US industry groups urge EPA to hand over CO2 well permitting authority to states

A backlog of applications languishing at the US Environmental Protection Agency for carbon injection well permits are frustrating industry groups nationwide, which are asking the agency to speed up its review process so they can advance projects that will help meet the government's own climate goals.

On March 14, a collection of state chambers of commerce and industry associations sent a letter to EPA Administrator Michael Regan expressing concern "about uncertain permitting timelines for Class VI injection wells" -- or those used for CO2 storage. They are also concerned with the EPA's slowness in granting states authority over their own Class VI well-permitting process.

To date, the EPA has delegated authority over Class VI well permitting to two states, North Dakota and Wyoming. Four states -- Texas, Louisiana, West Virginia, and Arizona -- have submitted applications or pre-applications to the EPA to gain their own permitting authority, according to the Hunton Andrews Kurth Class VI Program Permit Tracker.

Louisiana carbon injection wells

Louisiana has particularly had trouble gaining permitting authority, known as primacy, over its carbon injection wells. The state initially submitted its pre-application to the agency in 2021, but the state's approval has faced delays even as oil and gas companies like Talos Energy, Occidental Petroleum and Sempra Infrastructure propose carbon sequestration projects in the state.

More than a dozen Louisiana-based business and industry groups also sent a letter to Regan March 7, urging the agency to approve the state's application for primacy.

"Louisiana has responsibly administered the other five classes of the Safe Drinking Water Act's underground injection well program and has the expertise and experience necessary to efficiently manage the EPA's Class VI wells for carbon storage," the letter said.

The EPA said in an email that it expects to take action on Louisiana's application in May 2023.

The EPA created the Underground Injection Control Program in 2010 under the Safe Drinking Water Act to ensure that underground carbon storage wells do not threaten underground water sources. Under the program, states can apply for regulatory authority over carbon wells by demonstrating that their environmental standards are at least as stringent as the EPA's. The latest applicant was Texas, which submitted its pre-application last year.

Backlog of projects at 73

Carbon sequestration projects seeking EPA permits continue to stack up, especially as companies seek to take advantage of the expanded 45Q tax credits under the Inflation Reduction Act. According to the agency, 73 projects are awaiting permits -- over 75% of which were added to the queue in the last year. Since the beginning of the Biden administration, the EPA has approved only one.

"The administration's actions are not matching its words," the March 14 letter said.

"Without immediate improvement, the current Class VI permitting timeline will continue to serve as a barrier to meeting emission reduction goals -- including the ones the Biden administration has set -- while discouraging much-needed infrastructure investments across the country," the letter said. "The good news is that we have a solution in state primacy: There is clear precedence that states understand their respective geographies, industries and interests, allowing for an expedited permitting progress without sacrificing important environmental standards."