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Carbon Capture Regulations under Evaluation

As concerns about climate change have spurred countries across the world, including the United States, to address carbon emissions, the conversation around carbon capture and sequestration has heated up. 

Carbon capture and sequestration projects are underway as global warming activists and scientists have called for environmentally friendly energy sourcing, and corporations are looking for ways to comply with net zero mandates. 

What is carbon capture and sequestration (CCS)? 

Carbon capture removes CO2 emissions from the atmosphere and compresses it to either use as another energy source or to sequester it by injection deep into the Earth. Carbon capture technologies remove the carbon dioxide emitted during industrial operations and store it roughly one mile beneath the Earth’s crust, stopping the CO2 from reaching the atmosphere. 

The recent Infrastructure Investment and Jobs Act contemplates that CCS will be key component to fighting climate change.

What are the current legal issues moving forward regarding carbon capture? 

The Gulf of Mexico has been identified as a prime location for carbon sequestration because the depleted pore space beneath the seabed has already demonstrated its long-term sequestration capabilities, having already held oil and gas for millennia. 

Accordingly, the Infrastructure Investment and Jobs Act tasked the Department of the Interior to craft regulations to govern carbon sequestration in the Outer Continental Shelf, a series of submerged lands 200 nautical miles outside of state jurisdiction. As contemplated, the regulations would provide the mechanisms for DOI to issue leases to qualified renewable energy leaders for carbon sequestration on the OCS. 

While the current leasing provisions of the Outer Continental Shelf Land Act (OCSLA) include regulations related to renewal energy, the CCS regulations have yet to be released. In the interim, some have considered OCSLA's renewable energy lease regulations as an avenue to acquiring regulatory approval for CCS on the Outer Continental Shelf. However, it remains unclear whether OCSLA's renewable energy regulations would authorize a lease on the OCS for carbon sequestration.

Why are people talking about CCS in Louisiana? 

Louisiana has the ideal geography and geology for capture and sequestration due to its proximity to existing energy infrastructure and well-trained, highly skilled workers in the state. Since the early stages of carbon capture in the U.S., Louisiana has positioned itself to capitalize on the economic benefits of this technology.

What do critics of CCS say? 

The oil and gas industry argues that carbon sequestration will enable more energy production and increase the number of jobs while keeping emissions low. Critics counter that it is much easier to keep carbon dioxide out of the atmosphere than it is to retrieve it. Others are concerned there could be environmental damage if pipelines or storage areas were to leak. Louisiana is uniquely positioned to mitigate these concerns because there are numerous industrial corridors that are proximate to the depleted oil fields on the Outer Continental Shelf, reducing risk by reducing the distance from the capture source to the sequestration point.

What happens next for the process?

Globally, CCS projects are already underway. In Louisiana, there are currently a number of bills in the legislature creating rules to govern future CCS projects and share revenue with local governments. At the Federal level, the DOI is expected to release draft regulations governing CCS on the OCS for public comment. Decisions on environmental responsibility, economic impact and sustainability will culminate in forming the next steps in the legislative process at the State and Federal levels.

Stone Pigman has experience in carbon capture and storage regulatory issues in the Gulf of Mexico. We are currently advising a leading CCS company on various legal and regulatory aspects relating to the project, including a review of the evolving regulatory environment at the federal level to allow CCS operations on the Outer Continental Shelf.

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