair or contaminate other formations containing fresh water or oil, gas, coal, or other commercial mineral deposits; and

##### that the operation of the proposed storage facility will not unduly endanger human health and the environment and is in the public interest.

#### Except as provided in this section, the Administrator may approve an application described in subsection (a) of this section, in whole or part, with such modifications and upon such terms and conditions as the Administrator finds necessary or appropriate.

#### [Certificate of Operation]{.underline}.

Prior to commencing injection of carbon dioxide, the owner or operator
of the storage facility shall record with the Agency a certificate,
entitled \"Certificate of Operation of Carbon Dioxide Sequestration
Facility,\" which shall contain a statement that the owner or operator
has acquired by eminent domain or otherwise all necessary ownership
rights with respect to the storage facility, and the date upon which the
storage facility shall be effective.

## Permits for Third--Party Injectors

### [Permit requirements]{.underline}.

The Administrator shall promulgate within 18 months after the date of
enactment of this chapter regulations requiring each person planning to
geologically sequester carbon dioxide at a storage facility owned by
another person to have a permit issued pursuant to this section.

### [Permit application requirements]{.underline}.

Each application for a permit under this section shall contain such
information as may be required under regulations promulgated by the
Administrator, including but not limited to information respecting---

#### estimates of the quantity of carbon dioxide proposed to be sequestered;

#### the means proposed for transporting the carbon dioxide to the storage facility; and

#### risk characterization and risk management of any risks identified by the Administrator in accordance with section I04.

### [Permit issuance]{.underline}.

In order to issue a permit to a third--party injector to geologically
sequester carbon dioxide at a storage facility, the Administrator must
find that the sequestration by the third‑party injector at the proposed
storage facility will not unduly endanger human health and the
environment and is in the public interest.

# Standards

## Capture Facility and Carbon Dioxide Pipeline Standards

Not later than 18 months after the date of enactment of this chapter,
and after opportunity for public hearings and consultation with the
Secretary, the Administrator and other appropriate Federal agencies, the
Commission shall propose regulations establishing such performance
standards, applicable to owners and operators of capture facilities and
carbon dioxide pipelines, as may be consistent with the public interest.
In establishing such standards, the Commissioner shall, where
appropriate, distinguish in such standards between requirements
appropriate for new facilities and for facilities in existence on the
date of promulgation of such regulations. Such standards shall include,
but need not be limited to, requirements respecting---

### operating methods, techniques, and practices for the capture, compression and on‑site storage at the capture facility of carbon dioxide;

### satisfactory reporting, monitoring, and inspection practices to ensure compliance with laws and regulations applicable to capture facilities and carbon dioxide pipelines; and

### compliance with the requirements of section III01 or III02, as applicable, respecting permits for capture facilities and carbon dioxide pipelines, respectively.

## Geologic Sequestration and Storage Facility Standards

Not later than 18 months after the date of enactment of this chapter,
and after opportunity for public hearings and consultation with the
Secretary and other appropriate Federal agencies, the Administrator
shall promulgate regulations establishing such performance standards,
applicable to storage facility owners and operators, as may be necessary
to protect human health and the environment. In establishing such
standards, the Administrator shall, where appropriate, distinguish in
such standards between requirements appropriate for new facilities and
for facilities in existence on the date of promulgation of such
regulations. Such standards shall include, but need not be limited to,
requirements respecting---

### the purity and quality of carbon dioxide necessary so as not to compromise the safety and efficiency of the reservoir to effectively contain the carbon dioxide for long--term geologic sequestration;

### the appropriate selection of reservoirs and the design, construction, operation, maintenance and monitoring of storage facilities;

### maintaining records of the location, amount and performance of carbon dioxide which is geologically sequestered, including amounts sequestered by third‑party injectors in existing storage facilities;

### satisfactory reporting, monitoring, and inspection practices to ensure compliance with laws and regulations applicable to storage facilities;

### procedures for closure and decommissioning of storage facilities and post--closure monitoring;

### contingency plans for effective action to minimize unanticipated damage from pollution, invasion, and escape or migration of carbon dioxide from a storage facility;

### such additional qualifications as to ownership, continuity of operation, and training for personnel as may be necessary or desirable; and

### compliance with the requirements of section III03 of this title respecting permits for geologic sequestration of carbon dioxide.

# Liability of Owners and Operators of Capture Facilities, Carbon Dioxide Pipelines and Storage Facilities

## Liability of Owners and Operators for Specified Harms

The liability of owners and operators of capture facilities, carbon
dioxide pipelines and storage facilities for release of carbon dioxide
or accidents causing harm to human health or the environment that are
associated with geologic sequestration of carbon dioxide shall be
limited to compensation from a government--administered fund set out
below.

## Source of Compensation Fund

### Fee amount.

The Administrator is authorized to collect a fee from all persons with
whom an indemnification agreement is executed under this section. This
fee shall be a fixed amount, as determined by the Administrator, per
year per ton of carbon dioxide injected for storage facilities licensed
under section III03 of this chapter. Such fees will be used to establish
and fund the Compensation Fund.

### [Fee reduction]{.underline}.

The Administrator is authorized to reduce the fee set forth above. The
Administrator shall establish criteria in writing for determination of
the fee for storage facilities licensed under section III03 of this
chapter, taking into consideration such factors as---

#### the type, size, and location of the storage facility involved, and other factors pertaining to the hazard, and

#### the nature and purpose of the storage facility.

### [Use of funds]{.underline}.

The Compensation Fund shall only be used as compensation for injuries
that may arise from the release of carbon dioxide from storage
facilities.

## Administrative Hearings

The assessment of any claim arising under this chapter will be governed
by the Consolidated Rules of Practice as set out in 40 C.F.R. Part 22.

## Compensable Injuries and Compensation Amount

### The Administrator shall establish criteria in writing for determination of---

#### the types of injuries that are compensable under the Compensation Fund; and

#### the amount to be paid for each type of injury identified under subsection (c)(i) of this section.

### An Administrative Law Judge (ALJ) may authorize compensation for injuries if the person requesting such payment has demonstrated to the ALJ that---

#### the type of injury is compensable under subsection (a)(i) of this section;

#### the injury is the result of a carbon dioxide release or accident resulting from the geologic sequestration of carbon dioxide; and

#### such costs are reasonable and equitable.

### If an injury is not listed in subsection (a)(i) of this section, an ALJ retains the authority to determine

#### whether the injury resulted from the geologic sequestration of carbon dioxide; and

#### the compensation amount to be awarded for that injury.

### Any determination under subsection (c) of this section that compensation should be awarded shall be made within the compensation limits as set out by the Administrator under subsection (a)(ii) of this section.

## Source of Compensation

### Any injuries deemed compensable under section 504 shall be paid from the Compensation Fund under section 502(a).

### After any incident resulting from the geologic sequestration of carbon dioxide involving damages, the Administrator, as appropriate, shall---

#### make a survey of the causes and extent of damage; and 

#### expeditiously submit a report setting forth the results of such survey to Congress, to the Representatives of the affected districts, to the Senators of the affected States, and (except for information that will cause serious damage to the national defense of the United States) to the public, to the parties involved, and to the courts.

### [Plan for distribution of funds when liability exceeds Compensation Fund]{.underline}.

#### Whenever the United States District Court for the District of Columbia determines upon the petition of any interested person that public liability from a single incident resulting from geologic sequestration may exceed the Compensation Fund under section 502(a) of this chapter, the Administrator shall submit to the Congress within 90 days:

##### an estimate of the aggregate dollar value of claims for personal injuries and environmental damage that have arisen or will arise from such incident and that exceed the amount of aggregate funds collected under section 502(a) of this chapter; 

##### recommendations for additional sources of funds to pay claims exceeding the applicable amount of aggregate funds collected under section 502(a) of this chapter, which recommendations shall consider a broad range of possible sources of funds (including possible revenue measures on the sector of the economy, or on any other class, to which such revenue measures might be applied); 

##### one or more compensation plans that either individually or collectively shall provide for full and prompt compensation for all valid claims and contain a recommendation or recommendations as to the relief to be provided, including any recommendations that funds be allocated or set aside for the payment of claims that may arise as a result of latent injuries that may not be discovered until a later date; and

##### any additional legislative authorities necessary to implement such compensation plan or plans.

## Claims Exempt From Compensation Fund Coverage

### No claims will be paid for harms based solely on any carbon dioxide contribution to climate change.

### Claims under this chapter are limited to direct harm of human health or the environment from exposure to carbon dioxide or accident associated with its release from reservoirs at storage facilities. Claims of trespass and nuisance are governed by the law of the State where a storage facility is located. 

# Property Rights

## Effects on State Law

Except as specifically provided herein, nothing in this Act shall be
construed as affecting, intending to affect, or in any way interfering
with the laws of the respective States, including common law relating to
private property rights, including, but not limited to, those private
property rights related to ownership of the surface estate, subsurface
reservoir, and mineral estate, as well as any State law or common law
pertaining to subsurface water rights.

## Ownership Requirements and Eminent Domain Authority

### No permit shall be issued for a storage facility unless the owner or operator holds the necessary property rights for construction and operation of the storage facility.

### When any owner or operator of a storage facility that has been licensed in accordance with this chapter cannot acquire by contract, or is unable to agree with the owner of property as to the compensation to be paid, all surface and subsurface property rights and interests necessary for construction and operation of the storage facility, including, but not limited to, all necessary rights-of-way to construct, operate and maintain all pipelines, compressor stations, pressure apparatus, or other stations or necessary equipment or facilities, the owner or operator may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such property may be located, or in the State courts. The practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated.

### Owners of property subject to eminent domain authority shall be compensated at fair market value. The Administrator may promulgate regulations establishing the method for determination of fair market value.

### The right of eminent domain granted in this section shall not prejudice the rights of the owners of said land or other rights or interests therein as to all other uses not acquired for the storage facility.

# Trust Fund, Liability Release and Transfer of Ownership

## Establishment of Trust Fund

There is hereby established a Carbon Dioxide Storage Facility Trust Fund
to be administered by the Administrator. There is hereby levied on the
owner or operator of a storage facility a fee equal to \_\_\_\_ for each
ton of carbon dioxide injected for geologic sequestration for the
purposes of funding the Carbon Dioxide Storage Facility Trust Fund. The
Trust Fund shall be utilized solely for the long-term monitoring and
maintenance of the site and storage facility, including but not limited
to maintenance and monitoring of remaining surface facilities and wells,
remediation of mechanical problems associated with remaining wells and
surface infrastructure, repairing mechanical leaks at the site, and
plugging and abandoning remaining wells under the jurisdiction of the
Administrator for use as observation wells. The Trust Fund shall be
administered by the Administrator.

## Transfer of Ownership

Ten years after cessation of injection operations, or such other time
frame as the Administrator establishes by regulation, the Administrator
shall issue a Certificate of Completion of Injection Operations, upon a
showing by the owner or operator of the storage facility that the
reservoir is reasonably expected to retain mechanical integrity and
remain emplaced, at which time ownership to the remaining storage
facility, including the geologically sequestered carbon dioxide,
transfers to the United States.

## Liability Release

Upon issuance of the Certificate of Completion of Injection Operations,
the owner or operator of a storage facility and the owner or operator of
any capture facility which captured, transported and geologically
sequestered carbon dioxide at such storage facility shall be released
from all further liability relating to permitted geologic sequestration
of carbon dioxide associated with such storage facility. This subsection
shall have no impact on the Compensation Fund and associated
regulations, which Fund will remain in effect at all times regardless of
ownership of the reservoir and geologically sequestered carbon dioxide.

# Tribal Lands and Geologic Sequestration

## Tribal Ownership

### Indian tribes have sovereign ownership over reservoirs on Indian tribal lands into which carbon dioxide has been geologically sequestered. 

### Indian tribes retain ownership rights over geologically sequestered carbon dioxide that has migrated to non‑Indian tribal lands.

### If carbon dioxide which has been geologically sequestered by an Indian tribe migrates off of Indian tribal lands, the owners of the trespassed land are entitled to receipt of a portion of the proceeds under a unitization theory. 

# Offshore Sequestration

## Definitions

When used in this section of this chapter

### The term \"affected State\" means, with respect to any program, plan, lease sale, or other activity, proposed, conducted, or approved pursuant to the provisions of this chapter, any State---

#### which is, or is proposed to be, directly connected by transportation facilities to any leased area covered by this section of this chapter;

#### which is designated by the Secretary as a State in which there is a substantial probability of significant impact on or damage to the coastal, marine, or human environment, or a State in which there will be significant changes in the social, governmental, or economic infrastructure, resulting from the sequestration of carbon dioxide anywhere on the Outer Continental Shelf; or

#### in which the Secretary finds that because of such activity there is, or will be, a significant risk of serious damage, due to factors such as prevailing winds and currents, to the marine or coastal environment in the event of any release of carbon dioxide from vessels, pipelines, or other transshipment facilities.

### The term \"Agency\" means the Minerals Management Service.

### The term \"disposal\" means the sequestration of carbon in sub-seabed geological formations.

### The term \"lease\" means any form of authorization which is issued under section 902 of this chapter and which authorizes the sub-seabed geologic sequestration of carbon dioxide.

### The term \"marine environment\" means the physical, atmospheric, and biological components, conditions, and factors which interactively determine the productivity, state, condition, and quality of the marine ecosystem, including the waters of the high seas, the contiguous zone, transitional and intertidal areas, salt marshes, and wetlands within the coastal zone and on the outer Continental Shelf.

### The term \"outer Continental Shelf\" means all submerged lands lying seaward and outside of the area of lands beneath navigable waters as defined in section 2 of the Submerged Lands Act (Public Law 31, Eighty‑third Congress, first session), and of which the subsoil and seabed appertain to the United States and are subject to its jurisdiction and control.

### The term \"Secretary\" means the Secretary of the Interior, except that with respect to functions under this Act transferred to, or vested in, the Secretary of Energy or the Federal Energy Regulatory Commission by or pursuant to the Department of Energy Organization Act (42 U.S.C. § 7101 *et seq.*), the term \"Secretary\" means the Secretary of Energy, or the Federal Energy Regulatory Commission, as the case may be.

### The term \"sub‑seabed geologic sequestration\" means underground storage in a sub‑seabed geological reservoir, located in the outer Continental Shelf, for at least 1,000 years of at least 90% of the carbon dioxide emitted from a capture facility, with a storage failure rate of no more than 1%.

## Coordination of Leasing and Permitting Activities

### [In general]{.underline}.

Not later than 180 days after the date of enactment of this section, the
Secretary of the Interior and the Administrator of the Environmental
Protection Agency shall enter into and submit to Congress a memorandum
of understanding in accordance with this section, the outer Continental
Shelf Lands Act, and other applicable laws, regarding coordination of
leasing and permitting for sub‑seabed geologic sequestration of carbon
dioxide in the outer Continental Shelf.

### [Administration of leasing and permitting activities]{.underline}.

The Secretary shall administer the provisions of this chapter relating
to the leasing of the outer Continental Shelf, and shall prescribe such
rules and regulations as may be necessary to carry out such provisions.
The Secretary may at any time prescribe and amend such rules and
regulations as he determines to be necessary and proper in order to
provide for the protection of the marine environment and the protection
of the natural resources of the outer Continental Shelf, and,
notwithstanding any other provisions herein, such rules and regulations
shall, as of their effective date, apply to all operations conducted
under a lease issued or maintained under the provisions of this chapter.
In the enforcement of safety, environmental, and conservation laws and
regulations, the Secretary shall cooperate with the relevant departments
and agencies of the Federal Government and of the affected States.

### Lease and permit applications.

The regulations prescribed by the Secretary under this subsection shall
include, but not be limited to, provisions to---

#### establish an administrative procedure for processing lease applications for sub‑seabed geologic sequestration of carbon dioxide, including lines of authority, steps in permit application processing, criteria for assessing permit applications, and time limits for permit application procession;

#### establish a 5‑year program for leasing of lands in the outer Continental Shelf for sequestration, and a process for updating that program every 5 years; and

#### establish a program for evaluating the long‑term effects of sub‑seabed geologic sequestration of carbon dioxide on the marine environment.

### [Data retrieval system]{.underline}.

The memorandum of understanding shall establish a joint data retrieval
system that is capable of tracking lease and permit applications and
providing to the applicants information as to their status within the
Department of the Interior and Environmental Protection Agency,
including an estimate of the time required for administrative action.

## Ownership of Sub‑Seabed Geological Formation

It is hereby declared to be the policy of the United States that---

### the subsoil and seabed of the outer Continental Shelf appertain to the United States and are subject to its jurisdiction, control, and power of disposition as provided in this chapter; and

### this chapter shall be construed in such a manner that the character of the waters above the outer Continental Shelf as high seas and the right to navigation and fishing therein shall not be affected.

## Method of Disposal

The regulations prescribed by the Secretary under this subsection shall
be limited to the sequestration of carbon dioxide through permitted
injection wells into the sub‑seabed geological formations or the outer
Continental Shelf.

# Interaction With Other Federal and State Laws

## Interaction with the Clean Air Act

### Nothing in this chapter shall be construed to preempt or otherwise affect the authority of the Administrator to promulgate any regulations under the Clean Air Act, except to the extent described in this section.

### Facilities and equipment involved solely in transportation or sequestration of carbon dioxide (as defined in this chapter) are not subject to regulations promulgated under the Clean Air Act. Equipment used at a capture facility to prepare carbon dioxide for transportation will be considered transportation equipment for purposes of this paragraph.

### Nothing in this chapter or the Clean Air Act shall be construed to authorize any State, interstate, or local authority to require of a capture facility any emission standards more stringent than the applicable Federal requirements, unless such standards are part of a Federally approved State Implementation Plan.

### Permitting agencies must give the highest priority to applications for capture facilities in order to expedite the application process.

### New capture facilities created by modifying existing power generating facilities will not be considered modifications under the New Source Review program (42 U.S.C. §§ 7475, 7503) if the following conditions are met:

#### the power generating facility already complies with the Best Available Control Technology (42 U.S.C. § 7475), or agrees to implement it within 5 years;

#### the creation of the capture facility results in no net emissions increase of any regulated Clean Air Act pollutants; and

#### the capture facility modifications are limited to changes necessary to implement the capture and geologic sequestration of carbon dioxide.

## Interaction with the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, and Comprehensive Environmental Response Compensation and Liability Act

### Nothing in this chapter shall be construed to preempt or otherwise affect the authority of the Administrator to promulgate any regulations under the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, or the Comprehensive Environmental Response Compensation and Liability Act except to the extent described in this section.

### Carbon dioxide is not considered a pollutant or waste under the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, or Comprehensive Environmental Response Compensation and Liability Act for purposes of geologic sequestration of carbon dioxide.

### Clean Water Act § 404 permitting requirements shall not be preempted by this chapter.

### Except as provided in subsection (b), the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, and Comprehensive Environmental Response Compensation and Liability Act will apply to the regular operations of capture facilities and storage facilities. As used in this section, the term \"regular operations\" means construction and operation of any power generation, operation and other activities of capture facilities and storage facilities outside of those involved in the capture, storage and geologic sequestration of carbon dioxide.

### Nothing in this chapter shall be construed to limit the Administrator\'s authority under the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, or Comprehensive Environmental Response Compensation and Liability Act with regard to the regular operations of capture facilities and storage facilities. Penalties and other enforcement mechanisms provided for in the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, or Comprehensive Environmental Response Compensation and Liability Act may be imposed or implemented with regard to the operations of capture facilities and storage facilities outside of direct CCS transportation and injection.

## Interaction with State Environmental Laws

### Except as otherwise provided in this section, a State or political subdivision of a State may not establish, continue in effect, or enforce a law or regulation establishing standards with regard to the capture, transport (designed to connect to a storage facility), injection, or geologic sequestration of carbon dioxide or imposing a requirement for equipment associated with a capture facility or storage facility if such law, regulation, standard or requirement is inconsistent with the provisions or purposes of this chapter.

### The authority of each State to enforce environmental protection legislation within its jurisdiction not inconsistent with the Administrator\'s and Commission\'s permitting of capture, transport, injection, or geologic sequestration of carbon dioxide and/or not related to the climate change issues associated with the capture, transport, injection, or geologic sequestration of carbon dioxide shall not be superseded, abrogated or otherwise impaired by this chapter.

### Compliance with this chapter or standards, regulations, or orders prescribed under this chapter does not relieve a person from liability at common law or under State law.

## Integration with Federal Agency Consultation Laws

### In making a decision under this chapter, the Administrator or the Commission, as applicable, shall comply with applicable requirements of Federal law, including any requirements of---

#### the National Environmental Protection Act of 1969 (42 U.S.C. § 4321 *et seq.*);

#### the Endangered Species Act of 1973 (16 U.S.C. § 1531 *et seq.*);

#### the Marine Mammal Protection Act of 1972 (16 U.S.C. § 1361 *et seq.*); and

#### the National Historic Preservation Act of 1966 (16 U.S.C. § 470 *et seq.*).

Such integration shall be effected only to the extent that it can be
done in a manner consistent with the goals and policies expressed in
this chapter and in the other acts referred to in this section.

### Not later than 18 months after the date of enactment of this section, the Administrator shall issue any regulations necessary to implement this section. The regulations should describe any categorical exclusions or exemptions under the acts referred to in this section.

### Except as provided in subsection (b) of this section, this chapter shall not be construed as superseding or limiting the authorities and responsibilities, under any other provision of law, of the Administrator or any other Federal officer, department, or agency.

## Construction with Other Federal Laws

### The Secretary (as defined in section 901(g)) shall consult with the Governor of any Affected State when reviewing any license or permit for sequestration of carbon dioxide in a sub‑seabed geological formation of the outer Continental Shelf which may affect any land use or water use in the coastal zone of a State with a coastal zone management program approved pursuant to section 306 of the Coastal Zone Management Act of 1972 (16 U.S.C. § 1455). Notwithstanding the foregoing, the Secretary shall have exclusive authority to approve any license or permit for geologic sequestration of carbon dioxide in a sub‑seabed geological formation of the outer Continental Shelf. This chapter supersedes consistency review requirements under the Coastal Zone Management Act of 1972 (16 U.S.C. § 1451 *et seq.*).

### Except as specifically provided in this chapter, or where they prevent or interfere with the uniform permitting and regulatory system set up in this legislation, nothing in this chapter affects the rights of States under:

#### the Coastal Zone Management Act of 1972 or

#### the Clean Water Act. 

####  {#section .unnumbered}

## Enforcement

1.  **Citizen Suits**

### [Authorization; jurisdiction]{.underline}.

Except as provided in subsection (b) of this section, any citizen may
commence a civil action on his own behalf---

#### against any person (including (1) the United States, and (2) any other governmental instrumentality or agency to the extent permitted by the eleventh amendment to the Constitution) who is alleged to be in violation of any permit, standard, regulation, condition, requirement, prohibition, or order which has become effective pursuant to this chapter;

#### against the Administrator where there is alleged a failure of the Administrator to perform any act or duty under this chapter which is not discretionary with the Administrator; or

#### against the Commission where there is alleged a failure of the Commission to perform any act or duty under this chapter which is not discretionary with the Commission.

Any action under paragraph (i) of this subsection shall be brought in
the district court for the district in which the alleged violation
occurred. Any action brought under paragraph (ii) or (iii) of this
subsection may be brought in the district court for the district in
which the alleged violation occurred or in the District Court of the
District of Columbia. The district courts shall have jurisdiction,
without regard to the amount in controversy or the citizenship of the
parties, to enforce the permit, standard, regulation, condition,
requirement, prohibition, or order, referred to in paragraph (i), to
order such person to take such other action as may be necessary, or
both, to order the Administrator to perform the act or duty referred to
in paragraph (ii), or to order the Commission to perform the act or duty
referred to in paragraph (iii), as the case may be, and to apply any
appropriate civil penalties under section 1102 of this chapter.

### [Notice]{.underline}.

No action may be commenced---

#### under subsection (a)(i) of this section---

##### prior to 60 days after the plaintiff has given notice of the alleged violation (i) to the Administrator or the Commission, as applicable, and (ii) to any alleged violator of the standard, limitation, or order, except that such action may be brought immediately after such notification in the case of an action under this section respecting a violation of section 1103 of this chapter;

##### with respect to the siting of a storage or capture facility, nor to restrain or enjoin the issuance of a permit for such facility; or

##### if the Administrator or Commission has commenced and is diligently prosecuting a civil or criminal action in a court of the United States, but in any such action in a court of the United States any citizen may intervene as a matter of right; or

#### under subsection (a)(ii) of this section, prior to 90 days after the plaintiff has given notice of such action to the Administrator, except that such action may be brought immediately after such notification in the case of an action under this section respecting a violation of section 1103 of this chapter. Notice under this subsection shall be given in such manner as the Administrator shall prescribe by regulation.

#### under subsection (a)(ii) of this section, prior to 90 days after the plaintiff has given notice of such action to the Commission, except that such action may be brought immediately after such notification in the case of an action under this section respecting a violation of section 1103 of this chapter. Notice under this paragraph shall be given in such manner as the Commission shall prescribe by regulation.

### [Intervention by Administrator or Commission; United States interests protected]{.underline}.

#### In any action under this section, the Administrator or the Commission, as applicable, if not a party, may intervene as a matter of right.

#### [Protection of interests of United States]{.underline}.

Whenever any action is brought under this section in a court of the
United States, the plaintiff shall serve a copy of the complaint on the
Attorney General and the Administrator or the Commission, as applicable.
No consent judgment shall be entered in an action in which the United
States is not a party prior to 45 days following the receipt of a copy
of the proposed consent judgment by the Attorney General and the
Administrator or the Commission, as applicable.

#### [Litigation costs]{.underline}.

The court, in issuing any final order in any action brought pursuant to
this section, may award costs of litigation (including reasonable
attorney and expert witness fees) to any prevailing or substantially
prevailing party, whenever the court determines such award is
appropriate. The court may, if a temporary restraining order or
preliminary injunction is sought, require the filing of a bond or
equivalent security in accordance with the Federal Rules of Civil
Procedure.

#### [Statutory or common law rights not restricted]{.underline}.

Nothing in this section shall restrict any right which any person (or
class of persons) may have under any statute or common law to seek
enforcement of any standard or limitation or to seek any other relief
(including relief against the Administrator, the Commission or a State
agency).

#### [Standard or limitation]{.underline}.

For purposes of this section, the term \"standard or limitation under
this chapter\'\' means (1) a standard of performance under subchapter IV
of this chapter; (2) a permit or condition thereof issued under
subchapter III of this chapter, which is in effect under this chapter;
or (3) a regulation under section 203, 204, or 205 of this chapter.

#### [\"Citizen\'\' defined]{.underline}.

For the purposes of this section, the term \"citizen\'\' means a person
or persons having an interest which is or may be adversely affected.

#### [Civil action by State Governors]{.underline}.

A Governor of a State may commence a civil action under subsection (a)
of this section, without regard to the limitations of subsection (b) of
this section, against the Administrator where there is alleged a failure
of the Administrator to enforce a standard or limitation under this
chapter, the violation of which is occurring in another State and is
causing an adverse effect on the public health or welfare in his State.

## Federal Enforcement

### [Compliance orders]{.underline}.

#### Whenever on the basis of any information the Administrator or the Commission determines that any person has violated or is in violation of any requirement of this chapter, the Administrator or the Commission may issue an order assessing a civil penalty for any past or current violation, requiring compliance immediately or within a specified time period, or both, or the Administrator or the Commission may commence a civil action in the United States district court in the district in which the violation occurred for appropriate relief, including a temporary or permanent injunction.

#### Any order issued pursuant to this subsection may include a suspension or revocation of any permit issued by the Administrator or the Commissioner under this chapter and shall state with reasonable specificity the nature of the violation. Any penalty assessed in the order shall not exceed \$25,000 per day of noncompliance for each violation of a requirement of this chapter. In assessing such a penalty, the Administrator or Commission shall take into account the seriousness of the violation and any good faith efforts to comply with applicable requirements.

### [Public hearing]{.underline}.

Any order issued under this section shall become final unless, no later
than 30 days after the order is served, the person or persons named
therein request a public hearing. Upon such request, the Administrator
or the Commission, as applicable, shall promptly conduct a public
hearing. In connection with any proceeding under this section, the
Administrator or the Commission, as applicable, may issue subpoenas for
the attendance and testimony of witnesses and the production of relevant
papers, books, and documents, and may promulgate rules for discovery
procedures.

### [Violation of compliance orders]{.underline}.

If a violator fails to take corrective action within the time specified
in a compliance order, the Administrator or the Commission, as
applicable, may assess a civil penalty of not more than \$25,000 for
each day of continued noncompliance with the order and the Administrator
or the Commission may suspend or revoke any permit issued to the
violator.

### [Criminal penalties]{.underline}.

Any person who---

#### knowingly transports or causes to be transported carbon dioxide for geologic sequestration to a storage facility which does not have a permit under this chapter;

#### knowingly captures, transports or geologically sequesters carbon dioxide---

##### without a permit under this chapter, or

##### in knowing violation of any material condition or requirement of such permit;

#### knowingly captures, transports or geologically sequesters carbon dioxide and who knowingly destroys, alters, conceals, or fails to file any record, application, report, or other document required to be maintained or filed for purposes of compliance with regulations promulgated by the Administrator or the Commission under this chapter, or

#### knowingly omits material information or makes any false material statement or representation in any application, record, report, permit, or other document filed, maintained, or used for purposes of compliance with regulations promulgated by the Administrator or the Commission under this chapter;

shall, upon conviction, be subject to a fine of not more than \$50,000
for each day of violation, or imprisonment not to exceed two years (five
years in the case of a violation of paragraph (i), (ii) or (iii) of this
subsection), or both. If the conviction is for a violation committed
after a first conviction of such person under this subsection, the
maximum punishment under the respective paragraph shall be doubled with
respect to both fine and imprisonment.

### [Knowing endangerment]{.underline}.

Any person who knowingly captures, transports or geologically sequesters
in violation of subsection (d) of this section who knows at that time
that he thereby places another person in imminent danger of death or
serious bodily injury, shall, upon conviction, be subject to a fine of
not more than \$250,000 or imprisonment for not more than fifteen years,
or both. A defendant that is an organization shall, upon conviction of
violating this subsection, be subject to a fine of not more than
\$1,000,000.

### [Special rules]{.underline}.

For the purposes of subsection (e) of this section---

#### A person\'s state of mind is knowing with respect to---

##### his conduct, if he is aware of the nature of his conduct;

##### an existing circumstance, if he is aware or believes that the circumstance exists; or

##### a result of his conduct, if he is aware or believes that his conduct is substantially certain to cause danger of death or serious bodily injury.

#### In determining whether a defendant who is a natural person knew that his conduct placed another person in imminent danger of death or serious bodily injury---

##### the person is responsible only for actual awareness or actual belief that he possessed; and

##### knowledge possessed by a person other than the defendant but not by the defendant himself may not be attributed to the defendant;

provided, that in proving the defendant\'s possession of actual
knowledge, circumstantial evidence may be used, including evidence that
the defendant took affirmative steps to shield himself from relevant
information.

#### It is an affirmative defense to a prosecution that the conduct charged was consented to by the person endangered and that the danger and conduct charged were reasonably foreseeable hazards of an occupation, a business, or a profession. The defendant may establish an affirmative defense under this subsection by a preponderance of the evidence.

#### All general defenses, affirmative defenses, and bars to prosecution that may apply with respect to other Federal criminal offenses may apply under subsection (e) of this section and shall be determined by the courts of the United States according to the principles of common law as they may be interpreted in the light of reason and experience. Concepts of justification and excuse applicable under this section may be developed in the light of reason and experience.

#### The term \"organization\'\' means a legal entity, other than a government, established, or organized for any purpose, and such term includes a corporation, company, association, firm, partnership, joint stock company, foundation, institution, trust, society, union, or any other association of persons.

#### The term \"serious bodily injury\'\' means---

##### bodily injury which involves a substantial risk of death;

##### unconsciousness;

##### extreme physical pain;

##### protracted and obvious disfigurement; or

##### protracted loss or impairment of the function of a bodily member, organ, or mental faculty.

### [Civil penalty]{.underline}.

Any person who violates any requirement of this section shall be liable
to the United States for a civil penalty in an amount not to exceed
\$25,000 for each such violation. Each day of such violation shall, for
purposes of this subsection, constitute a separate violation.

# Miscellaneous Provisions

## Petition for Regulations; Public Participation

### [Petition]{.underline}.

Any person may petition the appropriate Federal agency for the
promulgation, amendment, or repeal of any regulation for which it has
responsibility under this chapter. Within a reasonable time following
receipt of such petition, such Federal agency shall take action with
respect to such petition and shall publish notice of such action in the
Federal Register, together with the reasons therefor.

### [Public participation]{.underline}.

#### Public participation in the development, revision, implementation, and enforcement of any regulation, guideline, information, or program for which a Federal agency is responsible under this chapter shall be provided for, encouraged, and assisted by such Federal agency. Each such Federal agency shall develop and publish minimum guidelines for public participation in such processes.

#### Before the issuing of a permit to any person in accordance with subchapter III of this chapter, the Administrator or the Commission, as applicable, will provide notice to the public in accordance with the procedures set forth in such subchapter. If within 45 days the Administrator or the Commission, as applicable, receives written notice of opposition to its intention to issue such permit and a request for a hearing, or if the Administrator or the Commission determines on his own initiative, he shall hold an informal public hearing (including an opportunity for presentation of written and oral views) on whether he should issue a permit for the proposed facility. Whenever possible, the Administrator or the Commission shall schedule such hearing at a location convenient to the nearest population center to such proposed facility and give notice in the aforementioned manner of the date, time, and subject matter of such hearing.

## Separability

If any provision of this chapter, or the application of any provision of
this chapter to any person or circumstance, is held invalid, the
application of such provision to other persons or circumstances, and the
remainder of this chapter, shall not be affected thereby.

## Review of Federal Agency Action

### [Venue; procedures]{.underline}.

#### Review of any action taken by a Federal agency pursuant to its responsibilities under this chapter that is reviewable under subsection (b)(1) of this section may be had by any interested person only in the United States Court of Appeals for the District of Columbia.

#### Review of any action taken by a Federal agency pursuant to its responsibilities under this chapter that is reviewable under subsection (b)(ii) of this section may be had by any interested person in the Circuit Court of Appeals of the United States for the Federal judicial district in which such person resides or transacts business which is directly affected by such action upon application by such person.

#### Any such application under paragraph (i) or (ii) of this subsection shall be made within 60 days from the date notice of such Federal agency action appears in the Federal Register, or after such date only if such application is based solely on grounds which arose after such 60th day. The filing of a petition for reconsideration by the Administrator of any otherwise final rule or action shall not affect the finality of such rule or action for purposes of judicial review nor extend the time within which a petition for judicial review of such rule or action under this section may be filed, and shall not postpone the effectiveness of such rule or action.

### [Reviewable actions]{.underline}.

#### The following actions taken by a Federal agency pursuant to its responsibilities under this chapter are subject to judicial review under this section pursuant to subsection (a)(i):

##### promulgating any regulation under subchapter II of this chapter;

##### promulgating any standard or regulation under subchapter IV of this chapter; or

#### The following actions taken by a Federal agency pursuant to its responsibilities under this chapter are subject to judicial review under this section pursuant to subsection (a)(ii):

##### issuing or denying any permit under subchapter III of this chapter;

##### issuing any order or penalty under section 1102 or 1103.

### Action of a Federal agency with respect to which review could have been obtained under subsection (iii) of this section shall not be subject to judicial review in any civil or criminal proceeding for enforcement.

### [Award of fees]{.underline}.

In any judicial proceeding under this subsection, the court may award
costs of litigation (including reasonable attorney and expert witness
fees) to any prevailing or substantially prevailing party whenever it
determines that such award is appropriate.

### [Additional evidence]{.underline}.

In any judicial proceeding brought under subsection (a) of this section
in which review is sought of a determination under this chapter required
to be made on the record after notice and opportunity for hearing, if
any party applies to the court for leave to adduce additional evidence,
and shows to the satisfaction of the court that such additional evidence
is material and that there were reasonable grounds for the failure to
adduce such evidence in the administrative proceeding, the court may
order such additional evidence (and evidence in rebuttal thereof) to be
taken before the applicable Federal agency, in such manner and upon such
terms and conditions as the court may deem proper. The applicable
Federal agency may modify its findings as to the facts, or make new
findings, by reason of the additional evidence so taken, and it shall
file such modified or new findings, and its recommendation, if any, for
the modification or setting aside of his original determination, with
the return of such additional evidence.

**White Paper In Support of**

**DRAFT Proposed Carbon Geologic Sequestration Legislation**

**(July 2008)**

**Prepared by The Program to Facilitate Interagency Environmental
Cooperation, with the**

**Interagency Environmental Cooperation Class**

**in connection with The Environment, Energy and Natural Resources Law
Center at**

**The University of Houston Law Center**

**I. Introduction**

The legislative proposal arises from the Program to Facilitate
Interagency Environmental Cooperation's review of the Environmental
Protection Agency's effort to regulate carbon sequestration projects
through the Underground Injection Permit program of the Safe Drinking
Water Act. While the program and affiliated class believe this effort is
laudable, review of the proposed system reveals that it may not be
sufficient to significantly promote carbon geologic sequestration.[^1]

National and international attention on climate change provides an
opportunity for comprehensive legislation seeking to promote the capture
and geologic sequestration of carbon dioxide by reducing legal and
regulatory barriers while protecting the public safety, health, and
welfare. The Proposed Legislation, strives to address the legal and
regulatory barriers that slow deployment of geologic sequestration
technology. The White Paper provides a background on carbon geologic
sequestration and the current legal regime. In addition, the White Paper
discusses specific barriers remedied in the Proposed Legislation and
provides an explanation of the policy choices involved in drafting the
legislative language.

The Proposed Legislation and this White Paper are intended as resources
for members of Congress and their staffs as they consider future carbon
sequestration legislation. They were drafted in conjunction with the
Program to Facilitate Interagency Environmental Cooperation of the
Environment, Energy, and Natural Resources Center at the University of
Houston by Professor Victor B. Flatt's Interagency Environmental
Cooperation Class, an advanced environmental law class focused on
resolving regulatory and legal conflicts among and between federal and
state agencies. Members of the class come from diverse professional
backgrounds The class includes career practitioners of environmental law
and litigation, supervising engineers with extensive environmental
compliance experience, and law students with energy sector,
environmental, and legislative experience. As the A.L. O'Quinn Chair in
Environmental Law and Director of the Center for Environment, Energy and
Natural Resources Law, Professor Flatt is recognized internationally for
his work in environmental regulation of the energy sector. The
Environment, Energy and Natural Resources Center provides a forum for
education and discussion of the most important issues of the day, such
as climate change, air pollution, clean coal and renewable energy.

The Proposed Legislation and this White Paper present a possible pathway
for promoting national deployment of carbon geologic sequestration and
carbon capture electric generation.

**II. Background**

**A. Why Geologic Sequestration of Carbon is Needed**

The Intergovernmental Panel on Climate Change ("IPCC") recently
concluded that warming of the climate system is "unequivocal" and that
natural systems are being affected by regional climate changes and
temperature increases.[^2] The panel further concluded that most of the
observed increase in global average temperatures is very likely due to
an increase in greenhouse gas concentrations.[^3] Most importantly, the
IPCC concluded with high agreement that continued emissions of
greenhouse gasses will likely result in changes in the number and size
of glacial lakes, changes in spring peak discharge patterns, as well as
"pole-ward" and upward shifts in plant and animal ranges.[^4] Other
anticipated harms include ocean acidification, increased water and food
source stress, sea level increases and altered frequencies and
intensities of extreme weather that will adversely affect natural and
human systems.[^5]

The IPCC also concluded that carbon dioxide (CO~2~) emissions are the
primary cause of accelerated atmospheric warming.[^6] Carbon dioxide is
a by-product of the combustion of fossil fuels, such as coal, to
energy.[^7] Coal-fired power plants account for more than 80% of the
CO~2~ emissions from electric power generation in the United States and
more than 30% of the total U.S. CO~2~ emissions.[^8] Representing 49% of
the United States' existing electric generating capacity, coal is the
primary fuel for the generation of electricity in the United States and
it is likely to remain so for some time in the future.[^9] The IPCC
predicts that world energy will be dominated by fossil fuels until at
least the middle of the century.[^10]

The IPCC 2007 Climate Change Report concluded that increasing emissions
will cause further warming and induce further changes in the global
climate system that will very likely be larger than those observed
during the 20^th^ century.[^11] The United States' (as well as other
countries') continued reliance on coal-produced electrical power without
commensurate reductions in CO~2~ could have disastrous environmental
consequences.

**B. Carbon Geologic Sequestration**

Carbon dioxide capture and storage ("CCS") is one of the most promising
alternatives for reducing CO~2~ emissions. Many believe that carbon
capture technologies can potentially remove 80%-95% of the CO~2~ emitted
from electric power plants.[^12] Thus, there is significant support for
the installation of carbon capture and sequestration on existing power
plants and the incorporation of capture and sequestration into all new
coal-fired electric generating facilities.

The Proposed Legislation seeks to promote geologic sequestration of
carbon by reducing the regulatory and legal barriers to the approval and
implementation of carbon geologic sequestration projects.

**C. The Legal Landscape**

**1. Regulation of Carbon Geologic Sequestration**

Congress passed the Energy Policy Act of 2005 amid increasing public
concern over greenhouse gasses and use of foreign sources of fuel.[^13]
The Act authorized nearly \$1.3 billion dollars to fund development of
clean coal technologies, including Carbon Capture and Sequestration
(CCS) electric utilities.[^14] Congress has yet, however, to pass
legislation directly regulating the approval and operation of carbon
geologic sequestration.[^15]

Without clear legal precedent, the Advanced Coal Technology Work Group
was charged by the Clean Air Act Advisory Committee in September 2006 to
address promotion of advanced coal technologies, including carbon
capture and sequestration. The work group concluded that under the
existing legal regime, the best way to address geologic sequestration
was through the Underground Injection Control program.[^16]

Several members of congress are working on carbon capture and
sequestration legislation. At the same time, numerous states have
enacted or are considering some sort of legislation affecting carbon
sequestration. As of January 2005, a report prepared for the Department
of Energy reported that at least fourteen states had enacted state
carbon sequestration legislation.[^17] At the time of the survey,
numerous other states had carbon sequestration legislation pending. With
the continuously changing status of federal and state carbon
sequestration legislation, and the possibility of even more volatile
municipal regulation, carbon sequestration projects face an uncertain
future.

Further, CCS technologies face an uncertain future due to significant
gaps in state and national regulatory oversight. Few states have
established agency jurisdiction over CO~2~ injection processes, and of
those even fewer have established regulatory standards over the
process.[^18] This does very little to encourage industry deployment of
CCS technology on a national scale. While the Underground Injection
Control program is a step in the correct direction, it does not address
all of the barriers to carbon sequestration. Due to the amount of
planning and construction time required for such projects, and the cost
savings and efficiency attendant to designing facilities in the light of
a single set of regulatory requirements, state and local regulation of
carbon sequestration should arguably be limited or standardized. Towards
that end this legislative proposal establishes a legal and regulatory
framework for carbon capture and sequestration approval and operation
that will provide certainty for the industry, eliminate regulatory
barriers, and streamline the permitting process, while maintaining the
protection of the public and the environment.

> **2. Regulation of Coal-Fired Power Plants**

Because it is expected that the majority of carbon sequestration
projects will be part of either a new or existing coal-fired power
plant, the regulation of power plants is significant to the ultimate
success of sequestration projects.[^19] Electric utilities are governed
by both federal and state regulatory agencies. The Federal Electric
Regulatory Commission (FERC) regulates the electric industry at the
national level.[^20] Various state entities, from state Public Utility
Commissions to municipal boards and city councils, regulate the industry
at the state and municipal level. These state entities are discussed as
a group below and are collectively referred to as "PUC's."

Though their powers vary from state to state, the PUC's perform largely
the same functions. These functions include: 1) Regulating market entry
by issuing operating permits called "certificates of public need and
convenience"; [^21] 2) Siting or zoning of generation units, and
establishing easements for pipelines for fuel conveyance; 3) Setting and
enforcing standards for generating unit reliability in accordance to
regional reliability council rules; 4) Rate regulation that is not
preempted by FERC; 5) Setting and enforcing standards for public health,
safety, and environmental protection;[^22] and 6) Regulating certain
practices in the retail market such as discontinuance of retail service
due to non-payment by a customer. [^23] Additionally, any growth or
major changes to a pre-existing utility will likely trigger additional
review by the PUCs to renew the certificate.

These functions give PUCs a tremendous amount of control over electric
utilities. The PUCs are usually local or state boards that are elected
or otherwise selected through the political process.[^24] For the board
to make a decision, the electric utility must first file a request. Many
routine requests, such as requesting a rate increase to cover increased
costs, are automatically approved if after a period of public comment no
one objects to the request. If there is an objection, usually by another
electric utility, then the request will be reviewed by the PUC and may
even be set for a hearing.[^25] Depending on the local laws, decisions
made by the PUC may be administratively appealed. PUC decisions are
generally given deference by courts.[^26]

While FERC typically does not have the authority to grant permits for
utilities to operate or expand,[^27] it does have jurisdiction over
several important aspects of the electric market. These responsibilities
include: 1) Monitoring wholesale and transmission rates, with regulation
of these rates if they find that the current rate is "unjust,
unreasonable, unduly discriminatory or preferential;"[^28] 2) Reviewing
sales of assets, mergers or consolidation within the energy industry to
ensure that the transaction is "consistent with the public
interest;"[^29] 3) Setting guidelines for pooling arrangements by which
electric utilities coordinate facilities and resources, require
utilities to connect with one another, and/or transmit another company's
power across its lines;[^30] and 4) Regulating the interstate natural
gas market including natural gas pipelines and storage. The
administrative procedure for FERC operates in the same way as the PUCs.

**D. Conclusion**

The existing legal framework for carbon sequestration continues to be
uncertain and encumbered with significant legal barriers and investment
disincentives. The Proposed Legislation is intended to clarify,
simplify, and streamline this complex regulatory landscape.

**III. The Legislative Proposal**

Each of the following lettered sections addresses a significant issue in
the Proposed Legislation including background information, the policy
choices that must be addressed, discussion of and justification for the
proposed solution incorporated into the Proposed Legislation, and the
section of the Proposed Legislation itself.

**A. Introduction and Definitions**

The purpose of the legislation has been discussed in the introductory
sections of the White Paper. We prepared the White Paper and Proposed
Legislation to "encourage the implementation of geologic sequestration
of carbon dioxide while protecting health and the environment." As a
result, the legislation addresses licensing of sequestration and
electric generating facilities, ownership rules, the applicability of
federal and state environmental laws and specific issues such as
pipelines and off-shore sequestration.

The definitions in the proposal seek to employ terms commonly used in
this substantive area but to give them specific meanings so as to
provide legislative clarity. In particular, "geologic sequestration" is
defined as "underground storage in a reservoir for at least 1,000 years
of at least 90% of the carbon dioxide emitted from a capture facility,
with a storage failure rate of no more than 1% (by volume) over 1000
years;" while the term "storage facility" in pertinent part means "the
underground reservoir, underground equipment, and surface buildings and
equipment utilized in the storage operation . . ."[^31]

**Proposed Legislation**

# Subchapter I. General Provisions {#subchapter-i.-general-provisions-1 .unnumbered}

## 101 Congressional Findings and Objectives {#congressional-findings-and-objectives-1 .unnumbered}

### [Findings]{.underline}.

The Congress finds---

#### the geologic sequestration of carbon dioxide will benefit the citizens and environment of the United States by reducing greenhouse gas emissions; and

#### as disclosed in reports of the Department of Energy and other reports made pursuant to the authority of Congress, it is declared that the business of geologic sequestration, capture by capture facilities, and transportation of carbon dioxide is affected with the public interest, and that Federal regulation in matters relating to the geologic sequestration, capture by capture facilities, and transportation of carbon dioxide in interstate and foreign commerce is necessary in the public interest.

### [Objective]{.underline}.

The objective of this chapter is to encourage the implementation of
geologic sequestration of carbon dioxide while protecting health and the
environment.

## Definitions

When used in this chapter---

### The term \"Administrator\" means the Administrator of the Environmental Protection Agency.

### The term \"Agency\" means the Environmental Protection Agency.

a.  The term \"capture facility\" means electric generating or other
    facilities which employ carbon dioxide capture technology to capture
    carbon dioxide stream and any associated byproducts, excluding
    hazardous substances (defined in 40 CFR, Part 261) for geologic
    sequestration.

### The term \"carbon dioxide\" means carbon dioxide (CO~2~) produced as a byproduct of combustion in the industrial process (including carbon dioxide generated from oil and gas production and processing operations) of sufficient purity and quality as to not compromise the safety and efficiency of the reservoir to effectively contain the carbon dioxide, or otherwise create a health or environmental risk.

### The term \"carbon dioxide pipelines\" means pipelines dedicated to transporting carbon dioxide from one or more capture facilities to the storage and injection site for geologic sequestration, not wholly contained within a joint capture and storage facility.

### The term \"Clean Air Act\" means the Clean Air Act, as codified at 42 U.S.C. § 7401 *et seq.*

### The term \"Clean Water Act\" means the Clean Water Act, as codified at 33 U.S.C. § 1251 *et seq.*

### The term \"Commission\" means the Federal Electric Regulatory Commission.

### The term \"Commissioner\" means a Commissioner of the Federal Electric Regulatory Commission.

### The term \"Comprehensive Environmental Response Compensation and Liability Act\" shall mean the Comprehensive Environmental Response Compensation and Liability Act, as codified at 42 U.S.C. § 9601 *et seq.*

### The term \"Federal agency\" means any department, agency, or instrumentality of the United States.

### The term \"geologic sequestration\" means underground storage or containment in a reservoir for at least 1,000 years of at least 90% of a gaseous liquid or super-critical carbon dioxide stream emitted from a capture facility, with a storage failure rate of no more than 1% volume loss in 1000 years (as determined by the Administrator based on the best scientific evidence).

### The term \"greenhouse gases\" means those gases, including carbon dioxide, methane, nitrous oxide, chlorofluorocarbons, and ozone, whose presence in the atmosphere results in the capture of radiation from sunlight by preventing radiative heat from reflecting back into space.

### The term \"Indian tribe\" means any Indian tribe, band, nation, or other organized group or community, including any Alaska Native village, which is Federally recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.

### The term \"injection well\" means a well used to inject carbon dioxide into and/or withdraw carbon dioxide from a reservoir.

### The term \"OSHA\" means the Occupational Safety and Health Administration.

### The term \"oil or gas\" means oil, natural gas, or gas condensate.

### The term \"owner or operator\" means any person who owns, leases, operates, controls, or supervises a capture facility, carbon dioxide pipeline or storage facility.

### The term \"PHMSA\" means the Pipeline and Hazardous Materials Safety Administration of the Department of Transportation.

### The term \"person\" includes an individual, corporation, partnership, association, State, municipality, political subdivision of a State, and any agency, department, or instrumentality of the United States and any officer, agent, or employee thereof.

### The term \"reservoir\" means any subsurface sedimentary stratum, formation, aquifer, or cavity or void (whether natural or artificially created), including oil and gas reservoirs, saline formations and coal seams, suitable for or capable of being made suitable for the injection and storage of carbon dioxide therein.

### The term \"Resource Conservation and Recovery Act\" means the Resource Conservation and Recovery Act, as codified at 42 U.S.C. § 6991 *et seq.*

### The term \"Safe Drinking Water Act\" means the Safe Drinking Water Act, as codified at 42 U.S.C. § 300f *et seq.*

### The term \"Secretary\'\' means the Secretary of Energy.

### The term \"site\" means the land or water area where any storage facility is physically located, including adjacent land used in connection with the storage facility.

### The term \"State\" means a State, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa and includes the Commonwealth of the Northern Mariana Islands.

### The term \"storage facility\" means the underground reservoir, underground equipment, and surface buildings and equipment utilized in the storage operation, excluding pipelines used to transport the carbon dioxide from one or more capture facilities to the storage and injection site, not wholly contained within a joint capture and storage facility. The underground reservoir component of the storage facility includes any necessary and reasonable areal buffer and subsurface monitoring zones designated by the Agency for the purpose of ensuring the safe and efficient operation of the storage facility for the storage of carbon dioxide and shall be chosen to protect against pollution, invasion, and escape or migration of carbon dioxide.

### The term \"third--party injector\" means any person who geologically sequesters carbon dioxide at a storage facility owned or operated by another person.

### The term \"unitization\" means the process of combining separately owned portions of a common reservoir or field into a large, field-wide unit.

## Administration

### [Regulations; delegation of powers and duties; regional officers and employees]{.underline}.

#### The Administrator, the Commission, OSHA, and PHMSA are authorized to prescribe such regulations as are necessary to carry out their respective functions under this chapter. Each may delegate to any officer or employee of its respective Federal agency such of its powers and duties under this chapter as it may deem necessary or expedient.

#### Not later than 12 months after the date of enactment of this chapter, the Administrator, the Commission, OSHA, and PHMSA shall promulgate regulations establishing general applicable procedures and policies for their respective officers and employees to follow in carrying out a delegation under paragraph (a), if any. Such regulations shall be designed---

##### to assure fairness and uniformity in the criteria, procedures, and policies applied in implementing and enforcing the chapter; and

##### to provide a mechanism for identifying and standardizing inconsistent or varying criteria, procedures, and policies being employed by such officers and employees in implementing and enforcing the chapter.

### [Authorities]{.underline}.

#### In carrying out this chapter, the Administrator, the Commission, OSHA and PHMSA are authorized to---

##### prescribe, in consultation with Federal, State, and regional authorities, such regulations as are necessary to carry out each of their respective functions under this chapter;

##### consult with or exchange information with other Federal agencies undertaking research, development, demonstration projects, studies, or investigations relating to the capture, transport and geologic sequestration of carbon dioxide;

##### consult with representatives of science, industry, agriculture, labor, environmental protection and consumer organizations, and other groups, as each deems advisable;

##### utilize the information, facilities, personnel and other resources of Federal agencies, including the National Energy Technology Laboratory, on a reimbursable basis, to perform research and analyses and conduct studies and investigations related to the capture, transport and geologic sequestration of carbon dioxide and to otherwise carry out each of the Federal agencies\' respective functions under this chapter; and

##### to delegate to the Secretary of Transportation the performance of any inspection or enforcement function under this chapter relating to the transportation of carbon dioxide for purposes of geologic sequestration where such delegation would avoid unnecessary duplication of activity and would carry out the objectives of this chapter.

#### [Revision of regulations]{.underline}.

Each regulation promulgated under this chapter shall be reviewed and,
where necessary, revised not less frequently than every three years.

## Risk Assessment and Management

The Administrator shall examine, in consultation with the Secretary, the
risks associated with geologic sequestration of carbon dioxide on a
large scale as anticipated by this legislation and incorporate findings
and determinations in the permitting process as necessary to protect
public health, welfare and the environment.

**B. Streamlining State PUCs' Control over power plants associated with
CCS**

> **1. Why federal regulation is important to the question of promoting
> CO~2~**
>
> **sequestration efforts while still protecting environment, health,
> and safety.**

The promotion of sequestration requires permitting of new coal-fired
power plants. Due to greater concern over climate change, coal-fired
power plants have faced significant opposition in recent years, with
very few obtaining approval at the state level.[^32] As discussed above,
present and future energy needs in the United States are dependent upon
coal-fired power plants. Thus it is imperative that the approval process
for appropriately designed coal fired generating facilities,
incorporating capture and sequestration technology, be streamlined.
Recent experience suggests that even with advanced capture and
sequestration technology incorporated into the coal-fired power plant
designs, approval will be difficult due to lack of public awareness of
CCS technology and its impact on climate change.[^33] However, by
implementing the Proposed Legislation, the regulators will be given the
proper tools to address these issues.

To create a truly national solution for CCS utility permitting,
additional consideration should also be given to carbon dioxide pipeline
jurisdictions. There would still be multiple agency barriers to
deploying CCS technology without addressing a solution for carbon
dioxide pipeline permitting. Currently, non-natural gas interstate
pipelines are regulated for safety and siting by the Department of
Transportation Pipeline and Hazardous Materials Administration (PHMA),
and intrastate pipelines are regulated for safety and pricing by either
PUC's or state mining commissions depending on the eventual use of the
carbon dioxide in question. Depending on where a CCS facility was sited,
the utility could require overlapping state and federal approval for
pipeline safety, siting and carrier pricing.

2.  **What policy decisions were made on this issue for purposes of
    proposed legislation and why.**

Typically, approval of a power plant requires approval from the entities
that regulate utilities, normally the state's equivalent of the "PUC",
environmental approval (sometimes federal and state), market power
evaluation and approval to address antitrust issues, and compliance with
workplace safety rules. Carbon dioxide pipeline approval similarly
requires approval from whatever state and federal entities regulate that
type of pipeline approval as well as environmental, antitrust and
workplace safety approval. Although the federal permitting scheme for
storage facilities eliminates many of the approval requirements of other
agencies, environmental, antitrust, and workplace safety approvals all
must be addressed in order to streamline the approval process for each
of the building blocks of a successful sequestration program.

For this reason, the Proposed Legislation expressly assigns to
appropriate existing federal agencies the authority to regulate and set
minimum standards in each of these areas. Of these, perhaps the most
novel, and hence the most controversial is assigning to FERC
responsibility for establishing standards for the power generation
permitting program.

As stated before, presently FERC does not have the authority to give
most power plants a certificate of public need and convenience as this
responsibility is relegated to the various state PUCs.[^34] The Proposed
Legislation assigns FERC the authority to issue regulations regarding
minimum standards by which FERC can issue certificate of public need and
convenience to a coal-fired electric generation facility that
incorporates geologic sequestration of carbon dioxide.

FERC has previous experience with the direct regulation of utilities.
Under section 210 of PURPA, FERC may give certain small and industrial
generators that meet specific parameters "Qualifying Facility" (QF)
status.[^35] This status bypasses traditional state permitting of
electric utilities by allowing small and industrial generators to sell
power into the wholesale market under FERC supervised contracts without
first obtaining a "certificate of public need and convenience."[^36]
This allows the utility freedom to operate in a relatively unregulated
market, free from traditional PUC oversight.[^37] Congress intended
section 210 to encourage the use of alternative energy sources so to
reduce the nation's dependence on foreign fuel due to the Iranian Oil
Embargo of the 1970's and skyrocketing fuel costs.[^38]

The Proposed Legislation would only eliminate state PUC jurisdiction
over certificates. Regulation under PURPA § 210 would still require
rigorous oversight of rates.[^39] CCS utilities' wholesale market
contracts would still be subject to FERC's review, as they would be
under the PUC.[^40] The CCS utility would still conform to FERC's
requirements for minimum reliability and interconnection standards.[^41]
They would also be subject to the rules and oversight of the ISO, or
regional wholesale electric market pool, that they operate in.[^42]
Section 210 does not limit administrative appeals, nor does it limit
judicial oversight.[^43] By adding the appropriate savings clauses, CCS
utilities would still be subject to state and federal anti-trust and
environmental review by the appropriate state and federal agencies.

Pipelines for carbon dioxide can also be easily addressed. Congress
could streamline the process by federally preempting all safety, siting,
and pricing jurisdiction of carbon dioxide pipelines for purposes of
carbon sequestration. In fact, FERC and the PHMA already coordinate
efforts to regulate natural gas pipelines. FERC regulates carrier
pricing and storage while the PHMA regulates safety and siting. Both
administrations already have an existing model for cooperation due to
their shared jurisdiction over natural gas pipelines. This model can be
readily adapted for carbon dioxide pipelines for use by CCS utilities.

The other streamlining sections of the Proposed Legislation are less
controversial as they involve federal agencies acting in their areas of
expertise. The Occupational Safety and Health Administration is charged
with addressing safety and health issues for all facilities regulated
under the Proposed Legislation. Market power review is the province of
the Federal Trade Commission and Department of Justice. Environmental
Review is the province of the Environmental Protection Agency. In each
case, the agency most knowledgeable in a particular area is charged with
regulating how approvals will take place in their area of expertise.

3.  **Proposed Legislation**

# Subchapter II: Authorities {#subchapter-ii-authorities .unnumbered}

## 201 Agency Authority Over Storage Facilities {#agency-authority-over-storage-facilities-1 .unnumbered}

The Administrator shall have exclusive authority to approve or deny an
application for the siting, construction, expansion, or operation of a
storage facility. Except as specifically provided in this chapter,
nothing in this chapter is intended to affect otherwise applicable law
related to any Federal agency\'s authorities or responsibilities related
to storage facilities.

## 202 State Consultation for Storage Facilities {#state-consultation-for-storage-facilities-1 .unnumbered}

### State consultation.

The Governor of a State in which a storage facility is proposed to be
located shall designate the appropriate State agency for the purposes of
consulting with the Administrator regarding an application under
section III02 or III04 of this chapter. The Administrator shall consult
with such State agency regarding State and local safety considerations
prior to issuing a permit pursuant to section III02 or III04. For the
purposes of this section, State and local safety considerations
include---

#### the type and use of the storage facility;

#### the existing and projected population and demographic characteristics on and near the site;

#### the existing and proposed land uses near the site;

#### the natural and physical aspects of the site;

#### the emergency response capabilities near the site; and

#### the need to encourage remote siting.

### Advisory report.

The State agency may furnish an advisory report on State and local
safety considerations to the Agency with respect to an application no
later than 30 days after the application was filed with the Agency.
Before issuing a permit authorizing an applicant to site, construct,
expand, or operate a storage facility, the Administrator shall review
and respond specifically to the issues raised in the advisory report
furnished by the State agency described in subsection (a) of this
section.

## 203 Commission Regulatory Authority Over Capture Facilities and Carbon Dioxide Pipelines {#commission-regulatory-authority-over-capture-facilities-and-carbon-dioxide-pipelines-1 .unnumbered}

Except as set forth in sections 204, 205, and subchapter X of this
chapter, the Commission shall have the exclusive authority to promulgate
regulations for the siting, construction, expansion, or operation of
capture facilities and carbon dioxide pipelines. Except as specifically
provided in this chapter, nothing in this chapter is intended to affect
otherwise applicable law related to any Federal agency\'s authorities or
responsibilities related to capture facilities and carbon dioxide
pipelines.

## 204 OSHA Regulatory Authority Over Capture Facilities and Storage Facilities {#osha-regulatory-authority-over-capture-facilities-and-storage-facilities-1 .unnumbered}

### Except as set forth in this chapter, OSHA shall have authority to promulgate regulations governing worker safety at capture facilities and storage facilities.

**(b)** Not later than 12 months after the date of enactment of this
chapter, OSHA shall propose regulations addressing worker safety
requirements for the siting, construction, expansion, or operation of
capture facilities and storage facilities.

## 205 PHMSA Regulatory Authority Over Carbon Dioxide Pipelines {#phmsa-regulatory-authority-over-carbon-dioxide-pipelines-1 .unnumbered}

### Except as set forth in this chapter, PHMSA shall have authority to promulgate regulations governing worker safety for carbon dioxide pipelines 

**(b)** Not later than 12 months after the date of enactment of this
chapter, PHMSA shall propose regulations addressing worker safety
requirements for the siting, construction, expansion, or operation of
carbon dioxide pipelines.

## 206 Rates and Charges for Owners and Operators {#rates-and-charges-for-owners-and-operators-1 .unnumbered}

### Market power.

In exercising its authority under this chapter, the Commission may
authorize an owner or operator of a storage facility or carbon dioxide
pipeline to provide storage and transport services at market-based rates
for new storage and transport capacity related to a specific storage
facility placed in service after \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_,
notwithstanding the fact that the owner or operator is unable to
demonstrate that it lacks market power, if the Commission determines
that----

#### market-based rates are in the public interest and necessary to encourage the construction of the storage capacity in the area needing geologic sequestration services; and 

#### customers are adequately protected.

### The Commission shall ensure that reasonable terms and conditions are in place to protect consumers.

### If the Commission authorizes an owner or operator of a storage facility or carbon dioxide pipeline to charge market-based rates under this section, the Commission shall review periodically whether the market-based rate is just, reasonable, and not unduly discriminatory or preferential. 

## 207 Federal Jurisdiction Savings Clause {#federal-jurisdiction-savings-clause-1 .unnumbered}

Except as specifically provided in this chapter, nothing in this chapter
shall be construed to limit the authority or functions of any Federal
agency under any otherwise applicable Federal law or regulation not
inconsistent with this chapter.

## 208 State Jurisdiction Savings Clause {#state-jurisdiction-savings-clause-1 .unnumbered}

Except as specifically provided in this chapter, nothing in this chapter
shall be construed to limit the authority or functions of any State or
local authorities under any otherwise applicable State or local law or
regulation not inconsistent with this chapter.

**C. Federal Permitting of Carbon Sequestration Sites**

> **1.    Why federal permitting is important to the question of
> promoting CO~2~**
>
> **sequestration efforts while still protecting environment, health,
> and safety.**

Federal permitting will eliminate the current system of overlapping and
potentially conflicting requirements for CO~2~ sequestration facilities.
In addition, there are significant limits on the availability of sites
for carbon sequestration. As discussed below, these limitations include
both physical constraints on available sites and social constraints on
siting based on public opposition. State and local regulatory control
increases siting barriers. For this reason the Proposed Legislation
includes an exclusive federal permitting licensing scheme for carbon
sequestration storage.

**a.** **Background on Siting Issues**

**I*.* Appropriate Site Availability**

Geologic sequestration is accomplished by injecting CO~2~ into
encapsulated porous geological formations. Porous rock formations that
hold, or have previously held fluids such as natural gas, oil or brines
are potential candidates for CO~2~ storage.[^44] Saline aquifers and
formations as well as un-minable coal seams are also possible
sequestration locations.[^45] While acceptable formations are often
found near areas also appropriate for coal-fired power generation, this
is not universally true. The net effect is that there are only limited
potential sites appropriate for CO~2~ geologic sequestration facilities.

One possibility for increasing the available sites for carbon geologic
sequestration facilities is to create, or add to, the existing
infrastructure for moving CO~2~. Transporting captured CO~2~ in small
quantities is possible by truck, rail or ship; however, large scale
CO~2~ sequestration may require a dedicated interstate CO~2~ pipeline
network which simply does not exist at this time.[^46] A recent
Congressional Research Report on CO~2~ pipelines concluded that
developing an "expansive national CO~2~ pipeline network...could pose
numerous regulatory and economic challenges."[^47] Although CO~2~
pipeline technology has been employed historically to transport CO~2~
for oilfield recovery and CO~2~ pipelines operate much the same way as
natural gas pipelines, only 5800 kilometers of CO~2~ pipeline currently
operate in the United States.[^48] This relatively small regional
network is inadequate for massive transportation of CO~2~ to distant
geologic sequestration locations. Pipelines of the future may gather
CO~2~ from widespread sources and transport it to a central location for
sequestration. However, regulatory uncertainties regarding pipeline
authority as well as the difficulties of securing owner right of way,
combined with the expense and difficult of creating an extensive CO~2~
pipeline network renders full-scale reliance on CO~2~ transport through
an inter-state pipeline network well in the future. In the meantime, it
seems likely that most CO~2~ sequestration will take place very near the
point the CO~2~ is captured.[^49]

> **2. Community Reaction \-- Opposition to CO~2~ Geologic Sequestration
> Facilities**

Several different studies have revealed that the public has very little
information on what CO~2~ Sequestration is, and that, in general, the
public has a mild positive reaction to CO~2~ Sequestration.[^50]
However, there is evidence that various stakeholder groups may have a
very negative attitude toward specific projects.[^51] This attitude
stems both from the concern that reliance on CO~2~ sequestration will
extend the usage of fossil fuels and divert resources from the
development of renewable energy and concerns about specific CO~2~
facilities.[^52] Even if the public has a generally favorable impression
of carbon sequestration, it is likely that people living in the
immediate vicinity of a proposed project will object to the project.
Widespread reports of deaths associated with sudden accidental releases
of CO~2~, in addition to concerns about drinking water contamination and
the impact of living near a high pressure carbon dioxide facility will
likely result in local opposition to facilities and attempts to utilize
state law as well as local land use regulations and zoning ordinances to
ban carbon geologic sequestration facilities.

**2.      What policy decisions were made on this issue for purposes of
proposed**

**legislation and why.**

Given the limitations on appropriate sites, reducing barriers to siting
and maximizing the opportunity to site in appropriate locations seems
optimal. Exclusive federal permitting will help assure that appropriate
sites are available for carbon sequestration facilities. In addition,
federal permitting assures that uniform technology and management
standards will be developed and applied to all sequestration facilities.
Without exclusive federal licensing, local zoning and local and state
land use restrictions or hurdles may significantly reduce the
availability of appropriate locations for carbon dioxide geologic
sequestration.

> **a.** **LNG-A Model of exclusive federal licensing.**

There is precedent for federal preemption of state siting restrictions
of geologic storage. Liquefied Natural Gas ("LNG") terminals allow for
the transport and importation of natural gas in concentrated liquid
formation. Gas in liquefied form can be transported to places that are
not connected by a pipeline so that it is not "stranded" in a low-demand
market. However, LNG terminals are controversial and many communities
sought to exclude them entirely despite the benefits. This sentiment
created what lawmakers deemed to be unacceptable barriers to the
expansion of on-shore LNG terminal capacity. Local and state land use
and zoning restrictions were often utilized to resist siting of an LNG
terminal. The Energy Policy Act of 2005 sought to reduce these barriers
by modifying the siting process for LNG facilities and preempting local
and state siting barriers by declaring that exclusive authority to site
LNG facilities rested with the federal government:

> The Commission shall have the exclusive authority to approve or deny
> an application for the siting, construction, expansion, or operation
> of an LNG terminal. Except as specifically provided in this Act,
> nothing in this Act is intended to affect otherwise applicable law
> related to any Federal agency\'s authorities or responsibilities
> related to LNG terminals.[^53]

This provision has been upheld as a proper exercise of federal power
under the Supremacy Clause of the U.S. Constitution.[^54]

Moreover, its intent is grounded in the notion that operation of such
facilities do not create unacceptable health and safety risks in
communities with sites, much the same situation that exists for CO2
sequestration.

**b. Siting Factors**

The proposed legislation sets forth factors to be considered in siting
carbon geologic sequestration facilities including factors of interest
to communities. Increased concentrations of other pollutants harmful to
human health and the environment such as associated Nitrous Oxide and
Sulfur Dioxide, are also a concern. Commentators have raised concerns
that certain minority, racial, ethnic, and socioeconomic groups will
disproportionately bear the impact of these facilities, particularly if
a veto is allowed by local laws.[^55] To address this concern the
proposed legislation requires that the Administrator promulgate
regulations that consider the listed factors in making siting decisions.

**3.      Proposed legislation.**

# Subchapter III. Permits {#subchapter-iii.-permits .unnumbered}

## 301 Permits for Siting of Capture Facilities {#permits-for-siting-of-capture-facilities-1 .unnumbered}

### Permit requirements.

The Commission shall promulgate within 18 months after the date of
enactment of this chapter regulations requiring each person owning or
operating an existing capture facility or planning to site, construct,
expand, or operate a new capture facility to have a permit issued
pursuant to this section.

### [Permit application requirements]{.underline}.

Each application for a permit under this section shall contain such
information as may be required under regulations promulgated by the
Commission, including but not limited to information respecting---

#### estimates of the percentage and total quantity of carbon dioxide proposed to be captured;

#### the site at which the capture facility will be located; and

#### risk characterization and risk management of any risks identified by the Administrator in accordance with section I04.

### [Permit issuance]{.underline}.

#### [Procedure]{.underline}.

Upon the filing of any application to site, construct, expand, or
operate a capture facility, the Commission shall, within \_\_\_\_
days---

##### set the matter for hearing;

##### give reasonable notice of the hearing to all interested persons, including the State electric regulatory commission and State environmental protection agency of the State in which the capture facility is or will be located and, if not the same, the Governor-appointed State agency described in section 202(a) of this chapter;

##### decide the matter in accordance with this subsection; and

##### issue or deny the appropriate permit accordingly.

#### The Commission must consider the following factors in determining whether to approve or deny an application:

##### for a capture facility that is a coal-fired power generation facility, the efficiency of the capture and geologic sequestration of carbon dioxide; and

##### with respect to the environmental impacts of the siting of a capture facility, the nature of the area where the capture facility is to be sited, including, but not limited to:

###### the proximity of critical habitats designated under the Endangered Species Act;

###### the proximity of drinking water aquifers or supplies;

###### the proximity to identified State or Federal natural areas;

###### the nature of the community, including its racial, ethnic and socioeconomic makeup; and

###### the impact of increasing the ambient concentration of other pollutants.

#### The Commission\'s consideration of the factors set forth in paragraph (ii)(B) of this subjection does not preempt other consideration required by Federal law not inconsistent with this statute.

#### In order to issue a permit to site, construct, expand, or operate a capture facility, after public notice and hearing as described in subsection (c)(i) of this section, the Commission must find as follows:

##### that the operation of the capture facility will comply with the standards set out in and promulgated in accordance with section 401**;**

##### in the case of siting or construction, that the capture facility site is consistent with the public interest in light of the considerations set out in subsection (c)(ii)(B);

##### in the case of siting or construction, that a good faith effort has been made to obtain the consent of a majority of the owners having property interests affected by the capture facility and that the owner or operator intends to acquire any remaining interest by eminent domain or as otherwise allowed by this chapter; and

##### that the operation of the proposed capture facility is in the public interest.

#### Except as provided in this section, the Commission may approve an application described in subsection (b) of this section, in whole or part, with such modifications and upon such terms and conditions as the Commission finds necessary or appropriate.

#### [Certificate of Operation]{.underline}.

Prior to commencing construction of a capture facility, the owner or
operator of the capture facility shall record with the Commission a
certificate, entitled \"Certificate of Operation of Carbon Dioxide
Capture Facility,\" which shall contain a statement that the owner or
operator has acquired by eminent domain or otherwise all necessary
ownership rights with respect to the capture facility, and the date upon
which the capture facility shall be effective.

## 302 Permits for Carbon Dioxide Pipelines {#permits-for-carbon-dioxide-pipelines-1 .unnumbered}

### Permit requirements.

The Commission shall promulgate within 18 months after the date of
enactment of this chapter regulations requiring each person owning or
operating an existing carbon dioxide pipeline as defined in
section 102(e) or planning to site, construct, expand, or operate a new
carbon dioxide pipeline as defined in section 102(e) to have a permit
issued pursuant to this section.

### [Permit application requirements]{.underline}.

Each application for a permit under this section shall contain such
information as may be required under regulations promulgated by the
Commission, including but not limited to information respecting---

#### engineering design data;

#### surveyed route data;

#### risk characterization and risk management of any risks identified by the Administrator in accordance with section I04; and

#### all other materials deemed necessary by the Commission to fulfill the requirements of this chapter.

### [Permit issuance]{.underline}.

#### [Procedure]{.underline}.

Upon the filing of any application to site, construct, expand, or
operate a carbon dioxide pipeline, the Commission shall, within \_\_\_\_
days---

##### set the matter for hearing;

##### give reasonable notice of the hearing to all interested persons, including the State electric regulatory commission and State environmental protection agency of the State or States in which the carbon dioxide pipeline is or will be located and, if not the same, the Governor-appointed State agency described in section 202(a) of this chapter;

##### decide the matter in accordance with this subsection; and

##### issue or deny the appropriate permit accordingly.

#### The Commission must consider, in determining whether to approve or deny an application, with respect to the environmental impacts of the siting of a carbon dioxide pipeline, the nature of the area or areas where the carbon dioxide pipeline is to be sited, including:

##### the proximity of critical habitats designated under the Endangered Species Act;

##### the proximity of drinking water aquifers or supplies;

##### the proximity to identified State or Federal natural areas; and

##### the nature of the community, including its racial, ethnic and socioeconomic makeup.

#### In order to issue a permit to site, construct, expand, or operate a carbon dioxide pipeline, after public notice and hearing as described in subsection (c)(i) of this section, the Commission must find as follows:

##### that the operation of the carbon dioxide pipeline will comply with the standards set out in section 401;

##### in the case of siting or construction, that the carbon dioxide pipeline site is consistent with the public interest in light of the considerations set out in subsection (c)(ii);

##### in the case of siting or construction, that a good faith effort has been made to obtain the consent of a majority of the owners having property interests affected by the capture facility and that the owner or operator intends to acquire any remaining interest by eminent domain or as otherwise allowed by this chapter; and

##### that the operation of the proposed carbon dioxide pipeline is in the public interest.

#### Except as provided in this section, the Commission may approve an application described in subsection (b) of this section, in whole or part, with such modifications and upon such terms and conditions as the Commission finds necessary or appropriate.

#### [Certificate of Operation]{.underline}.

Prior to commencing construction of a carbon dioxide pipeline, the owner
or operator of the carbon dioxide pipeline shall record with the
Commission a certificate, entitled \"Certificate of Operation of Carbon
Dioxide Pipeline,\" which shall contain a statement that the owner or
operator has acquired by eminent domain or otherwise all necessary
ownership rights with respect to the carbon dioxide pipeline, and the
date upon which the carbon dioxide pipeline shall be effective.

## 303 Permits for Storage Facilities {#permits-for-storage-facilities-1 .unnumbered}

### Permit requirements.

The Administrator shall promulgate within 18 months after the date of
enactment of this chapter regulations requiring each person owning or
operating an existing storage facility for the geologic sequestration of
carbon dioxide or planning to site, construct, expand, or operate a new
storage facility for the geologic sequestration of carbon dioxide to
have a permit issued pursuant to this section.

### [Permit application requirements]{.underline}.

Each application for a permit under this section shall contain such
information as may be required under regulations promulgated by the
Administrator, including but not limited to information respecting---

#### estimates of the quantity of carbon dioxide proposed to be sequestered;

#### estimates of the quantity of carbon dioxide which can safely be sequestered in the reservoir;

#### the site at which the storage facility will be located;

#### the horizontal and vertical boundaries of the storage facility;

#### the means proposed for transporting the carbon dioxide to the storage facility; and

#### risk characterization and risk management of any risks identified by the Administrator in accordance with section I04.

### [Permit issuance]{.underline}.

#### [Procedure]{.underline}.

Upon the filing of any application to site, construct, expand, or
operate a storage facility, the Administrator shall, within
\_\_\_\_ days---

##### set the matter for hearing;

##### give reasonable notice of the hearing to all interested persons, including the State environmental protection agency of the State in which the storage facility is located and, if not the same, the Governor-appointed State agency described in section 202(a) of this chapter;

##### decide the matter in accordance with this subsection; and

##### issue or deny the appropriate permit accordingly.

#### The Administrator must consider, in determining whether to approve or deny an application, with respect to the environmental impacts of the siting or expansion of a storage facility, the nature of the area where the storage facility is to be sited, including:

##### the proximity of critical habitats designated under the Endangered Species Act;

##### the proximity of drinking water aquifers or supplies;

##### the proximity to identified State or Federal natural areas; and

##### the nature of the community, including its racial, ethnic and socioeconomic makeup.

#### In order to issue a permit to establish a storage facility, after public notice and hearing as described in subsection (c)(i) of this section, the Administrator must find as follows:

##### that the operation of the storage facility will comply with the standards set out in section 402; and the definition of "geologic sequestration" in 102(l);

##### that the storage facility and reservoir are suitable and feasible for the injection and storage of carbon dioxide;

##### that the storage facility site is consistent with the public interest in light of the considerations set out in subsection (c)(ii);

##### that a good faith effort has been made to obtain the consent of a majority of the owners having property interests affected by the storage facility and that the owner or operator intends to acquire any remaining interest by eminent domain or as otherwise allowed by this chapter;

##### that the use of the storage facility for the geologic sequestration of carbon dioxide will not materially impair or contaminate other formations containing fresh water or oil, gas, coal, or other commercial mineral deposits; and

##### that the operation of the proposed storage facility will not unduly endanger human health and the environment and is in the public interest.

#### Except as provided in this section, the Administrator may approve an application described in subsection (a) of this section, in whole or part, with such modifications and upon such terms and conditions as the Administrator finds necessary or appropriate.

#### [Certificate of Operation]{.underline}.

Prior to commencing injection of carbon dioxide, the owner or operator
of the storage facility shall record with the Agency a certificate,
entitled \"Certificate of Operation of Carbon Dioxide Sequestration
Facility,\" which shall contain a statement that the owner or operator
has acquired by eminent domain or otherwise all necessary ownership
rights with respect to the storage facility, and the date upon which the
storage facility shall be effective.

## 304 Permits for Third--Party Injectors {#permits-for-thirdparty-injectors-1 .unnumbered}

### Permit requirements.

The Administrator shall promulgate within 18 months after the date of
enactment of this chapter regulations requiring each person planning to
geologically sequester carbon dioxide at a storage facility owned by
another person to have a permit issued pursuant to this section.

### [Permit application requirements]{.underline}.

Each application for a permit under this section shall contain such
information as may be required under regulations promulgated by the
Administrator, including but not limited to information respecting---

#### estimates of the quantity of carbon dioxide proposed to be sequestered;

#### the means proposed for transporting the carbon dioxide to the storage facility; and

#### risk characterization and risk management of any risks identified by the Administrator in accordance with section I04.

### [Permit issuance]{.underline}.

In order to issue a permit to a third--party injector to geologically
sequester carbon dioxide at a storage facility, the Administrator must
find that the sequestration by the third‑party injector at the proposed
storage facility will not unduly endanger human health and the
environment and is in the public interest.

**D. Liability Management**

**1. Why this issue is important to the question of supporting CCS
efforts**

> **while still protecting environment, health, and safety.**

One of two purposes of this proposed legislation is to reduce the
regulatory and legal barriers to the implementation of CCS projects. One
of the most formidable barriers facing potential CCS operations is the
possible liability costs of these operations. If the costs of CCS
outweigh benefits, it should not go forward. However, studies indicate
that the benefits of CCS operations will be substantial and come with
little risk of harm. However, differing rules and regulations on
liability exist, and pose a problem in promoting CCS. CCS operators need
some assurance that liability costs will not outweigh the benefit
derived from implementing CCS operations. Without this predictability,
the threat of liability costs will likely deter a large number of
potential operators. Thus, creating and adopting a liability scheme that
encourages private industry to implement CCS operations is necessary.

The second purpose of this legislation is to protect public health and
personal property rights. Like water and oil, carbon dioxide (CO~2~) is
a "fugitive" substance.[^56] Thus, when CO~2~ is injected underground it
will naturally migrate throughout the pore space.[^57] This natural
migration could lead CO~2~ to travel upward throughout the reservoir
into undetected or abandoned portions of the reservoir, or into portions
of the reservoir that are not owned by the operator.[^58] Although
unlikely, large surface releases could pose health risks to humans, in
the form of asphyxiation or the other effects from prolonged exposure to
high concentrations of CO~2~.[^59] Exposure of 1 to 5% atmospheric CO2
mixture can result in physical effects, such as increased breathing;
above 10% usually results in loss of consciousness; and most
concentrations above 30% are lethal.[^60] Furthermore, CO~2~ seepage
could harm flora and fauna, and could potentially ruin nearby ecosystems
and agriculture.[^61] Even if it remains underground, CO~2~ could cause
saline intrusion into potable aquifers, could make sources of oil and
gas unattainable, could create pressure changes causing ground heave,
and could even trigger seismic events.[^62] Even if there were no direct
physical harm or trespass, a CO~2~ release would increase CO~2~ levels
in our atmosphere, a leading cause of climate change. Thus, any
liability scheme must also ensure that public health and private
property rights will be protected and any harms will be compensated.

**2**. **What policy decisions were made on this issue for purposes of
proposed**

**legislation and why.**

> **a. Possible Causes of Action**

There are four general causes of action that may arise in the event of a
CO~2~ release. These claims contain similar elements, but some claims
may be better suited for particular sets of facts. In addition, there
exists the possibility of claims of harm arising from climate change.

> **1. Negligence**

The most likely cause of action would be a general negligence claim that
is a broader claim and could cover a wide variety of harms.[^63] A
negligence claim could be used to address harm to human and
environmental health.[^64] In order to prove a negligence claim, the
plaintiff would have to prove four elements: duty, breach, causation,
and damages. The plaintiff would have to show that the operator had a
duty of care over the CCS operation, that the operator breached that
duty, and that the plaintiff's injuries were caused by that breach.
[^65] Damages could be in the form of either property damage or damage
to plaintiff's health.[^66]

> **2. Trespass**

Another claim could be a trespass claim. As discussed previously, CO~2~
will naturally migrate throughout the reservoir. This could lead to the
CO~2~ migrating into pore space that is not owned by the operator,
giving rise to a trespass cause of action. The plaintiff owner would
need to show that the unauthorized entry of the CO~2~ into her property
prevented her from making use of that pore space.[^67] The remedy for
trespass is usually an injunction, payment for the loss of property
value and/or costs of restoration.[^68]

> **3. Nuisance**

Another possible cause of action is that of nuisance. The difference
between a nuisance claim and a trespass claim is that a nuisance claims
arises from an interference of the enjoyment of one's property, while a
trespass claim arises from an invasion of one's property.[^69] Damages
for nuisance and trespass are virtually identical.[^70]

> **4. Trespass and Nuisance as State Law Claims**

Claims for trespass and nuisance are property claims and would be
similar to claims under natural gas migration. Thus, these claims may be
better understood and addressed under similar state law. To the extent
that state laws are not consistent or unpredictable, we propose model
state legislation in subchapter VI. Therefore, this legislation does not
seek to preempt any state law claims of trespass or nuisance.

> **5. Strict Liability**

Another possible claim could be a strict liability claim. Strict
liability claims are reserved for abnormally dangerous activities under
section 519 and 520 of the Restatement (Second) of Torts.[^71] Under
strict liability, an operator can be found liable even is she used "all
possible preventative measures."[^72]

In light of our goal, it would seem far too harsh to impose a strict
liability standard on CCS operators. This type of scheme would likely
discourage the private sector from implementing CCS, unless the
government agreed to grant a full liability shield to permitted CCS
operators. A liability shield on top of a strict liability scheme would
place the federal government in the dubious position of accepting all
liability for CCS operations and would essentially place the burden on
taxpayers.

> **6. Climate Change**

The purpose of CCS operations is to reduce the amount of CO~2~ emitted
into our atmosphere, as these emissions are the primary cause of
atmospheric warming.[^73] Thus, one other perceived harm that could
arise from CCS operations is that a major release of CO~2~ would
contribute to climate change. Damages from climate change harm is a
somewhat novel legal concept but is a possible uncertainty in CCS. If
liability could be imposed on CCS operators for a CO~2~ release that did
not cause any harm other than increasing CO~2~ levels in our atmosphere,
an unlikely occurrence given our standards, this scheme would fail to
reach our goal of encouraging implementation of CSS. It seems
counterproductive to impose climate change liability on operators who
have undertaken demonstrated efforts to reduce harm from CO~2~ emissions
and also have complied with government mandated standards designed to
avoid such harm. If operators are held liable for their contribution to
climate change because of a CO~2~ release, they will have much less
incentive to implement CCS.

> **7. Conclusion**

Liability regulation in the legislation should be limited to physical
harm to humans, animals, and plant life. As noted above, claims of
property damage, in the form of trespass and nuisance, should be
regulated by state law.

A strict liability doctrine should not be adopted for CCS operations, in
that it would greatly increase the risk of liability costs for CCS
operators. Finally, CCS operators should not bear liability for climate
change claims. The purpose of CCS operations is specifically aimed to
address the harms of climate change. If operators take on the burden of
implementing CCS operations, they should not also be held liable for
climate change claims.

> **b. Liability Schemes**
>
> **1. Insurance**

The most commonly used method for managing liability is insurance.
Insurance serves three related but separate functions. First, insurance
transfers risk from parties who are risk averse to enterprises more
willing to bear risk. Second, insurance spreads risk by combining
individual risks into a general pool. Third, insurance performs a
risk-allocation function by charging premiums that reflect the risk
posed by each individual that is insured.[^74] Essential to setting
proper premium prices and setting aside the proper funds in case of an
accident is a knowledge of the frequency and severity of a CCS disaster.
Because CCS is a very new technology and there has been no real
opportunity to assess the frequency and severity of CCS events, CCS is
not well suited, at least at this point, for actuarial models.[^75] If
private insurance companies set premium prices too low it could render
them unable to cover the damages that stem from a CCS accident. On the
other hand, if insurance companies set premiums too high, this could
deter possible operators from entering into the CCS business. Without a
working knowledge of the frequency and/or severity of CCS accidents, a
private insurance scheme standing alone would be little more than
guesswork and would probably not adequately reach both our goals of
encouraging private industry to implement CCS while protecting public
health and welfare.

> **2. Liability Cap**

Another liability scheme that has worked in other areas is a liability
cap. The Price-Anderson Act, adopted in 1957, regulates liability for
the nuclear power industry in the United States.[^76] This act allows
for a limited liability shield, in that each nuclear plant operator must
obtain primary insurance coverage up to 300 million dollars.[^77] In the
event that damages from a nuclear accident were to exceed the primary
insurance coverage, each nuclear operator would then be required to
purchase secondary insurance coverage of 15 million dollars.[^78] If the
damages of a nuclear accident were ever to exceed both the primary and
secondary insurance coverage, the nuclear operators would be shielded
form any amount over the secondary coverage and the federal government
would take on the remaining liability.[^79]

**3. Liability Shield**

Another possible scheme would be to grant a complete liability shield to
all CCS operators that have followed certain safety rules and
regulations as set out by the appropriate federal agency.[^80] Under
this scheme, as long as the operator followed all CCS safety
regulations, she would be completely exempt from all claims. This scheme
would encourage private industry to implement CCS technology by removing
the liability costs associated with CCS. This scheme, however, would
deprive possible victims of necessary compensation unless the federal
government agreed to take on the liability that would have been borne by
the CCS operators. Furthermore, even if the federal government agreed to
a liability shield, it may not adequately protect the public welfare as
CCS operators would have less incentive to adopt the safest practices in
implementing CCS. Thus, while a partial liability shield may be
plausible, a complete liability shield would not be the best method to
reach our twofold goal of encouraging private investment, while
adequately protecting human and environmental health.

> **4. Bonding**

Another possibility is bonding. Typically, the operator or a third party
would post the bond as a promise of compliance with federal
regulations.[^81] The bond would then be released back to the original
payor when its promise of compliance is fulfilled.[^82] The main issue
in this context would be the length of time that is required of the
operator to be in compliance before his promise is deemed to be
fulfilled.[^83] If compliance is incomplete or insufficient, the bond is
forfeited and used to finance any claims arising from these
operations.[^84] Bonding has been used as a liability measure in coal
mining projects and hard-rock mining projects.[^85]

Bonding is less favorable to private investment than a partial liability
shield because the bond shifts the burden of proof from the injured
party proving that harm was done to the operator to prove that
compliance criteria was met.[^86] At the same time, the public sector is
only protected up to the amount of the bond posted -- not necessarily
for the full amount of potential damages.[^87] However, if the operator
remains solvent after forfeiting its bond, harmed parties may seek
additional remedies through the court system.[^88]

> **5. Compensation Fund**

The final possibility would be to establish some sort of compensation
fund. In this scheme, those that create the risk, the CCS operators,
would make payments into a fund that would be used to address any harms
caused by CCS operations. The compensation fund would be beneficial to
injured parties in that the injured parties would not necessarily have
to trace their injury to a specific operator. Instead, they would have
to show that their injuries resulted from the negligence of any CCS
operator and would be awarded damages from the fund.

Under this scheme, one major issue would be determining how much each
operator should contribute to the fund. Payment could be based on
several factors such as, amount of CO~2~ stored, the injection site's
proximity to population centers, and the physical characteristics of the
reservoir.[^89]

> **c. Reaching Our Goal**
>
> **1. Compensation Fund**

To reach our goal of encouraging private industry to implement CCS while
protecting public health and welfare, the best liability scheme would be
to establish a compensation fund. Under this scheme, the federal
government would collect fees from CCS operators to provide funding for
injuries resulting from the release of CO~2~. Three major issues
immediately arise when implementing a compensation fund: 1) the method
of financing the fund; 2) what events are compensable; and 3) the amount
of compensation awarded to each injured party.[^90]

The first step is one that can partially be addressed in this memo.
However, both steps 2 and 3 are beyond our ability to determine at this
point. The type of injuries that can possibly occur and what the
compensation should be for these injuries is best left for EPA to
determine. EPA has particular expertise in determining environmental
safety risks and has specifically addressed the effects of CO~2~ on
human health.[^91] Both determinations should be based not only on sound
environmental and actuarial science, but should also be based on notions
of justice and fairness.

Thus, we are faced with the issue of determining the manner in which the
fund is to be financed. One possibility would be to consider the amount
of CO~2~ stored, i.e. -- the more you inject, the more you pay. Another
possibility is a risk-based contribution.[^92] Under this model, each
operator's contribution to the fund would be determined by: 1) an
analysis of the severity of damages that a CO~2~ release would cause
based on the amount of CO~2~ stored and its proximity to populations
centers; and 2) consideration of the likelihood of a CO~2~ leak based on
the physical characteristics of the reservoir.

While the risk-based model may seem to be the most fair, it should be
noted that every injection site will be subject to the same regulations
and safety standards. Thus, using the likelihood of a release as a
factor in determining each operator's contribution could be a redundant
exercise in risk evaluation. If every site is subject to the same safety
standards, then the amount of CO2 stored should be the basis of each
operator's contribution.

The other option is to have a uniform contribution.[^93] In other words,
each operator would pay the same amount to the fund, regardless of
amount stored, physical characteristics, and proximity to population
centers. While this option may prove to be more efficient from an
administrative point of view, it may discourage smaller operators who
would have to pay the same amount as large operators and would not
encourage the use of the most safe injection sites. In an effort to
establish a contribution model that accurately reflects the risk imposed
by each operator, contributions should be based on the amount of CO~2~
injected.

> **2. Liability Cap**

It should also be noted that a liability cap, similar to the
Price-Anderson Act, could also meet our goals. However, to implement
this scheme, there must be some study into the severity and likelihood
of CCS incidents. Under this model all CCS operators would be required
to purchase a specified amount of insurance. Although the effects of a
CO~2~ disaster on human and environmental health have not been
adequately studied, it is probably safe to say that they would not be as
severe as the effects of a nuclear disaster. Thus, the 300 million
dollars of insurance coverage required for nuclear operators is far
higher than is necessary for CCS operators. In order to determine the
proper amount of insurance coverage, there would have to be studies
undertaken to determine what the cost of a CCS incident would be. Using
these studies, an operator's liability would presumably be capped at an
appropriate level and the federal government would take on liability
exceeding the operator's insurance coverage.

This model has proven to be quite successful in the nuclear energy field
for over 50 years. Drawing conclusive comparisons between nuclear and
CCS operations may not properly address all the concerns with CCS
operations, but using the Price-Anderson Act as a model may serve as a
good starting point. While this model still requires significant premium
payments from operators, it should encourage them to enter the CCS arena
knowing that their liability is capped at a certain level. At the same
time, the liability cap would be set high enough to compensate for the
possible damages that could result from any sort of accident that stems
from CCS operations. Furthermore, if the insurance ceiling is deemed to
be too high, legislation could allow for a flexible ceiling depending on
future studies of the frequency and severity of CO~2~ releases.

While this model is not useful until there is some determination of the
severity and likelihood of CCS incidents, it could be a model used in
the future. After enough data is collected on CCS operations, Congress
could reconsider whether the liability cap is a better method of
managing liability than a compensation fund.

**3. Proposed Legislation**

**Subchapter V. Liability for Owners and Operators of Capture
Facilities, Carbon Dioxide**

> **Pipelines and Storage Facilities**

## 501 Liability of Owners and Operators for Specified Harms {#liability-of-owners-and-operators-for-specified-harms-1 .unnumbered}

The liability of owners and operators of capture facilities, carbon
dioxide pipelines and storage facilities for release of carbon dioxide
or accidents causing harm to human health or the environment that are
associated with geologic sequestration of carbon dioxide shall be
limited to compensation from a government--administered fund set out
below.

## 502 Source of Compensation Fund {#source-of-compensation-fund-1 .unnumbered}

### Fee amount.

The Administrator is authorized to collect a fee from all persons with
whom an indemnification agreement is executed under this section. This
fee shall be a fixed amount, as determined by the Administrator, per
year per ton of carbon dioxide injected for storage facilities licensed
under section III03 of this chapter. Such fees will be used to establish
and fund the Compensation Fund.

### [Fee reduction]{.underline}.

The Administrator is authorized to reduce the fee set forth above. The
Administrator shall establish criteria in writing for determination of
the fee for storage facilities licensed under section III03 of this
chapter, taking into consideration such factors as---

#### the type, size, and location of the storage facility involved, and other factors pertaining to the hazard, and

#### the nature and purpose of the storage facility.

### [Use of funds]{.underline}.

The Compensation Fund shall only be used as compensation for injuries
that may arise from the release of carbon dioxide from storage
facilities.

## 503 Administrative Hearings {#administrative-hearings-1 .unnumbered}

The assessment of any claim arising under this chapter will be governed
by the Consolidated Rules of Practice as set out in 40 C.F.R. Part 22.

## 504 Compensable Injuries and Compensation Amount {#compensable-injuries-and-compensation-amount-1 .unnumbered}

### The Administrator shall establish criteria in writing for determination of---

#### the types of injuries that are compensable under the Compensation Fund; and

#### the amount to be paid for each type of injury identified under subsection (c)(i) of this section.

### An Administrative Law Judge (ALJ) may authorize compensation for injuries if the person requesting such payment has demonstrated to the ALJ that---

#### the type of injury is compensable under subsection (a)(i) of this section;

#### the injury is the result of a carbon dioxide release or accident resulting from the geologic sequestration of carbon dioxide; and

#### such costs are reasonable and equitable.

### If an injury is not listed in subsection (a)(i) of this section, an ALJ retains the authority to determine

#### whether the injury resulted from the geologic sequestration of carbon dioxide; and

#### the compensation amount to be awarded for that injury.

### Any determination under subsection (c) of this section that compensation should be awarded shall be made within the compensation limits as set out by the Administrator under subsection (a)(ii) of this section.

## 505 Source of Compensation {#source-of-compensation-1 .unnumbered}

### Any injuries deemed compensable under section 504 shall be paid from the Compensation Fund under section 502(a).

### After any incident resulting from the geologic sequestration of carbon dioxide involving damages, the Administrator, as appropriate, shall---

#### make a survey of the causes and extent of damage; and 

#### expeditiously submit a report setting forth the results of such survey to Congress, to the Representatives of the affected districts, to the Senators of the affected States, and (except for information that will cause serious damage to the national defense of the United States) to the public, to the parties involved, and to the courts.

### [Plan for distribution of funds when liability exceeds Compensation Fund]{.underline}.

#### Whenever the United States District Court for the District of Columbia determines upon the petition of any interested person that public liability from a single incident resulting from geologic sequestration may exceed the Compensation Fund under section 502(a) of this chapter, the Administrator shall submit to the Congress within 90 days:

##### an estimate of the aggregate dollar value of claims for personal injuries and environmental damage that have arisen or will arise from such incident and that exceed the amount of aggregate funds collected under section 502(a) of this chapter; 

##### recommendations for additional sources of funds to pay claims exceeding the applicable amount of aggregate funds collected under section 502(a) of this chapter, which recommendations shall consider a broad range of possible sources of funds (including possible revenue measures on the sector of the economy, or on any other class, to which such revenue measures might be applied); 

##### one or more compensation plans that either individually or collectively shall provide for full and prompt compensation for all valid claims and contain a recommendation or recommendations as to the relief to be provided, including any recommendations that funds be allocated or set aside for the payment of claims that may arise as a result of latent injuries that may not be discovered until a later date; and

##### any additional legislative authorities necessary to implement such compensation plan or plans.

## 506 Claims Exempt From Compensation Fund Coverage {#claims-exempt-from-compensation-fund-coverage-1 .unnumbered}

### **(a)** No claims will be paid for harms based solely on any carbon dioxide contribution to climate change. {#a-no-claims-will-be-paid-for-harms-based-solely-on-any-carbon-dioxide-contribution-to-climate-change. .unnumbered}

### Claims under this chapter are limited to direct harm of human health or the environment from exposure to carbon dioxide or accident associated with its release from reservoirs at storage facilities. Claims of trespass and nuisance are governed by the law of the State where a storage facility is located.

**E. Property rights**

1.  **Importance of Ownership Issues and Condemnation to the Question
    of**

> **Supporting Sequestration Efforts While Still Protecting Environment,
> Health, and Safety.**

The injection of carbon dioxide into geologic formations is not new; it
has been used for decades in enhanced oil recovery operations. However,
because of the vast quantities of CO~2~ that will be injected and the
long-term storage that is required, CCS technology faces several novel
challenges, particularly in the area of subsurface property rights and
liability.[^94]

a.  **Ownership Issues Related to CCS Technology**

Geologic storage of immense amounts of carbon dioxide for hundreds, or
perhaps thousands, of years presents very complex property issues.
Carbon dioxide can be sequestered in a number of different geologic
formations, including depleted oil and gas reservoirs, saline aquifers,
coal seams, and deep sub-seabed formations.[^95] The geologic formation
subject to injection will dictate the property rights that are
implicated. MIT's recent study on the Future of Coal, notes that
"\[b\]ecause of their large storage potential and broad distribution, it
is likely that most geological sequestration will occur in saline
formations."[^96] However, the study also concluded that most initial
carbon sequestration projects will likely utilize depleted oil and gas
reservoirs because of their availability, the quality of existing
subsurface data, and the potential for economic return.[^97]
Additionally, whether sequestration takes place on-shore or off-shore
further impacts the legal framework at issue.[^98] Finally, because
there is already legal precedent governing the injection of carbon
dioxide for enhanced oil recovery operations, if the CO2 were initially
injected for this purpose, it is likely that it would be governed by
that body of law.[^99]

> **1.** **Depleted Oil and Gas Reservoirs**

The injection of carbon dioxide into oil and gas reservoirs implicates a
number of property interests, including surface owners, mineral owners,
lessees of solid minerals, oil and gas lessees, owners of non-operating
interests, owners of future interests and the rights of adjacent
property owners.[^100] In most of the world, subsurface minerals and
pore space is the property of the central government, simplifying
consideration of property issues for carbon sequestration.[^101]
However, in the United States, mineral rights and subsurface pore space
ownership on private land are held by private parties, adding great
complexity to the property rights equation.

The Interstate Oil and Gas Compact Commission ("IOGCC") Geologic Carbon
Dioxide Sequestration Task Force, "identified three working models that
can provide technological and regulatory guidance for \[geologic
storage\]: 1) injection of CO~2~ into underground formations for
enhanced oil recovery (EOR) operations; 2) storage of natural gas in
geologic reservoirs; and 3) injecting acid gas into underground
formations."[^102] According to the IOGCC Taskforce, the law governing
short term storage of natural gas is the most useful for the
consideration of CCS, however, we will address each of these legal
paradigms in turn because each adds to our understanding of the
complexity of the property rights at issue.

> **A. Enhanced Oil Recovery Operations ("EOC")**

Through enhanced oil recovery operations, CO~2~ is injected into an oil
and gas reservoir in order to re-pressurize the reservoir and increase
oil and gas recovery (termed secondary and tertiary recovery).[^103] EOC
operations have raised a number of legal questions regarding the
operator's liability to adjacent property owners. While the operator has
"the right to a fair share of the oil and gas in place and a duty to
protect the common source of supply" physical invasion of a neighboring
mineral estate with a substance injected to enhance recovery is
forbidden.[^104] As a result, EOC operations will generally only take
place in a field that has been unitized.[^105] With 'field unitization,'
oil or gas field leases for resource development are combined, thereby
creating a field-wide operation; liability is removed as a driving
concern because production and profits are shared by all unit members,
and the field is managed in order to optimize resource recovery.[^106]
In EOC operations that have not been unitized, liability has been
imposed on the operator for mineral loss on the basis of trespass and
nuisance.[^107]

In the case of secondary recovery operations, the power of state
regulatory boards to grant permits for forced unitization has been
consistently upheld.[^108] The unitization method may be of particular
interest in the regulation of CCS given the uncertainty of where the
CO~2~ will travel once it is injected into a reservoir. For example, in
*Phillips Petroleum Co. v. Stryker*, the Alabama Supreme Court reversed
a finding of damages to a landowner's reservoir that bordered a unitized
EOR project, holding that under Alabama law, the adjacent landowner
could have petitioned for inclusion into the unitized project in order
to protect his underlying reservoir.[^109] In coming to this conclusion,
the Court stressed the importance of state administrative power to
create and protect unitization projects.

B.  **Hazardous Waste Injection**

Underground injection wells dispose of about 50% of the liquid hazardous
waste produced in the United States, however, this amount is very small
compared to the enormous quantities of carbon dioxide that will be
stored in conjunction with CCS projects.[^110] Leading caselaw in this
area, premised on trespass, negligence and nuisance, affirms the
liability of operators for the intrusion of hazardous waste into the
pore space of adjacent landowners.[^111] However, these cases limit the
adjacent landowner's likelihood of recovery by placing the burden of
proof on the plaintiff and holding that claims for subsurface invasions
"are only valid so long as the invasions actually interfere with
'reasonable and foreseeable' use of the subsurface."[^112] In other
words, the adjacent land owner must be actually damaged in that their
own mineral operations were impacted, or they must demonstrate that they
had an expectation of profit from the use of their pore space for
storage that is now impaired.

> **C. Natural Gas Storage**

Natural gas is injected into shallow formations for temporary storage to
maintain reserves.[^113] The storage of natural gas in depleted
reservoirs is not entirely analogous to the storage of carbon dioxide in
that natural gas is generally stored for very short periods of time to
provide for increased demand in winter months.[^114] There are actually
two separate issues to consider when examining the law of natural gas
storage: 1) the ownership of the injected gas; and 2) the ownership of
the associated pore space.

i.  ***Ownership of the Injected Natural Gas***

State law has held the natural gas injected into underground reservoirs
remains the property of the injecting operator.[^115] This has been
found to be the case even where the injected natural gas migrated to an
adjacent property owner's reservoir where the operator has not obtained
storage rights.[^116] "The storing party was found to have retained
ownership rights even though the gas had migrated to production wells
that were on the third party's land not within the designated storage
area."[^117]

***ii.*** ***Ownership of the Pore Space***

The property law of each state will control ownership of the depleted
oil and gas reservoir pore space. There is no clear consensus on whether
the ownership of the pore space lies with the surface estate or the
mineral estate, and consideration of these rights varies considerably
from state to state.[^118] The two primary theories governing pore space
ownership are termed the American Rule and the English Rule.

Under the American Rule, once subsurface minerals have been removed from
the pore space, the surface owner, and not the mineral owner, retains
the right to use the depleted space for storage.[^119] In essence, the
mineral estate owner only has right to the actual minerals, not the
reservoir containing those minerals. This view has been adopted by a
number of states, including Oklahoma, Louisiana, and Michigan.[^120]
However, the Michigan Court was careful to note that any oil or natural
gas that remains in the pore space can serve to preclude the surface
owner using the reservoir for storage.[^121] Because certain amounts of
oil and natural gas typically remain in formations even after recovery
operations are completed, this could complicate use of this space for
CCS even in states where ownership of the pore space clearly lies with
the surface owner. The owner of the mineral estate (and any leased,
operating, or future interests thereto) would retain an interest in the
pore space for which he would have to be compensated.

Conversely, under the English Rule, which is followed in much of Canada
as well as Kentucky, the mineral owner retains the rights to the
subsurface pore space even after all minerals are extracted.[^122]
Complicating matters further, there are a number of states where the
ownership of pore space has not been addressed or remains unsettled.
This is of particular concern in Texas, where there is no clear general
rule on pore space ownership unless it has been specified by
contract.[^123]

Legal commentators have also failed to come to any consensus as to the
rightful ownership of pore space as between the mineral and surface
estates. In their article entitled *Geologic Carbon Dioxide
Sequestration: An Analysis of Subsurface Property Law*, authors
Elizabeth J. Wilson & Mark A. de Figueiredo conclude that while a
majority of states adopt the view that the surface owner has rights to
the spent reservoir space, mineral owners often retain a valid interest,
so it is in the best interest of the entity who wishes to obtain rights
to the pore space to compensate all estate owners.[^124] In contrast,
Williams and Meyers, in their treatise on oil and gas law, argue that
the mineral estate, as the dominant estate, should retain ownership of
the associated pore space even after the minerals are depleted.[^125]

> **2. Saline Formations**

The property rights concerning saline aquifers are dependent on a
separate legal regime governing groundwater rights.[^126] While there is
a developed body of law on the use of depleted oil and gas reservoirs
for natural gas storage, there is virtually no caselaw on the use of
saline aquifers for storage and associated property rights.[^127]
Rather, water law has focused on property rights concerning the use of
groundwater for consumption.[^128] "In general, states follow one of
five major doctrines with respect to ownership of groundwater rights:
(1) absolute dominion; (2) reasonable use; (3) correlative rights; (4)
the restatement rule; or (5) prior appropriation."[^129]

Pursuant to the absolute dominion rule, the owner of the surface estate
has "absolute dominion" over all resources on, above, or below his
property, including any underlying aquifer. The "absolute dominion"
owner may make any use of the underlying aquifer without risk of
liability to an adjoining landowner. [^130]

The next three doctrines are all essentially variants of the reasonable
use rule. The reasonable use owner may also use underlying groundwater
without restriction, as long as that use is reasonable and beneficial to
the land itself. The correlative rights rule is similar, except that
owners over an aquifer are held to have apportioned shares of the
aquifer dependent upon the amount of their land that overlies the
resource. The restatement rule (based on §858 of the Restatement
(Second) of Torts) is very similar to the reasonable use rule except
that it allows use of the groundwater outside of the land overlying the
aquifer.[^131] An owner will be liable to adjacent property owners for
unreasonable use that harms the aquifer.[^132]

Finally, under the prior appropriation rule (used throughout most of the
west) the first person to make beneficial use of a water source
establishes precedence over its continued use. However, some states have
imposed a reasonable use requirement on this doctrine.[^133]

> **A. Condemnation and Compensation**

Given the implications of subsurface trespass law outlined above,
establishing a reservoir for use in CCS will almost certainly require
the purchase of all property rights that could be impacted by the
project or the use of some sort of unitization process. The creation of
such a geologic storage unit could potentially take months or years of
negotiation, and some property interests will likely be adverse to use
of their pore space for storage at all. The solutions to these problems
are at least partially addressed by consideration of condemnation under
natural gas law.

The Natural Gas Act of 1938 provides for eminent domain for the
construction of pipelines, a power which the courts have held extends to
the construction of underground storage facilities.[^134] "Thus, if a
gas company is unable to directly contract with property owners for
storage rights, it can still obtain subsurface rights for storage by
initiating condemnation procedures in a state or federal court."[^135]
If a reservoir is not interstate, then corresponding state condemnation
laws must be used.

Most state statutes also provide for voluntary and involuntary
unitization procedures. While these laws are currently focused on
unitization for the purpose of mineral extraction, they could be useful
in the establishment of a reservoir for CCS operations. Under
involuntary unitization, once a certain percentage of owners in the
field agree to unitization (anywhere from 50 to 85%), an application may
be submitted to the state oil and gas or natural resources commission,
and if the application is approved, a unit is created.[^136] Thereafter,
the remaining property interests will be compelled to participate in the
unitized project, and are entitled to receipt of a potion of the
proceeds.

Methods for compensation for natural gas storage remain uncertain. This
issue was explored in depth in *Columbia Gas Transmission Corp. v. An
Exclusive Gas Storage Easement*.[^137] The court's analysis suggested
that an award of "fair market value" could be based on any of the
following methods:

> comparable sales of easements for natural gas in the particular
> formation; present value calculation (if sufficient natural gas exists
> for commercial recovery) of the foreseeable net income flow from the
> property for its foreseeable life"; capitalization of rental income
> for the right to store gas, calculated by multiplying the area to be
> rented with the value of comparable storage rights; calculation of the
> depreciation of the entire tract from the taking of the easement used
> for storage; calculating the difference of the market value of the
> property before and after the taking; mineral lease value, and
> viewpoint value, i.e. the value calculated from the point of view of
> the landowner.[^138]

While this case served to clarify the method of awarding fair market
value for natural gas storage in subsurface formations in Ohio, the law
of valuation remains unclear in most states and is largely
undecided.[^139]

> **B. Spectrum of Property Rights At Issue**

As evidenced by the above discussion, the property rights at issue for
any CCS project will depend upon both the geologic formation in which
the CO2 is injected, as well as the state law governing the particular
type of formation. Any legal and regulatory framework for the promotion
of CCS, would have to take into account, at a minimum, the following
property interests:

1)  Ownership of subsurface rights

    a.  Storage in oil and gas reservoirs

    b.  Storage in saline aquifers (separate legal regime)

    c.  Storage in sub-seabed formations

    d.  Pore space ownership issues

    e.  Trespass and liability issues

2)  Ownership of surface rights

    a.  Pore space ownership issues (overlap with subsurface rights)

    b.  Access and construction of facilities

3)  Severed Estate Issues

    a.  Lessees of solid minerals

    b.  Oil and gas lessees

    c.  Owners of non-operating interests

    d.  Owners of future interests

    e.  Rights of adjacent property owners

4)  Condemnation and unitization

    a.  Condemnation

    b.  Voluntary unitization

    c.  Compulsory unitization

5)  Short term ownership and liability issues

6)  Long term ownership and liability issues.

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2.  **Decisions Made for Purposes of Proposed Legislation and Why**

Due to the spectrum of property interests at issue and the diversity of
treatment of these interests between the states, we do not recommend
preemption of this area of state property law as part of our legislative
scheme. Of particular concern in our analysis is risk of takings claims
from each of these diverse property interests if federal law were to
pre-empt in this area. Also of concern is the large extent of
well-developed state property law that would be pre-empted through
federal legislation, and how this preemptive legislation would interact
with non-preempted state property law.

Furthermore, the IOGCC Task Force report, which has been widely cited by
commentators, specifically recommends that "given the jurisdiction,
experience and expertise of states and provinces in the regulation of
oil and natural gas production and natural gas storage in the United
States and Canada, the states and provinces would be the most logical
and experienced regulators of the geologic storage of carbon
dioxide."[^140] In keeping with this, the Task Force further recommended
that rather than imposing a legal property framework on the states for
the promotion of CCS technology, that "control of the necessary storage
rights should be required as part of the initial GSU site licensing to
promote orderly development and maximize utilization of the GSU" thus
essentially leaving the question of site ownership to established state
law.[^141]

Rather than preempt this area of property law, our proposal includes
limited federal statutory authority for certain key elements, as well as
an appendix supplementing the federal statute with Model State
Legislation that could be adopted by states with less developed or
unclear rules in order to better facilitate the proposed federal scheme.
This model legislation, provided in Appendix A, addresses a number of
factors that are of particular concern to subsurface property rights and
should help to facilitate CCS deployment, including ownership of
subsurface pore space and impacts on surface and mineral estates, state
condemnation provisions, and a post-closure ownership scheme.

The proposed federal legislation provides for the following elements.
Section 701 of the federal statutory scheme sets out a savings clause,
specifically holding that unless otherwise provided herein, nothing in
the statute will serve to preempt state law.

Section 702 provides that no sequestration project may be permitted
without ownership of all necessary property rights. If the owner or
operator is unable to obtain all the required property rights, Section
702 further provides for condemnation proceedings for interstate
projects, modeled after the Natural Gas Act of 1938. If these eminent
domain powers are exercised, the federal legislation provides for
compensation of the property owner at fair market value. Pursuant to the
statute, the EPA may promulgate regulations establishing the method for
determination of fair market value. Section 702 specifically provides
that any right of eminent domain granted pursuant to the statute will
not prejudice the owners of the land to other uses of the property not
acquired for the storage facility. A similar condemnation procedure for
intra-state reservoirs is also provided for in the Model State Statute.

Section 703 of the federal legislation adopts a long-term ownership
transfer and release of liability scheme that should help address
concerns about long-term storage liability issues that are inherent to
CCS. Under the laws governing natural gas storage, it is apparent that
the injecting operator will retain ownership rights of the injected
carbon dioxide, even if it were to migrate outside the designated
receiving reservoir. This retention of ownership raises important issues
regarding long-term monitoring and liability for the stored CO2.
Commentators have noted that likely the only entities that are equipped
to reliably handle the long-term storage requirements of carbon dioxide
are state and federal governments.[^142]

Given these issues, Section 703 of our proposed legislation adopts the
post-closure property transfer and release of liability provisions (in
primary part) promulgated by the IOGCC Task Force in their 2007 report
on Carbon Capture and Geologic Storage, to the extent it is consistent
with overall provisions on liability. The Task Force, which was
sponsored by the Department of Energy, included members from the IOGCC,
state agencies, federal agencies (both United States and Canada),
industry representatives, academic and professional representatives, and
environmental advocates. This diverse membership has suggested a
framework for long term liability and property ownership that appears to
be a workable solution for the promotion of CCS technology. The primary
components are summarized as follows:

> Closure is proposed to be divided into a Closure Period and
> Post-Closure Period. The Closure Period is defined as that period of
> time when the plugging of the injection wells (excluding wells to be
> used as observation wells as agreed upon between the CSP Operator and
> the SRA) is completed and continuing until a future date is reached,
> defined as some period of time (10 or 29 years, etc.) after injection
> activities and the injections wells are plugged. During this Closure
> Period, the operator of the CSP would be the responsible party and be
> required to maintain the CSP operational bond and individual or
> blanket well bonds specified in Section 4. The individual well bonds
> will be released as the wells are plugged. At the conclusion of the
> Closure Period, the operational bond would be released and the
> liability for ensuring that the CSP remains a secure storage site
> during the Post-Closure Period would transfer to the state.
>
> During the Post-Closure Period the financial resources necessary for
> the state or a state contracted entity to engage in future monitoring,
> verification, and remediation activities would be provided by a
> state-administered trust fund.[^143]

The IOGCC scheme was modified somewhat to conform with the other
elements of our proposed legislation, but the primary elements are
intact. The most critical change to our proposed legislation is that
during the Post-Closure Period, ownership would transfer to the United
States.

As noted above, the Model State Legislation provides for very similar
elements, with two notable additions. The Model State Legislation
includes a provision definitively establishing that the rights to the
pore space will remain with the surface estate after the associated
minerals have been depleted.[^144] This statutory language borrows
heavily from a similar statute recently passed in Wyoming.[^145]
Finally, the Section 3 of the Model State Legislation outlines a
unitization scheme for carbon sequestration activities, based on the
model unitization statute promulgated by the IOGCC[^146]. Because most
states already have laws governing voluntary and involuntary unitization
for oil and gas reservoirs, Section 3 of the Model State Legislation may
simply be instructive in the revision of existing state schemes to
include unitization for carbon sequestration.

3.  **Proposed Legislation**

# Subchapter VI. Property Rights {#subchapter-vi.-property-rights .unnumbered}

## 601 Effects on State Law {#effects-on-state-law-1 .unnumbered}

Except as specifically provided herein, nothing in this Act shall be
construed as affecting, intending to affect, or in any way interfering
with the laws of the respective States, including common law relating to
private property rights, including, but not limited to, those private
property rights related to ownership of the surface estate, subsurface
reservoir, and mineral estate, as well as any State law or common law
pertaining to subsurface water rights.

## 602 Ownership Requirements and Eminent Domain Authority {#ownership-requirements-and-eminent-domain-authority-1 .unnumbered}

### No permit shall be issued for a storage facility unless the owner or operator holds the necessary property rights for construction and operation of the storage facility.

### When any owner or operator of a storage facility that has been licensed in accordance with this chapter cannot acquire by contract, or is unable to agree with the owner of property as to the compensation to be paid, all surface and subsurface property rights and interests necessary for construction and operation of the storage facility, including, but not limited to, all necessary rights-of-way to construct, operate and maintain all pipelines, compressor stations, pressure apparatus, or other stations or necessary equipment or facilities, the owner or operator may acquire the same by the exercise of the right of eminent domain in the district court of the United States for the district in which such property may be located, or in the State courts. The practice and procedure in any action or proceeding for that purpose in the district court of the United States shall conform as nearly as may be with the practice and procedure in similar action or proceeding in the courts of the State where the property is situated.

### Owners of property subject to eminent domain authority shall be compensated at fair market value. The Administrator may promulgate regulations establishing the method for determination of fair market value.

### The right of eminent domain granted in this section shall not prejudice the rights of the owners of said land or other rights or interests therein as to all other uses not acquired for the storage facility.

# Subchapter VII. Trust Fund, Liability Release and Transfer of Ownership {#subchapter-vii.-trust-fund-liability-release-and-transfer-of-ownership .unnumbered}

## 701 Establishment of Trust Fund {#establishment-of-trust-fund-1 .unnumbered}

There is hereby established a Carbon Dioxide Storage Facility Trust Fund
to be administered by the Administrator. There is hereby levied on the
owner or operator of a storage facility a fee equal to \_\_\_\_ for each
ton of carbon dioxide injected for geologic sequestration for the
purposes of funding the Carbon Dioxide Storage Facility Trust Fund. The
Trust Fund shall be utilized solely for the long-term monitoring and
maintenance of the site and storage facility, including but not limited
to maintenance and monitoring of remaining surface facilities and wells,
remediation of mechanical problems associated with remaining wells and
surface infrastructure, repairing mechanical leaks at the site, and
plugging and abandoning remaining wells under the jurisdiction of the
Administrator for use as observation wells. The Trust Fund shall be
administered by the Administrator.

## 702 Transfer of Ownership {#transfer-of-ownership-1 .unnumbered}

Ten years after cessation of injection operations, or such other time
frame as the Administrator establishes by regulation, the Administrator
shall issue a Certificate of Completion of Injection Operations, upon a
showing by the owner or operator of the storage facility that the
reservoir is reasonably expected to retain mechanical integrity and
remain emplaced, at which time ownership to the remaining storage
facility, including the geologically sequestered carbon dioxide,
transfers to the United States.

## 703 Liability Release {#liability-release-1 .unnumbered}

Upon issuance of the Certificate of Completion of Injection Operations,
the owner or operator of a storage facility and the owner or operator of
any capture facility which captured, transported and geologically
sequestered carbon dioxide at such storage facility shall be released
from all further liability relating to permitted geologic sequestration
of carbon dioxide associated with such storage facility. This subsection
shall have no impact on the Compensation Fund and associated
regulations, which Fund will remain in effect at all times regardless of
ownership of the reservoir and geologically sequestered carbon dioxide.

**F. Tribal Lands**

> **1.      Why this issue is important to the question of supporting
> CO2 sequestration efforts while still protecting environment, health,
> and safety.**

The Federal Government has delegated Tribes sovereign rights in mineral
resources on Indian lands. Therefore, it important to identify what
ownership rights tribes would have in CO~2~ sequestration on Indian
lands and also rights pertaining to CO~2~ migration to lands they do not
own.

> **2.      What policy decisions were made on this issue for purposes
> of proposed and**
>
> **why.**

The Mineral Leasing Act of 1938 and the Indian Development Act of 1982
authorized tribes to develop tribal mineral resources. The term
"mineral" refers to both oil and gas and other minerals. CO~2~ is not
included in the definition of a mineral resource and there is no law to
define ownership of CO~2~ injected underground. The analogous resource
to CO~2~ is natural gas and it is defined as a mineral resource in which
tribes control ownership.[^147] However, the EPA and courts would not
likely view the elements as interchangeable. The EPA has declared that
CO~2~ is not a natural gas under the Underground Injection Control (UIC)
program. The UIC exemption of natural gas only applies to "natural gas
as commonly defined and not to other injections of matter in a gaseous
state."[^148] The United States Court of Appeals has also held the CO~2~
is not a natural gas under the SDWA.[^149]

Thus, sites for CO~2~ sequestration, while not currently defined as a
mineral, has mineral aspects for policy purposes. Congress has also
indicated by other methods its interest in exempting Indian lands from
some state control. Congress has implemented legislation that clearly
defines tribes as separate entities from the state. The states have no
power to regulate the development or lease of tribal mineral rights. In
*Assiniboine and Sioux Tribes v. Board of Oil and Gas*, tribes
challenged the Interior Department's delegation of authority to the
State of Montana over spacing of oil and gas wells on Indian
lands.[^150] The court held that states have a "clear lack of
jurisdiction over tribal leases."[^151]

Similar authority exists for underground waste injection. Underground
injection is placing fluids underground, in porous formations of rocks,
through wells or other similar conveyance systems.[^152] The Safe
Drinking Water Act (SDWA) authorized the EPA to regulate underground
injection of fluids.[^153] The Underground Injection Control (UIC)
program regulates the injection of "fluids, including solids,
semi-solids, liquids and gases (e.g. CO~2~)."[^154] The UIC program is
intended to prevent underground injection that could endanger existing
or potential underground drinking water sources.[^155] The EPA issues
permits to states and tribes to regulate the UIC program if the
requirements are met. The tribe has the primary responsibility for
maintaining water quality standards and underground injection. A tribe
"retains primary responsibility until EPA determines, by rule, that the
state or tribe UIC program no longer meets the minimum requirements
established under the SDWA."[^156] If a tribe does not implement a UIC
program then the EPA is responsible for regulating all of the injection
wells on the Indian lands. Indian lands are defined as, "all lands
within the Indian country regardless of ownership."[^157]

Another perspective on CO~2~ injection control is that as a sovereign
entity the tribes have ownership of all resources on Indian lands.
Federal law preempts a state's jurisdiction if it interferes or is
incompatible with federal and tribal interests reflected in federal law,
unless the state's interest is sufficient to justify the assertion of
state authority.[^158] Where a detailed federal regulatory scheme exists
and where its general thrust will be impaired by incompatible state
action, that state action without more, may be preempted by federal
law.[^159] State authority may also be barred if it infringes on the
inherent tribal sovereignty right of Indians to make their own laws and
be ruled by them.[^160] Since, as argued above, CO~2~ is analogous to a
mineral resource , CCS policy should also pre-empt the state from
regulating a tribe's ownership of CO~2~ pore space on Indian lands and
migration to state land based on sovereignty principles. Consistent with
this principle, Congress could pass legislation defining the tribe's
ownership of CO~2~ injections. Tribes should be given ownership rights
in pore spaces on Indian lands where CO~2~ has been injected.

Trespass must also be addressed. The gaseous composition of CO~2~
enables it to migrate or bleed to other lands. General principles of
state law ownership have moved towards protecting rights of underground
storage by treating trespasses as only entitled to monetary relief under
a unitization theory (see discussion in Section E). In *Rail Road
Commission v. Manzel*, the Texas Supreme Court established the "negative
capture rule," that recognized the similar treatment of oil and gas
capture and injected substances migration.[^161] Landowners who obtain a
state permit can inject substances that may migrate to the land of
others.[^162] The court held there is no trespass cause of action for
injunctive relief when a state issues an injection permit.[^163]
Currently, the analog, natural gas injectors retain ownership even if
migration has occurred.

The Legislature should clarify that Indian Tribes have ownership rights
of CO~2~ injected on tribal lands for purposes of liability and
trespass.

**3.      Proposed legislation.**

# Subchapter VIII. Tribal Lands and Geologic Sequestration {#subchapter-viii.-tribal-lands-and-geologic-sequestration .unnumbered}

## 801 Tribal Ownership {#tribal-ownership-1 .unnumbered}

### Indian tribes have sovereign ownership over reservoirs on Indian tribal lands into which carbon dioxide has been geologically sequestered. 

### Indian tribes retain ownership rights over geologically sequestered carbon dioxide that has migrated to non‑Indian tribal lands.

### If carbon dioxide which has been geologically sequestered by an Indian tribe migrates off of Indian tribal lands, the owners of the trespassed land are entitled to receipt of a portion of the proceeds under a unitization theory.

**G. Offshore Sequestration of Carbon in Sub-Seabed Geological
Structures**

> **1. Why this issue is important to the question of supporting CO2
> sequestration**

**efforts while still protecting environment, health, and safety.**

Much of the focus regarding carbon sequestration has been on
sequestration in onshore subsurface reservoirs; but the ability to
sequester offshore in the oceanic environment should also be considered.
The oceans are a natural setting for the sequestration of carbon since
it acts as a natural reservoir for CO~2~.[^164] As discussed in this
white paper, there have been international attempts to address the legal
permissibility of sequestration offshore, but the United States has
either not adopted the relevant protocol, or has not amended existing
federal law to encompass this type activity. Given the increasing focus
on climate change and what can be done to minimize the harmful effects
of carbon, while maintaining power supplies, the United States needs to
assess this as a viable alternative and provide more regulatory
certainty to those parties who wish to pursue this endeavor.

**2. What decisions were made on this issue for purposes of proposed
legislation**

> **and why.**

There are several issues that must be addressed when considering
offshore sequestration:

a)  Why Offshore Sequestration?

b)  Is Offshore Carbon Sequestration Permissible Under International
    Law?

c)  Is Offshore Carbon Sequestration Permissible Under United States
    Law?

d)  Which Federal Agency maintains Authority?

e)  What is the Effect of the Coastal Zone Management Act?

> **a. Why Offshore Sequestration?**

There are two methods to be considered for disposal of carbon dioxide in
the ocean environment. [^165] The first, and most controversial, option
is the direct injection of carbon dioxide onto the seabed. [^166] The
idea behind this method is that the carbon dioxide will be injected at
such great depths (at least 3000 meters) that it would form a "lake"
that is eventually absorbed. [^167] However, the problem remains that it
is difficult to predict what effect this direct injection will have on
the ecological systems in the area due to the changes in pH related to
the carbon dioxide. [^168] For this reason, the option of direct
injection of carbon dioxide to the ocean floor is untenable at this
time.

The second method is the disposal of carbon dioxide into sub-seabed
geological formations. [^169] Geological sequestration will allow for
the trapping of the CO~2~ and minimize the exposure issues involved in
direct injection to the seafloor and is therefore a better choice
between in two options from both an environmental and legal standpoint.

> **b. Is Offshore Carbon Sequestration Permissible Under International
> Law?**

The 1996 London Protocol to the Convention on the Prevention of Marine
Pollution by Dumping Wastes and Other Matter (London Protocol) is the
primary international legal document concerning ocean pollution.[^170]
The London Protocol prohibited the "dumping of any wastes or other
matter" except those specifically listed.[^171] It further explained
that dumping included "any storage of wastes or other matter in the
seabed and the subsoil".[^172] This effectively precluded parties to the
London Protocol from sub-seabed sequestration of carbon, which was not
listed as a waste capable of being "dumped".

However, due to the growing concern about climate change, the parties to
the London Protocol met in 2006 to adopt an amendment specifically
allowing for "carbon dioxide storage in sub-seabed formations."[^173]
The new amendment provides that "'carbon dioxide streams from carbon
dioxide capture processes for sequestration' can be stored if they meet
three criteria: (1) disposal is into a sub-seabed geological formation;
(2) the carbon dioxide stream is of high purity containing only
incidental amounts of associate substances; and (3) no wastes or other
matter are added for the purpose of disposing of those wastes or other
matter."[^174]

The 2006 Amendments contemplated that permits would be issued by the
affected governments based on a "demonstration \[of\] the integrity of a
proposed sequestration site with monitoring and mitigation safeguards in
place to ensure that the CO~2~ will be permanently stored as
intended."[^175]

One of the further steps that came from the 2006 Amendments was to
review potential risks and issues that would need to be addressed as
part of the permitting system.[^176] From this came the "Risk Assessment
and Management Framework for CO2 Sequestration in Sub-Seabed Geological
Structures" which was adopted in 2006 by the Contracting Parties to the
London Protocol.[^177] The issues which were selected as guidelines for
the permitting process were: (1) Site Selection and Characterization;
(2) Exposure Assessment; (3) Effects Assessment; (4) Risk
Characterization; and (5) Risk Management.[^178]

The United States has not yet ratified the 1996 London Protocol or
subsequent 2006 Amendment; therefore, the U.S. does not have in place
the minimal structure needed to set up a regulatory scheme for
sub-seabed carbon sequestration consistent with international
agreement.[^179] At a minimum, any regulatory scheme developed for
carbon sequestration in U.S. waters offshore should address these same
areas of concern as they were designed to protect the environment and
aquatic life.

> **c. Is Offshore Carbon Sequestration Permissible Under United States
> Law?**

The legality of carbon sequestration in U.S. offshore waters is governed
by the Marine Protection Research and Sanctuaries Act (MPRSA).[^180] The
Act runs parallel to the original 1972 London Convention in regulation
of dumping of materials into ocean waters unless otherwise specifically
listed or allowed by permit.[^181] Because of this, the MPRSA contains
many of the same ambiguities concerning carbon sequestration.[^182]

Prior to implementation of an offshore carbon sequestration scheme, the
MPRSA should either be preempted by federal legislation or should be
amended to address carbon sequestration offshore, similar to the 2006
Amendments to the London Protocol. The proposed legislation should
specifically adopt the protocols outlined in the 2006 Amendments to the
London Protocol.

> **d. Which Federal Agency will Maintain Authority?**

Most offshore activities involving energy are regulated primarily by the
Minerals Management Agency (under the Department of Interior) with
Memorandums of Understanding with other affected federal agencies to
allow for one central contact point for the offshore operations.

Recently the Minerals Management Service has seen their authority
expanded to cover alternative energy sources. The Energy Policy Act of
2005 (EPAct) "amended the Outer Continental Shelf Lands Act to grant the
Secretary of the U.S. Department of the Interior (Secretary)
discretionary authority to issue leases, easements, or rights-of-way for
activities on the Outer Continental Shelf that produce or support
production, transportation, or transmission of energy from sources other
than oil and gas."[^183]

Since the lands of the outer continental shelf are considered federal
lands, one of the provisions of proposed legislation which should be
addressed is how a party would acquire the right to both establish a
sub-seabed geological formation for use and the right to inject carbon
into the formation. One possible solution would be to utilize the
provisions of the OCSLA and the EPAct to establish a leasing system to
address both of these needs. Since the Minerals Management Service
already has experience administering similar types of activities, they
would be best suited to administer this new offshore leasing system.

Some of the other agencies which could be considered would be the
Department of Energy or the Environmental Protection Agency, but given
the unique expertise of the Minerals Management Service in offshore
activities, it may be best suited to monitor the regulatory and
permitting requirements which would accompany offshore carbon
sequestration.

> **e. What is the Effect of the Coastal Zone Management Act?**

The Coastal Zone Management Act was passed in 1972 to allow coastal
states to develop and implement federally approved coastal zone
management plans.[^184] As part of these plans, a coastal state may
review proposed federal operations offshore which may affect their
coastal waters, as designated by the Act.[^185]

Because of the possible resistance against wholly offshore operations
that would have no discernible effect on coastal waters, it may be best
to pre-empt the CZMA authority with respect to the actual carbon
sequestration offshore. The legislation could be drafted to allow for
the affected states' input, but not allow them authority to effectively
stall or cancel a proposed site based solely on opposition to CCS.
Because the complete proposed legislation covers onshore activities, it
should be noted that the pre-emption of the Coastal Zone Management Act
is limited to offshore activities.

**3. Proposed Legislation**

# Subchapter IX. Offshore Sequestration {#subchapter-ix.-offshore-sequestration .unnumbered}

## 901 Definitions {#definitions-3 .unnumbered}

When used in this section of this chapter

### **(a)** The term \"affected State\" means, with respect to any program, plan, lease sale, or other activity, proposed, conducted, or approved pursuant to the provisions of this chapter, any State--- {#a-the-term-affected-state-means-with-respect-to-any-program-plan-lease-sale-or-other-activity-proposed-conducted-or-approved-pursuant-to-the-provisions-of-this-chapter-any-state .unnumbered}

#### which is, or is proposed to be, directly connected by transportation facilities to any leased area covered by this section of this chapter;

#### which is designated by the Secretary as a State in which there is a substantial probability of significant impact on or damage to the coastal, marine, or human environment, or a State in which there will be significant changes in the social, governmental, or economic infrastructure, resulting from the sequestration of carbon dioxide anywhere on the Outer Continental Shelf; or

#### in which the Secretary finds that because of such activity there is, or will be, a significant risk of serious damage, due to factors such as prevailing winds and currents, to the marine or coastal environment in the event of any release of carbon dioxide from vessels, pipelines, or other transshipment facilities.

### **(b)** The term \"Agency\" means the Minerals Management Service. {#b-the-term-agency-means-the-minerals-management-service. .unnumbered}

### **(c)** The term \"disposal\" means the sequestration of carbon in sub-seabed geological formations. {#c-the-term-disposal-means-the-sequestration-of-carbon-in-sub-seabed-geological-formations. .unnumbered}

### **(d)** The term \"lease\" means any form of authorization which is issued under section 902 of this chapter and which authorizes the sub-seabed geologic sequestration of carbon dioxide. {#d-the-term-lease-means-any-form-of-authorization-which-is-issued-under-section-902-of-this-chapter-and-which-authorizes-the-sub-seabed-geologic-sequestration-of-carbon-dioxide. .unnumbered}

### **(e)** The term \"marine environment\" means the physical, atmospheric, and biological components, conditions, and factors which interactively determine the productivity, state, condition, and quality of the marine ecosystem, including the waters of the high seas, the contiguous zone, transitional and intertidal areas, salt marshes, and wetlands within the coastal zone and on the outer Continental Shelf. {#e-the-term-marine-environment-means-the-physical-atmospheric-and-biological-components-conditions-and-factors-which-interactively-determine-the-productivity-state-condition-and-quality-of-the-marine-ecosystem-including-the-waters-of-the-high-seas-the-contiguous-zone-transitional-and-intertidal-areas-salt-marshes-and-wetlands-within-the-coastal-zone-and-on-the-outer-continental-shelf. .unnumbered}

### **(f)** The term \"outer Continental Shelf\" means all submerged lands lying seaward and outside of the area of lands beneath navigable waters as defined in section 2 of the Submerged Lands Act (Public Law 31, Eighty‑third Congress, first session), and of which the subsoil and seabed appertain to the United States and are subject to its jurisdiction and control. {#f-the-term-outer-continental-shelf-means-all-submerged-lands-lying-seaward-and-outside-of-the-area-of-lands-beneath-navigable-waters-as-defined-in-section-2-of-the-submerged-lands-act-public-law-31-eightythird-congress-first-session-and-of-which-the-subsoil-and-seabed-appertain-to-the-united-states-and-are-subject-to-its-jurisdiction-and-control. .unnumbered}

### **(g)** The term \"Secretary\" means the Secretary of the Interior, except that with respect to functions under this Act transferred to, or vested in, the Secretary of Energy or the Federal Energy Regulatory Commission by or pursuant to the Department of Energy Organization Act (42 U.S.C. § 7101 *et seq.*), the term \"Secretary\" means the Secretary of Energy, or the Federal Energy Regulatory Commission, as the case may be. {#g-the-term-secretary-means-the-secretary-of-the-interior-except-that-with-respect-to-functions-under-this-act-transferred-to-or-vested-in-the-secretary-of-energy-or-the-federal-energy-regulatory-commission-by-or-pursuant-to-the-department-of-energy-organization-act-42-u.s.c.-7101-et-seq.-the-term-secretary-means-the-secretary-of-energy-or-the-federal-energy-regulatory-commission-as-the-case-may-be. .unnumbered}

### **(h)** The term \"sub‑seabed geologic sequestration\" means underground storage in a sub‑seabed geological reservoir, located in the outer Continental Shelf, for at least 1,000 years of at least 90% of the carbon dioxide emitted from a capture facility, with a storage failure rate of no more than 1%. {#h-the-term-subseabed-geologic-sequestration-means-underground-storage-in-a-subseabed-geological-reservoir-located-in-the-outer-continental-shelf-for-at-least-1000-years-of-at-least-90-of-the-carbon-dioxide-emitted-from-a-capture-facility-with-a-storage-failure-rate-of-no-more-than-1. .unnumbered}

## 902 Coordination of Leasing and Permitting Activities {#coordination-of-leasing-and-permitting-activities-1 .unnumbered}

### In general.

Not later than 180 days after the date of enactment of this section, the
Secretary of the Interior and the Administrator of the Environmental
Protection Agency shall enter into and submit to Congress a memorandum
of understanding in accordance with this section, the outer Continental
Shelf Lands Act, and other applicable laws, regarding coordination of
leasing and permitting for sub‑seabed geologic sequestration of carbon
dioxide in the outer Continental Shelf.

### **(b)** [Administration of leasing and permitting activities]{.underline}. {#b-administration-of-leasing-and-permitting-activities. .unnumbered}

The Secretary shall administer the provisions of this chapter relating
to the leasing of the outer Continental Shelf, and shall prescribe such
rules and regulations as may be necessary to carry out such provisions.
The Secretary may at any time prescribe and amend such rules and
regulations as he determines to be necessary and proper in order to
provide for the protection of the marine environment and the protection
of the natural resources of the outer Continental Shelf, and,
notwithstanding any other provisions herein, such rules and regulations
shall, as of their effective date, apply to all operations conducted
under a lease issued or maintained under the provisions of this chapter.
In the enforcement of safety, environmental, and conservation laws and
regulations, the Secretary shall cooperate with the relevant departments
and agencies of the Federal Government and of the affected States.

### **(c)** Lease and permit applications. {#c-lease-and-permit-applications. .unnumbered}

The regulations prescribed by the Secretary under this subsection shall
include, but not be limited to, provisions to---

#### establish an administrative procedure for processing lease applications for sub‑seabed geologic sequestration of carbon dioxide, including lines of authority, steps in permit application processing, criteria for assessing permit applications, and time limits for permit application procession;

#### establish a 5‑year program for leasing of lands in the outer Continental Shelf for sequestration, and a process for updating that program every 5 years; and

#### establish a program for evaluating the long‑term effects of sub‑seabed geologic sequestration of carbon dioxide on the marine environment.

### **(d)** [Data retrieval system]{.underline}. {#d-data-retrieval-system. .unnumbered}

The memorandum of understanding shall establish a joint data retrieval
system that is capable of tracking lease and permit applications and
providing to the applicants information as to their status within the
Department of the Interior and Environmental Protection Agency,
including an estimate of the time required for administrative action.

## 903 Ownership of Sub‑Seabed Geological Formation {#ownership-of-subseabed-geological-formation-1 .unnumbered}

It is hereby declared to be the policy of the United States that---

### the subsoil and seabed of the outer Continental Shelf appertain to the United States and are subject to its jurisdiction, control, and power of disposition as provided in this chapter; and

### this chapter shall be construed in such a manner that the character of the waters above the outer Continental Shelf as high seas and the right to navigation and fishing therein shall not be affected.

## 904 Method of Disposal {#method-of-disposal-1 .unnumbered}

The regulations prescribed by the Secretary under this subsection shall
be limited to the sequestration of carbon dioxide through permitted
injection wells into the sub‑seabed geological formations or the outer
Continental Shelf.

**H.** **Carbon Capture and Sequestration Legislation: Relationship to
Other Acts**

1.  **Why this issue is important to the question of supporting CO~2~
    sequestration**

> **efforts while still protecting environment, health, and safety.**

Every new piece of legislation must fit into the legislative framework
established by Congress. The possibility of carbon capture and
sequestration ("CCS") legislation requires an analysis of other
environmental statutes to determine which should apply or be preempted.
New legislation should strive to uphold the goals and congressional
intent behind currently enacted environmental regulations. Facilities
emitting pollutants, hazardous waste, and water contaminants need
clarity to comply with regulations.

CCS is being offered as a way to enable the use of coal in power plants
without the associated CO~2~ emissions. CCS projects provide a potential
compromise to the tension between the increasing demand for energy and
the contribution to climate change from greenhouse gas emissions from
coal-fired power plants. Although the process has been proven to work,
large-scale implementation is not seen as economic without significant
government incentives. Potential technology adopters also have to deal
with an existing maze of regulations and doubts about how they affect
their project. Carbon sequestration legislation should seek to promote
efficient implementation of the technology. Expediting the process of
CCS implementation could contribute significantly to the important task
of reducing carbon dioxide emissions nationwide. To the extent that
barriers caused by non-substantive application of other acts retard this
development, they should be addressed.

> **2. What policy decisions were made on this issue for purposes of
> proposed**
>
> **legislation and why.**
>
> **a. Overview of Policy Decisions: Opportunities for Clarification**

CCS legislation should create a new permitting program and regulatory
standards for CCS activities. The goals of the CCS legislation are
twofold: 1) to provide clarity as to what are the regulatory
requirements of CCS; and 2) promote implementation of CCS while still
protecting human health and the environment. To achieve these goals, CCS
legislation should accommodate other statutes that also ensure
protection of the environment while clarifying potential areas of
statutory conflict.

> **1. Clean Air Act**

Generally speaking, the Clean Air Act ("CAA") would regulate CO~2~
emissions if EPA determines it to be a CAA regulated pollutant. However,
the CCS legislation may be the appropriate statute for governing
emissions from some of the CCS-related operations. For example,
activities at the wellhead and its associated emissions should be
governed by the CCS legislation. This includes any emissions of CO~2~
related to the actual injection and sequestration. Similarly, emissions
related to transportation of the CO~2~ from the power plants to the
injection site should be governed by the CCS legislation.

Because most power plant equipment would still be regulated by the CAA,
the CCS legislation should clearly indicate how it will interact with
the New Source Review permit program and other CAA programs. For the
most part, the CAA should continue to apply as-is to non-CCS power plant
equipment. However, some regulatory flexibility should be afforded to
CCS projects in order to promote implementation of the technology.

> **2. Clean Water Act, Resource Conservation & Recovery Act, Safe**
>
> **Drinking Water Act, and Comprehensive Environmental Response
> Compensation and Liability Act**

For carbon sequestration legislation to be successful, it should
comprehensively govern the process rather than share jurisdiction from
lack of clarity in other statutes such as the CWA § 402, the RCRA, the
SDWA, and the CERCLA in the carbon sequestration process. This will give
facilities an incentive for incorporating carbon sequestration.

Because carbon sequestration is not currently implemented in the
majority of facilities, the proposed legislation will not change
existing permits or other activities regulated under the CWA § 402, the
RCRA, the SDWA, or the CERCLA; current statutes will still control
regular operations as they do now. Penalties will remain consistent with
existing statutes. In order to designate when carbon sequestration
legislation applies, the EPA will have discretion to define "regular
operations" and the "carbon sequestration process." Clear and complete
definitions for each phase of the carbon sequestration process could
help avoid the litigation issues encountered by possible application of
the current statutes to CCS projects.

> **3. State Environmental Laws**

Although reserving states' authority to impose liability upon projects
or to impede federal permits under CZMA or CWA could present significant
obstacles to implementing CCS projects, our statute should include
savings clauses and preserve state laws to the extent they don't
conflict with the federal act. Our legislation could establish
procedural methods for resolving conflicts, and can limit state
interference through prohibitions of unreasonable delay. Some might
argue that NEPA environmental impact statements provide sufficient
environmental protection to promote the health, safety, and welfare of
citizens. Furthermore, complete preemption permitting could improve
predictability by removing the possibility that projects will face
different environmental requirements in every state. However, complete
preemption would likely present insurmountable political obstacles.
States' rights activists and environmental groups would likely
vehemently oppose abrogation of state environmental laws and
opportunities within the CZMA and CWA for state review of federal
permits and actions. Additionally, pollution control and land use
decisions have traditionally been the province of state and local
governments, and complete preemption could violate this traditional
division of authority. Although including savings clauses carving out
specific grants of state authority to mitigate political opposition
might create litigation in some cases, this approach increases the
likelihood our legislation will find sufficient political support to be
enacted.   

> **b. Clean Air Act**
>
> **1. Introduction**

The CAA's main purpose is "to protect and enhance the quality of the
Nation's air resources so as to promote the public health and welfare
and the productive capacity of its population"[^186]. The CAA addresses
a multitude of issues such as emission standards for moving sources,
ambient air quality, hazardous air pollutants, technology standards,
acid rain, operating permits and stratospheric ozone.[^187]

Because there is a possibility of CO~2~ being regulated as an air
pollutant, and because CCS facilities usually produce other regulated
pollutants, our proposal to enact CCS legislation will result in some
boundary problems with the existing CAA framework. CCS legislation needs
to clearly indicate how it will interact with the CAA. In addition,
legislative choices will need to be made regarding the relationship
between the CCS permitting framework and the New Source Review ("NSR")
permitting program.

> **2. Regulating Carbon Dioxide under the existing Clean Air Act**

Climate change caused by Carbon Dioxide and other substances is not
expressly addressed by the CAA. Whether the Act provides authority to
regulate CO~2~ for climate effects is a subject of disagreement.[^188]

The US Supreme Court recently addressed the question of CO~2~ in the
context of moving sources emissions standards. In *Massachusetts v.
EPA*, the Court found that CO~2~ could be considered an "air pollutant"
for purposes of CAA Subchapter II (Emission Standards for moving
sources) and instructed the EPA to review its contention that it had
discretion on whether or not to regulate it as such.[^189] Other legal
challenges demanding EPA to issue CO~2~ regulations are still to run
their full course through the legal system, unless preempted by
comprehensive climate change legislation.[^190]

There are several sections of the CAA where CO~2~ from power plants
could be regulated:[^191]

> **i.** CO~2~ could be considered a criteria air pollutant[^192], which
> would require setting a National Ambient Air Quality Standard
> ("NAAQS") for CO~2~.[^193] This would require states to write State
> Implementation Plans ("SIPs") that address CO~2~,[^194] as well as
> inclusion of CO~2~ emissions in NSR permitting[^195]. However, the SIP
> process is not well suited to address a global problem such as climate
> change.[^196] If CO~2~ is a criteria pollutant, it could also be
> regulated under the New Source Performance Standards ("NSPS") program
> pursuant to CAA Section 111.[^197] NSPS require consideration of costs
> and use of a proven technology.[^198] These two requirements may
> greatly limit the scope of any CO~2~-related NSPS.
>
> **ii.** CO~2~ could be categorized as a Hazardous Air Pollutant
> ("HAP")[^199] under CAA Section112.[^200] This may be unlikely, as
> HAPs by definition have to cause adverse effects on human health
> through "inhalation or other routes of exposure"[^201], language not
> easily reconciled with climate change.

Because the CAA may not be particularly well suited to regulate CO~2~
emissions, at least as it pertains to stationary sources, there are
currently several legislative proposals to regulate CO~2~ through CO~2~
cap-and-trade legislation and/or legislative carbon tax
legislation.[^202] Such legislation could offer incentives for companies
to implement new technology such as CCS.[^203] Our proposed CCS
legislation would then establish the regulatory framework for CCS
operations.

> **3. Clarification of relationship between CAA and CCS legislation**

Emissions from some CCS facilities and equipment are better regulated by
a federal CCS legislation. Specifically, activities such as CO~2~
transportation and injection appear not well suited for regulation under
the CAA. Similarly, it is preferable to have one federal regulatory
framework overseeing all aspects of CCS-related air emissions instead of
individual state plans. This will prevent the problem of multiple and
conflicting state standards. It will also bring clarity and expediency
to the process.

The harder question is how much of the "capture" portion should be part
of CCS jurisdiction. This is complicated by the inherently different
methods to capture the carbon. Carbon capture can occur post-combustion,
pre-combustion, or as part of a pure oxygen combustion system.[^204]
This makes it impossible to use an "anything downstream of this valve is
not subject to this rule" approach. Instead, a "stream" approach would
be needed. Under such an approach, once the carbon is concentrated to a
certain degree, the CCS legislation would serve as the regulatory
framework for emissions. This stream could be defined as "Highly
Concentrated Carbon Dioxide Stream" or HCCDS, and the minimum CO~2~%
would be established by the Administrator. Typically, the only equipment
downstream of this jurisdictional point will be compression equipment
preparing the concentrated stream for transportation or injection.[^205]
Such equipment would be subject to the CCS standards instead of CAA
ones.

There will be some additional equipment involved in capturing the CO~2~.
This includes amine absorbers and regenerators, solid absorbers, and
other CO~2~ separation equipment.[^206] This process equipment is more
like other power plant equipment than the CO~2~ transportation and
injection equipment. Therefore, they should be regulated by the CAA,
subject to the exemptions noted below.

> **4. Relation of existing CAA programs with CCS legislation**

The CAA should continue to operate as-is to non-CCS power plant
equipment such as boilers and turbines. This includes existing programs
such as NSPS, HAPs and Acid Rain.[^207] Similarly, carbon capture
equipment upstream of the "Highly Concentrated Carbon Dioxide Stream"
jurisdictional line would also be subject to the CAA. However, some
regulatory exemptions to the NSR program should be considered for
projects that consist solely of adding CCS to an existing power plant,
or for new power plant projects that incorporate CCS in the design. This
could further the CCS legislative goal of promoting implementation of
CCS technology, as long as it is still protective of the environment.

The New Source Review (NSR) program has been the subject of extensive
litigation. Many of these cases have been related to power plants.[^208]
These cases deal mostly with the Routine Maintenance, Repair and
Replacement exemption from major modification status and the appropriate
test to use. The cases have been in part about whether this modification
test should be the same as the NSPS hourly test or if it could be an
annual emissions test. Court decisions on this issue had been
inconsistent until a recent Supreme Court decision clarified the
issue.[^209]

The relation of the NSR program to future efforts to regulate CO~2~ is
the subject of controversy.[^210] With regards to possible CCS projects,
the NSR program raises two issues: the relation of NSR to CCS projects
in existing power plants, and to new power plants with CCS.

A.  **Should CCS projects in existing coal power plants trigger a**

> **NSR modification?**

If carbon legislation is passed by Congress, existing coal power plants
may have an incentive to add CCS equipment to their operations. EPA will
have to decide if these projects could be considered a NSR major
modification. If CCS projects can be considered major modifications, it
could make these facilities subject to complex Prevention of Significant
Deterioration ("PSD") review or Nonattainment New Source Review ("NNSR")
when they try to implement a CCS project.[^211]

The decision to allow CCS projects to be major modifications will depend
on whether EPA determines that CO~2~ is a regulated pollutant under any
section of the CAA.[^212] If CO~2~ is regulated under the CAA in the
future, EPA would have to make the further determination of whether it
will be considered a "regulated NSR pollutant".[^213] Further
complicating matters is the fact that a NSR modification could also be
triggered by non-CO~2~ emissions increases related to the CCS project.
This level of uncertainty coupled with the possibility of triggering PSD
or NNSR may discourage some facilities from commencing plans for CCS
projects. Such an outcome would go against the stated purposes of the
proposed CCS legislation. Therefore, CCS legislation should clearly
state whether CCS projects could be considered a NSR modification.

The reasoning for CCS projects not triggering NSR modification would be
that the goal of the CCS legislation is to promote CCS implementation
and prevent confusion about overlapping regulatory programs. In
addition, the purpose of the major modification trigger is to allow
regulatory review of projects that result in emissions increases of
regulated NSR pollutants.[^214] By contrast, the goal of CCS projects is
solely to reduce emissions of CO~2~, and does not include modifying the
facility to optimize or increase power production. There is some
precedent of sorts in EPA's 2002 NSR revisions.[^215] These revisions
included the creation of a Pollution Control Project ("PCP") category. A
modification that was solely a PCP, with a net emissions reduction,
would be exempted from NSR. This was the case even if the project
reduced emissions of some pollutants but increased emissions of others.
However, to be considered part of the PCP, any other process changes had
to be necessary for implementation of the PCP.[^216] EPA had to vacate
the PCP concept after the D.C. Circuit held that EPA lacked authority to
grant exemptions from NSR if there was a significant emissions increase
of an individual pollutant even if the net effect for all pollutants was
total emissions reduction.[^217] However, Congress does have the
authority to grant such an exemption if it wanted to.

The counterargument against total exemption from NSR is twofold. For
one, even if the net result is a reduction, the increases in a
particular pollutant may be detrimental to local air quality in some
circumstances. Without New Source Review, this could not be taken into
consideration. The second reason is that it might offer an incentive to
keep old grandfathered plants that do not comply with more stringent
technology standards such as Best Available Control Technology ("BACT")
or Lowest Achievable Emissions Rate ("LAER"). The intent of the CAA was
for industry to eventually replace these grandfathered plants with
newer, cleaner, state of the art plants.

To balance these considerations, one possible approach could be a
two-pronged one:

> **i.** CCS projects at an existing power plant would be exempted from
> NSR if: 1) the plant already complies with BACT or LAER standards; 2)
> the project results in no net emissions increase of any CAA
> pollutants; and 3) the modification is limited to changes necessary to
> implement CCS.
>
> **ii.** If the plant does not currently comply with BACT or LAER
> (i.e., has grandfathered units), the CCS project would be exempted
> from NSR if: 1) the plant agrees to implement BACT within a short time
> period (perhaps 5 years); 2) the project results in no net emissions
> increase of CAA pollutants; and 3) the modification is limited to
> changes necessary to implement CCS.
>
> **B. Will a new power plant with CCS be required to obtain all**
>
> **the usual NSR authorizations?**

A second question deals with how much flexibility under the CAA should
be afforded to a proposed coal power plant that incorporates CCS in its
design. Specifically, should such a proposed facility have to go through
the whole NSR preconstruction authorization process? In order to answer
this question, one must consider the stated goal of CCS legislation:
promoting implementation of CCS while protecting health and the
environment.

The strongest argument for requiring full NSR compliance for a new power
plant with CCS is that a new power plant could affect the State's
attainment of NAAQS, which in turn could affect federal funds to the
state.[^218] It should be noted that the post-capture equipment, or
HCCDS equipment (including transportation, injection and sequestration),
would not be subject to NSR and would be subject to CCS permitting
instead.

The counterarguments to full NSR compliance are that going through full
NSR process can be a daunting task and may offer the opportunity for
local or state governments to kill some projects that would otherwise
comply with federal requirements. Air permit applications for new power
plants are routinely rejected by local and state governments or pulled
by companies due to local opposition.[^219] This could offer an
incentive for companies to modify their old plants with CCS instead of
building new ones. New plants would have lower emission rates of
non-CO~2~ pollutants.

To balance these considerations, the CCS legislation could offer some
incentives for including CCS in new power plant proposals. Specifically,
new power plants with CCS would still have to undergo CAA permitting,
with the following exception:

> **i.** A State cannot require emission standards more stringent than
> the applicable federal requirements, unless such standards are part of
> a federally-approved SIP. In other words, a State cannot deny an air
> permit application if it meets all federal requirements, including
> approved SIP requirements.

Congress should also tell permitting agencies to give the highest
priority to applications for power plants with CCS, in order to expedite
the application process while still providing for a full permitting
review. This may serve as an incentive for companies that could
otherwise shy away from proposing a new power plant with CCS due to the
significant time required to go through the whole NSR permitting
process.

> **c. Other Environmental Laws**
>
> **1. Introduction**

This section discusses the purpose, permitting requirements, and
penalties for each of the following statutes: the Clean Water Act
("CWA"), Wetlands permits under CWA § 402, the Resource Conservation and
Recovery Act ("RCRA"), the Safe Drinking Water Act ("SDWA"), and the
Comprehensive Response Compensation and Liability Act (CERCLA). This
discussion seeks to clarify current regulations and establish when this
legislation solely governs the injection space for carbon sequestration.
Where there is any confusion over carbon dioxide as a potential
pollutant or waste under the CWA, SDWA, or RCRA, this new carbon
sequestration legislation should govern the injection space of the
carbon sequestration process. Because the definition of waste under the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") tracks the waste definition under the CWA, RCRA, and SDWA and
the same issues apply, clarification should be applied to CERCLA as
well.

> **2. CWA: NPDES Permits**

The CWA was enacted for the "restoration and maintenance of chemical,
physical, and biological integrity of the Nation's waters."[^220] The
CWA created the National Pollutant Discharge Elimination System
("NPDES") permit program through § 402; a certification requirement for
activities that affect navigable waters under § 401; total maximum daily
load ("TMDL") limits under § 303(d); and non-point regulatory
requirements in §§ 208 and 319.

CWA § 303(d) requires states to develop a priority ranking of waters
where effluent limitations are not stringent enough to achieve a water
quality standard.[^221] The government must then set TMDLs for specified
pollutants in the identified waters and allocate TMDLs among the various
sources.[^222] In *Pronsolino v. Nastri*, the Supreme Court determined
that TMDLs are not limited to point or nonpoint sources, unlike NPDES
permits.[^223] The effluent limitations provision of the CWA grants the
jurisdictional authority to administer §§ 402 and 404 permits for
discharges.[^224]

The EPA or an authorized state may grant NPDES permits.[^225] NPDES
allow facilities to legally discharge pollutants.[^226] NPDES permits
apply when there is an addition of a pollutant to navigable waters from
a point source.[^227] The CWA does not comprehensively define
"addition," but it was clarified in *Catskill Mountains Chapter of Trout
Unlimited v. City of New York.*[^228] In *Catskills*, interbasin
transfers---involving connected water---were not considered
additions.[^229] The definition of navigable waters was debated in
several Supreme Court cases.[^230] Discrete point sources were defined
under *United States v. Plaza Health Laboratories, Inc*., in which the
court held that a person could not be a point source.[^231]

States are frequently granted jurisdiction to administer NPDES permits.
The states issue permits, receive the dischargers' monitoring reports
("DMRs"), conduct inspections and initiate enforcement actions if
dischargers are not compliant.[^232] When the state administers NPDES
permits, the EPA still oversees the program.[^233] States must provide
the EPA with a copy of each permit application.[^234] The EPA may veto a
permit if it violates the CWA.[^235] NPDES permits grant dischargers a
permit shield; when a discharger is compliant with a NPDES permit, the
EPA authorizes its compliance with the CWA.[^236] Additionally,
dischargers must comply with water quality standards established in the
CWA.[^237]

In order to permit an activity that discharges a pollutant into a
navigable water, the discharger must comply with all applicable water
quality standards set out in § 303(c)(2)(A), and other CWA requirements
such as the § 303 antidegredation policy.[^238] Water quality standards
are determined by designated use and water quality criteria.[^239] Water
quality certification is required not just for § 402 NPDES permits, but
also for § 404 wetlands requirements and other licenses.[^240] States
are also given discretion to estimate the TMDL to implement water
quality standards, subject to EPA approval.[^241]

Nonpoint sources are regulated by category and have their own procedures
and methods of control.[^242] The CWA requires "feasible" best
management practices ("BMPs") by the state.[^243] Dischargers must
prepare a planning process which will ultimately be submitted to the EPA
Administrator, detailing alternatives to waste management.[^244] CWA §
319 continues the BMP focus.[^245] If an NPDES permit does not result in
an adequately clean water body, then the state should develop a nonpoint
source management plan.[^246]

Since carbon dioxide can alter the ph of receiving water (a conventional
pollutant under Sec. § 304),[^247] direct injection into water could
implicate the CWA. However, CO~2~ sequestration sites authorized by our
legislation should not affect water of the United States and carbon
dioxide should not be considered a pollutant for the purpose of
injection in the carbon sequestration process since it will be regulated
separately under the legislative program. Legislation for carbon
sequestration should define key terms and avoid any uncertainty under
the CWA.

> **3. Wetlands: § 404 permits**

The CWA also manages disposal of dredged and fill materials.[^248]
Dredged materials include materials excavated or dredged from national
waters.[^249] Fill material is material placed in national waters with
an effect of 1) replacing any amount of national water with dry land or
2) changing the water's bottom elevation.[^250] Unlike other provisions
in the CWA, the Army Corps of Engineers ("the Corps") is the primary
authority over § 404 permits.[^251] Jurisdiction over wetlands has
received considerable attention by courts. Only navigable waters,
defined as waters of the United States and territorial seas, are
regulated by the CWA.[^252] In *Riverside Bayview*, the court held that
adjacent wetlands are included in the CWA's definition of "waters of the
United States."[^253] The *SWANNC* court subsequently limited CWA
statutory authority, holding "waters of the United States" to not
include isolated wetlands.[^254] *Rapanos* later tried to formulate a
test for identifying adjacent wetlands; Kennedy's concurrence used a
"significant nexus" test between the wetland and waterway.[^255]

§ 404 permits are issued to individual dischargers or for general
categories of discharges. There must be notice and opportunity for
public hearings concerning each permit.[^256] There are three general
requirements to obtain a § 404 permit. First, criteria must be followed
pursuant to the EPA's guidelines.[^257] Second, the Corps must evaluate
the permit pursuant to the EPA's guidelines.[^258] Third, the EPA must
review a proposed permit before the Corps may issue it, retaining the
right to veto a permit if there is an adverse impact on the
environment.[^259] Permits to emit dredged or fill materials are issued
if they are in the public interest and meet effluent and water quality
guidelines.[^260]

Under EPA guidelines, no discharge is permitted if a practicable
alternative would have a less adverse impact.[^261] To be practicable,
an alternative must be available and capable of being done in light of
cost, technology, and logistics.[^262] The least environmentally
damaging practicable alternative is sought that will accomplish the
basic project purpose.[^263] *Funds for Animals v. Rice* demonstrated
that least damaging practicable alternatives may be ignored if
dischargers are given other compensation methods.[^264] In *Funds for
Animals*, mitigation banks were discussed as a method for dischargers to
preserve or restore wetlands as compensation for other environmental
consequences under a § 404 permit.[^265]

The Corps issues a large number of general permits. General permits are
available after notice and comment, lasting for five years.[^266] To be
eligible for a general permit, there must be minimal adverse
environmental effects if calculated separately, and minimum cumulative
adverse effects on the environment.[^267] Nationwide permits ("NWPs")
allow certain activities despite the impact of the discharges to
wetlands.[^268] The Corps requires preconstruction notification ("PCN")
to the District Engineer to be eligible for a NWP.[^269] There is
currently a Mining Activities NWP that allows discharges to wetlands
associated with isolated waters.[^270] *National Mining Assoc. v. U.S.
Army Corps of Engineers* established the Tulloch rule for incidental
fallback.[^271] The *Nat'l Mining Assoc.* court found the Corps had
eliminated the "de minimis" exception for fallback from dredging
operations.[^272] The court found additions to wetlands must be
regulated.[^273] It is still possible to avoid permit requirements by
proving the fallback is "merely incidental" to normal dredging
operations and not really an addition to the wetland.[^274] Exceptions
to permit requirements under carbon sequestration legislation must
similarly be limited to normal sequestration operations.

The Corps shares enforcement authority for § 404 permits with the
EPA.[^275] Both agencies have authority to enforce against violators of
§ 404 if the other agency declines to exercise its authority.[^276]

While unlikely, it is possible that carbon dioxide sequestration might
impact wetlands. Therefore, outside of normal impacts associated with
wetlands disturbance, legislation should clarify the injected CO~2~
should not be regulated as "dredged" or "fill materials" or "fallback"
as it is defined under the CWA.

> **4. RCRA: Resource Conservation & Recovery Act**

The goal of the RCRA is to protect human health by regulating hazardous
waste.[^277] The major programs under RCRA include requirements for
hazardous waste generators under Subtitle C, solid waste facilities
without hazardous waste under Subtitle D, and those who store and
transport petroleum or hazardous substances---not including hazardous
waste---in underground storage tanks under Subtitle I.[^278] Hazardous
waste includes "contained gaseous material" from different
activities.[^279] Hazardous waste is any discarded material with
substantial risk to human health or the environment when improperly
managed.[^280] Solid waste can be gaseous as well.[^281] First the EPA
determines if a material is a "waste," and then the focus becomes
whether the material is "discarded."[^282]

The definitions for a "solid waste" and "discarded" were subjects of
judicial debate. *Owen Electric* produced the working definition of
waste as whether the byproduct is immediately recycled for use in the
same industry; if not, then the byproduct is waste.[^283] The effect of
*Owen Electric* is to deem something a waste if it is saved for a later
use.[^284] *American Petroleum Institute* established the idea that
doing a process for profit, like removing the last oil out of waste
water, removes the material from consideration as a waste.[^285] The
three historical arguments for granting EPA jurisdiction over recycled
material include prevailing legislative history, the common threat to
human health, and the discrepancy between using intent to move materials
in and out of hazardous waste management in violation of the "cradle to
grave" principle for regulating materials.[^286] The *AMC I* court did
exempt materials destined for "immediate release," specifically
in-process secondary materials, from RCRA.[^287] Immediate release is to
be distinguished from regulating waste that may be recycled some time in
the future.[^288] Carbon sequestration legislation will have to clarify
whether CO2 is a waste within the definition of RCRA. New legislation
also must determine what effect, if any, recycling carbon dioxide for
another purpose would have on its designation.

Under Subtitle C, waste is distinguished among several categories. A
material is hazardous if it is included in a per se list or contains one
of four characteristics: ignitability, corrosivity, reactivity, or
toxicity.[^289] RCRA has four categories of listed wastes and three
categories of generators of hazardous waste: fully-regulated, small
quantity generators, and conditionally-exempt generators.[^290]

Treatment, storage, and disposal facilities ("TSDs") have their own
requirements under RCRA. All TSDs must apply for a permit.[^291] Some
grandfathered facilities have interim status until the EPA processes
their permit applications.[^292] All TSDs require personnel training,
contingency planning, and recordkeeping.[^293] The RCRA also establishes
a ground-water monitoring system and closure requirements.[^294] The
system requires monitoring wells, a sampling and analysis plan, and
reporting requirements.[^295] The monitoring program must occur during
the life of the facility and, in some cases, during post-closure.[^296]
Owners of facilities must minimize further maintenance and control
post-closure escape of hazardous waste when closing a facility.[^297]
Owners must create a closure plan and perform certain removal or
decontaminating activities.[^298] There are also financial assurance
requirements for closures and insurance requirements to protect
neighbors from sudden or nonsudden accidental occurrences.[^299]

Because of some of its characteristics, Carbon dioxide could be
considered a hazardous or solid waste under RCRA in certain
circumstances so clarification in carbon sequestration legislation is
required. For carbon dioxide, there is no known threat to human health
during sequestration though a sudden escape could be dangerous \[see
liability section\]. For that remote possibility, we have proposed
legislation for compensation and post-closure liability.

> **5. SDWA: Safe Drinking Water Act, Enforcement of Drinking Water**
>
> **Standards**

The SDWA protects public water supplies from harmful contaminants.[^300]
The EPA must issue a National Primary Drinking Water Regulation when
there is an opportunity to reduce health risks associated with
contaminants that may have adverse health effects and are likely to be
present in public water systems frequently at risky levels.[^301] States
may be given authority to enforce and implement the SDWA programs.[^302]
The Public Water Supply Supervision program ("PWSS") is the primary
regulatory program under the SDWA, over which most states have
authority.[^303] Other programs under the SDWA include the State
Groundwater Protection program, the Underground Injection Control
program, Sole Source Aquifer Protection program, and the Wellhead
Protection program.[^304]

The EPA looks to many factors when developing a drinking water
regulation. Factors include the occurrence of a contaminant in the
environment, human exposure and risks of adverse health effects to
populations, the availability of analytical methods to monitor a
contaminant, the availability and costs of treatment techniques, and the
impacts of regulation on public water systems, the economy, and public
health.[^305] Interim standards may be issued in emergency situations
since the entire regulatory process takes many years to complete.[^306]

Enforceable standards for primary drinking water standards are
established as close to a non-enforceable maximum contaminant level goal
("MCLG") as possible.[^307] The MCLG considers risk to sensitive
subpopulations.[^308] MCLGs are "set at the level at which no known or
anticipated adverse effects on the health of persons occur and which
allows an adequate margin of safety."[^309] The EPA then establishes the
maximum contaminant level ("MCL"), an enforceable standard set as close
to the MCLG as is "feasible."[^310] "Feasible" was defined in the Senate
as the level that can be reached by large, regional drinking water
systems applying best available treatment technology.[^311] However, the
SDWA allows the EPA to issue standards below the feasible level if the
cost does not justify the benefit.[^312] Secondary drinking water
standards are for contaminants that affect the aesthetic quality of
drinking water.[^313] Secondary maximum contaminant levels are goal
levels that states may raise or lower for local conditions.[^314]
Monitoring restrictions are equally stringent as those for primary
drinking water regulations.[^315]

Although carbon dioxide could be considered a contaminant in some
circumstances under the SDWA and in fact the EPA has proposed the SDWA
as a way to regulate sequestration,[^316] new carbon sequestration
legislation will deal with these issues and should preempt SDWA
application.

**d. Interaction with State Environmental Laws**

> **1. Introduction**

Although CCS projects could serve an important role in reducing GHG
emissions with minimal reduction in existing environmental protection,
the processes of transporting captured carbon from production sites and
injecting gasified carbon dioxide into pore space could implicate state
environmental laws. Some contamination or environmental hazard could
theoretically result from such projects. However, some states might also
object to CCS projects because of siting concerns. Confusion over the
jurisdictional boundaries between comprehensive federal CCS legislation
and state and common law could delay or thwart federally licensed or
permitted CCS projects. State environmental laws, the Coastal Zone
Management Act ("CZMA"), and the CWA Section 401 all potentially provide
state and local governments with opportunities to regulate CCS projects.
Clarifying these jurisdictional boundaries will facilitate efficient
implementation of new projects.

CCS legislation could limit states' ability to employ these tools
through expressly preempting state and common law environmental laws,
limiting conflict through savings clauses, or limiting states' authority
under the CZMA and CWA. However, legislation completely preempting state
environmental laws could provoke strong opposition from states' rights
advocates and environmental groups. Complete preemption of state
environmental laws would also violate principles of traditional
environmental law federalism. A savings clause preserving causes of
action under state and common law environmental laws while superseding
state measures in direct conflict with a CCS regulatory framework could
mitigate political opposition to the legislation.

> **2. General Preemption Principles**

The Supremacy Clause, the basis for the doctrine of federal preemption,
provides that the Constitution and "the Laws of the United States which
shall be made in Pursuance thereof\... shall be the supreme Law of the
Land."[^317] Under preemption doctrine, the Constitution and federal
laws supersede contrary state and local laws.[^318] Federal law can
preempt state laws in three different ways: "by express language in a
congressional enactment, by implication from the depth and breadth of a
congressional scheme that occupies the legislative field, \[and\] by
implication because of a conflict with a congressional enactment."[^319]
These forms of preemption are commonly referred to as "express,"
"field," and "conflict" preemption.[^320]

If CCS legislation remains silent on its relationship to state laws,
ordinary principles of conflict preemption would likely apply. Courts
would find that the CCS statute preempts state environmental legislation
only upon finding that Congress attempted to preempt an entire
field.[^321] "In environmental law, there is scarcely any legislation
that preempts an entire field."[^322] Therefore, remaining silent about
the statute's interaction with state laws could create confusion about
the precise jurisdictional boundaries between federal and state
governments. Instead of remaining silent, CCS legislation could include
a savings clause carving out a specific area of authority for states.
Alternatively, CCS legislation could completely preempt state laws.

> **3. Confusion over jurisdictional boundaries could delay or thwart**
>
> **CCS projects.**
>
> **A. Interaction with state environmental laws could create**
>
> **confusion.**

Many states have enacted environmental protection legislation roughly
analogous to the National Environmental Protection Act ("NEPA"). Like
the federal act, state environmental protection acts ("SEPA") generally
require impact assessments of various government actions. Though many
states follow NEPA by requiring an impact assessment only for "major
action," some states such as California have EPAs establishing a lower
threshold triggering review.[^323] While NEPA requires an environmental
impact statement for federal actions, SEPAs often apply to a broader
range of activity, including state action and local land use
decisions.[^324]

State acts not only regulate a broader range of activity than does NEPA,
but may also include additional substantive requirements. For example,
some states have included in their SEPAs requirements that adverse
impacts on the environment be minimized.[^325] This requirement
theoretically imposes upon projects a higher burden of environmental
review than NEPA imposes.[^326] In addition to SEPAs, many state and
local governments have pollution control laws. For example, many local
governments incorporate pollution control into their zoning
ordinances.[^327] This additional level of regulation and permitting
requirements could present challenges to CCS projects.

> **B. Confusion over interaction with states' approved coastal**
>
> **management plans could delay or thwart CCS projects.**

The Coastal Zone Management Act emerged as a result of an intense battle
between states and federal governments over the regulation of coastal
areas, including offshore activity.[^328] After passing the Submerged
Lands Act granting states jurisdiction over coastal areas to three
nautical miles from the shore, Congress enacted the Outer Continental
Shelf Lands Act ("OCLSA") establishing federal jurisdiction over areas
beyond the three nautical mile limit.[^329] The devastating effects of
the Santa Barbara oil spill in 1969 demonstrated the potential risks to
state coastline from activities occurring in federally controlled
waters.[^330] This environmental catastrophe strengthened states'
arguments that they needed heightened authority to protect coastal
zones, and the CZMA represented an effort to grant states enhanced
oversight while retaining the three mile jurisdictional boundary.[^331]
According to the statute, states with coastal zones may develop a
coastal management plan ("CMP") to "manage, protect, and conserve
coastal resources."[^332] The statute requires the National Oceanic and
Atmospheric Administration ("NOAA") to review the plan by comparing it
to a list of enumerated criteria.[^333] After NOAA certifies the state
program, the CZMA grants states heightened ability to influence
activities affecting the coastal zone.[^334] Section 307 of CZMA
provides that federal activities, including licensing and permitting,
affecting the state coastal zones must be consistent with a state\'s
coastal zone management plan.[^335] The three types of activities
subject to consistency review with the state CMP are: 1) activities
proposed by federal agencies; 2) private activities that require federal
approval; and 3) offshore oil exploration, development, and production
plans that are submitted for federal approval under OCSLA.[^336]

Federal agency activities "shall be carried out in a manner which is
consistent to the maximum extent practicable with the enforceable
policies of approved State management programs."[^337] The agency must
make a consistency determination for its activity and submit the
findings to the state for review.[^338] This consistency determination
"must be based upon an evaluation of the relevant enforceable policies
of the \[state\'s\] management program."[^339] A description of this
evaluation must be included in the consistency determination or provided
to the state separately.[^340] In contrast, private actors seeking
federal permits must meet the higher burden of providing "a
certification that the proposed activity complies with the enforceable
policies of the state\'s approved program and that such activity will be
conducted in a manner consistent with the program."[^341] The affected
state may then review the certification for consistency with the
CMP.[^342] The state can object to the federal action or permit based on
inconsistency.[^343] If a state fails to object within six months from
receipt of a consistency certification (with all necessary information
and data), its concurrence is conclusively presumed.[^344]

Although the Supreme Court initially interpreted §307 of the CZMA
narrowly, requiring direct effects upon the coastal zone, Congress
amended the statute in 1990 and clarified its intent to grant states
broad authority to review federal activity and private activity
requiring federal permits for consistency with CMPs.[^345] A recent
Ninth Circuit opinion has reaffirmed states' broad authority to require
consistency review of federal permitting activity before such activity
proceeds.[^346] Several other cases have supported states' broad rights
under the CZMA, holding that states with approved CMPs may prevent
federally permitted actions as inconsistent because of environmental
*or* socioeconomic effects to coastal zones.[^347] Finally, as several
commentators have noted, states can require consistency reviews for
activities occurring outside the state itself, as long as there exists
some identifiable effect on the coastal zone.[^348]

Based on these broadly construed powers to intervene in federal agency
actions and private actions requiring federal permits, states could
require CCS projects to pass a consistency review with approved CMPs.
Such states would only have to demonstrate an effect on "any land or
water use or natural resource of the coastal zone."[^349] As discussed
above, courts have construed the effect requirement broadly, allowing
indirect effects and effects such as socioeconomic consequences
completely unrelated to environmental matters.

Despite states' broad authority to intervene and require consistency
reviews, federal statutes can limit the scope of this authority and
provisions within the CZMA itself provide mechanisms for overriding
state action. For example, the President may exempt a federal agency
activity from the CZMA if the activity is "in the paramount interest of
the United States."[^350] The Secretary of Commerce may override a
state\'s objection to private activities by finding that the activity is
consistent with the objectives of the CZMA or "is otherwise necessary in
the interest of national security."[^351] Although the federal
government has not taken full advantage of the available procedures for
overriding states' actions under the CZMA, such provisions do exist to
prevent excessive interference with CCS projects under our
legislation.[^352]

Additionally, federal statutes occasionally expressly or indirectly
limit states' authority under CZMA. For example, the Energy Policy Act
of 2005 and regulations promulgated under it provide that the Federal
Energy Regulatory Commission ("FERC") is the exclusive authority for
approving or disapproving LNG facilities.[^353] Though the Act
ostensibly preserves states' rights under CZMA, CWA, and the CAA,[^354]

> "some State CZMA enforceable policies that NOAA previously approved
> that would specifically apply to LNG or LNG-type facilities would
> likely no longer be enforceable for purposes of CZMA federal
> consistency reviews. State CZMA enforceable policies must be legally
> binding under State law and a policy that is specifically preempted
> could not be legally binding under State law. (In the past, NOAA has
> not approved State policies that would specifically regulate
> activities that are federally preempted.) Other State policies that
> are coastal-effects based and not written to regulate LNG-type
> facilities would continue to be applied through CZMA review."[^355]

Therefore, by granting exclusive approval or oversight authority to a
federal agency and clarifying that our CCS permitting framework
supersedes states permitting systems for specified projects and
equipment, our legislation could preserve states' broad powers under
CZMA while clarifying exclusive federal jurisdiction over CCS projects.
Just as state policies not written to regulate LNG facilities continue
to operate under the Energy Policy Act, our legislation could preserve
state policies not written to regulate CCS while minimizing direct
conflict by clearly establishing federal jurisdiction over approval and
oversight of CCS projects.

> **C. Confusion over interaction with states' certification**
>
> **requirements under §401 of the CWA could delay or**
>
> **thwart CCS projects.**

Section 401 of the CWA requires any applicant for a federal license or
permit to conduct an activity potentially resulting in a discharge to
navigable state waters to provide the licensing or permitting agency a
water quality certification.[^356] A state with EPA-approved water
quality standards must certify that a discharge will comply with the
standards.[^357] No federal agency may grant a license or permit until
the certification is granted or waived.[^358] Section 401 requires
states to provide interested parties notice and an opportunity to
comment on certification applications, and the statute allows states to
include conditions in their certifications.[^359] The federal permitting
agency must include these conditions in the permit.[^360] While the CZMA
provides a procedure for overriding state action to block permitting or
federal action, the CWA does not provide such a procedure.

In a 1994 case, the Supreme Court allowed a state to prevent permitting
of a hydroelectric facility based on effects on water quantity, refusing
to limit the scope of §401 power to federal actions or permits affecting
water quality.[^361] The Court continued this practice of liberally
construing §401 of the CWA in *S.D. Warren v. Maine Board of
Environmental Protection*.[^362] In *Warren*, the Court found that
discharges from dams trigger §401 certification requirements.[^363] Many
commentators have noted that courts construe the term "discharge"
liberally and that states enjoy growing authority under §401 to
influence or thwart federal permitting activity.[^364] Commentators have
also noted that courts have expanded states' §401 authority to impose
conditions on federal permits beyond factors affecting the discharge
itself, enabling states to exert authority over the entire
project.[^365]

States desiring to influence CCS projects initiated under CCS
legislation could attempt to do so under §401 by refusing to certify a
discharge. As discussed above, states could refuse to certify a project
based on effects on water quality *or* quantity, and could probably
impose conditions upon any federal permit beyond components of the
project affecting the discharge. Although CCS legislation could
expressly or impliedly limit states' §401 authority, such a limitation
could provoke strong political opposition. As one commentator notes,
jurisdictional disputes between state and federal government threatened
reauthorization of the CWA from 1975-77, and in order to gain enough
votes for the legislation to pass Congress included an amendment
reaffirming states' rights.[^366] This amendment, known as the "Wallop
Amendment," provides that:

> "It is the policy of Congress that the authority of each State to
> allocate quantities of water within its jurisdiction shall not be
> superseded, abrogated or otherwise impaired by this chapter. It is the
> further policy of Congress that nothing in this chapter shall be
> construed to supersede or abrogate rights to quantities of water which
> have been established by any State. Federal agencies shall co-operate
> with State and local agencies to develop comprehensive solutions to
> prevent, reduce and eliminate pollution in concert with programs for
> managing water resources."[^367]

**4. CCS legislation should not completely preempt state and common
law**

> **environmental laws, or limit states' rights under CZMA or CWA
> outside of the CCS immediate context**.

a.  **Preemption of state and common law environmental laws could
    cause**

> **excessive political opposition and conflicts with traditional
> principles of**
>
> **environmental federalism.**

Many commentators have noted that traditionally, pollution and land use
decisions have been delegated to states, while natural resources
decisions have been dominated by the federal government.[^368] Such
commentators list the following reasons for delegating pollution control
and land use decisions to the states: "the nation\'s size and geographic
diversity, the close relationship between pollution and land use (long
considered a local prerogative), the federal government\'s limited
resources, and the states\' previous experience administering laws of
this type."[^369] Commentators also note that in implementing
environmental laws, "states generally prefer a more cooperative,
flexible approach toward enforcement" than allowed under the federal
law.[^370] Professor Hope Babcock remarks that "state agencies want to
accommodate local industries and are sensitive to local political
pressure."[^371] States are likely to desire protecting these political
interests and would probably fight legislation altering the balance of
power. Finally, many advocates of preserving state environmental
authority assert that states serve as important policy laboratories and
therefore allow experimentation to find the most efficient methods of
environmental regulation.[^372]

Because of these arguments about traditional delegation of pollution and
land use laws, and assertions that states provide necessary flexibility
and innovation in environmental regulation, federal statutes perceived
as infringing states' authority often provoke strong opposition. As
discussed above, section 307 of the CZMA, 401 of the CWA, and the Wallop
Amendment all serve as politically significant recitations that states
retain meaningful authority over federal action and permitting
decisions. Any language completely preempting state environmental laws
could provoke the same kind of discord that prompted Congress to include
the above safeguards of state authority, and could threaten the ability
of CCS legislation to find sufficient support to pass. Completely
preempting state environmental laws could prove politically unfeasible,
and various other options exist for limiting jurisdictional conflict
over CCS projects.

Many federal statutes include savings clauses to preserve specific areas
of state law despite establishing federal jurisdiction. Such clauses
"affirm the continued availability of state common law causes of action
notwithstanding federal regulation."[^373] The CWA, Oil Pollution Act,
and CERCLA exemplify this kind of clause. All acts include language
providing that nothing in the statute limits the ability of states to
impose additional liability for violations of applicable laws, as long
those state remedies do not conflict or interfere with the federal
statutes' purpose, objectives and execution.[^374] This statute will
maintain states' ability to impose additional liability for violations
of other state laws, but recognizes states' potential ability to
interfere in developing CCS sites and should therefore use FERC's LNG
project approach in preventing state and local agencies from using state
or local laws to "'prohibit or unreasonably delay the construction or
operation of facilities approved'" under permitting procedures that CCS
legislation establishes.[^375] Traditional conflict preemption
principles will prevent states from establishing CCS regulations
directly contradicting the CCS permitting and regulatory system. The CCS
statute should maintain consistent permitting and regulatory procedures
by establishing federal jurisdiction over CCS projects. However,
including a savings clause preserving state environmental laws and state
powers under CZMA and CWA §401 will still promote health, safety, and
welfare; and uphold environmental federalism precedent.

**3. Proposed Legislation**

# Subchapter X. Interaction With Other Federal and State Laws {#subchapter-x.-interaction-with-other-federal-and-state-laws .unnumbered}

## 1001 Interaction with the Clean Air Act {#interaction-with-the-clean-air-act-1 .unnumbered}

### Nothing in this chapter shall be construed to preempt or otherwise affect the authority of the Administrator to promulgate any regulations under the Clean Air Act, except to the extent described in this section.

### Facilities and equipment involved solely in transportation or sequestration of carbon dioxide (as defined in this chapter) of sufficient concentration as determined by the Administrator are not subject to regulations promulgated under the Clean Air Act. Equipment used at a capture facility to prepare carbon dioxide for transportation will be considered transportation equipment for purposes of this paragraph.

### Nothing in this chapter or the Clean Air Act shall be construed to authorize any State, interstate, or local authority to require of a capture facility any emission standards more stringent than the applicable Federal requirements, unless such standards are part of a Federally approved State Implementation Plan.

### Permitting agencies must give the highest priority to applications for capture facilities in order to expedite the application process.

### New capture facilities created by modifying existing power generating facilities will not be considered modifications under the New Source Review program (42 U.S.C. §§ 7475, 7503) if the following conditions are met:

#### the power generating facility already complies with the Best Available Control Technology (42 U.S.C. § 7475), or agrees to implement it within 5 years;

#### the creation of the capture facility results in no net emissions increase of any regulated Clean Air Act pollutants; and

#### the capture facility modifications are limited to changes necessary to implement the capture and geologic sequestration of carbon dioxide.

## 1002 Interaction with the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, and Comprehensive Environmental Response Compensation and Liability Act {#interaction-with-the-clean-water-act-safe-drinking-water-act-resource-conservation-and-recovery-act-and-comprehensive-environmental-response-compensation-and-liability-act-1 .unnumbered}

### Nothing in this chapter shall be construed to preempt or otherwise affect the authority of the Administrator to promulgate any regulations under the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, or the Comprehensive Environmental Response Compensation and Liability Act except to the extent described in this section.

### Carbon dioxide is not considered a pollutant or waste under the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, or Comprehensive Environmental Response Compensation and Liability Act for purposes of geologic sequestration of carbon dioxide.

### Clean Water Act § 404 permitting requirements shall not be preempted by this chapter.

### Except as provided in subsection (b), the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, and Comprehensive Environmental Response Compensation and Liability Act will apply to the regular operations of capture facilities and storage facilities. As used in this section, the term \"regular operations\" means construction and operation of any power generation, operation and other activities of capture facilities and storage facilities outside of those involved in the capture, storage and geologic sequestration of carbon dioxide.

### Nothing in this chapter shall be construed to limit the Administrator\'s authority under the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, or Comprehensive Environmental Response Compensation and Liability Act with regard to the regular operations of capture facilities and storage facilities. Penalties and other enforcement mechanisms provided for in the Clean Water Act, Safe Drinking Water Act, Resource Conservation and Recovery Act, or Comprehensive Environmental Response Compensation and Liability Act may be imposed or implemented with regard to the operations of capture facilities and storage facilities outside of direct CCS transportation and injection.

## 1003 Interaction with State Environmental Laws {#interaction-with-state-environmental-laws-1 .unnumbered}

### Except as otherwise provided in this section, a State or political subdivision of a State may not establish, continue in effect, or enforce a law or regulation establishing standards with regard to the capture, transport (designed to connect to a storage facility), injection, or geologic sequestration of carbon dioxide or imposing a requirement for equipment associated with a capture facility or storage facility if such law, regulation, standard or requirement is inconsistent with the provisions or purposes of this chapter.

### The authority of each State to enforce environmental protection legislation within its jurisdiction not inconsistent with the Administrator\'s and Commission\'s permitting of capture, transport, injection, or geologic sequestration of carbon dioxide and/or not related to the climate change issues associated with the capture, transport, injection, or geologic sequestration of carbon dioxide shall not be superseded, abrogated or otherwise impaired by this chapter.

> \*\*\*\*\*\*\*\* \[Sec. 1004 below\]

## 1005 Construction with Other Federal Laws {#construction-with-other-federal-laws-1 .unnumbered}

### The Secretary (as defined in section 901(g)) shall consult with the Governor of any Affected State when reviewing any license or permit for sequestration of carbon dioxide in a sub‑seabed geological formation of the outer Continental Shelf which may affect any land use or water use in the coastal zone of a State with a coastal zone management program approved pursuant to section 306 of the Coastal Zone Management Act of 1972 (16 U.S.C. § 1455). Notwithstanding the foregoing, the Secretary shall have exclusive authority to approve any license or permit for geologic sequestration of carbon dioxide in a sub‑seabed geological formation of the outer Continental Shelf. This chapter supersedes consistency review requirements under the Coastal Zone Management Act of 1972 (16 U.S.C. § 1451 *et seq.*).

a.  State CZMA policies cannot be used for the sole purpose of
    preventing construction or operation of a CCS capture,
    transportation, or sequestration facility. State CZMA or other
    policies that are "coastal effects" based, and not written to
    regulate CCS-type facilities would continue to be applied through
    CZMA review. No state may withhold a CWA 401 Certification for water
    quality based on any possible alteration of water quality from the
    addition of CO2 to water for capture, transport or sequestration
    facilities that meet the standards for permitting established under
    this law.

### **(c)** Except as specifically provided in this chapter, or where they prevent or interfere with the uniform permitting and regulatory system set up in this legislation, nothing in this chapter affects the rights of States under: {#c-except-as-specifically-provided-in-this-chapter-or-where-they-prevent-or-interfere-with-the-uniform-permitting-and-regulatory-system-set-up-in-this-legislation-nothing-in-this-chapter-affects-the-rights-of-states-under .unnumbered}

#### the Coastal Zone Management Act of 1972 or

#### the Clean Water Act.

**I. Integration with Other Federal Agency Consultation Laws**

1.  **Why this issue is important to the question of supporting CO2
    sequestration**

> **efforts while still protecting environment, health, and safety.**

While we want to streamline the CCS process in order to encourage
development of these projects, we must account for environmental values
through federal safeguards established by agency consultation and
consideration laws such as National Environmental Protection Act (NEPA),
the Endangered Species Act (ESA), the Marine Mammal Protection Act
(MMPA), and the National Historic Preservation Act (NHPA). This requires
an examination of whether the existing laws are necessary, given the
environmental protections in this proposed legislation. Assuming these
laws will continue in effect, it is important to ensure that their
effective operation does not hamper CCS for no additional benefit.

2.  **What policy decisions were made on this issue for purposes of
    proposed**

> **legislation and why.**

There are several federal consultation laws that should be addressed in
determining which applications should exist for CCS projects.

a.  NEPA

b.  Endangered Species Act

c.  Marine Mammal Protection Act

d.  National Historic Preservation Act

> **a. NEPA**

NEPA mandates that all federal agencies prepare and consider
environmental impact statements (EIS) before undertaking any major
federal action likely to have a significant effect on the
environment.[^376] NEPA regulations provide for a preliminary
Environmental Assessment (EA) where the significance of the
environmental impact is initially unclear.[^377] If the reviewing agency
makes a Finding of No Significant Impact (FONSI), then the project does
not require an additional EIS before moving on.[^378] Because many
federal actions do not cause major environmental impacts, several legal
and practical exclusions exist to NEPA preparations for federal
projects. The following sections discuss the existing exclusions and how
they could relate to CCS legislation.

> **1. EPA**

By vesting sequestration permitting authority in the EPA, some NEPA
exemptions for CCS proposals may be created. Several exemptions exist
for the agency. The Clean Water Act (CWA) and Clean Air Act (CAA)
explicitly exempt the EPA from NEPA compliance. Section 511 of the CWA
provides that "no action of the \[EPA\] administrator taken pursuant to
\[the Act\] shall be deemed a major Federal action significantly
affecting the quality of the human environment within the meaning of
NEPA."[^379] The Energy Supply and Environmental Coordination Act of
1974 provides the same exclusion for actions taken by the Administrator
pursuant to the CAA.[^380]

In addition to these express exemptions, the agency claims that if a
statute contains the "functional equivalent" of NEPA's review process,
then a NEPA review is redundant and unnecessary.[^381] Courts have
upheld this idea of functional equivalence relating to EPA's permitting
process in the Safe Drinking Water Act (SDWA) and RCRA, although these
acts do not explicitly preclude compliance with the strict provisions of
NEPA.[^382] The Eleventh Circuit Court of Appeals held that although
"RCRA does not require EPA to consider every point the agency would have
to consider in preparing a final EIS under NEPA," RCRA was a more
specific counterpart to NEPA.[^383] The court explained the rationale
behind the functional equivalence doctrine by noting that "limiting the
sweep of NEPA stems, in part, from the traditional view that specific
statutes prevail over general statutes dealing with the same basic
subjects."[^384]

By giving permitting authority to the EPA for CCS, the functional
equivalence doctrine might give the EPA the ability to permit CCS sites
without a NEPA review. However, CCS siting decisions, undertaken by the
Commission, would not fit under this categorical exclusion. It is also
dis-similar to RCRA or SDWA permitting, and NEPA review may be
considered a necessary review depending on the scope of the siting
determination criteria.

RCRA corrective actions do not require a NEPA review, as they are not
considered a "major federal action" and are listed in the categorical
exclusions. The DOE also relies on the CERCLA/NEPA policy that there is
a statutory conflict between CERCLA and NEPA, and that NEPA, as a matter
of law, does not apply to CERCLA cleanups because they are meant to
achieve expeditious cleanups which bars them from "pre-enforcement"
review.[^385] These smaller exclusions apply to CCS activities if they
are similarly related to RCRA or CERCLA actions.

> **2. Categorical Exclusions**

CEQ regulations authorize each federal agency to define categories of
actions within its jurisdiction that do not constitute major federal
actions.[^386] These exempted categories of actions purportedly do not
require a NEPA review and consist mostly of administrative paperwork and
inter-agency accounting. Some categorical exclusions from NEPA include
work performed by agencies within the Department of the Energy (DOE)
that affect oil and gas operations. These specific agency actions are
likely too small in scale to include CCS activity and therefore our
Proposed Legislation would not fit under them. The following discussion
addresses the categorical exclusions and how they relate to CCS.

> **A. DOE**

The DOE has included in their specific agency actions exemptions from
NEPA review for modifications to oil/gas/geothermal pumps and piping,
modification/abandonment of oil storage access/brine
injection/gas/geothermal wells, construction/operation of short crude
oil/gas/steam/geothermal pipeline segments, import/export of natural gas
(no new construction), import/export natural gas (new cogeneration
powerplant), certain permanent exemptions for any existing powerplant,
permanent exemption for mixed natural gas and petroleum, and workover of
existing oil/gas/geothermal wells.[^387] If any extraordinary
circumstances related to the proposal exist that may affect the
significance of the environmental effects, these categorical exclusions
do not apply and the proposal will require an EA or EIS.[^388]

In order for these exemptions to exist, the proposal must not: "threaten
a violation of applicable statutory, regulatory, or permit requirements
for environment, safety and health," "require siting and construction or
major expansion of waste storage, disposal, recovery, treatment
facilities" or "disturb hazardous substances, pollutants, contaminants,
or CERCLA-excluded petroleum and natural gas products that preexist in
the environment such that there would be uncontrolled or unpermitted
releases."[^389] The above listed exemptions seem to include some work
required for CCS, but the siting and construction of CCS wellheads and
reservoirs would likely meet the limiting criteria and therefore, keep
CCS proposals out of the DOE's categorical exclusions.

> **B. DOI**

The DOI has created a list of categorical exclusions, however, they are
aimed at administrative agency work. CCS proposals could not follow
these exclusions for guidance in the field.

**C. Coastal Zone Management Act**

The CZMA does not create sweeping exclusions, but NOAA has created
exclusions for smaller scale projects. Section 306A projects under the
CZMA are generally considered categorical exclusions under NEPA. They
are usually "small scale" and cost less than \$100,000. If the proposal
costs more than \$100,000 and might have a significant impact on the
environment, the project must be reviewed to determine if an EA or EIS
is required.[^390]

> **3. 2005 Energy Policy Act**

The 2005 Energy Policy Act requires NEPA review, but also created five
additional categorical exclusions which the Act maintained did not
lessen environmental review.[^391] These indicate how similar exemptions
might be made for CCS.

Section 390 created categorical exclusions for

> \(1\) Individual surface disturbances of less than 5 acres so long as
> the total surface disturbance on the lease is not greater than 150
> acres and site-specific analysis in a document prepared pursuant to
> NEPA has been previously completed.
>
> \(2\) Drilling an oil or gas well at a location or well pad
>
> site at which drilling has occurred previously within 5 years prior to
> the date of spudding the well.
>
> \(3\) Drilling an oil or gas well within a developed field
>
> for which an approved land use plan or any environmental document
> prepared pursuant to NEPA analyzed such drilling as a reasonably
> foreseeable activity, so long as such plan or document was approved
> within 5 years prior to the date of spudding the well.
>
> \(4\) Placement of a pipeline in an approved right-of-way corridor, so
> long as the corridor was approved within 5 years prior to the date of
> placement of the pipeline.
>
> \(5\) Maintenance of a minor activity, other than any
>
> construction or major renovation or a building or facility.[^392]

Section 311, 3A requires that all "applicant\[s\] shall comply with
pre-filing process required under the National Environmental Policy Act
of 1969 prior to filing an application with the Commission. The
regulations shall require that the pre-filing process commence at least
6 months prior to the filing of an application for authorization to
construct an LNG terminal and encourage applicants to cooperate with
State and local officials."[^393]

LNG siting permitting decisions have recently undergone scrutiny for
failing to complete satisfactory NEPA analysis. The Wyden Bill,
introduced April 7, 2008, complains that FERC, in its permitting
authority, is failing to look at the NEPA-required alternatives analysis
and demonstrating a public need for the LNG facilities. However, the EIS
prepared for the Broadwater LNG terminal considered both alternatives
and a public need for the terminal.

In order to prevent similar complaints, Proposed CCS Legislation could
include specific language for siting although the EPA may consider
creating categorical exclusions for other pieces of the CCS permitting
and construction process through the regulations.

> **4. Recommendation for NEPA Language**

CCS will not be automatically exempt from NEPA. Some agency created
exclusions may apply. By giving permitting decisions to the EPA, which
considers various environmental factors, then its permit review process
might provide functional equivalence for permittees who would like to
avoid double preparations, similar to RCRA and SDWA permitting schemes.
EPA may also create categorical exclusions similar to the 2005 Energy
Policy Act and the DOE's agency actions relating to the oil and gas
production, which presumably do not impair environmental protection. The
Proposed Legislation therefore need not exempt NEPA compliance because
the Administrator can create efficient and necessary categorical
exemptions in the regulations. The overall goal of CCS Proposed
Legislation aims to expedite development of CCS projects while
simultaneously protecting the environment, health, and safety, so
including NEPA for compliance and allowing EPA to carve out specific
exemptions within their regulations preserves environmental review and
gives the agency entrusted with environmental protection the ability to
create appropriate exclusions. Actions of the Commission are more likely
to trigger NEPA review and therefore relying on Congressional statements
as to the extent of NEPA consideration in Commission decisions may be
appropriate. The 2005 Energy Policy Act used this approach, and so could
CCS Legislation.

> **b. Endangered Species Act**

The Endangered Species Act (ESA) requires that all federal agencies must
insure, in consultation with the Secretary, that their actions are not
likely to jeopardize the continued existence of any endangered or
threatened species or result in the destruction of, or adverse
modification of, such species' critical habitat.[^394] If an agency
would like an exemption to the ESA, that agency must perform a
biological assessment for the purpose of identifying any endangered or
threatened species which is likely to be affected by such action.[^395]
Then the applicant must apply for an exemption, only to be granted by
the Secretary and the Endangered Species Committee.[^396] Therefore, if
a CCS operation is likely to affect any endangered or threatened
species, the applicant must apply for an exemption. Since there is no
barrier to administering this law unique to CCS, and our goal is
continued protection, the Proposed Legislation should adhere to the ESA
and should address the Act in its language.

> **c. Marine Mammal Protection Act**

The Marine Mammal Protection Act (MMPA) authorizes the National Marine
Fishery Services (NMFS) and Federal Wildlife Services (FWS) to issue
Letters of Authorization (LOA) to U.S. citizens who petition them for
limited unintentional or accidental taking of small numbers of marine
mammals, provided that the activity would have a negligible impact to
marine mammals.[^397] Operators can ask for a site-specific LOA which
lasts up to five years.[^398] In the absence of an LOA, operators are
liable for any take of marine mammals. A "take" is described as,
"harass, hunt, capture, kill or collect, or attempt to harass, hunt,
capture, kill or collect." "Harassment" is determined by actions that
"ha\[ve\] the potential to injure a marine mammal or marine mammal stock
in the wild; or, ha\[ve\] the potential to disturb a marine mammal or
marine mammal stock in the wild by causing disruption of behavioral
patterns, including, but not limited to, migration, breathing, nursing,
breeding, feeding, or sheltering but which does not have the potential
to injure a marine mammal or marine mammal stock in the wild."[^399]

Offshore drilling operators have to apply for these permits from the
NMFS and FWS due to potential harassment of marine mammals in the
offshore drilling processes. If CCS operators intend to venture into
offshore siting, they will likely also have to apply for LOAs through
the NMFS and FWS. Takings are often incidental to offshore oil and gas
structural activities. Because CCS operations do not present any
applicable exemptions to MMPA, the Proposed Legislation should adhere to
this Act and should address it in its language.

> **d. National Historic Preservation Act**

The National Historic Preservation Act (NHPA) is legislation intended to
preserve historic and archaeological sites in the United States. The
federal government must approve any federally-funded project that might
impact sites listed on, or eligible for listing on, the National
Register of Historic Places.[^400] The review is not binding, but does
allow for public notice and comment. The regulations set out an
exemption process requiring the applicant to consult with the State
Historic Preservation Officer and the Tribal Historic Preservation
Officer and the applicant must provide public participation.[^401] If
the foreseeable effects on the historic property are minimal and all
other criteria are met, the reviewing Council will grant an
exemption.[^402]

NHPA does not provide blanket exemptions. CCS applicants will also have
to apply for exemptions through the regulatory process. If a CCS siting
or operation has the foreseeable negative effect on an historic site,
the operator will have to apply for an exemption. Again, CCS operations
do not present any foreseeable blanket exemptions from this Act, and
therefore, the Proposed Legislation should adhere to the NHPA and defer
to the EPA to permit for individual exemptions.

> **e. Policy Decision Conclusions**

Very few blanket exemptions exist under these federal environmental
laws. This Proposed Legislation should defer categorical exemptions
under NEPA to the EPA, but should otherwise follow the NEPA reviewing
process. By giving permitting authority to the EPA, the court's
recognition of functional equivalence in appropriate circumstances could
lessen NEPA procedural requirements. CCS activities should comply with
regulations under the ESA, the MMPA, and the NHPA.

3.  **Proposed Legislation**

## 1004 Integration with Federal Agency Consultation Laws {#integration-with-federal-agency-consultation-laws-1 .unnumbered}

### In making a decision under this chapter, the Administrator or the Commission, as applicable, shall comply with applicable requirements of Federal law, including any requirements of---

#### the National Environmental Protection Act of 1969 (42 U.S.C. § 4321 *et seq.*);

#### the Endangered Species Act of 1973 (16 U.S.C. § 1531 *et seq.*);

#### the Marine Mammal Protection Act of 1972 (16 U.S.C. § 1361 *et seq.*); and

#### the National Historic Preservation Act of 1966 (16 U.S.C. § 470 *et seq.*).

Such integration shall be effected only to the extent that it can be
done in a manner consistent with the goals and policies expressed in
this chapter and in the other acts referred to in this section.

### Not later than 18 months after the date of enactment of this section, the Administrator shall issue any regulations necessary to implement this section. The regulations should describe any categorical exclusions or exemptions under the acts referred to in this section.

### Except as provided in subsection (b) of this section, this chapter shall not be construed as superseding or limiting the authorities and responsibilities, under any other provision of law, of the Administrator or any other Federal officer, department, or agency.

J.  **Additional Provisions**

> Additional provisions deal with general enforcement standards and are
> modeled after other environmental laws.

###  {#section-1 .unnumbered}

**Appendix A: Model State/Tribal Legislation**

**Section 1**: **Ownership of Pore Space**

# As used in this section, the term \"pore space\" is defined to mean subsurface space which can be used as storage space for carbon dioxide or other substances.

# The ownership of all pore space below surface lands and waters of the state is declared to be vested in the owner of the surface estate.

# A conveyance of the surface estate shall be a conveyance of the pore space in all strata below the surface of such real property unless the ownership interest in such pore space previously has been severed from the surface ownership or is explicitly excluded in the conveyance. 

# The ownership of pore space in strata may be conveyed in any manner provided by law for the transfer of mineral interests in real property. No agreement conveying mineral or other interests underlying the surface estate shall act to convey ownership of any pore space unless the agreement explicitly conveys that ownership interest.

# Nothing in this section shall be construed to change or alter the state or common law as it relates to the rights belonging to, or the dominance of, the mineral estate.

# All instruments which transfer the rights to pore space under this section shall describe the scope of any right to use the surface estate. The owner of any pore space right shall have no right to use the surface estate beyond that set out in a properly recorded instrument.

# Transfers of pore space rights made after \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (date of enactment) are null and void at the option of the owner of the surface estate if the transfer instrument does not contain a specific description of the location of the pore space being transferred. The description may include but is not limited to a subsurface geologic or seismic survey or a metes and bounds description of the surface lying over the transferred pore space. In the event a description of the surface is used, the transfer shall be deemed to include pore space at all depths underlying the described surface area unless specifically excluded. The validity of pore space rights under this paragraph shall not affect the respective liabilities of any party and such liabilities shall operate in the same manner as if the pore space transfer were valid. 

# Nothing in this section shall alter, amend, diminish or invalidate rights to the use of subsurface pore space that were acquired by contract or lease prior to \_\_\_\_\_\_\_\_\_\_\_ (date of enactment).

# It is the intent of the legislature to clarify the ownership of pore space underlying the surface of the lands and waters of this state. All conveyances of interests in real property on and after \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (date of enactment) shall be subject to the provisions of this act. All conveyances of real property made prior to \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ (date of enactment) shall be construed in accordance with the provisions of this act unless a person claiming an ownership interest contrary to the provisions of this act establishes such ownership by a preponderance of the evidence in an action to establish ownership of such interest.

**Section 2: Eminent Domain Authority**

(a) When any owner or operator of a sequestration project that has been
    licensed in accordance with the Act, cannot acquire by contract, or
    is unable to agree with the owner of property as to the compensation
    to be paid, all surface and subsurface property rights and interests
    necessary for construction and operation of the sequestration
    project, including, but not limited to, all necessary rights-of-way
    to construct, operate and maintain all pipelines, compressor
    stations, pressure apparatus, or other stations or necessary
    equipment or facilities, the owner or operator may acquire the same
    by the exercise of the right of eminent domain in the state courts.

> \(b\) Owners of property subject to eminent domain authority shall be
> compensated at fair market value. The State environmental regulatory
> agency may promulgate regulations establishing the method for
> determination of fair market value.
>
> \(c\) The right of eminent domain granted in this section shall not
> prejudice the rights of the owners of said land or other rights or
> interests therein as to all other uses not acquired for the storage
> facility.

**Section 3: Unitization**

> \(a\) The State Regulatory Agency upon its own motion, or upon the
> petition by any interested party, shall conduct a hearing to consider
> the need for the operation as a unit of an entire pool or any portion
> thereof, in order to facilitate the use of the pore space for the
> storage of carbon dioxide or other substances.
>
> \(b\) The State Regulatory Agency shall issue an order requiring unit
> operations, if it finds that:
>
> 1\. Operation of the pool or any portion thereof is necessary to
> prevent waste, to facilitate use of the pore space for carbon dioxide
> or other substances, to avoid the drilling of unnecessary wells, and
> to protect the correlative rights of the property owners;
>
> 2\. The unit operation of the pool or any portion thereof is
> reasonably necessary in order to carry on proper development,
> maintenance or other operations.

\(c\) The order issued by the State Regulatory Agency shall be upon
terms and conditions that are just and reasonable for unit operations
and shall include:

> 1\. A description of the pool or portion thereof, to be so operated,
> termed the unit area;
>
> 2\. A statement of the nature of the operations contemplated;
>
> 3\. A just and reasonable allocation to the separately owned tracts in
> the unit area of for the injection of all carbon dioxide or other
> substances into the unit area;
>
> 4\. A provision for the credits and charges to be made in the
> adjustment among the owners in the unit area for their interest in
> wells, tanks, pumps, machinery, materials, and equipment contributed
> to the unit operations;
>
> 5\. The time when the unit operations shall commence, and the manner
> in which, and the circumstances under which, the unit operations and
> the unit shall terminate and be dissolved;
>
> 6\. Such additional provisions that are found to be appropriate for
> carrying on the unit operations, and for the prevention of waste and
> protection of correlative rights.

\(d\) General Provisions:

> 1\. The State Regulatory Agency may approve additions to the unit
> portions of pools not previously included within the unit and may
> extend the unit area as necessary. The State Regulatory Agency may
> approve reductions to the unit area as necessary. An order adding to
> or deleting from the unit area shall be upon terms that are just and
> reasonable.
>
> 2\. A property owner not included in the original unit may petition
> for inclusion into the unit area.
>
> 3\. All operations, including, but not limited to, the commencement,
> drilling, or operation of a site upon any portion of the unit area
> shall be deemed for all purposes the conduct of such operations upon
> each separately owned tract in the unit area by the several owners
> thereof.
>
> 4\. The State Regulatory Agency, upon its own motion, or up the
> petition by any owner may for good cause terminate unit operations and
> dissolve the unit.

**Section 4: Trust Fund, Liability Release and Transfer of Ownership**

a.  Establishment of Trust Fund. There is hereby established a Carbon
    Dioxide Storage Facility Trust Fund to be administered by the State
    Regulatory Agency. There is hereby levied on the Owner or Operator a
    fee equal to \_\_\_\_ for each ton of carbon dioxide injected for
    storage for the purposes of funding the Carbon Dioxide Geologic
    Storage Trust Fund. The Trust Fund shall be utilized solely for the
    long-term monitoring and maintenance of the site and storage
    facility, including but not limited to, maintenance and monitoring
    of remaining surface facilities and wells, remediation of mechanical
    problems associated with remaining wells and surface infrastructure,
    repairing mechanical leaks at the site, and plugging and abandoning
    remaining wells under the jurisdiction of the State Regulatory
    Agency for use as observation wells. The Trust Fund shall be
    administered by the Administrator.

> \(b\) Liability Release/Transfer of Ownership. Ten years, or some
> other timeframe as established by rule, after cessation of operations,
> the State Regulatory Agency shall issue a Certificate of Completion of
> Injection Operations, upon a showing by the Owner or Operator that the
> reservoir is reasonably expected to retain mechanical integrity and
> remain emplaced, at which time ownership to the remaining project
> including the stored carbon dioxide transfers to the State.
>
> \(c\) Upon issuance of the Certificate of Completion of Injection
> Operations, the owner or operator, and all generators of any injected
> carbon dioxide, shall be released from all further liability
> associated with the project. This section shall have no impact on the
> Compensation Fund and associated regulations, which Fund will remain
> in effect at all times regardless of ownership of the pore space and
> stored carbon dioxide.

[^1]: *See* [Final report of the Advanced Coal Technology work
    Group]{.smallcaps} (January 29, 2008), *available at*
    http://www.epa.gov/air/caaac/coaltech/2008_01_final_report.pdf
    \[hereinafter [Final report of the Advanced Coal Technology work
    Group\]]{.smallcaps}.

[^2]: [Intergovernmental Panel on Climate Change, Climate Change 2007
    Synthesis Report Summary for Policymakers]{.smallcaps} 2 (2007),
    *available at*
    http://www.ipcc.ch/pdf/assessment-report/ar4/syr/ar4_syr_spm.pdf
    \[hereinafter IPCC 2007 [Climate Change Report\]]{.smallcaps}.

[^3]: *Id.* at 5.

[^4]: *Id.*

[^5]: *Id.* at 8-12.

[^6]: *Id.*

[^7]: Jeffrey Moore, *The Potential Law of On-Shore Geologic
    Sequestration of CO~2~ Captured from Coal-Fired Power Plants*, 28
    [Energy L.J.]{.smallcaps} 443 (2007) (citing [Intergovernmental
    Panel on Climate Change, Special report on Carbon Dioxide Capture
    and Storage 53 (]{.smallcaps}Bert Metz, ed., Cambridge University
    Press 2005[))]{.smallcaps}.

[^8]: *Id.* (citing [Natural Res. Def. Council, NRDC issue Paper, Coal
    in a Changing Climate]{.smallcaps} 14 (2007)).

[^9]: Energy Information Agency, [Electric Power Annual]{.smallcaps} 2
    (October 22, 2007), *available at*
    http://www.eia.doe.gov/cneaf/electricity/epa/epa_sum.html.

[^10]: [Intergovernmental Panel on Climate Change, Special report on
    Carbon Dioxide Capture and Storage, Technical Summary]{.smallcaps}
    (2007), *available at*
    http://www.ipcc.ch/pdf/special-reports/srccs/srccs_technicalsummary.pdf
    \[hereinafter IPCC [Carbon Capture Report\].]{.smallcaps}

[^11]: IPCC 2007 [Climate Change Report]{.smallcaps} at 7[.]{.smallcaps}

[^12]: [Paul Parfomak & Peter Folger,]{.smallcaps} [Cong. Research
    Serv., Carbon Dioxide (CO2) Pipelines for Carbon Sequestration:
    Emerging Policy Issues]{.smallcaps} CRS-1 (April 19, 2007),
    *available at*
    http://ncseonline.org/NLE/CRSreports/07May/RL33971.pdf \[hereinafter
    CO2 [Pipelines Report\]]{.smallcaps}.

[^13]: Statement on Signing the Energy Policy Act of 2005, 41 [Weekly
    Comp. Pres. Doc.]{.smallcaps} 1267 (Aug. 15, 2005), *available at*
    http://www.whitehouse.gov/news/releases/2005/08/20050808-6.html.

[^14]: *Id.*

[^15]: There is also increasing concern over EPA regulation of carbon
    emissions after the Supreme Court decision in *Massachusetts v. U.S.
    Envtl. Prot. Agency*, 127 S. Ct. 1438 (2007)*.* This, and other
    legislative concerns are addressed *infra* in Section III-C.

[^16]: *See* [Final report of the Advanced Coal Technology work
    Group.]{.smallcaps}

[^17]: [Melissa Chan and Sara Forbes,]{.smallcaps} [Carbon Sequestration
    Role in State and Local Actions]{.smallcaps}, table 1
    (DOE/NETL-2005/1212 January 2005), *available at*
    http://www.netl.doe.gov/energy-analyses/pubs/slfinal_1.pdf.

[^18]: *Id.*

[^19]: Indeed incorporating sequestration is hoped to be a pathway for
    overcoming the current hostile environment for coal-fired power
    plants. For a discussion on the current difficulties in obtaining
    approval of coal-fired power plants, *see* Felicity Barringer,
    *States' Battles Over Energy Grow Fiercer With U.S. in a Policy
    Gridlock*, [N.Y. Times]{.smallcaps}, Mar. 20, 2008.

[^20]: *See* 16 U.S.C. § 824 (2000).

[^21]: [Louis B. Schwartz, John J. Flynn, and Harry First]{.smallcaps},
    [Free Enterprise and Economic Organization: Government
    Regulation]{.smallcaps} 32 (6th ed. 1985)
    [\[]{.smallcaps}hereinafter [Regulation\].]{.smallcaps}

[^22]: *Id.*

[^23]: *Id.*

[^24]: [American Public Power Association, 2005 Governance
    Survey]{.smallcaps} (2005),
    http://www.appanet.org/files/PDFs/governance.pdf.

[^25]: [Regulation]{.smallcaps}, *supra* note Error: Reference source
    not found

[^26]: Zuni Pub. Sch. Dist. No. 89 v. Dep't of Educ*.*, 127 S. Ct. 1534
    (2007).

[^27]: *See* 16 U.S.C. § 824(a)(3) (2000).

[^28]: *See* 16 U.S.C. § 824(d)-(e) (2000).

[^29]: *See* 16 U.S.C. § 824(b) (2000).

[^30]: *See* 16 U.S.C. §§ 824(a), (i)-(k) (2000)*. See also*
    R[egulation,]{.smallcaps} at 31.

[^31]: Appendix A, *infra*.

[^32]: Judy Pasternak, *The Nation: Coal At Heart of Climate Battle;
    Environmental groups go to court to stop each new power plant and
    force Washington to address the issue*, [L.A. Times]{.smallcaps},
    Apr. 18, 2008, at A1.

[^33]: Fred Pace, *Proposed coal plant denied: Virginia regulators say
    proposal neither reasonable nor prudent*, [Richmond
    Times]{.smallcaps}, Apr. 15, 2008 (Virginia Corporation Commission
    denied approval for new power plant using coal gasification
    technology).

[^34]: *Supra* Section I.

[^35]: *See* 16 U.S.C. § 824(a-3) (2000).

[^36]: *See* 16 U.S.C. § 824(a-3)(e) (2000), *See also* F.E.R.C. v.
    Mississippi et. al*.,* 456 U.S. 742 (1982).

[^37]: Steven Ferrey, *Sustainable Energy, Environmental Policy, and
    States' Rights: Discerning the Energy Future Through the Eye of the
    Dormant Commerce Clause,* 12 [N.Y.U. Envtl. L.J.]{.smallcaps} 507,
    541 (2004).

[^38]: Kamine/Besicorp Allegany L.P. v. Rochester Gas & Electric Corp.,
    908 F.Supp. 1180 (W.D. N.Y.)(1995).

[^39]: *See* 16 U.S.C. § 824(a-3)(b) (2000).

[^40]: *See* 16 U.S.C. § 824(a-3)(h) (2000).

[^41]: *See* 16 U.S.C. § 824(a-3)(m) (2000).

[^42]: *See* 16 U.S.C. § 824(a-3)(b) (2000).

[^43]: *See* 16 U.S.C. § 824(a-3)(g) (2000).

[^44]: IPCC [Carbon Dioxide Capture Report]{.smallcaps} at 31.

[^45]: Moore, *supra* note Error: Reference source not found, at 453.

[^46]: CO~2~ [Pipelines Report]{.smallcaps} at CRS-1.

[^47]: *Id.*

[^48]: *Id.* at CRS-4-5.

[^49]: *See id.* at CRS-6*,* concluding that 77% of the total annual
    CO~2~ captured from the major North American sources will likely be
    stored directly below the sources and that an additional 18% may be
    stored within 100 miles of the source.

[^50]: *See, e.g[., ]{.smallcaps}*[Heleen de Coninck]{.smallcaps} et al,
    [Acceptability of]{.smallcaps} CO~2~ [Capture and Storage -- a
    review of legal, regulatory, economic and social aspects
    of]{.smallcaps} CO~2~ [capture and Storage (May 2006),]{.smallcaps}
    http://www.ecn.nl/docs/library/report/2006/c06026.pdf[;]{.smallcaps}
    Shackley, Simon, *et al*, [The Public Perceptions of Carbon Capture
    and Storage]{.smallcaps} (Tyndall Centre for Climate Change Research
    2004), www.tyndall.ac.uk/publications/working_papers/wp44.pdf

[^51]: *Id.*

[^52]: *See, e.g.,* Camila Thorndike and Sarah Judkins, *Proposed Plant
    Stalled in Washington* [(M]{.smallcaps}arch 18, 2008),
    http://itsgettinghotinhere.org/2008/03/18/no-coal-collaboration-trips-up-proposed-plant-in-eastern-washington.

[^53]: Energy Policy Act of 2005 § 311, codified at 15 U.S.C. §
    717b(e)(1)(Supp.2006).

[^54]: AES Sparrows Point LNG, LLC v. Smith*,* 470 F.Supp.2d 586 (D. Md.
    2007) (striking down a zoning ordinance on LNG siting).

[^55]: *See, e.g.,* Brown, Valerie, *Of Two Minds: Groups Square Off on
    Carbon Mitigation*[,]{.smallcaps} 115 [Environ Health
    Persp.]{.smallcaps} A548 (November 2007), *available at*
    http://www.ehponline.org/members/2007/115-11/EHP115pa546PDF.PDF.
    *See also* Gauna, Eileen, *LNG Facility Siting and Environmental
    (in)Justice: Is it Time for a National Siting Scheme*[,]{.smallcaps}
    2 [Envt'l & Energy L. & Pol'y J.]{.smallcaps} 85 (2007), arguing
    that environmental justice considerations demanded resolution by a
    national siting scheme taking such considerations into account. The
    same reasoning could be applied to siting of carbon geologic
    sequestration facilities.

[^56]: *See* Burnham v. Hardy Oil Co., 147 S.W. 330, 335 (Tex. Civ. App.
    1912).

[^57]: *See* Mark de Figueiredo, The Liability of Carbon Dioxide Storage
    55 (Jan. 12, 2007)(unpublished Ph.D. dissertation, MIT), *available
    at*
    http://sequestration.mit.edu/pdf/Mark_de_Figueiredo_PhD_Dissertation.pdf

[^58]: *See* Alexandra B. Klass and Elizabeth J. Wilson, Climate Change
    and Carbon Sequestration 9 (2008) (unpublished manuscript, available
    at http://works.bepress.com/alexandra_klass/4/); *see* *id.* at 55.

[^59]: *See* Klass, *supra* note 58, at 9.

[^60]: *See* Sarah H. Forbes, *Regulatory Barriers for Carbon Capture,
    Storage and Sequestration* at 5, [National Energy Technology
    Laboratory (]{.smallcaps}November 2002) (noting 1986 disaster when
    CO~2~ release from natural reservoir under Lake Nyos in Africa
    killed more than 1700 people), *available at*
    http://www.netl.doe.gov/technologies/carbon_seq/refshelf/reg-issues/Capture.PDF.

[^61]: *See* Klass, *supra* note 58, at 9.

[^62]: *See id.* at 9-10.

[^63]: See Melanie R. Kay, *Environmental Negligence: A Proposal for a
    New Cause of Action for the Forgotten Innocent Owners of
    Contaminated Land*, 94 [Calif. L. Rev.]{.smallcaps} 149, 168 (2006).

[^64]: *See* de Figueiredo, *supra* note 57, at 56.

[^65]: *See* Kay, *supra* note 63, at 170 (quoting Newhall Land &
    Farming Co. v. Superior Court, 19 Cal. App. 4th 334, 349 (Cal. Ct.
    App. 1993)).

[^66]: *See* de Figueiredo, *supra* note 57, at 57.

[^67]: *See id.*

[^68]: *See id.*

[^69]: *See id.* at 56; G. Nelson Smith III, *Nuisance and Trespass
    Claims in Environmental Litigation: Legislative Inaction and Common
    Law Confusion*, 36 [Santa Clara L. Rev]{.smallcaps}. 39, 54 (1995).

[^70]: *See id.* at 56.

[^71]: *See* Klass, *supra* note 58, at 23.

[^72]: de Figueiredo, *supra* note 57, at 58.

[^73]: [Intergovernmental Panel on Climate Change, Climate Change 2007
    Synthesis Report Summary for Policymakers]{.smallcaps} 8-12 (2007).

[^74]: Kenneth S. Abraham, *Environmental Liability and the Limits of
    Insurance*, 88 [Colum. L. Rev]{.smallcaps}. 942, 945-46 (1988).

[^75]: *See id.* at 960; de Figueiredo, *supra* note 57, at 62.

[^76]: *See* 42 U.S.C. § 2210 (2000).

[^77]: 10 C.F.R. § 140.11(a)(4) (2006).

[^78]: *See id.*

[^79]: *See* 42 U.S.C. § 2210(e)(2) (2000).

[^80]: This scheme has been used in other environmental statutes, namely
    CERCLA. *See* 42 U.S.C. § 9607(j).

[^81]: David Gerard and Elizabeth Wilson, *Environmental Bonds and the
    Problem of Long-Term Carbon Sequestration* at 2,
    www.ecy.wa.gov/laws-rules/wac173407_218/Gerard%20Wilson%20Bonding.pdf.

[^82]: *See id.*

[^83]: *See id.* at 14-15.

[^84]: *See id.* at 3.

[^85]: *See id.* fn 5.

[^86]: *Id.* at 8.

[^87]: *Id.*

[^88]: *Id.*

[^89]: *See* de Figueiredo, *supra* note 57 at 71.

[^90]: Kenneth S. Abraham, *Individual Action and Collective
    Responsibility: The Dilemma of Mass Tort Reform*, 73 [Va. L.
    Rev.]{.smallcaps} 845, 886 (1987).

[^91]: *See* [Office of Air and Radiation, Stratospheric Protection
    Division EPA,]{.smallcaps} [Carbon Dioxide as a Fire Suppressant:
    Examining the Risks,]{.smallcaps} Appendix B [(2000);]{.smallcaps}
    *see also* 29 C.F.R. § 1910.1000 (OSHA regulations regarding human
    exposure to CO~2~).

[^92]: *See* Abraham, *supra* note 74 at 890.

[^93]: *See id.*

[^94]: Elizabeth J. Wilson & Mark A. de Figueiredo, *Geologic Carbon
    Dioxide Sequestration: An Analysis of Subsurface Property Law*, 36
    [Envtl. L. Rep.]{.smallcaps} 10114 (2006).

[^95]: *Id.*

[^96]: [Massachusetts Inst. Of Tech., The Future of Coal: Options for a
    Carbon Constrained World]{.smallcaps} 44 (2007),
    http://web.mit.edu/coal/The_Future_of_Coal.pdf.

[^97]: *Id.*

[^98]: IEA, *Prospects for CO2 Capture and Storage* 190 (2004).

[^99]: Wilson & de Figueiredo, *supra* note 94, at 10114.

[^100]: I[OGCC Task Force on Carbon Capture and Geologic Storage,
    Storage of Carbon Dioxide in Geologic Structures: A Legal and
    Regulatory Guide for States and Provinces]{.smallcaps} 15 (2007),
    available at
    http://www.southwestcarbonpartnership.org/\_Resources/PDF/2008-CO2-Storage-Legal-and-Regulatory-Guide-for-States-Full-Report.pdf.

[^101]: Int'l Risk Governance Council, Regulation of Carbon Capture and
    Storage P-13 (2008).

[^102]: [IOGCC Task Force]{.smallcaps}, *supra* note 100, at 15.

[^103]: Wilson & de Figueiredo, *supra* note 94, at 10118.

[^104]: *Id.*

[^105]: The use of field unitization in oil and gas operations is
    widespread. Only Texas, the largest oil and gas producing state in
    the United States, does not have a compulsory unitization law.
    Jacqueline Lang Weaver, *The Tragedy of the Commons from Spindletop
    to Enron*, 24 [J. Land Resources & Envtl. L.]{.smallcaps} 187, 187
    (2004)("Such a statute is universally recognized as necessary to
    assure the maximum efficient recovery of oil and gas while also
    allocating fair shares of a field\'s bounty to the different
    operators of leases overlying a common reservoir").

[^106]: *Id.*

[^107]: *Id.* Note that this is not the case in Texas under the
    "negative rule of capture" established in *Railroad Commission of*
    *Texas v. Manziel*, 361 S.W.2d 560, 562 (1962) in which the Texas
    Supreme Court held that technical rules of trespass could not defeat
    a secondary recovery project.

[^108]: *Id.*

[^109]: *Id.* (*citing Phillips Petroleum Co. v. Stryker*, 723 So.2d 585
    (Ala. 1998)).

[^110]: Wilson and de Figueiredo*, supra* note 94*,* at 10119.

[^111]: *Id.* (*citing Chance v. BP Chemical, Inc.,* 670 N.E.2d 985
    (Ohio 1996); *Mongrue v. Monsanto*, 249 F.3d 422 (5th Cir. 2001)).

[^112]: *Id.*

[^113]: Jeffrey W. Moore, *The Potential of On-Shore Geologic
    Sequestration of CO2 Captured from Coal-Fired Power Plants*, 28
    [Energy L.J.]{.smallcaps} 443, 461 (2007). Note that natural gas can
    also be stored in suitable salt caverns and natural aquifers. Wilson
    & de Figueiredo, *supra* note 94, at 10121.

[^114]: Also, note that natural gas injection is exempt from regulation
    under the Underground Injection Control ("UIC") program. Moore,
    *supra* note 7, at 14. However, the EPA and the U.S. courts have
    held that CO2 is not a "natural gas" under the UIC program or the
    Safe Water Drinking Act. *Id.* (*citing Arco Oil & Gas Co. v. EPA*,
    14 F.3d 1431, 1436 (10th Cir. 1993)). Regulation of CCS under UIC
    and SDWA will be addressed in a separate section of this report.

[^115]: Wilson & de Figueiredo, *supra* note 94, at 10121.

[^116]: *Id.* (*citing Lone Star Gas Co. v. Murchison,* 353 S.W.2d 870
    (Tex. Ct. App. 1962); *Natural Gas Co. v. Mahon & Rowsey, Inc.,* 786
    F.2d 1004 (10th Cir. 1986)).

[^117]: *Id.*

[^118]: [IOGCC Task Force,]{.smallcaps} *supra* note 100, at 16.

[^119]: Wilson & de Figueiredo, *supra* note 94, at 10121.

[^120]: [IOGCC Task Force,]{.smallcaps} *supra* note 7, at 17-18.

[^121]: *Id.* (*citing Dep't of Trans. v. Goike*, 560 N.W.2d 365, 366
    (Mich. Ct. App. 1996).

[^122]: Wilson & de Figueiredo, *supra* note 94, at 10121; [IOGCC Task
    Force,]{.smallcaps} *supra* note 100, at 18-19.

[^123]: [IOGCC Task Force,]{.smallcaps} *supra* note 100, at 16.

[^124]: Wilson & de Figueiredo, *supra* note 94, at 10123.

[^125]: [IOGCC Task Force]{.smallcaps} *supra* note 100, at 20 (*citing*
    Williams & Meyers, 1 Oil & Gas Law § 222, at 334).

[^126]: Wilson & de Figueiredo, *supra* note 94, at 10117.

[^127]: *Id.*

[^128]: *Id.*

[^129]: *Id.*

[^130]: *Id.*

[^131]: *Id.*

[^132]: *Id.*

[^133]: *Id.*

[^134]: Wilson & de Figueiredo, *supra* note 94, at 10122 (citing
    Columbia Has Trans. Corp. v. An Exclusive Gas Storage Easement, 776
    F.2d 125, 128 (6th Cir. 1985); Steven D. McGrew, *Selected Issues in
    Federal Condemnations for Underground Natural Gas Storage Rights:
    Valuation Methods, Inverse Condemnation, and Trespass*, 51 [Case W.
    Res. L. Rev.]{.smallcaps} 131, 138-40 (2000)).

[^135]: *.* Wilson & de Figueiredo, *supra* note 94, at 10122.

[^136]: *Id.* at 10119 (citing [U.S. Office of Technology Assessment,
    Enhanced Oil Recovery Potential in the United States
    234]{.smallcaps} (1978)).

[^137]: *Id.* at 10122 (citing 620 N.E.2d at 49).

[^138]: *Id.*

[^139]: *Id.*

[^140]: [IOGCC Task Force]{.smallcaps}, *supra* note 100, at 3.

[^141]: *Id.*

[^142]: [Int'l Risk Governance Council, Regulation of Carbon Capture and
    Storage]{.smallcaps} P-23 (2008).

[^143]: [IOGCC Task Force]{.smallcaps}, *supra* note 100, at 29.

[^144]: Wyoming was the first state to pass such legislation earlier
    this year. *See* [Nat'l Conference of State Legislatures, Memorandum
    re Carbon Capture and Sequestration Legislation]{.smallcaps} (2008).

[^145]: H.R. 0089, 59th Leg., 2008 Budget Sess. (Wyo. 2008)(enacted).

[^146]: [IOGCC, Model Statute and Fieldwide Unitization
    References,]{.smallcaps} Appendix A (1999).

[^147]: See Indian Mineral Development Act of 1982, 25 U.S.C.A §2102(a)
    (1988)

[^148]: [Massachusetts Inst. Of Tech., The Future of Coal: Options for a
    Carbon Constrained World]{.smallcaps} 43 (2007).

[^149]: Arco Oil & Gas Co. v. EPA, 14 F.3d 1431, 1436 (10^th^ Cir.
    1993).

[^150]: Assiniboine and Sioux Tribes v. Board of Oil and Gas, 792 F2d.
    782, 796 (9^th^ Cir. 2003).

[^151]: *Id.*

[^152]: *Id.*

[^153]: *Id.*

[^154]: 33 U.S.C. §§ 1251-1387 (2000) (stating the SWDA requires
    underground injection activities not harm USDWs).

[^155]: *Id.*

[^156]: Legal Envtl. Assistance Found., Inc. v. EPA, 118 F.3d 1467,
    1469-70.

[^157]: 40 C.F.R. §144.2 (2006)

[^158]: Prairie Band Potawatomi Nation v. Richards, 125 S. Ct.1397 (U.S.
    2005).

[^159]: Three Affiliated Tribes of Fort Berthold Reservation v. World
    Engineering, 476 U.S. 877 (1986).

[^160]: Calif. v. Cabazon Band of Mission Indians, 480 U.S. 202 (U.S.
    1987).

[^161]: R.R. Comm'n of Tex. v. Manziel, 361 S.W.2d 560, 568 (Tex. 1962).

[^162]: *Id.*

[^163]: *Id.*

[^164]: Karen N. Scott, *Day After Tomorrow: Ocean CO2 Sequestration and
    the Future of Climate Change*, [Geo. Int'l Envtl. L.
    Rev.]{.smallcaps} (Fall 2005), *available at*
    http://findarticles.com/p/articles/mi_qa3970/is_200510/ai_n15746142/pg_17.

[^165]: *Id.*

[^166]: *Id.*

[^167]: *Id.*

[^168]: *Id.*

[^169]: Ann Brewster Weeks, *Subseabed Carbon Dioxide Sequestration as a
    Climate Mitigation Option for the Eastern United States: A
    Preliminary Assessment of Technology and Law*, [12 Ocean & Coastal
    L. J.]{.smallcaps} 245, 245-47 (2007).

[^170]: *Id* at 247.

[^171]: *Id* at 259.

[^172]: *Id.*

[^173]: World Resources Institute, *London Protocol Adopts Amendment
    Allowing for Sub-seabed Carbon Dioxide Storage* (2008),
    http://pdf.wri.org/css_06_12_08_london_protocol.pdf.

[^174]: *Id.*

[^175]: International Maritime Organization, CO2 Sequestration FAQ,
    *available at*
    http://www.imo.org/Newsroom/mainframe.asp?topic_id=1548 (last
    visited April 13, 2008).

[^176]: *Id.*

[^177]: International Maritime Organization, *Risk Assessment and
    Management Framework for CO2 Sequestration in Sub-Seabed Geological
    Structures* (2006),
    http://www.imo.org/includes/blastDataOnly.asp/data_id=19064/CO2SEQUESTRATIONRAMF2006.doc.

[^178]: *Id.*

[^179]: Weeks, *supra* note 169, at 262.

[^180]: *Id.*

[^181]: *Id.*

[^182]: *Id.*

[^183]: Minerals Management Service, *Alternative Energy Programs:
    Program Overview*, *available at*
    http://www.mms.gov/offshore/AlternativeEnergy/ProgramOverview.htm
    (last visited April 13, 2008).

[^184]: National Oceanic and Atmospheric Administration, *NOAA Office of
    Legislative Affairs -- Coastal Zone Management Act*, *available at*
    http://www.legislative.noaa.gov/Legislation/czma.html (last visited
    April 13, 2008).

[^185]: *Id.*

[^186]: 42 U.S.C. 7401 (b)(1) (2000).

[^187]: *See* Clean Air Act, 42 U.S.C. §§ 7401-7515.

[^188]: *See* Gary McCutchen, *Greenhouse Gases and New Source Review*,
    18 No.1 [AIRPOLC]{.smallcaps} 5.1 (2008).

[^189]: Massachusetts v. EPA, 127 S. Ct. 1438 (2007).

[^190]: [Robert Martineau & David Novello, The Clean Air Act
    Handbook]{.smallcaps} 499 (2d ed. 2004).

[^191]: *Id*. at 499-501.

[^192]: *Id.*

[^193]: 42 U.S.C. § 7409 (2000).

[^194]: 42 U.S.C. § 7410 (2000).

[^195]: 42 U.S.C. § 7475 (2000); 42 U.S.C. § 7503 (2000).

[^196]: [Martineau]{.smallcaps}, at 500.

[^197]: 42 U.S.C. § 7411 (2000).

[^198]: 42 U.S.C. § 7411(a)(1) (2000).

[^199]: [Martineau]{.smallcaps}, *supra*, note 190, at 500-01.

[^200]: 42 U.S.C. § 7412 (2000).

[^201]: 42 U.S.C. § 7412(b) (2000).

[^202]: Victor B. Flatt, *Taking the Legislative Temperature: Which
    Federal Climate Change Legislative Proposal is "Best"?*, 102 [Nw. U.
    L. Rev. Colloquy]{.smallcaps} 123, 144-45 (2007).

[^203]: *Id*.

[^204]: *See* [IPCC, 2005: Special Report on Carbon Dioxide Capture and
    Storage, Special Report of the Intergovernmental Panel on Climate
    Change]{.smallcaps}, *available at*
    http://arch.rivm.nl/env/int/ipcc/pages_media/SRCCS-final/IPCCSpecialReportonCarbondioxideCaptureandStorage.htm.

[^205]: *Id.*

[^206]: *Id.*

[^207]: *See* 42 U.S.C. § 7401 *et seq*.

[^208]: *See, e.g.*, Environmental Defense v. Duke Energy Corp., 127 S.
    Ct. 1423 (2007).

[^209]: *Id.*

[^210]: McCutchen, *supra* note 188, at 5.1.

[^211]: *See* 42 U.S.C. § 7475; 42 U.S.C. § 7503.

[^212]: McCutchen, *supra* note 188, at 5.1.

[^213]: *Id*.

[^214]: [Martineau]{.smallcaps}, *supra* note 190, at 145.

[^215]: *Id*. at 154-55.

[^216]: *Id*.

[^217]: New York v. U.S. E.P.A., 413 F.3d 3 (D.C. Cir.), reh'g. and
    reh'g. en banc den., 431 F.3d 801 (2005).

[^218]: 42 U.S.C. § 7509.

[^219]: *See* Craig Rubens, *Coal Power Plant Deathwatch*,
    http://earth2tech.com/2007/12/27/earth2tech-maps-coal-power-plant-deathwatch/.

[^220]: CWA § 101(a), 33 U.S.C. § 1251(a) (2000).

[^221]: CWA § 303(d)(2), 33 U.S.C. § 1313(d)(2) (2000).

[^222]: *Id.*

[^223]: 291 F.3d 1123 (9th Cir. 2002).

[^224]: CWA § 301, 33 U.S.C. § 1311 (2000).

[^225]: CWA § 402. 33 U.S.C. § 1342 (2000).

[^226]: CWA § 301, 33 U.S.C. § 1311 (2000).

[^227]: CWA § 502(7), (12), (14), 33 U.S.C. § 1362(7), (12), (14)
    (2000).

[^228]: 273 F.3d 481, 492 (2d Cir. 2001).

[^229]: *Id.*

[^230]: Idaho Rural Council v. Bosma, 143 F.Supp.2d 1169 (D. Idaho
    2001); United States v.
    [Riverside](http://web2.westlaw.com/result/result.aspx?rs=WLW8.04&ss=CNT&rlti=1&origin=Search&sv=Split&rp=%2Fsearch%2Fdefault.wl&referencepositiontype=T&cfid=1&fn=_top&n=1&sskey=CLID_SSSA33020124&mt=LawSchoolPractitioner&eq=search&method=TNC&query="RIVERSIDE+BAYVIEW"&srch=TRUE&effdate=1%2F1%2F0001+12%3A00%3A00+AM&db=ALLFEDS&referenceposition=SR%3B2577&vr=2.0&fmqv=s&service=Search&cnt=DOC&scxt=WL&rlt=CLID_QRYRLT34020124&rltdb=CLID_DB33020124)
    [Bayview](http://web2.westlaw.com/result/result.aspx?rs=WLW8.04&ss=CNT&rlti=1&origin=Search&sv=Split&rp=%2Fsearch%2Fdefault.wl&referencepositiontype=T&cfid=1&fn=_top&n=1&sskey=CLID_SSSA33020124&mt=LawSchoolPractitioner&eq=search&method=TNC&query="RIVERSIDE+BAYVIEW"&srch=TRUE&effdate=1%2F1%2F0001+12%3A00%3A00+AM&db=ALLFEDS&referenceposition=SR%3B2578&vr=2.0&fmqv=s&service=Search&cnt=DOC&scxt=WL&rlt=CLID_QRYRLT34020124&rltdb=CLID_DB33020124)
    Homes, Inc., 474 U.S. 121, 106 S.Ct. 455 (1985); [Solid Waste Agency
    of Northern Cook Cty. v. Army Corps of Engineers, 531 U.S. 159, 121
    S.Ct.
    675](http://web2.westlaw.com/find/default.wl?rs=WLW8.04&serialnum=2001047585&fn=_top&sv=Split&tc=-1&findtype=Y&tf=-1&db=708&vr=2.0&rp=%2Ffind%2Fdefault.wl&mt=LawSchoolPractitioner)
    (SWANCC); Rapanos v. U.S., 547 U.S. 715, 126 S.Ct. 2208 (2006).

[^231]: 3 F.3d 643, 646 (2d Cir.1993).

[^232]: CWA § 402(b), 33 U.S.C. § 1342(b) (2000).

[^233]: CWA § 402(d), 33 U.S.C. § 1342(d) (2000).

[^234]: CWA § 402(d)(1), 33 U.S.C. § 1342(d)(1) (2000).

[^235]: CWA § 402(d)(2), 33 U.S.C. § 1342(d)(2) (2000).

[^236]: CWA § 402(k), 33 U.S.C. § 1342(k) (2000).

[^237]: CWA § 301(b)(C), 33 U.S.C. § 1311(b)(C) (2000).

[^238]: CWA § 401(a), 33 U.S.C. § 1342(a) (2000); Mississippi Commission
    on Natural Resources v. Costle, 625 F.2d 1269 (5th Cir. 1980).
    []{.mark}

[^239]: CWA § 303(c)(2)(A) 33 U.S.C. § 1313(c)(2)(A) (2000); PUD No. 1
    of Jefferson County v. Washington Dept. of Ecology, 511 U.S. 700
    (1994). []{.mark}

[^240]: CWA § 401, 33 U.S.C. § 1341 (2000).

[^241]: CWA §§ 303(d), 33 U.S.C. § 1313(d) (2000).

[^242]: CWA § 208, 33 U.S.C. § 1288 (2000).

[^243]: CWA § 208(i), 33 U.S.C. § 1288(i) (2000).

[^244]: CWA § (b)(1)(A), 33 U.S.C. § (b)1(A) (2000).

[^245]: CWA § 319, 33 U.S.C. § 1329 (2000).

[^246]: *Id.*

[^247]: CWA § 304, 33 U.S.C. § 1314 (2000).

[^248]: CWA § 404, 33 U.S.C. § 1344 (2000). []{.mark}

[^249]: 33 C.F.R. § 323.2(c) (2006).

[^250]: 33 C.F.R. 323.2(e) (2006).

[^251]: CWA § 404(d), 33 U.S.C. § 1344(d) (2000).

[^252]: *Riverside Bayview*, at 123.

[^253]: *Id*. at 132-34.

[^254]: *SWANCC*, at 171-72.

[^255]: *Rapanos*, at 453.

[^256]: CWA §§ 404(a)-(e)(1), 33 U.S.C. § 1344(a)-(e)(1) (2000).

[^257]: CWA § 404(b)(1), 33 U.S.C. § 1344(b)(1) (2000).

[^258]: *Id.*

[^259]: CWA § 404(c), 33 U.S.C. § 1344(c) (2000).

[^260]: CWA §§ 404 (b)-(c), 33 U.S.C. § 1344 (b)-(c) (2000). []{.mark}

[^261]: 40 C.F.R. § 230.10 (2006).

[^262]: 40 C.F.R. § 230.10 (2006).

[^263]: CWA § 404(b)(1), 33 U.S.C. § 1344(b)(1) (2000).

[^264]: 85 F.3d 535, 544 (11th Cir. 1996).

[^265]: *Id.*

[^266]: CWA § 404(e), 33 U.S.C. § 1344(e) (2000).

[^267]: *Id.*

[^268]: *Id.*

[^269]: *Id.*

[^270]: NWP 44 for Mining Activities.

[^271]: 145 F.3d 1399 (D.C. Cir. 1998).

[^272]: *Id*. at 1401.

[^273]: *Id.*

[^274]: *Id*. at 1402.

[^275]: CWA § 404, 33 U.S.C. § 1344 (2000).

[^276]: *Id*.; CWA § 404(n), 33 U.S.C. § 1344(n) (2000).

[^277]: RCRA § 1003, 44 U.S.C. § 1692 (2000).

[^278]: RCRA §§ 3002-04, 44 U.S.C §§ 6922-24 (2000).

[^279]: RCRA § 1004(27)., 44 U.S.C. § 1693 (2000). []{.mark}

[^280]: *Id.*

[^281]: *Id.*

[^282]: *Id.;* Craig Johnston, William Funk, and Victor Flatt, Legal
    Protection of the Environment 404-05 (Thomson West 2^nd^ Ed. 2007*)
    (citing American Mining Congress v. EPA, 907 F.2d 1179 (D.C. Cir.
    1990) ("AMC II")).*

[^283]: Owen Electric Steel Co. v. Browner, 37 F.3d 146 (4th Cir. 1994).

[^284]: *Id.*

[^285]: American Petroleum Institute v. EPA, 540 F.2d 1023 (10th Cir.
    1976).

[^286]: Johnston, *et al, supra*, n. 282, at 393-410 (citing 68 Fed.
    Reg. 61558, 61561-61562 (Oct. 28, 2003)).

[^287]: *AMC I*, 824 F.2d 1177 (D. C. Cir. 1987).

[^288]: 48 Fed. Reg. 14, 472 (1983).

[^289]: 40 C.F.R. §§ 261.3(a), 262.11 (2006).

[^290]: 40 C.F.R. §§ 261, 262 (2006. []{.mark}

[^291]: RCRA § 3005(b), 42 U.S.C. § 6925(b) (2000).

[^292]: RCRA § 3005(e), 42 U.S.C. § 6925(e) (2000).

[^293]: 40 C.F.R. 264-65 (2006). []{.mark}

[^294]: 40 C.F.R. § 265 (2006).

[^295]: 40 C.F.R. §§ 265.92-94, (2006).

[^296]: 40 C.F.R. § 265.90 (2006).

[^297]: 40 C.F.R. § 265.111 (2006).

[^298]: 40 C.F.R. §§ 265.112, 265.228 (2006).

[^299]: 40 C.F.R. §§ 265.142-47 (2006).

[^300]: [Mary Tiemann, Cong. Research Serv., Safe Drinking Water Act:
    Implementation and Issues]{.smallcaps} 1 (2006), *available at*
    http://usinfo.state.gov/infousa/life/science/docs/IB10118.pdf.

[^301]: *Id*. at 3.

[^302]: *Id*. at 1*.*

[^303]: *Id*. at 1.

[^304]: 40 C.F.R. 141-40 (2006), SDWA § 1429.

[^305]: *Id*. at 3-4.

[^306]: *Id*. at 4.

[^307]: *Id*. at 4.

[^308]: *Id*.

[^309]: SDWA § 1412(b)(4).

[^310]: *Id*. at 4.

[^311]: *Id*.

[^312]: *Id*. at 4.

[^313]: 40 C.F.R. Part 143, (2006).

[^314]: 40 C.F.R. 143.3, (2006).

[^315]: 40 C.F.R. 143.4, (2006).

[^316]: *See* Draft Interim Report of the Advanced Coal Technology Work
    Group, Clean Air Act Advisory Committee.

[^317]: U.S. Const. art. VI, cl. 2.

[^318]: *See* Robert L. Glicksman, *Nothing is Real: Protecting the
    Regulatory Void through Federal Preepmtion by Inaction*, 26 [Va.
    Envtl. L.J]{.smallcaps}. 5 (2007).

[^319]: Jonathan H. Adler, *When is Two a Crowd? The Effect of Federal
    Action on State Environmental Regulation*, 31 [Harv. Envtl. L.
    Rev]{.smallcaps}. 67 (2007).

[^320]: *Id.*

[^321]: *See, e.g.,* Glicksman, *supra* note 318, at 7.

[^322]: *Id.*

[^323]: *See, e.g,.* [Cal. Pub. Res. Code]{.smallcaps} § 21100 (West
    2006).

[^324]: Robert B. McKinstry Jr., James McElfish, Michael Jacobson,
    Derald J. Hay, *Legal Tools that Provide Direct Protection for
    Elements of Biodiversity*, 16 [Widener L.J.]{.smallcaps} 909, 943
    (2007).

[^325]: *Id.*

[^326]: *Id.*

[^327]: *See, e.g.,* Village of Carpentersville v. Pollution Control
    Bd., 135 Ill. 2d 463, 142 Ill. Dec. 848, 553 N.E.2d 362 (1990)
    (holding that federal law does not preempt local zoning ordinances
    regulating pollution).

[^328]: *See* Linda Krop, *Defending States' Rights Under the Coastal
    Zone Management Act* -- California v. Norton, 8 [Sustainable Dev. L.
    & Pol\'y]{.smallcaps} 54, 54 (2007).

[^329]: *Id.* (citing Outer Continental Shelf Lands Act, [43 U.S.C. §§
    1331](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&fn=_top&sv=Split&tc=-1&findtype=L&docname=43USCAS1331&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl)-[1356
    (1952)](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&fn=_top&sv=Split&tc=-1&findtype=L&docname=43USCAS1356&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl);
    Submerged Lands Act, [43 U.S.C. §§
    1301](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&fn=_top&sv=Split&tc=-1&findtype=L&docname=43USCAS1301&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl)-[1315
    (1952)](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&fn=_top&sv=Split&tc=-1&findtype=L&docname=43USCAS1315&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl)).

[^330]: *Id.*

[^331]: *Id*.

[^332]: *Id.* (citing [16 U.S.C. §
    1452](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&fn=_top&sv=Split&tc=-1&findtype=L&docname=16USCAS1452&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl)
    (2000)).

[^333]: *Id.* (citing Legislation, NOAA Office of Legislative Affairs
    website, http:// www.legislative.noaa.gov/Legislation/czma.html
    (last visited Apr. 19, 2008)).

[^334]: 16 U.S.C. §1456.

[^335]: Krop, *supra* note 328, at 55 (citing [16 U.S.C. §
    1456(c)](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&referencepositiontype=T&referenceposition=SP%3B4b24000003ba5&fn=_top&sv=Split&tc=-1&findtype=L&docname=16USCAS1456&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl)
    (2000)).

[^336]: *Id.*

[^337]: 16 U.S.C. §1456(c)(1)(A) (2000).

[^338]: *Id.*

[^339]: *See* Sam Kalen, *The Coastal Zone Management Act of Today: Does
    Sustainability Have a Chance*?, 15 [Southeastern Envtl.
    L.J.]{.smallcaps} 191, 202 (2006) (citing [15 C.F.R. §
    930.39(a)](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&fn=_top&sv=Split&tc=-1&findtype=L&docname=15CFRS930.39&db=1000547&vr=2.0&rp=%2Ffind%2Fdefault.wl&mt=LawSchoolPractitioner)).

[^340]: *Id.*

[^341]: 16 U.S.C. §1456(c)(1)(A) (2000).

[^342]: *Krop*, *supra* note 328, at 55 (citing [16 U.S.C. §
    1456(c)(1)(C)](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&referencepositiontype=T&referenceposition=SP%3B4e350000f8fd7&fn=_top&sv=Split&tc=-1&findtype=L&docname=16USCAS1456&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl)
    (2000)).

[^343]: *Id.*

[^344]: *Id.*

[^345]: *See* *Krop*, *supra* note 328, at 55-58 (citing Sec\'y of the
    Interior v. California, 464 U.S. 312, 319 (1984), superceded by
    statute, Act of Nov. 5, 1990, as amended by § 2205(13) of Act Nov.
    4, 1992, Pub. L. No. 102-587).

[^346]: *See* *Krop*, supra note 328, at 55-56 (citing California v.
    Norton, 150 F. Supp. 2d 1046 (N.D. Cal. 2001), aff\'d, 311 F.3d 1162
    (9th Cir. 2002)).

[^347]: *See, e.g.* Conservation Law Foundation v. Watt, 560 F. Supp.
    561 (D. Mass. 1983), *aff\'d sub nom*., Massachusetts v. Watt, 716
    F.2d 946 (1st Cir. 1983).

[^348]: *See* Ann Powers, *Farming the Ocean*, 22-FALL [Nat. Resources &
    Env\'t]{.smallcaps} 45, 59 (2007) (comparing Section 307 of CZMA
    with Section 401 of CWA).

[^349]: 16 U.S.C. §1456(c)(1)(A) (2000).

[^350]: *Krop* , *supra* note 328, at 56 (citing [16 U.S.C. §
    1456(c)(1)(B)](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&referencepositiontype=T&referenceposition=SP%3B4d8a000011f17&fn=_top&sv=Split&tc=-1&findtype=L&docname=16USCAS1456&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl)).

[^351]: [16 U.S.C. §
    1456(c)(3)(A)](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&referencepositiontype=T&referenceposition=SP%3B773400008cd46&fn=_top&sv=Split&tc=-1&findtype=L&docname=16USCAS1456&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl),
    (B)(iii) (2000).

[^352]: *See* Joseph J. Kalo et al., [Coastal and Ocean Law: Cases and
    Materials]{.smallcaps} 241-42 (3d ed. 2007).

[^353]: *See* William Buzbee, *Asymmetrical Regulation: Risk,
    Preemption, and the Floor/Ceiling Distinction*, 82 [N.Y.U. L.
    Rev.]{.smallcaps} 1547 at n. 17 (2007) (citing Energy Policy Act of
    2005, [Pub. L. No. 109-58 §
    311(c)(2)](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&fn=_top&sv=Split&tc=-1&findtype=l&docname=UUID(I84999FC01B-B211DA818BF-B0916599498)&db=1077005&vr=2.0&rp=%2Ffind%2Fdefault.wl&mt=LawSchoolPractitioner),
    119 Stat. 594, 686-87 (to be codified at [15 U.S.C. §
    717b(e)(1)](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&referencepositiontype=T&referenceposition=SP%3B06a60000dfdc6&fn=_top&sv=Split&tc=-1&findtype=L&docname=15USCAS717B&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl&mt=LawSchoolPractitioner))
    (amending Natural Gas Act § 3, [15 U.S.C. §
    717b](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&fn=_top&sv=Split&tc=-1&findtype=L&docname=15USCAS717B&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl&mt=LawSchoolPractitioner)).

[^354]: *Id.*

[^355]: [Office of Ocean and Coastal Resource Management, National Ocean
    Service, National Oceanic and Atmospheric Administration,
    Implications of the Energy Policy Act of 2005 (]{.smallcaps}Pub. L.
    No. 109-58[) Provisions Relating to the Coastal Zone Management
    Act]{.smallcaps}, (2005), *available at*
    [http://www.coastalstates.org/documents/Members%20Only%20Page/USVI05/NOAA%20Implications%20of%20the%20Energy%20Policy%20Act%20of%202005%20Provisions%20Relating%20to%20the%20CZMA.pdf](http://www.coastalstates.org/documents/Members Only Page/USVI05/NOAA Implications of the Energy Policy Act of 2005 Provisions Relating to the CZMA.pdf)
    (referring to Pub. L. No. 109-58 § 311).

[^356]: 33 U.S.C. § 1341 (2000).

[^357]: *Id.*

[^358]: *Id.*

[^359]: *Id.*

[^360]: *Id.*

[^361]: *See* PUD No. 1 of Jefferson County v. Washington Dep\'t of
    Ecology, 511 U.S. 700 (1994).

[^362]: 547 U.S. 370 (2006); 126 S. Ct. 1843 (2006).

[^363]: *Id.*

[^364]: *See, e.g.,* Christopher Rycewicz and Dan Mensher, *Growing
    State Authority Under the Clean Water Act*, 22-FALL [Nat. Resources
    & Env\'t]{.smallcaps} 57 (2007).

[^365]: *Id.*

[^366]: Robert L. Fischman, Angela M. King, *Savings Clauses and Trends
    in Natural Resources Federalism*, 32 [Wm. & Mary Envtl. L. & Pol\'y
    Rev.]{.smallcaps} 129, 147-48 (2007).

[^367]: *Id.* (citing [33 U.S.C. §
    1251(g)](http://web2.westlaw.com/find/default.wl?tf=-1&rs=WLW8.04&referencepositiontype=T&referenceposition=SP%3B16f4000091d86&fn=_top&sv=Split&tc=-1&findtype=L&docname=33USCAS1251&db=1000546&vr=2.0&rp=%2Ffind%2Fdefault.wl&mt=LawSchoolPractitioner)
    (2000)).

[^368]: *See, e.g.,* Hope M. Babcock, *Dual Regulation, Collaborative
    Management, or Layered Federalism: Can Cooperative Federalism Models
    From other Laws Save our Public Lands?*, 14 [Hastings W.-N.W. J.
    Envtl. L. & Pol\'y]{.smallcaps} 449 (2007).

[^369]: *Id.*

[^370]: *Id.*

[^371]: *Id.*

[^372]: *Id.*

[^373]: Fischman & King, *supra* note 366, at 146.

[^374]: *Id.*

[^375]: *See* Sheila Slocum Hollis, *Liquefied Natural Gas: "The Big
    Picture" for Future Development in North America*, 2 [Envt\'l &
    Energy L. & Pol\'y J.]{.smallcaps} 5 at note 89 (2007) (citing
    Cameron LNG, 104 F.E.R.C. at pp. 61,889-90, (issuing certificates
    and granting reh\'g sub nom.); Hackberry LNG Terminal, L.L.C., 101
    F.E.R.C. ¶ 61,294 (Dec. 18, 2002)).

[^376]: 42 U.S.C. § 4332(C) (2000).

[^377]: 40 C.F.R. § 1501.3 (2006).

[^378]: *Id.* § 1501.4.

[^379]: 33 U.S.C. § 1371(c) (2000).

[^380]: 15 U.S.C. §793(c)(1) (2000).

[^381]: *See* Envt'l Def. Fund, Inc. v. EPA¸ 489 F.2d 1247, 1256 (D.C.
    Cir. 1973).

[^382]: Alabama ex rel. Seigleman v. EPA¸ 911 F.2d 499, 504 (11th Cir.
    1990).

[^383]: *Id.*

[^384]: *Id.*

[^385]: *See* Memorandum from United States Government on DOE Policies
    on Application of NEPA to CERCLA and RCRA Cleanup Actions (July 11,
    2002), *available at*
    www.eh.doe.gov/nepa/tools/guidance/Volume2/5-2b-cercla_rcra_nepa_july11memo.pdf.

[^386]: 40 C.F.R. §§ 1500.4(p), 1508.4 (2006).

[^387]: 10 C.F.R. Pt. 1021, Subpt. D, App. B, ¶ 5.2-5.12 (2006).

[^388]: *Id*. § 1021.410.

[^389]: *Id*. Part 1021, Subpt. D, App. B, ¶ 1-3 (2006).

[^390]: *See* Coastal Zone Management Act Section 306A Guidance and
    Checklist, NOAA and Florida Coastal Management Program (May 2007).

[^391]: *See* Instruction Memorandum No. 2005-247 from the Dept. of the
    Interior on Use of Section 390 Categorical Exclusions in the 2005
    Energy Policy Act (Sept. 30, 2005) *available at*
    http://www.blm.gov/wo/st/en/info/regulations/Instruction_Memos_and_Bulletins/national_instruction/2005/IM_2005_247.html.
    The guidance directs any permitting officer to perform several steps
    before applying the categorical exemption rather than preparing a
    NEPA document. If the action does not fit specifically within the
    exclusion, then an entire NEPA preparation is required. "This CX
    applies to maintenance of minor activities, such as maintenance of
    the well or wellbore, a road, wellpad, or production facility. The
    exclusion does not cover construction or major renovation of a
    building or facility. The addition of a compressor or a gas
    processing plant would therefore not be eligible for this CX. The CX
    (1) and (3) reference previous NEPA documents. Field Offices must
    apply the same or better mitigating measures considered in the
    parent NEPA documents to all actions approved under any CX.
    Additionally, BMPs are to be applied as necessary to reduce impacts
    to any authorization issued, regardless of the NEPA analysis or
    exclusion used."

[^392]: Energy Policy Act of 2005 § 390, Pub. L. No. 109-58, 119 Stat.
    748.

[^393]: *Id*. § 311, SEC 3A(a).

[^394]: 16 U.S.C. § 1536(a) (2000).

[^395]: *Id*. § 1536(c).

[^396]: *Id*. §§ 1536(b), (e).

[^397]: 16 U.S.C. § 1371(a)(5)(A) (200), 50 C.F.R. § 216.105 (2006).

[^398]: *Id*.

[^399]: *Id*. § 1362(13), (18)(A)(i),(ii).

[^400]: 16 U.S.C. § 470f (2000).

[^401]: 36 C.F.R. § 800.14(c)(1)-(3) (2006).

[^402]: *Id*. § 800.14(c)(5).