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US states eye authority over underground CO2 storage projects

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US states eye authority over underground CO2 storage projects

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Underground CO2 sequestration is underway in the U.S. at ethanol facilities in Illinois and North Dakota.
Source: Wolterk / iStock / Getty Images Plus via Getty Images

The idea of capturing CO2 from the air and injecting it more than a mile underground is no longer science fiction, but rather a U.S. government-backed decarbonization solution. State environmental regulators are taking notice.

Class VI injection wells — those used to inject CO2 into deep underground caverns — are permitted for the permanent storage of carbon dioxide by the U.S. Environmental Protection Agency. But the EPA has issued only two permits to date, both for ethanol producer Archer Daniels Midland Co. in Decatur, Ill.

The federal pace has led some states to take Class VI well permitting and enforcement into their own hands. North Dakota was the first out of the gate and has issued one permit so far, with two applications pending, according to the state's Department of Mineral Resources website. The Red Trail Energy LLC ethanol facility began injecting CO2 underground on June 16.

The state, known for its oil and gas industry, is also leading the way in other carbon capture policies, including the creation of a long-term liability trust fund that carbon capture companies pay into. "You can almost contemplate it like a state-run insurance fund," John Harju, vice president for strategic partnerships at the University of North Dakota's Energy and Environmental Research Center, said at a July 27 hearing before the U.S. Senate Committee on Environment and Public Works.

Wyoming has also applied for and secured primacy — or state authority — from the EPA over Class VI well permitting and general oversight.

"States [are] much more familiar with the local geology and the opportunities the state affords," Harju said. According to Harju, this means a faster permitting process that averages about seven months in North Dakota, compared to the EPA's five to six years in Illinois.

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Nine states — Alaska, Colorado, Kansas, Louisiana, Montana, Nebraska, Texas, Utah and West Virginia — are consulting with experts in North Dakota as they consider or pursue Class VI well primacy.

The movement comes as carbon capture and its associated infrastructure, including pipelines and Class VI wells, enjoy a burst of public and private investment.

The U.S. Department of Energy launched a $3.5 billion program in May to fund four regional direct air capture "hubs," or networks for removing, transporting, storing and using carbon dioxide emissions. Meanwhile, the 45Q tax credit program, which offers companies a federal tax break for every ton of CO2 captured, has spurred a torrent of carbon capture and storage projects.

For years developers have protested that the federal government's environmental permitting process for carbon capture and other energy projects is too slow and cumbersome.

"A growing number of organizations on both sides of the political spectrum acknowledge that the system we currently have in place is not working," Brad Townsend, vice president for policy and outreach at the Center for Climate and Energy Solutions, said at the hearing.

Louisiana, home to several carbon sequestration projects underway, is one of the states hoping to secure more oversight from the EPA. If successful, the state expects to receive 25 to 30 Class VI well permit applications in the next few years, Louisiana Department of Natural Resources official M. Jason Lanclos told the Senate committee.

"We really feel to be able to make an impact and to get these projects out the door, developers and folks who are doing these projects, they're very capital-intensive, and we have to make sure they have clarity in terms of how quickly these permits can be turned around," Lanclos said. "We cannot afford to review them in five-and-a-half to six years."

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