The CO2 Injection Program and Legal Issues Concerning CO2 Injection

Back in September, I mentioned that, on July 25, 2008, EPA unveiled the proposed regulations to govern the underground injection and storage of carbon dioxide.  See 73 Fed. Reg. 43492 (July 25, 2008)(available at http://www.epa.gov/fedrgstr/EPA-WATER/2008/July/Day-25/w16626.pdf) (lasted accessed Oct. 16, 2008).  EPA is currently accepting public comment on the proposed regulations until November 24, 2008. Although I previously provided a brief overview of the proposed regulatory framework, this post provides a more detailed look at the proposed carbon injection program and some of the issues it raises.  The proposed regulations include several components.  (1) Geologic Characterization---owners or operators must provide detailed maps and information regarding the receiving zone, including maps of local geology, overburden and subsurface material, rock strength and factures, and fluid pressures within the cap rock.  (2) Area of Review---operators must provide information regarding wells that penetrate the injection zone.  (3) Injection Well Construction---the well must be cased and cemented to prevent escape of fluids.  (4) Well Operation---injection pressure must be limited to avoid fractures in the confining zone.  (5) Mechanical Integrity---operators must demonstrate the internal and mechanical integrity of their system every five years; this includes a radioactive tracer survey of the bottom-hole cement every 5 years.  (6) Monitoring---operators must monitor the nature of the injected fluids, injection pressure, flow rate, and the quality of the ground water and report semi-annually.  (7) Well Plugging---operators must ensure that the well is in a state of static equilibrium and plugged using approved methods.  (8) Financial Responsibility---owners or operators would be required to demonstrate financial responsibility for corrective action such as well plugging, post-injection site care, site closure, and emergency and/or remedial response actions. 

Carbon injection raises many additional legal issues beyond mere compliance with federal regulations.  For instance, CO2 itself is not listed as a hazardous substance under CERCLA, but the CO2 stream may contain other substances such as mercury that are hazardous substances or the constituents of the CO2 stream could react with groundwater to produce listed hazardous substances such as sulfuric acid. Thus, whether or not there is a ‘‘hazardous substance’’ that may result in CERCLA liability from a sequestration facility depends entirely on the make-up of the specific CO2 stream and of the environmental media (e.g., soil, groundwater) in which it is stored.  Additionally, the instigation of a carbon dioxide sequestration program may also present dilemmas from a land use/property law standpoint.  Would civil damages be available in the case of CO2 migrating into the sub-surface strata of another's property?  Although the courts have obviously not addressed this scenario in the context of CO2 injection, when water and gases are pumped into the ground artificially, adjoining landowners may be able to recover on a theory of subsurface trespass and private nuisance.  However, this recovery is typically limited in that the adjoining landowner must prove damage before liability will be imposed.  This necessity of damage stems from the property maxim of the Rule of Reasonable Use: a person may use his property in any lawful manner, except that he/she may not use his/her property so as to injure a neighbor.  While courts disagree whether liability will be imposed, and the outcomes tend to be fact-specific, the instigation of a carbon sequestration program could result in litigation at the very least. 

This article was authored by Chris M. Hunter, Jackson Kelly PLLC. For more information on the author see here.