CRS Report for Congress

Prepared for Members and Committees of Congress 

Carbon Dioxide (CO2) Pipelines for Carbon 

Sequestration: Emerging Policy Issues 

Paul W. Parfomak 

Specialist in Energy and Infrastructure Policy 

Peter Folger 

Specialist in Energy and Natural Resources Policy 

Adam Vann 

Legislative Attorney 

July 31, 2009 

Congressional Research Service

7-5700 

www.crs.gov 

RL33971 
Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues 

Congressional Research Service 

Summary 

Congress is examining potential approaches to reducing manmade contributions to global 

warming from U.S. sources. One approach is carbon capture and sequestration (CCS)—capturing 

CO2 at its source (e.g., a power plant) and storing it indefinitely (e.g., underground) to avoid its 

release to the atmosphere. A common requirement among the various techniques for CCS is a 

dedicated pipeline network for transporting CO2 from capture sites to storage sites. 

In Congress, there has been considerable debate about the capture and sequestration aspects of 

carbon sequestration, while there has been relatively less focus on transportation. Nonetheless, 

there is increasing understanding among policy makers that a national CCS program could 

require the construction of a substantial network of interstate CO2 pipelines. In the 110th

Congress, legislative proposals would have required studying the feasibility of constructing and 

operating such a network of CO2 pipelines; would have required carbon sequestration projects to 

evaluate the most cost-efficient ways to integrate CO2 sequestration, capture, and transportation; 

and would have allowed accelerated depreciation for certain new CO2 pipelines. The Energy 

Independence and Security Act of 2007 (P.L. 110-140) required the Secretary of the Interior to 

recommend legislation to clarify the appropriate framework for issuing CO2 pipeline rights-ofway on public land (Sec. 714(7)). No legislative proposals related specifically to CO2 pipelines 

have been offered in the 111th Congress, although bills promoting a national policy of carbon 

control, such as the American Clean Energy and Security Act of 2009 (H.R. 2454), could 

implicitly create a national need for new CO2 pipeline infrastructure. 

That CCS and related legislation have been more focused on the capture and storage of CO2 than 

on its transportation, reflects a perception that transporting CO2 via pipelines does not present a 

significant barrier to implementing large-scale CCS. Notwithstanding this perception, and even 

though regional CO2 pipeline networks already operate in the United States for enhanced oil 

recovery (EOR), developing a more expansive national CO2 pipeline network for CCS could pose 

numerous new regulatory and economic challenges. There are important unanswered questions 

about pipeline network requirements, economic regulation, utility cost recovery, regulatory 

classification of CO2 itself, and pipeline safety. Furthermore, because CO2 pipelines for EOR are 

already in use today, policy decisions affecting CO2 pipelines take on an urgency that is, perhaps, 

unrecognized by many. Federal classification of CO2 as both a commodity (by the Bureau of 

Land Management) and as a pollutant (by the Environmental Protection Agency) could 

potentially create an immediate conflict which may need to be addressed not only for the sake of 

future CCS implementation, but also to ensure consistency of future CCS with CO2 pipeline 

operations today. 

In addition to these issues, Congress may examine how CO2 pipelines fit into the nation’s overall 

strategies for energy supply and environmental protection. If policy makers encourage continued 

consumption of fossil fuels under CCS, then the need to foster the other energy options may be 

diminished—and vice versa. Thus decisions about CO2 pipeline infrastructure could have 

consequences for a broader array of energy and environmental policies. 
Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues 

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Contents 

Introduction ................................................................................................................................1

Background ................................................................................................................................2

Carbon Capture and Sequestration.........................................................................................2

Capture...........................................................................................................................3

Transportation.................................................................................................................3

Sequestration in Geological Formations ..........................................................................4

Existing U.S. CO2 Pipelines ..................................................................................................4

Key Issues for Congress..............................................................................................................5

CO2 Pipeline Requirements for CCS .....................................................................................5

Economic Regulation............................................................................................................7

Federal Jurisdiction over CO2 Pipelines...........................................................................7

Potential Issues Related to ICC Jurisdiction.....................................................................8

Policy Implications for Rate Regulation ..........................................................................8

Siting Authority ..............................................................................................................9

Commodity vs. Pollutant Classification...............................................................................10

Pipeline Costs ..................................................................................................................... 11

Materials Costs ............................................................................................................. 11

Cost Recovery...............................................................................................................13

CO2 Pipeline Incentives ................................................................................................13

Cost Implications for Network Development.................................................................14

CO2 Pipeline Safety ............................................................................................................15

Criminal and Civil Liability ..........................................................................................16

Other Issues ........................................................................................................................17

Conclusion................................................................................................................................17

Figures 

Figure 1. Major CO2 Pipelines in the United States......................................................................5

Figure 2. U.S. Prices for Large Diameter Steel Pipe...................................................................12

Contacts 

Author Contact Information ......................................................................................................18
Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues 

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Introduction 

Congress has long been concerned about the impact of global climate change that may be caused 

by manmade emissions of carbon dioxide (CO2) and other greenhouse gases.1

 Congress is also 

debating policies related to global warming and is examining a range of potential initiatives to 

reduce manmade contributions to global warming from U.S. sources.2

 One approach to mitigating 

manmade greenhouse gas emissions is direct sequestration: capturing CO2 at its source, 

transporting it via pipelines, and storing it indefinitely to avoid its release to the atmosphere.3

 This 

paper explores one component of direct sequestration—transporting CO2 in pipelines. 

Carbon capture and storage (CCS) is of great interest because potentially large amounts of CO2

emitted from the industrial burning of fossil fuels in the United States could be suitable for 

sequestration. Carbon capture technologies can potentially remove 80%-95% of CO2 emitted 

from an electric power plant or other industrial source. Power plants are the most likely initial 

candidates for CCS because they are predominantly large, single-point sources, and they 

contribute approximately one-third of U.S. CO2 emissions from fossil fuels. 

There are many technological approaches to CCS. However, one common requirement for nearly 

all large-scale CCS schemes is a system for transporting CO2 from capture sites (e.g., power 

plants) to storage sites (e.g., underground reservoirs). Transporting captured CO2 in relatively 

limited quantities is possible by truck, rail, and ship, but moving the enormous quantities of CO2

implied by a widespread implementation of CCS technologies would likely require a dedicated 

interstate pipeline network. 

In Congress, there has been considerable debate about the capture and sequestration aspects of 

carbon sequestration, while there has been relatively less focus on transportation. Nonetheless, 

there is increasing understanding among policy makers that a national CCS program could 

require the construction of a substantial network of interstate CO2 pipelines. In the 110th

Congress, legislative proposals would have required studying the feasibility of constructing and 

operating such a network of CO2 pipelines; would have required carbon sequestration projects to 

evaluate the most cost-efficient ways to integrate CO2 sequestration, capture, and transportation; 

and would have allowed accelerated depreciation for certain new CO2 pipelines.4

 The Energy 

Independence and Security Act of 2007 (P.L. 110-140) required the Secretary of the Interior to 

recommend legislation to clarify the appropriate framework for issuing CO2 pipeline rights-ofway on public land (Sec. 714(7)). No legislative proposals related specifically to CO2 pipelines 

have been offered in the 111th Congress, although bills promoting a national policy of carbon 

control, such as the American Clean Energy and Security Act of 2009 (H.R. 2454), could 

implicitly create a national need for new CO2 pipeline infrastructure.5

 

1

 This report does not explore the underlying science of climate change, nor the question of whether action is justified. 

See CRS Report RL34513, Climate Change: Current Issues and Policy Tools, by Jane A. Leggett. 

2

 For more discussion of congressional activities related to global warming, see CRS Report R40556, Market-Based 

Greenhouse Gas Control: Selected Proposals in the 111th Congress, by Jonathan L. Ramseur, Larry Parker, and Brent 

D. Yacobucci. 

3

 This report does not address indirect sequestration, wherein CO2 is stored in soils, oceans, or plants through natural 

processes. For information on the latter, see CRS Report R40562, U.S. Tree Planting for Carbon Sequestration, by 

Ross W. Gorte. 

4

 See S. 2144, S. 2191, S. 2323, and S. 2149. 

5

 For more analysis see CRS Report R40643, Greenhouse Gas Legislation: Summary and Analysis of H.R. 2454 as 

(continued...) 
Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues 

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Legislative focus on the capture and storage components of direct carbon sequestration reflects a 

perception that transporting CO2 via pipelines does not present a significant barrier to 

implementing large-scale CCS. Even though regional CO2 pipeline networks already operate in 

the United States for enhanced oil recovery (EOR), developing a more expansive national CO2

pipeline network for CCS could pose numerous new regulatory and economic challenges. As one 

analyst has remarked, 

Each of the individual technologies involved in the transport portion of the CCS process is 

mature, but integrating and deploying them on a massive scale will be a complex task. “The 

question is, how would the necessary pipeline network be established and evolve?”6

A thorough consideration of potential CCS approaches necessarily involves an assessment of their 

overall requirements for CO2 transportation by pipeline, including the possible federal role in 

establishing an interstate CO2 pipeline network. 

This report introduces key policy issues related to CO2 pipelines which may require congressional 

attention. It summarizes the technological requirements for CO2 pipeline transportation under a 

comprehensive CCS strategy. It characterizes these requirements relative to the existing CO2

pipeline infrastructure in the United States used for EOR. The report summarizes policy issues 

related to CO2 pipeline development, including uncertainty about pipeline network requirements, 

economic regulation, utility cost recovery, regulatory classification of CO2 itself, and pipeline 

safety. The report concludes with perspectives on CO2 pipelines in the context of the nation’s 

overall energy and infrastructure requirements. 

Background 

Carbon sequestration policies are inextricably tied to the function and availability of the 

necessary technologies. Consequently, discussion of CCS policy alternatives benefits from a basic 

understanding of the physical processes involved, and relevant experience with existing 

infrastructure. This section provides a basic overview of carbon sequestration processes overall, 

as well as specific U.S. experience with CO2 pipelines.7

Carbon Capture and Sequestration 

Carbon capture and sequestration is essentially a three-part process involving a CO2 source 

facility, a long-term CO2 storage site, and an intermediate mode of CO2 transportation. 

 

(...continued) 

Passed by the House of Representatives , coordinated by Mark Holt and Gene Whitney. 

6

 John Douglas, “Expanding Options for CO2 Storage,” EPRI Journal, Electric Power Research Institute (Spring 2007): 

24. 

7

 More analysis is provided in CRS Report RL33801, Carbon Capture and Sequestration (CCS), by Peter Folger. 
Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues 

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Capture 

The first step in direct sequestration is to produce a concentrated stream of CO2 for transport and 

storage. Currently, three main approaches are available to capture CO2 from large-scale industrial 

facilities or power plants: 

• pre-combustion, which separates CO2 from fuels by combining them with air 

and/or steam to produce hydrogen for combustion and CO2 for storage, 

• post-combustion, which extracts CO2 from flue gases following combustion of 

fossil fuels or biomass, and 

• oxyfuel combustion, which uses oxygen instead of air for combustion, 

producing flue gases that consist mostly of CO2 and water from which the CO2 is 

separated.8

These approaches vary in terms of process technology and maturity, but all yield a stream of 

extracted CO2 which may then be compressed to increase its density and make it easier (and 

cheaper) to transport. Although technologies to separate and compress CO2 are commercially 

available, they have not been applied to large-scale CO2 capture from power plants for the 

purpose of long-term storage.9

Transportation 

Pipelines are the most common method for transporting large quantities of CO2 over long 

distances. CO2 pipelines are operated at ambient temperature and high pressure, with primary 

compressor stations located where the CO2 is injected and booster compressors located as needed 

further along the pipeline.10 In overall construction, CO2 pipelines are similar to natural gas 

pipelines, requiring the same attention to design, monitoring for leaks, and protection against 

overpressure, especially in populated areas.11 Many analysts consider CO2 pipeline technology to 

be mature, stemming from its use since the 1970s for EOR and in other industries.12 Marine 

transportation may also be feasible when CO2 needs to be transported over long distances or 

overseas; however, many manmade CO2 sources are located far from navigable waterways, so 

such a scheme would still likely require pipeline construction between CO2 sources and port 

terminals. Rail cars and trucks can also transport CO2, but these modes would be logistically 

impractical for large-scale CCS operations. 

 

8

 Intergovernmental Panel on Climate Change, Special Report: Carbon Dioxide Capture and Storage, 2005 (2005): 22-

23. (Hereafter referred to as IPCC 2005.) 

9

 H. J. Herzog and D. Golumb, “Carbon Capture and Storage from Fossil Fuel Use,” in C.J. Cleveland (ed.), 

Encyclopedia of Energy (New York, NY: Elsevier Science, Inc., 2004): 277-287. 10 IPCC 2005: 26. 

11 IPCC 2005: 181. 

12 CO2 used in EOR enhances oil production by re-pressurizing geological formations and reducing oil viscosity, 

thereby increasing oil movement to the surface. CO2 is used industrially as a chemical feedstock, to carbonate 

beverages, for refrigeration and food processing, to treat water, and for other uses. 
Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues 

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Sequestration in Geological Formations 

In most CCS approaches, CO2 would be transported by pipeline to a porous rock formation that 

holds (or previously held) fluids where the CO2 would be injected underground. By injecting CO2

at depths greater than 800 meters in a typical reservoir, pressure keeps the injected CO2 in a 

supercritical state and thus less likely to migrate out of the geological formation. Injecting CO2

into such formations uses existing technologies developed primarily for oil and natural gas 

production which potentially could be adapted for long-term storage and monitoring of CO2. 

Other underground injection applications in practice today, such as natural gas storage, deep 

injection of liquid wastes, and subsurface disposal of oil-field brines, also provide potential 

technologies and experience for sequestering CO2.

13 Three main types of geological formations 

are being considered for carbon sequestration: (1) oil and gas reservoirs, (2) deep saline 

reservoirs, and (3) unmineable coal seams. The overall capacity for CO2 storage in such 

formations is potentially huge if all the sedimentary basins in the world are considered.14 The 

suitability of any particular site, however, depends on many factors, including proximity to CO2

sources and other reservoir-specific qualities like porosity, permeability, and potential for leakage. 

Existing U.S. CO2 Pipelines 

The oldest long-distance CO2 pipeline in the United States is the 225 kilometer Canyon Reef 

Carriers Pipeline (in Texas), which began service in 1972 for EOR in regional oil fields.15 Other 

large CO2 pipelines constructed since then, mostly in the Western United States, have expanded 

the CO2 pipeline network for EOR. These pipelines carry CO2 from naturally occurring 

underground reservoirs, natural gas processing facilities, ammonia manufacturing plants, and a 

large coal gasification project to oil fields. Additional pipelines may carry CO2 from other 

manmade sources to supply a range of industrial applications. Altogether, approximately 5,800 

kilometers (3,600 miles) of CO2 pipeline operate today in the United States.16

 

13 IPCC 2005: 31. 

14 Sedimentary basins are large depressions in the Earth’s surface filled with sediments and fluids. 

15 Kinder Morgan CO2 Company, “Canyon Reef Carriers Pipeline (CRC),” web page (2009). 

http://www.kindermorgan.com/business/co2/transport_canyon_reef.cfm 

16 U.S. Dept. of Transportation, National Pipeline Mapping System database (July 2009). 
Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues 

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Figure 1. Major CO2 Pipelines in the United States 

Sources: Denbury Resources Inc., “EOR: The Economic Alternative for CCS,” Slide presentation (October 

2007). http://www.gasification.org/Docs/Conferences/2007/25EVAN.pdf; U.S. Dept. of Transportation, National 

Pipeline Mapping System, Official use only. (July 2009). 

The locations of the major U.S. CO2 pipelines are shown in Figure 1. By comparison, nearly 

800,000 kilometers (500,000 miles) of natural gas and hazardous liquid transmission pipelines 

crisscross the United States.17

Key Issues for Congress 

Congressional consideration of potential CCS policies is still evolving, but so far initiatives have 

focused more on developing capture and sequestration technologies than on transportation. 

Specific legislative proposals in Congress reflect the current perception that CO2 capture probably 

represents the largest technological hurdle to implementing widespread CCS, and that CO2

transportation by pipelines does not present as significant a barrier. While these perceptions may 

be accurate, industry and regulatory analysts have begun to identify important policy issues 

related specifically to CO2 pipelines which may require congressional attention. 

CO2 Pipeline Requirements for CCS 

Although any widespread CCS scheme in the United States would likely require dedicated CO2

pipelines, there is considerable uncertainty about the size and configuration of the pipeline 

network required. This uncertainty stems, in part, from uncertainty about the suitability of 

geological formations to sequester captured CO2 and the proximity of suitable formations to 

specific sources. One analysis concludes that 77% of the total annual CO2 captured from the 

major North American sources may be stored in reservoirs directly underlying these sources, and 

that an additional 18% may be stored within 100 miles of additional sources.18 If this were the 

 

17 Bureau of Transportation Statistics (BTS), National Transportation Statistics 2009 (2009), Table 1-10. This figire 

includes pipelines for petroleum and other hazardous liquids such as gasoline, jet fuel, diesel fuel, and propane. 

18 R.T. Dahowski, J.J. Dooley, C.L. Davidson, S. Bachu, N. Gupta, and J. Gale, “A North American CO2 Storage 

Supply Curve: Key Findings and Implications for the Cost of CCS Deployment,” Proceedings of the Fourth Annual 

(continued...) 
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case, the need for new CO2 pipelines would be limited to onsite transportation and a relatively 

small number of long-distance pipelines (only a subset of which might need to be interstate 

pipelines). 

Other analysts have suggested that captured CO2 may need to be sequestered, at least initially, in 

more centralized reservoirs to reduce potential risks associated with CO2 leaks.19 They suggest 

that, given current uncertainty about the suitability of various on-site geological formations for 

long-term CO2 storage, certain specific types of formations (e.g., deep saline aquifers) may be 

preferred as CO2 repositories because they have adequate capacity and are most likely to retain 

sequestered CO2 indefinitely. Others suggest that scale economies in seqestration site acquisition, 

validation, development, or monitoring may drive the choice of large, centralized sequestration 

sites. There are also significant scale economies for large, integrated CO2 pipeline networks that 

link many sources together rather than single, dedicated pipelines between individual sources and 

storage reservoirs.20 As geologic formations are characterized in more detail and suitable 

repositories identified, CO2 sources can be mapped against storage sites with increasing certainty. 

The current uncertainty over proximity of sources to storage sites, however, implies a wide range 

of possible pipeline configurations and a wide range of possible costs. 

Whether CCS policies ultimately lead to centralized or decentralized storage configurations 

remains to be seen; however, pipeline requirements and storage configurations are closely related. 

A 2007 study at the Massachusetts Institute of Technology (MIT) concluded that “the majority of 

coal-fired power plants are situated in regions where there are high expectations of having CO2

sequestration sites nearby.”21 In these cases, the MIT study estimated the cost of CO2 transport 

and injection to be less than 20% of total CCS costs. However, the study also stated that the costs 

of CO2 pipelines are highly non-linear with respect to the quantity transported, and highly 

variable due to “physical ... and political considerations.”22 Another 2007 study, at Duke 

University, concluded that “geologic sequestration is not economically or technically feasible 

within North Carolina,” but “may be viable if the captured CO2 is piped out of North Carolina 

and stored elsewhere.”23 More recent studies continue to suggest a range of possible scenarios for 

CO2 pipeline development.24 As Congress considers CCS policies, it may examine the 

relationship between CO2 reservoir sites and pipeline requirements in the context of CCS 

 

(...continued) 

Conference on Carbon Capture and Sequestration ( Alexandria, VA: May 2-5, 2005). The study addresses CO2 capture 

at 2,082 North American facilities including power plants, natural gas processing plants, refineries, cement kilns, and 

other industrial plants. 

19 Jennie C. Stevens and Bob Van Der Zwaan, “The Case for Carbon Capture and Storage,” Issues in Science and 

Technology, vol. XXII, no. 1 (Fall 2005): 69-76. (See page 15 of this report for a discussion of safety issues.) 

20 MIT 2007: 58. 

21 John Deutch, Ernest J. Moniz, et al., The Future of Coal. (Cambridge, MA: Massachusetts Institute of Technology: 

2007): 58. (Hereafter referred to as MIT 2007.) 

22 MIT 2007: 58. 

23 Eric Williams, Nora Greenglass, and Rebecca Ryals, “Carbon Capture, Pipeline and Storage: A Viable Option for 

North Carolina Utilities?” Working paper prepared by the Nicholas Institute for Environmental Policy Solutions and 

The Center on Global Change, Duke University (Durham, NC: March 8, 2007): 4. 

24 See, for example: ICF Internaional, Developing a Pipeline Infrastructure for CO2 Capture and Storage: Issues and 

Challenges, Prepared for INGAA Foundation (Washington, DC: February, 2009); Michael Murphy, “Carbon 

Sequestration Options In The Ohio River Valley,” Proceedings of the 42nd Annual Meeting of the Geological Society of 

America, North-Central Section (Evansville, IN: April 25, 2008). 
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demonstration project experience and an increasing body of scientific information about 

sequestration geology. 

Economic Regulation 

Economic regulation of interstate pipelines by the federal government is generally intended to 

ensure pipelines fulfill common carrier obligations by charging reasonable rates; providing rates 

and services to all upon reasonable request; not unfairly discriminating among shippers; 

establishing reasonable classifications, rules, and practices; and interchanging traffic with other 

pipelines or transportation modes.25 If interstate CO2 pipelines for carbon sequestration are 

ultimately to be developed, it will raise important regulatory questions in this context because 

federal jurisdiction over hypothetical interstate CO2 pipeline siting and rate decisions is not clear. 

Based on their current regulatory roles, two of the more likely candidates for jurisdiction over 

interstate pipelines transporting CO2 for purposes of CCS are the Federal Energy Regulatory 

Commission (FERC) and the Surface Transportation Board (STB).26 However, both agencies 

have at some point expressed a position that interstate CO2 pipelines are not within their purview, 

as summarized below.27

Federal Jurisdiction over CO2 Pipelines 

The Natural Gas Act of 1938 (NGA) vests in FERC the authority to issue “certificates of public 

convenience and necessity” for the construction and operation of interstate natural gas pipeline 

facilities.28 FERC is also charged with extensive regulatory authority over the siting of natural gas 

import and export facilities, as well as rates for transportation of natural gas and other elements of 

transportation service. FERC also has jurisdiction over regulation of oil pipelines pursuant to the 

Interstate Commerce Act (ICA).29 Although FERC is not involved in the oil pipeline siting 

process, as with natural gas, FERC does regulate transportation rates and capacity allocation for 

oil pipelines.30 Jurisdiction over rate regulation for pipelines “other” than “water, gas or oil” 

pipelines resides with the STB, a decisionally independent regulatory agency affiliated with the 

Department of Transportation.31 The STB acts as a forum for resolution of disputes related to 

pipelines within its jurisdiction. Parties who wish to challenge a rate or another aspect of a 

pipeline’s common carrier service must petition the STB for a hearing, however; there is no 

ongoing regulatory oversight. 

 

25 General Accounting Office (now Government Accountability Office), Surface Transportation: Issues Associated 

With Pipeline Regulation by the Surface Transportation Board, RCED-98-99 (Washington, DC: April 21, 1998):3; and 

49 U.S.C. § 155. 

26 The STB is the successor agency to the Interstate Commerce Commission (ICC) under the Interstate Commerce 

Commission Termination Act of 1995 (P.L. 104-88). 

27 For a more comprehensive discussion of CO2 pipeline regulatory jurisdiction, see CRS Report RL34307, Regulation 

of Carbon Dioxide (CO2) Sequestration Pipelines: Jurisdictional Issues, by Adam Vann and Paul W. Parfomak. See, 

also: Philip M. Marston and Patricia A. Moore, “From EOR To CCS: The Evolving Legal And Regulatory Framework 

For Carbon Capture And Storage,” Energy Law Journal, vol. 29 (2008), pp. 451-466. 

28 15 U.S.C. 717f(c). 

29 49 App. U.S.C.§1. 

30 Section 1801 of the Energy Policy Act of 1992 directed FERC to “promulgate regulations establishing a simplified 

and generally applicable ratemaking methodology” for oil pipeline transportation. 

31 49 U.S.C. § 1-501(a)(1)(c). 
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Although CO2 pipelines are not explicitly excluded from FERC jurisdiction by statute, FERC 

ruled in 1979 that they are not subject to the Commission’s jurisdiction because they do not 

transport natural gas for heating purposes.32 Likewise, the ICC in 1980 concluded that Congress 

intended to exclude all types of gas, including CO2, from ICC regulation. After making the initial 

decision that it likely did not have jurisdiction over CO2 pipelines, the ICC did conclude that the 

issue was “important enough to institute a proceeding and accept comments on the petition and 

our view on it.”33 After the comment period the ICC confirmed its view that CO2 pipelines were 

excluded from the ICC’s (and, therefore, the STB’s) jurisdiction.34 Thus, the two federal 

regulatory agencies that, generally speaking, have jurisdiction over interstate pipeline rate and 

capacity allocation matters appear to have rejected explicitly jurisdiction over CO2 siting and 

rates, and there is no legislative or judicial history to suggest that their rejections were improper 

at the time. Absent federal authority, CO2 pipelines are regulated to varying degrees by the 

states.35

Potential Issues Related to ICC Jurisdiction 

Notwithstanding the ICC’s 1980 disclaimer of jurisdiction over CO2 pipelines, interstate CO2

pipelines could still be considered subject to STB jurisdiction. Although the STB is the successor 

to the now-defunct ICC, the STB conceivably could determine that its jurisdiction is not governed 

by the ICC’s decision in the CO2 matter. Indeed, the Supreme Court has ruled that federal 

agencies are not precluded from changing their positions on the issue of regulatory jurisdiction. 

According to the Court, “an initial agency interpretation is not instantly carved in stone. On the 

contrary, the agency, to engage in informed rulemaking, must consider varying interpretations and 

the wisdom of its policy on a continuing basis.”36 Accordingly, regulation of CO2 pipelines for 

CCS purposes by the STB (or by FERC, for that matter) under existing statutes remains a 

possibility. 

Policy Implications for Rate Regulation 

If CCS technology develops to the point where interstate CO2 pipelines become more common, 

and if FERC and the STB continue to disclaim jurisdiction over CO2 pipelines, then the absence 

of federal regulation described above may pose policy challenges. In particular, with many more 

pipeline users and interconnections than exist today, complex common carrier issues might 

arise.37 One potential concern, for example, is whether rates should be set separately for existing 

pipelines carrying CO2 as a valuable commercial commodity (e.g., for EOR), versus new 

pipelines carrying CO2 as industrial pollution for disposal. Furthermore, if rates are not reviewed 

prior to pipeline construction, it might be difficult for regulators to ensure the reasonableness of 

 

32 Cortez Pipeline Company, 7 FERC ¶ 61,024 (1979). 

33 Id. 

34 Cortez Pipeline Company—Petition for Declaratory Order—Commission Jurisdiction Over Transportation of Carbon 

Dioxide by Pipeline, 46 Fed. Reg. 18805 (March 26, 1981). 

35 Marston and Moore, (2008), pp. 456-461. 

36 Chevron U.S.A. v. Nat. Res. Def. Council, 467 U.S. 837, at 863-64 (1984). 

37 Beard Company 2000 annual report (10-k) filed with the U.S. Securities and Exchange Commission states that the 

company (with other plaintiffs) filed a lawsuit in 1996 against CO2 pipeline owner Shell Oil Company and other 

defendants alleging, among other things, that the defendants “controlled and depressed the price of CO2” from a field 

partially owned by Beard and “reduc[ed] the delivered price of CO2 while ... simultaneously inflating the cost of 

transportation.” http://www.secinfo.com/dRxzp.424.htm#1fmr 
Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues 

Congressional Research Service 9 

CO2 pipeline rates until after the pipelines were already in service. If CO2 pipeline connections 

become mandatory under future regulations, such arrangements might expose pipeline users to 

abuses of potential market power in CO2 pipeline services, at least until rate cases could be heard. 

Presiding over a large number of CO2 rate cases of varying complexity in a relatively short time 

frame might also be administratively overwhelming for state agencies, which may have limited 

resources available for pipeline regulatory activities. 

Siting Authority 

A company seeking to construct a CO2 pipeline must secure siting approval from the relevant 

regulatory authorities and must subsequently secure rights of way from landowners along the 

pipeline right by purchasing easements or by eminent domain. However, since federal agencies 

claim no regulatory authority with respect to CO2 pipeline construction, potential builders of new 

CO2 pipelines do not require, and could not obtain, federal approval to construct new pipelines. 

Likewise, federal regulators claim no eminent domain authority for pipeline construction, and so 

cannot ensure that pipeline companies can secure rights of way to construct new pipelines. By 

contrast, companies seeking to build interstate natural gas pipelines must first obtain certificates 

of public convenience and necessity from FERC under the Natural Gas Act (15 U.S.C. §§ 717, et 

seq.). Such certification may include safety and security provisions with respect to pipeline 

routing, safety standards and other factors.38 A certificate of public convenience and necessity 

granted by FERC (15 U.S.C. § 717f(h)) confers eminent domain authority. 

The state-by-state siting approval process for CO2 pipelines may be complex and protracted, and 

may face public opposition, especially in populated or environmentally sensitive areas. As the 

National Commission on Energy Policy (NCEP) states in its 2006 report:39

Recent developments notwithstanding, most new energy projects are still regulated primarily 

at the state level and public opposition remains inextricably intertwined with local concerns, 

including environmental and ecosystem impacts as well as, in some cases, complex issues of 

property rights and competing land uses.... In some cases, upstream or downstream 

infrastructure requirements—such as the need for ... underground carbon sequestration sites 

... may generate as much if not more opposition than the energy facilities they support. At the 

same time—and despite recent moves toward consolidated oversight by FERC or other 

regulatory authorities—fragmented permitting processes, nonstandard permitting 

requirements, and interagency redundancy often still compound siting challenges. 

Securing rights of way along existing easements for other infrastructure (e.g., natural gas 

pipelines, electric transmission lines) may be one way to facilitate the siting of new CO2

pipelines. However, existing easements may be ambiguous as to the right of the easement holder 

to install and operate CO2 pipelines. Questions may also arise as to compensation for landowners 

or easement holders for use of such easements, and as to whether existing easements can be sold 

or leased to CO2 pipeline companies.40 A related issue is whether state condemnation laws, which 

are often used to secure sites for infrastructure deemed to be in the public interest, allow for CO2

pipelines to be treated as public utilities or common carriers. This issue also arises on federal 

 

38 18 C.F.R. § 157. 

39 National Commission on Energy Policy, Siting Critical Energy Infrastructure: An Overview of Needs and 

Challenges. (Washington, DC: June 2006): 9. (Hereafter referred to as NCEP 2006.) 

40 Partha S. Chaudhuri, Michael Murphy, and Robert E. Burns, “Commissioner Primer: Carbon Dioxide Capture and 

Storage” (National Regulatory Research Institute, Ohio State Univ., Columbus, OH: Mar. 2006): 17. 
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lands managed by the Bureau of Land Management (BLM). New CO2 pipelines through BLM 

lands potentially may be sited under right of way provisions in either the Federal Land Policy and 

Management Act (FLPMA; 43 U.S.C. § 35) or the Mineral Leasing Act (MLA; 30 U.S.C. § 185). 

However, the MLA imposes a common carrier requirement while the FLPMA does not. Although 

the agency currently permits CO2 pipelines for EOR under the MLA,41 CO2 pipeline companies 

seeking to avoid common carrier requirements under CCS schemes may litigate to secure rights 

of way under FLPMA.42 Provisions in P.L. 110-140 required the Secretary of the Interior to 

recommend legislation to clarify the appropriate framework for issuing CO2 pipeline rights-ofway on federal land (Sec. 714(7)). In its resulting report, the Department of the Interior states that 

“existing policy and guidance are adequate to address rights-of-way issuance under either” the 

FLMPA or the MLA, and that no new legislation would be required.43

Another complicating factor in the siting of CO2 pipelines for CCS is the types of locations of 

existing CO2 sources. Although a network of long-distance CO2 pipelines exists in the United 

States today for EOR, these pipelines are sited mostly in remote areas accustomed to the presence 

of large energy infrastructure. However, many potential sources of CO2, such as power plants, are 

located in populated regions, many with a history of public resistance to the siting of energy 

infrastructure. If a widespread CO2 pipeline network is required to support CCS, the ability to site 

pipelines to serve such facilities may become an issue requiring congressional attention. As the 

NCEP concluded, “In sum, it seems probable that the siting of critical infrastructure will continue 

to present a major challenge for policymakers.”44

Commodity vs. Pollutant Classification 

Under a comprehensive CCS policy, captured CO2 arguably could be classified as either a 

commodity or as a pollutant. CO2 used in EOR is considered to be a commodity, and is regulated 

as such by the states. Because captured CO2 may be sold as a valuable commodity for EOR, and 

may have further economic potential for enhanced recovery of coal bed methane (ECBM), some 

argue that all CO2 under a CCS scheme should be classified as a commodity.45 However, it is 

unlikely that the quantities of CO2 captured under a widely implemented CCS policy could all be 

absorbed in EOR or ECBM applications. In the long run, significant quantities of captured CO2

will have to be disposed as industrial pollution, with negative economic value.46 Furthermore, on 

April 2, 2007, the U.S. Supreme Court held that the Clean Air Act gives the U.S. Environmental 

Protection Agency (EPA) the authority to regulate greenhouse gas emissions, including CO2, from 

new motor vehicles.47 The court also held that EPA cannot interpose policy considerations to 

refuse to exercise this authority. While the specifics of EPA regulation under this ruling might be 

 

41 U.S. Dept. of the Interior, Bureau of Land Management, Environmental Assessment for Anadarko E&P Company 

L.P. Monell CO2 Pipeline Project, EA #WY-040-03-035 (Feb. 2003): 71. 

42 Chaudhuri et al: 17. 

43 U.S Dept. of the Interior, Report to Congress: Framework For Geological Carbon Sequestration On Public Land, 

June 3, 2009, p. 12. 

44 NCEP 2006: 9. 

45 IOGCC 2005: 41. 

46 S.M. Frailey, R.J. Finlay, and T.S. Hickman, “CO2 Sequestration: Storage Capacity Guideline Needed,” Oil & Gas 

Journal (Aug. 14, 2006): 44. 

47 Massachusetts v. EPA; at http://www.supremecourtus.gov/opinions/06pdf/05-1120.pdf. For further information see 

CRS Report RL33776, Clean Air Issues in the 110th Congress: Climate Change, Air Quality Standards, and Oversight, 

by James E. McCarthy. 
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subject to agency discretion, it has implications for the regulation of CO2 emissions from 

stationary sources, such as power plants. 

Separately, EPA has also concluded that geologic sequestration of captured CO2 through well 

injection meets the definition of “underground injection” in § 1421(d)(1) of the Safe Drinking 

Water Act (SDWA).48 EPA anticipates protecting underground sources of drinking water, through 

its authority under the SDWA, from “potential endangerment” as a result of underground 

injection of CO2 in anticipated CCS pilot projects. EPA’s assertion of authority under SDWA for 

underground injection of CO2 during CCS pilot studies may contribute to uncertainty over future 

classification of CO2 as a commodity or a pollutant. 

Conflicting classification of captured CO2 as either a commodity or pollutant has important 

implications for CO2 pipeline development. For example, classifying all CO2 as a pollutant not 

only would contradict current state and BLM treatment of CO2 for EOR, but might also 

undermine an interstate commerce rationale for FERC regulation of CO2 pipelines. On the other 

hand, classifying all CO2 as a commodity would create other policy contradictions, for example, 

in regions like New England where EOR may be impracticable. Under either scenario, legislative 

and regulatory ambiguities would arise—especially for an integrated, interstate CO2 pipeline 

network carrying a mixture of “commodity” CO2 and “pollutant” CO2. Resolving these 

ambiguities to establish a consistent and workable CCS policy could likely be an issue for 

Congress. 

Pipeline Costs 

If an extensive network of pipelines is required for CO2 transportation, pipeline costs may be a 

major consideration in CCS policy. MIT estimated overall annualized pipeline transportation (and 

storage) costs of approximately $5 per metric ton of CO2.

49 If CO2 sequestration rates in the 

United States were on the order of 1 billion metric tons per year at mid-century, as some analysts 

propose, annualized pipeline costs would run into the billions of dollars. Furthermore, because 

most pipeline costs are initial capital costs, up-front capital outlays for a new CO2 pipeline 

network would be enormous. The 2007 Duke study, for example, estimated it would cost 

approximately $5 billion to construct a CO2 trunk line along existing pipeline rights of way to 

transport captured CO2 from North Carolina to potential sequestration sites in the Gulf states and 

Appalachia.50 Within the context of overall CO2 pipeline costs, several specific cost-related issues 

may warrant further examination by Congress. 

Materials Costs 

Analysts commonly develop cost estimates for CO2 pipelines based on comparable construction 

costs for natural gas pipelines, and to a lesser extent, petroleum product pipelines. In most cases, 

these comparisons appear appropriate since CO2 pipelines are similar in design and operation to 

other pipelines, especially natural gas pipelines. A University of California (UC) study analyzing 

the costs of U.S. transmission pipelines constructed between 1991 and 2003 found that, on 

 

48 U.S. Environmental Protection Agency, memorandum (July 5, 2006). Available at http://www.epa.gov/OGWDW/

uic/pdfs/memo_wells_sequestration_7-5-06.pdf. 

49 MIT 2007: xi. 

50 Eric Williams et al. (2007): 20. 
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average, labor accounted for approximately 45% of the total construction costs. Materials, rights 

of way, and miscellaneous costs accounted for 26%, 22%, and 7% of total costs, respectively.51

Materials cost was most closely dependent upon pipeline size, accounting for an increasing 

fraction of the total cost with increasing pipeline size, from 15% to 35% of total costs. The MIT 

study estimated that transportation of captured CO2 from a 1 gigawatt coal-fired power plant 

would require a pipe diameter of 16 inches.52 According to the UC analysis, total construction 

costs for such a pipe between 1991 and 2003 averaged around $800,000 per mile (in 2002 

dollars), although the study stated that costs for any individual pipeline could vary by a factor of 

five depending its location.53

Figure 2. U.S. Prices for Large Diameter Steel Pipe 

Dollars per net ton 

$-

$500

$1,000

$1,500

$2,000

$2,500

Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

Source: Preston Pipe & Tube Report. Pipe prices represent average transaction price (by weighted average value) 

for double-submerged arc-welded pipe > 24” diameter, combining domestic and import shipments. 

Since pipeline materials make up a significant portion of CO2 pipeline construction costs, analysts 

have called attention to rising pipeline materials costs, especially steel costs, as a concern for 

policymakers.54 Following a period of low steel prices and company bankruptcies earlier in the 

decade, higher prices resulting from both strong demand and increased production costs for 

carbon steel plate, used in making large-diameter pipe, may alter the basic economics of CO2

pipeline projects and CCS schemes overall. As Figure 2 shows, the price of large-diameter pipe 

was generally around $500 per ton in 2000. By late 2008, just prior to the start of the global 

economic crisis, the price of pipe exceeded $2,000 per ton. Analysts forecast carbon steel prices 

to decline over the next two years, but to a level still more than double the price early in the 

decade.55

 

51 N. Parker, “Using Natural Gas Transmission Pipeline Costs to Estimate Hydrogen Pipeline Costs,” UCD-ITS-RR04-35, Inst. of Transportation Studies, Univ. of California (Davis, CA: 2004): 1. http://hydrogen.its.ucdavis.edu/people/

ncparker/papers/pipelines; see, also, G. Heddle, H. Herzog, and M. Klett, “The Economics of CO2 Storage,” MIT 

LFEE 2003-003 RP (Laboratory for Energy and the Environment, MIT, Cambridge, MA: Aug. 2003). 

http://lfee.mit.edu/public/LFEE_2003-003_RP.pdf 

52 MIT 2007: 58. 

53 N. Parker (2004): Fig. 23. 

54 IPCC 2005: 27. 

55 Paul Vivian, Preston Pipe & Tube Report, Preston Publishing Co, Personal communication (July 24, 2009). 
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If some form of CCS is effectively mandated in the future, a surge in demand for new CO2 pipe, 

in competition with demand for natural gas and oil pipelines, may exacerbate the trend of rising 

prices for pipeline materials, and could even lead to shortages of pipe steel from North American 

sources. As a consequence, the availability and cost of pipeline steel to build such a CO2 pipeline 

network for CCS may be a limiting factor for widespread CCS implementation. 

Cost Recovery 

In states where traditional rate regulation exists, construction and operation of CO2 pipelines for 

CCS could raise questions about cost recovery for electric utilities under state utility regulation. 

If, for example, a CO2 pipeline is constructed for the exclusive use of a single power plant for onsite (or nearby) CO2 sequestration, and is owned by the power plant owners, it logically could be 

considered an extension of the plant itself. In such cases, the CO2 pipelines could be eligible for 

regulated returns on the invested capital and their costs could be recovered by utilities in 

electricity rates. Alternatively such a CO2 pipeline could be owned by third parties and considered 

a non-plant asset providing a transportation service for a fee. In the latter case, the costs could 

still be recovered by the utility in its rates as an operating cost. 

Two complications arise with respect to pipeline cost recovery. First, because utility regulation 

varies from state to state (e.g., some states allow for competition in electricity generation, others 

do not),56 differences among states in the economic regulation of CO2 pipelines could create 

economic inefficiencies and affect the attractiveness of CO2 pipelines for capital investment. 

Second, if CO2 transportation infrastructure is intended to evolve from shorter, stand-alone, 

intrastate pipelines into a network of interconnected interstate pipelines, pipeline operators 

wishing to link CO2 pipelines across state lines may face a regulatory environment of daunting 

complexity. Without a coherent system of economic regulation for CO2 pipelines, whether as a 

commodity, pollutant, or some other classification, developers of interstate CO2 pipelines may 

need to negotiate or litigate repeatedly issues such as siting, pipeline access, terms of service, and 

rate “pancaking” (the accumulation of transportation charges assessed by contiguous pipeline 

operators along a particular transportation route). It is just these kinds of issues which have 

complicated and impeded the integration of individual utility electric transmission systems into 

larger regional transmission networks.57

CO2 Pipeline Incentives 

Oil industry representatives frequently point to EOR as offering a market-based model for 

profitable CO2 transportation via pipeline. It should be noted, however, that much of the existing 

CO2 pipeline network in the United States for EOR has been established with the benefit of 

federal tax incentives. Although current federal tax law provides no special or targeted tax 

benefits specifically to CO2 pipelines, investments in CO2 pipelines do benefit from tax 

provisions targeted for EOR. They also benefit from accelerated depreciation rules, which apply 

generally to any capital investment including petroleum and natural gas (non-CO2) pipelines. For 

example, the Internal Revenue Code provides for a 15% income tax credit for the costs of 

recovering domestic oil by one of nine qualified EOR methods, including CO2 injection (I.R.C. § 

 

56 In market-based states, cost recovery may affect electricity markets. 

57 For further information of electric transmission regulation, see CRS Report R40511, Electric Power Transmission: 

Background and Policy Issues, by Stan Mark Kaplan. 
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43).58 Also, extraction of naturally occurring CO2 may qualify for percentage depletion allowance 

under I.R.C. § 613(b)(7). Prior federal law, both tax and nontax, also provided various types of 

incentives for EOR which stimulated investment in CO2 pipelines. In particular, oil produced 

from EOR projects was exempt from oil price controls in the 1970s. Development of CO2

pipeline infrastructure in the 1980s benefitted from tax advantages to EOR oil under the crude oil 

windfall profits tax law, which was in effect from March 1980 to August 1988. 

Although there were never incentives explicitly for CO2 pipelines under federal tax and price 

control regulation in the 1970s and 1980s, it is clear that CO2 pipeline infrastructure development 

benefitted from these regulations. In a CCS environment where some captured CO2 is a valuable 

commodity, but the remainder is not, establishing similar regulatory incentives for CO2 pipelines 

becomes complex. One initial proposal, for example, would allow seven-year accelerated 

depreciation for qualifying CO2 pipelines. As debate continues about the economics of CO2

capture and sequestration generally, and how the federal government can encourage CCS 

infrastructure investment, Congress may seek to understand the implications of CCS incentives 

specifically on CO2 pipeline development. 

Cost Implications for Network Development 

In light of the overall costs associated with CO2 pipelines, including the uncertainty about future 

materials costs and cost recovery, some analysts anticipate that a CO2 network for CCS will begin 

with shorter pipelines from CO2 sources located close to sequestration sites. Larger CO2 trunk 

lines are expected to emerge to capture substantial scale economies in long-distance pipeline 

transportation. According to the 2007 MIT report, “it is anticipated that the first CCS projects will 

involve plants that are very close to a sequestration site or an existing CO2 pipeline. As the 

number of projects grow, regional pipeline networks will likely evolve.”59 It is debatable, 

however, whether piecemeal growth of a CO2 pipeline network in this way, presumably by 

individual facility operators seeking to minimize their own costs, would ultimately yield an 

economically efficient and publically acceptable CO2 pipeline network for CCS. Weaknesses and 

failures in the North American electric power transmission grid, which was developed in this 

manner, may be one example of how piecemeal, uncoordinated network development may fail to 

satisfy key economic and operating objectives. 

As an alternative to piecemeal CO2 pipeline development, some analysts suggest that it may be 

more cost effective in the long run to build large trunk pipelines when the first sites with CO2

capture come on line with the expectation that subsequent users could fill the spare capacity in the 

trunk line.60 In addition to lower per-unit transport costs for CO2, such an arrangement would 

smooth out potentially intermittent CO2 flows from individual capture sites (especially 

discontinuously operated power plants), provide a greater buffer for overall CO2 supply 

fluctuations, and generally allow for more operational flexibility in the system.61 Planning and 

 

58 Unfortunately for EOR investors, while this tax credit is part of current federal tax law, its phaseout provisions mean 

that presently it is not available—the credit is zero—due to high crude oil prices. 

59 Ibid., MIT. (2007): 59. 

60 Brian Jeffries, “One Version of a Fully Built Out CO2 Pipeline Grid,” Slide presentation, Wyoming Pipeline 

Authority, May 19, 2009, http://www.wyopipeline.com/information/presentations/2009/May/

Theoretical%20CO2%20Pipeline%20Economics.pdf. 

61 John Gale and John Davidson, “Transmission of CO2—Safety and Economic Considerations,” Energy, Vol. 29, Nos. 

9-10 (July-August 2004): 1326. 
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financing such a CO2 trunk line system would present its own challenges, however. As another 

analysis points out, “implementation of a ‘backbone’ transport structure may facilitate access to 

large remote storage reservoirs, but infrastructure of this kind will require large initial upfront 

investment decisions.”62 How a CO2 network for CCS would be configured, and who would 

configure it, may be issues for Congress.63

CO2 Pipeline Safety 

CO2 occurs naturally in the atmosphere, and is produced by the human body during ordinary 

respiration, so it is commonly perceived by the general public to be a relatively harmless gas. 

However, at concentrations above 10% by volume, CO2 may cause adverse health effects and at 

concentrations above 25% poses a significant asphyxiation hazard. Because CO2 is colorless, 

odorless, and heavier than air, an uncontrolled release may accumulate and remain undetected 

near the ground in low-lying outdoor areas, and in confined spaces such as caverns, tunnels, and 

basements.64 Exposure to CO2 gas, as for other asphyxiates, may cause rapid “circulatory 

insufficiency,” coma, and death.65 Such an event occurred in 1986 in Cameroon, when a cloud of 

naturally-occurring CO2 spontaneously released from Lake Nyos killed 1,800 people in nearby 

villages.66

The Secretary of Transportation has primary authority to regulate interstate CO2 pipeline safety 

under the Hazardous Liquid Pipeline Act of 1979 as amended (49 U.S.C. § 601). Under the act, 

the Department of Transportation (DOT) regulates the design, construction, operation and 

maintenance, and spill response planning for CO2 pipelines (49 C.F.R. § 190, 195-199). The DOT 

administers pipeline regulations through the Office of Pipeline Safety (OPS) within the Pipelines 

and Hazardous Materials Safety Administration (PHMSA).67 Although CO2 is listed as a Class 2.2 

(non-flammable gas) hazardous material under DOT regulations (49 C.F.R. § 172.101), the 

agency applies nearly the same safety requirements to CO2 pipelines as it does to pipelines 

carrying hazardous liquids such as crude oil, gasoline, and anhydrous ammonia (49 C.F.R. § 195). 

To date, CO2 pipelines in the United States have experienced few serious accidents. According to 

OPS statistics, there were 31 leaks from CO2 pipelines reported from 2002 through 2008—none 

resulting in injuries to people. By contrast, there were 2,059 accidents causing 106 fatalities and 

382 injuries related to natural gas and hazardous liquids (excluding CO2) pipelines during the 

same period.68 It is difficult to draw firm conclusions from these accident data, because CO2

pipelines account for less than 1% of total natural gas and hazardous liquids pipelines, and CO2

 

62 IPCC 2005: 190. 

63 For further discussion see CRS Report RL34316, Pipelines for Carbon Dioxide (CO2) Control: Network Needs and 

Cost Uncertainties, by Paul W. Parfomak and Peter Folger. 

64 J. Barrie, K. Brown, P.R. Hatcher, and H.U. Schellhase, “Carbon Dioxide Pipelines: A Preliminary Review of 

Design and Risks,” Proceedings of the 7th International Conference on Greenhouse Gas Control Technologies 

(Vancouver, Canada: Sept. 5-9, 2004): 2. 

65 Airco, Inc., “Carbon Dioxide Gas,” Material Safety Data Sheet (Aug. 4, 1989). http://www2.siri.org/msds/f2/byd/

bydjl.html 

66 Kevin Krajick, “Defusing Africa’s Killer Lakes,” Smithsonian, v. 34, n. 6. (2003): 46—55. 

67 PHMSA succeeds the Research and Special Programs Administration (RSPA), reorganized under P.L. 108-246, 

which was signed by the President on Nov. 30, 2004. 

68 Office of Pipeline Safety (OPS), “Distribution, Transmission, and Liquid Accident and Incident Data,” (2009). Data 

files available at http://ops.dot.gov/stats/IA98.htm. 
Carbon Dioxide (CO2) Pipelines for Carbon Sequestration: Emerging Policy Issues 

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pipelines currently run primarily through remote areas. Based on the limited sample of CO2

incidents, analysts conclude that, mile-for-mile, CO2 pipelines appear to be safer than the other 

types of pipeline regulated by OPS.69 Additional measures, such as adding gas odorants to CO2 to 

aid in leak detection, may further mitigate CO2 pipeline hazards. Nonetheless, as the number of 

CO2 pipelines expands, analysts suggest that “statistically, the number of incidents involving CO2

should be similar to those for natural gas transmission.”70 If the nation’s CO2 pipeline network 

expands significantly to support CCS, and if this expansion includes more pipelines near 

populated areas, more CO2 pipeline accidents are likely in the future.71

Criminal and Civil Liability 

There are no special provisions in U.S. law protecting the pipeline industry from criminal or civil 

liability. In fact, criminal liability has been at issue in a handful of recent pipeline incidents. For 

example, in 2007, BP reportedly agreed to pay Alaska $20 million in fines and restitution to 

resolve criminal liability for a 2006 pipeline spill at its Prudhoe Bay oilfield.72 In 2003, the 

Justice Department announced over $100 million in civil and criminal penalties against Olympic 

Pipeline and Shell Pipeline resolving claims from a fatal gasoline pipeline fire in Bellingham, 

WA, in 1999.73 In March 2003, emphasizing the environmental aspects of homeland security, 

Attorney General John Ashcroft reportedly announced a crackdown on companies failing to 

protect against possible terrorist attacks on storage tanks, transportation networks, industrial 

plants, and pipelines.74

Even if no federal or state regulations are violated, CO2 pipeline operators could still face civil 

liability for personal injury or wrongful death in the event of an accident. In the Bellingham 

accident, the pipeline owner and associated defendants reportedly agreed to pay a $75 million 

settlement to the families of two children killed in the accident.75 In 2002, El Paso Corporation 

settled wrongful death and personal injury lawsuits stemming from a natural gas pipeline 

explosion near Carlsbad, NM, which killed 12 campers.76 Although the terms of those settlements 

were not disclosed, two additional lawsuits sought a total of $171 million in damages.77 The MIT 

study concluded that operational liability for CO2 pipelines, as part of an integrated CCS 

infrastructure, “can be managed within the framework that has been successfully used for decades 

by the oil and gas industries.”78 Nonetheless, as CCS policy evolves, Congress may seek to 

ensure that liability provisions for CO2 pipelines are adequate and consistent with liability 

provisions in place for other CO2 infrastructure. 

 

69 John Gale and John Davidson. (2004): 1322. 

70 Barrie et al. (2004): 2. 

71 Gale and Davidson (2004): 1321. 

72 Chris Baltimore, “BP to Pay $373 Million to Settle Charges,” Reuters News Service, (Oct. 25, 2007). 

73 “Shell, Olympic Socked for Pipeline Accident,” Energy Daily (Jan. 22, 2003). 

74 John Heilprin, “Ashcroft Promises Increased Enforcement of Environmental Laws for Homeland Security,” 

Associated Press, Washington dateline (Mar. 11, 2003). 

75 Business Editors, “Olympic Pipe Line, Others Pay Out Record $75 Million in Pipeline Explosion Wrongful Death 

Settlement,” Business Wire (April 10, 2002). 76 National Transportation Safety Board, Pipeline Accident Report, PAR-03-01. (Feb. 11, 2003). 

77 El Paso Corp., Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, Form 10-Q, 

Period ending June 30, 2002. (Houston, TX: 2002). The impact of these lawsuits on the company’s business is unclear, 

however; the report states that “our costs and legal exposure ... will be fully covered by insurance.” 

78 MIT 2007: 58. 
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Other Issues 

In addition to the issues discussed above, additional policy issues related to CO2 pipelines may 

arise as CCS policy evolves. These may include addressing technical transportation problems 

related to the presence of other pollutants, such as sulfuric and carbonic acid, in CO2 pipelines. 

Some have also suggested the use or conversion of existing non-CO2 pipelines, such as natural 

gas pipelines, to transport CO2.

79 Coordination of U.S. CO2 pipeline policies with Canada, with 

whom the United States shares its existing pipeline infrastructure, may also become a 

consideration. Finally, the potential impacts of CO2 pipeline development overseas on the global 

availability of construction skills and materials may arise as a key factor in CCS economics and 

implementation. 

Conclusion 

Policy debate about the mitigation of climate change through some scheme of carbon capture and 

sequestration is expanding quickly. To date, debate among legislators has been focused mostly on 

CO2 sources and storage sites, but CO2 pipelines are a vital connection between the two. Although 

CO2 transportation by pipeline is in some respects a mature technology, there are many important 

unanswered questions about the socially optimal configuration, regulation, and costs of a CO2

pipeline network for CCS. Furthermore, because CO2 pipelines for EOR are already in use today, 

policy decisions affecting CO2 pipelines take on an urgency that is, perhaps, unrecognized by 

many. It appears, for example, that federal classification of CO2 as both a commodity (by the 

BLM) and as a pollutant (by the EPA) potentially could create an immediate conflict which may 

need to be addressed not only for the sake of future CCS implementation, but also to ensure 

consistency between future CCS and today’s CO2 pipeline operations. 

In addition to these issues, Congress may examine how CO2 pipelines fit into the nation’s overall 

strategies for energy supply and environmental protection. The need for CO2 pipelines ultimately 

derives from the nation’s consumption of fossil fuels. Policies affecting the latter, such as energy 

conservation, and the development of new renewable, nuclear, or hydrogen energy resources, 

could substantially affect the need for and configuration of CO2 pipelines. If policy makers 

encourage continued consumption of fossil fuels under CCS, then the need to foster the other 

energy options may be diminished—and vice versa. Thus decisions about CO2 pipeline 

infrastructure could have consequences for a broader array of energy and environmental policies. 

 

79 An example is the Gwinville, MS-Lake St. John, LA natural gas pipeline purchased by Denbury Resources, Inc. in 

2006 and converted to CO2 transportation for EOR in 2007. 
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Author Contact Information 

Paul W. Parfomak 

Specialist in Energy and Infrastructure Policy 

pparfomak@crs.loc.gov, 7-0030 

Adam Vann 

Legislative Attorney 

avann@crs.loc.gov, 7-6978 

Peter Folger 

Specialist in Energy and Natural Resources Policy 

pfolger@crs.loc.gov, 7-1517