If enacted, Pennsylvania will join the small group of other states that have enacted such laws, including neighboring West Virginia
The need for carbon capture sequestration legislation is of particular interest in light of the United States Supreme Court’s recent decision in West Virginia v. EPA, Nos. 20-1530, 20-1531, 20-1778, 20-1780, 2022 U.S. Dist. LEXIS 3268, (June 30, 2022). There, the Court held that the Environmental Protection Agency (EPA) could not employ strategies like the Clean Power Plan,1 a proposal by the Obama administration. Instead, the Court held that the agency should rely solely on its traditional approach of emission regulation, meaning that it has the authority to regulate pollution control equipment in power plants in order to lower emissions at the source. Thus, carbon capture and sequestration (CCS) projects may be one of the technologies that the EPA can use as a tool to regulate emissions from power plants while still having the potential to survive the Supreme Court’s scrutiny.2
Pennsylvania lawmakers may be joining this handful of other states to directly address CCS operations. Despite the current lack of legislation in Pennsylvania, it has been reported that companies have already met with Pennsylvania’s environmental regulators to discuss plans for developing the state’s first carbon dioxide wells deep underground. One place to look for a potential model for Pennsylvania’s statute could be its neighbor to the southwest, West Virginia.
West Virginia
The West Virginia statute – Article 11B. Underground Carbon Dioxide Sequestration and Storage – became effective on May 30, 2022 and establishes the procedures and practices for carbon dioxide capture in the state. The law requires that carbon capture developers obtain a permit from the West Virginia Department of Environmental Protection and also details the legal framework for obtaining pore ownership rights. Specifically, the statute states that “[t]itle to pore space in all strata underlying the surface of lands and waters is vested in the owner of the overlying surface estate” and that a “conveyance of title to the surface of real property conveys the pore space in all strata underlying the surface of the real property.” W. Va. Code section 22-11B-18(a) and (b). Additionally, “[t]itle to pore space may not be severed from title to the surface of the real property overlying the pore space.” Id. at 18(c). However, the statute specifically states that it “does not affect transactions before the effective date of this article, where the terms are clear and unambiguous upon the face of the instruments which severed pore space from title to the surface estate.” Id. at 18(d). The statute also makes clear that “[i]n the relationship between a severed mineral owner and a pore space estate, this article does not change or alter the common law, as it relates to the rights belonging to, or the dominance of, the mineral estate.” Id. at 18(e). West Virginia requires that the storage operator obtain “the written consent of persons who own at least 75 percent of the storage reservoir’s pore space and have at least begun the process to obtain the remaining interests through the [Oil and Gas Conservation Commission].”3 W. Va. Code section 22-11B-4(d)(4). The West Virginia statute allows companies to begin carbon capture projects in the state and provides the regulatory and legal framework to do so.
Pennsylvania
As noted above, Pennsylvania currently does not have any legislation directly regarding CCS projects operated in the state. However, Pennsylvania Senator Gene Yaw plans to introduce the Pennsylvania Geologic Storage of Carbon Dioxide Act, which will create Pennsylvania-specific legislation around the legal and regulatory ramifications for CCS. This legislation would address pore ownership and liability for all CCS projects within the state. Senator Yaw’s co-sponsorship memorandum, which has been circulated to the Pennsylvania Senate, states that the proposed legislation would:
- Establish legislative intent to facilitate carbon capture in Pennsylvania
- Designate property rights around storage sites in deep geologic formations
- Assign state regulatory authority of CCS facilities in Pennsylvania
- Specify the regulator and permitting process within the existing federal structure
- Create a cash fund sustaining regulatory operations, minimizing impact to taxpayers4
Key takeaways
- If enacted, the Pennsylvania Geologic Storage of Carbon Dioxide Act would provide the regulatory and legal framework for carbon capture and sequestration projects within Pennsylvania.
- West Virginia’s recently passed statue addresses these issues to allow for the development of CCS projects in that state.
- The Clean Power Plan sought to use emission trading and generation shifting to eliminate CO2 from existing power plants.
- See, e.g., Benjamin Storrow, “Supreme Court ruling opens door to carbon capture,” E&E News (July 5, 2022).
- For a more comprehensive list of permit application requirements and necessary steps to begin CCS projects in West Virginia, see W. Va. Code section 22-11B-4(a-f).
- Senate Co-Sponsorship Memoranda from Senator Gene Yaw on the Pennsylvania Geologic Storage of Carbon Dioxide Act (Mar. 30, 2022) (on file with the Pennsylvania State Senate).
Client Alert 2022-183
