Construction Law: Carbon Capture Storage

The Pros, Cons, & Regulations

by Trent Cotney, partner, Adams & Reese, LLP

(Editor’s Note: Trent Cotney, partner at Adams & Reese, LLP, is dedicated to representing the roofing and construction industries. Cotney is General Counsel for the Western States Roofing Contractors Association and several other industry associations. For more information on this subject, please contact the author at trent.cotney@arlaw.com.)

In recent years, you have likely heard a great deal about carbon capture and storage (CCS). Many new or proposed roofing products feature carbon capture as an additional benefit. This process benefits the environment, but it is unclear how it is regulated and by whom. Below are details that will help you understand the advantages, disadvantages, incentives, and regulatory expectations.

 

What Is CCS?

Many industrial processes, including cement and steel production, emit carbon dioxide (CO2). CCS is a process that reduces carbon emissions. It involves trapping CO2 before it enters the atmosphere, compressing and transporting it, and finally injecting it into rock formations for storage deep underground. Typical storage sites include depleted gas and oil reservoirs and saline aquifers.

 

Advantages of CCS

CCS is a technology that can reduce industrial plant discharge. Industrial and energy production cause nearly 50% of greenhouse gas emissions in the United States. CCS has the ability to seize CO2 and permanently store it. According to some reports, CCS can remove as much as 20% of CO2 emissions from industrial facilities. In addition, the CCS process can remove other pollutants, such as nitrogen oxide, at the same time. CCS can also lower the social costs of carbon. Such costs are the dollar values associated with climate change.

 

Disadvantages of CCS

The multi-step practice of CCS is expensive. Industrial plants must be equipped with the right technology, which requires material purchases. There are costs associated with pipelines and storage as well. Another concern is that storage options could reach capacity in the long term. By some estimates, the United States has enough storage space for at least another hundred years, but beyond that it’s unknown. And finally, transportation and storage can be dangerous. An accident or leak could unleash CO2 into the surrounding area, harming human life and wildlife, as well as contaminating groundwater and soil.

 

CCS Incentives

Many states see the advantages of CCS projects, so they offer incentives to companies willing to take on such tactics. The federal government offers some incentives as well. These include direct financial assistance, such as grants and loans. In addition, the government offers ways to recover utility costs and reach clean energy standards. There are also tax incentives that reduce corporate taxes or provide property and sales tax exemptions. However, before some developers take on these projects, it is critical that they understand the requirements and regulations.

 

How CCS Is Regulated

Managing and regulating CCS has fallen mainly to the states, as there are no specific federal environmental regulations related to the CCS projects. However, some laws and regulations do enable federal control and influence. Politically, there is bipartisan support for CCS incentives, but many CCS projects face multiple challenges and obstacles.

• Environmental Concerns: The National Environmental Policy Act (NEPA) is the federal law that directs environmental review and permissions. CCS projects with federal funding or another federal connection may fall under NEPA. Note that CCS pipelines likely do not have the high environmental impact of gas and oil pipelines. However, recent gas and oil pipeline issues have grown contentious, so opposition to CCS pipelines could increase. Also, NEPA review may involve many stakeholders and public input, which can always lead to project delays.
• Pipeline Issues: The Pipeline and Hazardous Materials Safety Administration (PHMSA), within the Department of Transportation, regulates interstate CO2 pipelines. That agency’s Office of Pipeline Safety sets regulations for designing, creating, maintaining, and operating pipelines. It also oversees spill response and planning. The PHMSA has minimum safety standards for interstate pipelines, and few states have their own. Note that the PHMSA does not regulate pipelines for CO2 being transported in gaseous or subcritical liquid states. However, the PHMSA does regulate pipelines transporting CO2 in a supercritical liquid state. CO2 is more difficult to transport in a gaseous state, and most of it is transported in a supercritical liquid state, thus remaining under PHMSA regulation.
• Clean Air Concerns: Industrial plants and CO2 injection sites must comply with the Greenhouse Gas Reporting Program within the federal Environmental Protection Agency (EPA). This program requires greenhouse gas data to be reported annually. Such reporting involves information about capturing, injecting, and storing CO2 and impacts approximately 8,000 facilities.
• Clean Water Concerns: If CCS pipelines cross wetlands or water, federal permitting may be necessary under the Clean Water Act. Section 404 addresses any pipeline transportation of gases and liquids, as well as discharge of materials into United States waters. Depending on the level of impact, the Army Corps of Engineers issues general or individual permits for applicable CCS projects.
• Drinking Water Protection: According to the Safe Drinking Water Act, the EPA is required to protect underground sources of drinking water (USDW). To that end, the EPA created the Underground Injection Control (UIC) program. It sets rules for underground injection wells as a means to protect USDW. The UIC regulates some CCS projects based on the types of wells being used. The EPA has given some states the regulatory authority of the UIC program. This administrative authority may also be divided between states or shared with the EPA. In most instances, the program requires well owners and operators to ensure they have the financial capability to maintain wells, in addition to plugging and abandoning them as necessary.
• Wildlife Issues: In some cases, CCS projects or pipelines may impact threatened species or wildlife with habitat or mitigation protections. The Endangered Species Act, the Bald and Golden Eagle Protection Act, the Migratory Bird Treaty Act, and other federal laws state the developers may not hunt, shoot, wound, kill, harass, or harm any protected species. Before beginning a CCS project that could affect protected wildlife, developers must submit their intent to the Fish and Wildlife Service (FWS) for review or secure an Incidental Take Permit. They are also required to create a habitat conservation plan. After FWS review, projects may require revisions to better protect applicable wildlife.
• Historic Areas: If a CCS project or pipeline could affect a historically or culturally significant area, it will require review from the National Historic Preservation Act. The goal of this review is to prevent or minimize any harm to historic sites. Sites can include those associated with the cultural practice, traditions, or history of rural groups, Native American communities, and other cultural entities.

 

Final Advice

CCS projects are admirable and provide many environmental advantages. In addition, the government has created significant incentives for such projects. However, developers must be aware of the various environmental laws and regulations that impact these projects. The regulations can be complicated and subject to change, so it is essential to stay informed.