II 

111TH CONGRESS 

1ST SESSION S. 1502 

To establish a program to be managed by the Department of Energy to 

ensure prompt and orderly compensation for potential damages relating 

to the storage of carbon dioxide in geological storage units. 

IN THE SENATE OF THE UNITED STATES 

JULY 22, 2009 

Mr. CASEY (for himself and Mr. ENZI) introduced the following bill; which was 

read twice and referred to the Committee on Energy and Natural Resources 

A BILL 

To establish a program to be managed by the Department 

of Energy to ensure prompt and orderly compensation 

for potential damages relating to the storage of carbon 

dioxide in geological storage units. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Carbon Storage Stew5 ardship Trust Fund Act of 2009’’. 

6 SEC. 2. PURPOSES. 

7 The purposes of this Act are— 


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1 (1) to promote the commercial deployment of 

2 carbon capture and storage as an essential compo3 nent of a national climate mitigation strategy; 

4 (2) to require private liability assurance during 

5 the active project period of a carbon dioxide storage 

6 facility; 

7 (3) to establish a Federal trust fund consisting 

8 of amounts received as fees from operators of carbon 

9 dioxide storage facilities; 

10 (4) to establish a limit on liability for damages 

11 caused by injection of carbon dioxide by carbon diox12 ide storage facilities subject to certificates of closure; 

13 (5) to establish a program— 

14 (A) to certify the closure of commercial 

15 carbon dioxide storage facilities; and 

16 (B) to provide for the transfer of long-term 

17 stewardship to the Federal Government for car18 bon dioxide storage facilities on the issuance of 

19 certificates of closure for the facilities; 

20 (6) to provide for the prompt and orderly com21 pensation for damages relating to the storage of car22 bon dioxide; and 

23 (7) to protect the environment and public by 

24 providing long-term stewardship of geological stor25 age units. 


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1 SEC. 3. DEFINITIONS. 

2 In this Act: 

3 (1) ACTIVE PROJECT PERIOD.—The term ‘‘ac4 tive project period’’ means the phases of the carbon 

5 dioxide storage facility through receipt of a certifi6 cate of closure, including— 

7 (A) the siting and construction of the facil8 ity; 

9 (B) carbon dioxide injection; 

10 (C) well capping; 

11 (D) facility decommissioning; and 

12 (E) geological storage unit monitoring, 

13 measurement, verification, and remediation. 

14 (2) ADMINISTRATOR.—The term ‘‘Adminis15 trator’’ means the Administrator of the Environ16 mental Protection Agency. 

17 (3) CARBON DIOXIDE STORAGE FACILITY.—The 

18 term ‘‘carbon dioxide storage facility’’ means a facil19 ity that receives and permanently stores or seques20 ters carbon dioxide within a geological storage unit, 

21 including carbon dioxide permanently stored as a re22 sult of enhanced hydrocarbon recovery. 

23 (4) CERTIFICATE OF CLOSURE.—The term 

24 ‘‘certificate of closure’’ means a determination 

25 issued by the Administrator or other Federal or 

26 State regulatory authority with respect to a carbon 


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1 dioxide storage facility that certifies that the oper2 ator of the carbon dioxide storage facility has com3 pleted injection operations, well closure, and any re4 quired monitoring and remediation to ensure that 

5 any carbon dioxide injected into a geological storage 

6 unit would not harm or present a risk to human 

7 health, safety, and the environment, including drink8 ing water supplies. 

9 (5) CIVIL CLAIM.—The term ‘‘civil claim’’ 

10 means a claim, cause of action, lawsuit, judgment, 

11 court order, administrative order, government or 

12 agency order, fine, penalty, or notice of violation, for 

13 civil relief with respect to damages or harm to per14 sons, property, or natural resources from the injec15 tion of carbon dioxide by a carbon dioxide storage 

16 facility. 

17 (6) DAMAGE.— 

18 (A) IN GENERAL.—The term ‘‘damage’’ 

19 means any direct or indirect damage or harm to 

20 persons, property, or natural resources from the 

21 injection of carbon dioxide into geological stor22 age units. 

23 (B) INCLUSIONS.—The term ‘‘damage’’ in24 cludes personal injury, sickness, real or per25 sonal property damage, natural resource damVerDate Nov 24 2008 03:18 Jul 23, 2009 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1502.IS S1502

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1 age, trespass, subsidence losses, revenue losses, 

2 and loss of profits. 

3 (7) ENHANCED HYDROCARBON RECOVERY.— 

4 The term ‘‘enhanced hydrocarbon recovery’’ means 

5 the use of carbon dioxide to improve or enhance the 

6 recovery of oil or natural gas from oil or natural gas 

7 fields. 

8 (8) FUND.—The term ‘‘Fund’’ means the Car9 bon Storage Trust Fund established by section 

10 5(d)(1). 

11 (9) GEOLOGICAL STORAGE UNIT.—The term 

12 ‘‘geological storage unit’’ includes saline formations, 

13 hydrocarbon formations, basalt formations, salt cav14 erns, unmineable coal seams, or any other geological 

15 formation capable of permanently storing carbon di16 oxide. 

17 (10) LIABILITY ASSURANCE.—The term ‘‘liabil18 ity assurance’’ means privately funded financial 

19 mechanisms, including third-party insurance, self-in20 surance, performance bonds, trust funds, letters of 

21 credit, and surety bonds. 

22 (11) LONG-TERM STEWARDSHIP.—The term 

23 ‘‘long-term stewardship’’ means the monitoring, 

24 measurement, verification, and remediation and reVerDate Nov 24 2008 03:18 Jul 23, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1502.IS S1502

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1 lated activities associated with a carbon dioxide stor2 age facility after issuance of a certificate of closure. 

3 (12) PROGRAM.—The term ‘‘Program’’ means 

4 the Carbon Storage Stewardship and Trust Fund 

5 Program established by section 5(a). 

6 (13) SECRETARY.—The term ‘‘Secretary’’ 

7 means the Secretary of Energy. 

8 SEC. 4. LONG-TERM STEWARDSHIP RESPONSIBILITY. 

9 (a) IN GENERAL.—Subject to subsection (b), the Sec10 retary shall be responsible for the long-term stewardship 

11 of a carbon dioxide storage facility on the issuance of a 

12 certificate of closure for the carbon dioxide storage facility. 

13 (b) TRANSFER TO STATE.— 

14 (1) IN GENERAL.—A State may request that 

15 the management responsibilities associated with 

16 long-term stewardship of a carbon dioxide storage 

17 facility located in the State be transferred to the 

18 State in accordance with regulations established by 

19 the Secretary. 

20 (2) APPROVAL OF REQUEST.—If the Secretary 

21 approves a request under paragraph (1), the State 

22 shall be responsible for the long-term stewardship of 

23 the applicable carbon dioxide storage facility begin24 ning on the date of the approval in accordance with 


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1 applicable Federal and State laws (including regula2 tions). 

3 (3) FAILURE TO ACT BY STATE.—In accordance 

4 with any regulations established under paragraph 

5 (1), if the Secretary determines that a State that 

6 has accepted management responsibilities under 

7 paragraph (1) has failed to carry out the responsibil8 ities of the State with respect to the carbon dioxide 

9 storage facility, the Secretary shall assume long10 term stewardship of the carbon dioxide storage facil11 ity as soon as practicable after the date of the deter12 mination. 

13 (c) STANDARDS.—The Secretary, in coordination 

14 with the Administrator, shall establish standards for any 

15 monitoring, measurement, verification, and site remedi16 ation activities necessary to protect health, safety, and the 

17 environment during long-term stewardship performed by 

18 a State or the Federal Government. 

19 (d) COORDINATION WITH ADMINISTRATOR.—If long20 term stewardship is vested with the Secretary, the Sec21 retary may coordinate responsibility for site monitoring, 

22 measurement, verification, and remediation and related 

23 activities with the Administrator. 


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1 SEC. 5. CARBON STORAGE STEWARDSHIP AND TRUST FUND 

2 PROGRAM. 

3 (a) IN GENERAL.—There is established in the De4 partment of Energy the Carbon Storage Stewardship and 

5 Trust Fund Program. 

6 (b) LIABILITY ASSURANCE REQUIRED FOR OPERA7 TORS OF COMMERCIAL CARBON DIOXIDE STORAGE FA8 CILITIES.—Notwithstanding any other provision of Fed9 eral or State law, in carrying out the Program, the Sec10 retary shall require operators of carbon dioxide storage fa11 cilities to maintain adequate liability assurance during the 

12 active project period. 

13 (c) FEES.— 

14 (1) IN GENERAL.—In carrying out the Pro15 gram, the Secretary shall require operators of car16 bon dioxide storage facilities to pay a risk-based fee, 

17 in an amount to be established in accordance with 

18 paragraph (2), for each ton of carbon dioxide in19 jected by the carbon dioxide storage facility into geo20 logical storage units during the operation phase of 

21 the facility. 

22 (2) AMOUNT.— 

23 (A) IN GENERAL.—As soon as practicable 

24 after the date of enactment of this Act and 

25 after taking into account the criteria described 


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1 in subparagraph (B), the Secretary shall estab2 lish— 

3 (i) the minimum and maximum bal4 ance for the Fund; and 

5 (ii) the amount of the fee required 

6 under paragraph (1). 

7 (B) CRITERIA.—The criteria referred to in 

8 subparagraph (A) are— 

9 (i) the estimated quantity of carbon 

10 dioxide to be injected annually into geologi11 cal storage units by all operating commer12 cial carbon dioxide storage facilities; 

13 (ii) the likelihood or risk of an inci14 dent resulting in liability; 

15 (iii) the likely dollar value of any dam16 ages relating to an incident; 

17 (iv) other factors relating to the risk 

18 of the carbon dioxide storage facility and 

19 associated geological storage unit; and 

20 (v) impact on commercial and eco21 nomic viability of carbon dioxide storage 

22 facilities. 

23 (C) CONSIDERATIONS.—In establishing the 

24 amount of the fee under subparagraph (A)(ii), 

25 the Secretary may consider using a fee system 


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1 that is based on the level of risk associated with 

2 a specific geological storage unit to provide an 

3 incentive for the selection and operation of the 

4 best carbon dioxide storage facilities. 

5 (D) ENHANCED HYDROCARBON RECOV6 ERY.—The Secretary shall determine the most 

7 appropriate approach for charging a fee on the 

8 quantity of carbon dioxide injected into oil and 

9 gas fields, after taking into consideration— 

10 (i) the quantity of carbon dioxide that 

11 is permanently stored; 

12 (ii) whether or not the enhanced hy13 drocarbon recovery operation is also being 

14 operated as a carbon dioxide storage facil15 ity; and 

16 (iii) any other factors that the Sec17 retary determines to be appropriate. 

18 (E) REVIEW AND ADJUSTMENT.—The Sec19 retary shall, on at least an annual basis, review 

20 the Fund balance— 

21 (i) to ensure that there are sufficient 

22 amounts in the Fund to make the pay23 ments required under subsection (d)(3)(A); 

24 and 


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1 (ii) to determine whether or not to in2 crease or decrease the amount, or dis3 continue collection, of the fee, after taking 

4 into consideration— 

5 (I) the annual quantity of carbon 

6 dioxide injected by carbon dioxide 

7 storage facilities; 

8 (II) the number and estimated 

9 value of claims against the Fund; and 

10 (III) any other relevant factors, 

11 as determined by the Secretary. 

12 (3) DEPOSIT.—Notwithstanding section 3302 

13 of section 31, United States Code, the fees collected 

14 under paragraph (1) shall be deposited in the Fund. 

15 (d) CARBON STORAGE TRUST FUND.— 

16 (1) ESTABLISHMENT.—There is established in 

17 the Treasury of the United States a revolving fund, 

18 to be known as the ‘‘Carbon Storage Trust Fund’’, 

19 consisting of such amounts as are deposited under 

20 subsection (c)(3). 

21 (2) USE OF FUND.— 

22 (A) IN GENERAL.—Amounts in the Fund 

23 shall be made available, without further appro24 priation or fiscal year limitation— 


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1 (i) to the Secretary for the payment 

2 of civil claims from a carbon dioxide stor3 age facility that are brought after a certifi4 cate of closure for the carbon dioxide stor5 age facility has been issued; 

6 (ii) to the Secretary for long-term 

7 stewardship after the date of issuance of a 

8 certificate for closure; and 

9 (iii) to the Secretary or other appro10 priate regulatory authority to pay any rea11 sonable and verified administrative costs 

12 incurred by the Secretary or regulatory au13 thority in carrying out the Program. 

14 (B) LIMITATION.—Amounts in the Fund 

15 shall only be used for the purposes described in 

16 clause (i), (ii), or (iii) of subparagraph (A). 

17 (C) LIMITATION ON PAYMENTS.— 

18 (i) IN GENERAL.—Subject to clause 

19 (ii), an aggregate claim for damages 

20 brought under subparagraph (A)(i) shall 

21 be limited to an amount to be established 

22 by the Secretary as soon as practicable 

23 after the date of enactment of this Act, 

24 based on mechanisms such as— 


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1 (I) actuarial modeling of probable 

2 damage; and 

3 (II) net present value analysis. 

4 (ii) CONGRESSIONAL ACTION.—If esti5 mated or actual aggregate damages exceed 

6 the amount established under clause (i)— 

7 (I) the Secretary shall notify 

8 Congress; and 

9 (II) on receipt of notice under 

10 subclause (I), Congress may provide 

11 for payments in excess of that 

12 amount, in accordance with guidelines 

13 established by Congress by law. 

14 (D) EXCEPTION FOR GROSS NEGLIGENCE

15 AND INTENTIONAL MISCONDUCT.—Notwith16 standing subparagraph (A), no amounts in the 

17 Fund shall be used to pay a claim for liability 

18 arising out of conduct of an operator of a car19 bon dioxide storage facility that is grossly neg20 ligent or that constitutes intentional mis21 conduct, as determined by the Secretary. 

22 (E) PROCEDURES FOR ADJUDICATION OF

23 CLAIMS.—Claims of damage brought under sub24 paragraph (A)(i) relating to carbon dioxide in a 


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1 carbon dioxide storage facility subject to a cer2 tificate of closure shall be— 

3 (i) filed in the United States Court of 

4 Federal Claims; and 

5 (ii) adjudicated in accordance with 

6 procedures established by the United 

7 States Court of Federal Claims. 

8 (3) INITIAL FUNDING.— 

9 (A) IN GENERAL.—If sufficient amounts 

10 are not available in the Fund to cover potential 

11 claims during the first years of the Program, 

12 the Secretary may request from the Secretary 

13 of the Treasury an interest-bearing advance in 

14 funding from the Treasury to carry out the 

15 Program, subject to subparagraph (B). 

16 (B) TERMS AND CONDITIONS.—The terms 

17 and conditions for the repayment of an advance 

18 under subparagraph (A) shall be specified by 

19 the Secretary of the Treasury. 

20 SEC. 6. LIMITATION ON CIVIL CLAIMS. 

21 (a) IN GENERAL.—Except as provided in subsection 

22 (b), on issuance of a certificate of closure, a civil claim 

23 or claim for the performance of long-term stewardship re24 sponsibilities under applicable Federal and State law, may 

25 not be brought against— 


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1 (1) the operator or owner of the carbon dioxide 

2 storage facility subject to the certificate of closure; 

3 (2) the generator of the carbon dioxide stored 

4 in the applicable geological storage unit; or 

5 (3) the owner or operator of the pipeline used 

6 to transport the carbon dioxide to the carbon dioxide 

7 storage facility subject to the certificate of closure. 

8 (b) EXCEPTION.—Subsection (a) shall not apply in 

9 the case of a civil claim involving the gross negligence or 

10 intentional misconduct of an owner, operator, or gener11 ator. 

Æ 


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