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SENATE BILL NO. 49
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-THIRD LEGISLATURE - FIRST SESSION
BY THE SENATE RULES COMMITTEE BY REQUEST OF THE GOVERNOR
Introduced: 1/27/23
Referred: Resources, Finance
A BILL
FOR AN ACT ENTITLED
"An Act relating to the geologic storage of carbon dioxide; and providing for an 1
effective date." 2
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 3
* Section 1. SHORT TITLE. This Act may be known as the Carbon Capture, Utilization, 4
and Storage Act. 5
* Sec. 2. AS 31.05.027 is amended to read: 6
Sec. 31.05.027. Land subject to commission's authority. The authority of the 7
commission applies to all land in the state lawfully subject to its police powers, 8
including land of the United States and land subject to the jurisdiction of the United 9
States. The authority of the commission further applies to all land included in a 10
voluntary cooperative or unit plan of development or operation entered into in 11
accordance with AS 38.05.180(p) or 38.05.730.
12
* Sec. 3. AS 31.05.030(h) is amended to read: 13
(h) The commission may take all actions necessary to allow the state to 14 33-GS1567\A
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acquire primary enforcement responsibility under 42 U.S.C. 300h-1 and 42 U.S.C. 1
300h-4 (Safe Drinking Water Act of 1974, as amended, 42 U.S.C. 300f - 300j-26), for 2
the control of underground injection related to the recovery and production of oil and 3
natural gas and the control of underground injection in Class I wells, as defined in 40 4
C.F.R. 144.6, as amended, and the control of underground injection in Class VI 5
wells, as defined in 40 C.F.R. 144.6, as amended. 6
* Sec. 4. AS 37.14 is amended by adding a new section to read: 7
Article 11. Carbon Storage Closure Trust Fund. 8
Sec. 37.14.850. Carbon storage closure trust fund. (a) The carbon storage 9
closure trust fund is established as a separate trust fund of the state. The principal and 10
earnings of the fund shall be held by the state for the purpose of protecting the public 11
interest in maintenance and closure of carbon storage facilities in the state. The fund is 12
composed of the carbon storage closure trust fund income account and the carbon 13
storage closure trust fund operating account. 14
(b) The carbon storage closure trust fund income account consists of payments 15
received under (c) of this section, AS 41.06.180, and earnings on the income account. 16
The carbon storage closure trust fund operating account consists of appropriations by 17
the legislature of the annual balance of the carbon storage closure trust fund income 18
account and any earnings on those appropriations while in the operating account. 19
(c) Before payments are accepted into the carbon storage closure trust fund 20
income account for a particular carbon storage facility, the Alaska Oil and Gas 21
Conservation Commission and the operator may execute a memorandum of 22
understanding that outlines a schedule of expected payments into the fund and the 23
relationship of the payments and accumulated earnings in the fund to the operator's 24
obligations under AS 41.06.155 or 41.06.175. If the memorandum of understanding 25
addresses investment of the fund with respect to payments made by the operator, the 26
commissioner of revenue must also sign the memorandum. 27
(d) Nothing in this section creates a dedicated fund. 28
(e) In this section, unless the context requires otherwise, 29
(1) "fund" means the carbon storage closure trust fund; 30
(2) "storage facility" has the meaning given in AS 41.06.210. 31 33-GS1567\A
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* Sec. 5. AS 38.05.069(e) is amended to read: 1
(e) Nothing in (c) of this section affects the disposal of minerals under 2
AS 38.05.135 - 38.05.183 or carbon storage under AS 38.05.700 - 38.05.795. 3
* Sec. 6. AS 38.05.070(a) is amended to read: 4
(a) Land, including tide, submerged, or shoreland, to which the state holds title 5
or to which it may become entitled, may be leased, except for the extraction of natural 6
resources and carbon storage under AS 38.05.700 - 38.05.795, in the manner 7
provided in AS 38.05.070 - 38.05.105. 8
* Sec. 7. AS 38.05.130 is amended to read: 9
Sec. 38.05.130. Damages and posting of bond. Rights may not be exercised 10
by the state, its lessees, successors, or assigns under the reservation as set out in 11
AS 38.05.125 until the state, its lessees, successors, or assigns make provision to pay 12
the owner of the land full payment for all damages sustained by the owner, by reason 13
of entering upon the land. If the owner for any cause refuses or neglects to settle the 14
damages, the state, its lessees, successors, assigns, or an applicant for a lease or 15
contract from the state for the purpose of prospecting for valuable minerals, or option, 16
contract, or lease for carbon storage or mining coal, or lease for extracting 17
geothermal resources, petroleum, or natural gas, may enter upon the land in the 18
exercise of the reserved rights after posting a surety bond determined by the director, 19
after notice and an opportunity to be heard, to be sufficient as to form, amount, and 20
security to secure to the owner payment for damages, and may institute legal 21
proceedings in a court where the land is located, as may be necessary to determine the 22
damages which the owner may suffer. 23
* Sec. 8. AS 38.05.135(a) is amended to read: 24
(a) Except as otherwise provided, valuable mineral deposits in land belonging 25
to the state shall be open to exploration, development, and the extraction of minerals. 26
All land, together with tide, submerged, or shoreland, to which the state holds title to 27
or to which the state may become entitled, may be obtained by permit or lease for the 28
purpose of exploration, development, and the extraction of minerals. Except as 29
specifically limited by AS 38.05.131 - 38.05.181 and 38.05.700 - 38.05.795, land may 30
be withheld from lease application on a first-come, first-served basis, and offered only 31 33-GS1567\A
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on a competitive bid basis when determined by the commissioner to be in the best 1
interests of the state. 2
* Sec. 9. AS 38.05.135(c) is amended to read: 3
(c) Payment of a royalty or a net profit share payment to the state under a lease 4
issued under AS 38.05.135 - 38.05.181 or a payment of a rent or charge under 5
AS 38.05.700 - 38.05.795 becomes due on the date and in the manner specified in the 6
lease or in a regulation adopted by the commissioner. 7
* Sec. 10. AS 38.05.135(d) is amended to read: 8
(d) If a royalty or net profit share payment to which the state is entitled under 9
AS 38.05.135 - 38.05.181 or a payment of a rent or charge under AS 38.05.700 - 10
38.05.795 is not paid or is underpaid when it becomes due under (c) of this section, the 11
unpaid amount of the rent, charge, royalty, or net profit share payment bears interest 12
in a calendar quarter at the rate of five percentage points above the annual rate charged 13
member banks for advances by the 12th Federal Reserve District as of the first day of 14
that calendar quarter, or at the annual rate of 11 percent, whichever is greater, 15
compounded quarterly as of the last day of that quarter. 16
* Sec. 11. AS 38.05.135(e) is amended to read: 17
(e) If a royalty or net profit share payment to which the state is entitled under 18
AS 38.05.135 - 38.05.181 or a payment of a rent or charge under AS 38.05.700 - 19
38.05.795 is overpaid, interest at the rate and compounded in the manner provided in 20
(d) of this section shall be allowed and paid on the overpayment. The interest 21
allowance is subject to the following: 22
(1) if the state grants a credit against future payments for the 23
overpayment, the state shall pay interest on the overpayment 24
(A) from the date that is the later of the date the overpayment 25
was 26
(i) due; or 27
(ii) received; 28
(B) to the date that is the earlier of the date 29
(i) of notice to the lessee of the credit; or 30
(ii) on which the lessee actually takes the credit; 31 33-GS1567\A
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(2) if the state refunds the overpayment, the state shall pay interest on 1
the overpayment 2
(A) from the date that is the later of the date the overpayment 3
was 4
(i) due; or 5
(ii) received; 6
(B) to the date the state issues the refund. 7
* Sec. 12. AS 38.05.140(a) is amended to read: 8
(a) A person may not take or hold coal leases or permits during the life of coal 9
leases on state land exceeding an aggregate of 92,160 acres, except that a person may 10
apply for coal leases or permits for acreage in addition to 92,160 acres, not exceeding 11
a total of 5,120 additional acres of state land. The additional area applied for shall be 12
in multiples of 40 acres, and the application shall contain a statement that the granting 13
of a lease for additional land is necessary for the person to carry on business 14
economically and is in the public interest. On the filing of the application, except as 15
provided by AS 38.05.180(ff)(3) or 38.05.180(gg) and 38.05.700 - 38.05.795, the coal 16
deposits in the land covered by the application shall be temporarily set aside and 17
withdrawn from all other forms of disposal provided under AS 38.05.135 - 38.05.181. 18
* Sec. 13. AS 38.05.184(b) is amended to read: 19
(b) No carbon storage licenses or leases or additional oil or gas leases may 20
be issued by the department or any other state agency for the exploration for or the 21
development or production of oil and gas on state-owned land and waters seaward of 22
the mean higher high water line, beginning at Anchor Point; then around the perimeter 23
of Kachemak Bay, to Point Pogibshi; then west to the three mile limit of state land and 24
waters; then north to a point three miles west of Anchor Point; then east to the mean 25
higher high water line of Anchor Point, the point of beginning. 26
* Sec. 14. AS 38.05 is amended by adding new sections to read: 27
Article 15A. Carbon Storage Exploration Licenses; Leases. 28
Sec. 38.05.700. Policy on carbon dioxide storage. It is in the public interest 29
to promote the geologic storage of carbon dioxide. The geologic storage of carbon 30
dioxide benefits the citizens of the state and the environment by reducing greenhouse 31 33-GS1567\A
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gas emissions. 1
Sec. 38.05.705. Applicability; regulations. (a) The provisions of 2
AS 38.05.700 - 38.05.795 apply to exploration licensing and the leasing of state land 3
for carbon storage. 4
(b) The commissioner may adopt regulations necessary to implement 5
AS 38.05.700 - 38.05.795. 6
Sec. 38.05.710. Carbon storage exploration licensing. (a) The commissioner 7
may issue carbon storage exploration licenses on state land. 8
(b) A carbon storage exploration license gives the licensee 9
(1) the exclusive right to explore, for carbon storage purposes, the state 10
land described in the license for a five-year term; 11
(2) the option to convert the license for all or part of the state land 12
described in the license into a carbon storage lease after the licensee 13
(A) fulfills the work commitments set out in the license; 14
(B) demonstrates the ability to meet the commercial terms for 15
the lease as set out in the license or in regulation; 16
(C) obtains a permit under AS 41.06.125; and 17
(D) complies with the lease conversion process of 18
AS 38.05.720(b). 19
(c) A carbon storage exploration license must 20
(1) be conditioned on an obligation by the licensee to fulfill a specified 21
work commitment as set out in the license; the work commitment must include 22
mandatory provisions for 23
(A) an annual fee paid by the licensee to the department in an 24
amount of at least $20 per acre subject to the license; and 25
(B) an annual report describing the licensee's exploration 26
activities in the previous calendar year, which must be provided by the licensee 27
to the department; 28
(2) include proposed commercial terms if the license is converted into 29
a carbon storage lease, which must at a minimum provide for 30
(A) an annual rent of at least $20 per acre; and 31 33-GS1567\A
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(B) a per-ton injection charge on all injected volumes of carbon 1
dioxide of at least $2.50; 2
(C) the posting of a bond or other security acceptable to the 3
department and in favor of the state; 4
(3) be conditioned on the posting of a bond or other security acceptable 5
to the department and in favor of the state; and 6
(4) be subject to revocation at the commissioner's discretion under (d) 7
of this section. 8
(d) The commissioner may revoke a carbon storage exploration license before 9
the termination of the license's five-year term if the licensee fails to comply with the 10
requirements of (c) of this section or applicable regulations. 11
(e) The department shall renew a carbon storage exploration license if the 12
licensee 13
(1) before the expiration of the license term, applies for a permit under 14
AS 41.06.125; 15
(2) is in compliance with the conditions of the license; 16
(3) provides documentation acceptable to the department of the 17
pending permit application; and 18
(4) submits an executed renewal form to the department affirming the 19
original terms of the license for the renewed license term. 20
(f) In the commissioner's discretion, a carbon storage exploration license may 21
be renewed for a term sufficient to determine whether the licensee's permit application 22
will be accepted under AS 41.06.105 - 41.06.210. 23
(g) A carbon storage exploration license that has been renewed under (e) of 24
this section terminates upon denial of the licensee's permit application by the Alaska 25
Oil and Gas Conservation Commission under AS 41.06.105 - 41.06.210. 26
(h) The dollar amounts in (c) of this section shall change every five years 27
according to changes in the Consumer Price Index for all urban consumers for the 28
Anchorage Metropolitan Area compiled by the Bureau of Labor Statistics, United 29
States Department of Labor. The index for January 2023 is the reference base index. 30
Sec. 38.05.715. License procedures. (a) The procedures in this section apply 31 33-GS1567\A
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to the issuance of a carbon storage exploration license under AS 38.05.710. 1
(b) To initiate the licensing procedure, an applicant shall submit to the 2
commissioner a proposal that 3
(1) identifies a specific area to be subject to the license; 4
(2) proposes minimum work commitments; 5
(3) proposes commercial terms applicable to a carbon storage lease 6
under AS 38.05.710(c)(2); 7
(4) demonstrates the applicant's ability to assume responsibility of a 8
carbon storage lease; 9
(5) describes how the applicant meets the minimum qualifications for a 10
licensee under applicable regulations; and 11
(6) includes an attestation of the applicant's ability to perform the 12
requirements of (2) - (4) of this subsection. 13
(c) The commissioner shall publish notice of a proposal received under (b) of 14
this section. The notice shall include a solicitation for competing proposals. A copy of 15
the published notice shall be sent to any lessee under AS 38.05.135 - 38.05.181 in one-16
half mile of the area proposed for an exploration license. Any person in the area may 17
submit a competing proposal under the process established by the commissioner in 18
regulation. The regulations must require that a competing proposal be submitted not 19
later than 90 days after the commissioner's written notice is published. 20
(d) After the deadline for submission of a competing proposal has passed, the 21
commissioner shall issue a written finding determining whether the state's best 22
interests are served through issuing a carbon storage exploration license. If the 23
commissioner determines that issuance of a carbon storage exploration license is in the 24
best interests of the state, the finding must 25
(1) describe the limitations, stipulations, conditions, or changes from 26
the initiating proposal or competing proposals that are required to make the issuance 27
of the exploration license conform to the best interests of the state; 28
(2) set out the commercial terms required for the eventual conversion 29
of the exploration license into a carbon storage lease; 30
(3) if there are competing proposals from multiple applicants, identify 31 33-GS1567\A
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which applicants are qualified for the issuance of the exploration license and include 1
information for the competitive bid process as set out in (f) of this section; and 2
(4) include a copy of the exploration license to be issued and the form 3
of lease that will be used for any portion of the exploration license area subsequently 4
converted to a lease under AS 38.05.720. 5
(e) If the commissioner concludes that issuance of a carbon storage 6
exploration license is in the best interests of the state, and that only one applicant is 7
qualified to be issued the license, the applicant may accept or reject the exploration 8
license, as limited or conditioned by the terms of the finding and in the form attached 9
to the finding, not later than 30 days after the finding's date of publication. The 10
applicant shall accept or reject the issuance of the carbon storage exploration license in 11
writing. The commissioner shall consider an applicant's failure to respond in the 30-12
day period as a rejection of the license. 13
(f) If the commissioner concludes that issuance of the carbon storage 14
exploration license is in the best interests of the state, and that more than one applicant 15
is qualified to be issued the license, the commissioner shall issue a request for 16
competitive sealed bids, under procedures adopted by regulation, to determine which 17
qualified applicants will be issued the license. If the commissioner determines that a 18
competitive bid process is necessary, the best interest finding must include notice that 19
the commissioner intends to request competitive bids. 20
(g) The commissioner shall establish in regulation the criteria for the 21
assessment of competitive bids under (f) of this section and for the determination of a 22
successful bidder. 23
(h) If a lessee under AS 38.05.135 - 38.05.181 in the area covered by a 24
proposed carbon storage exploration license participates in a competitive bid process 25
under (f) of this section and is not the successful bidder, before issuing the license, the 26
commissioner shall provide the lessee an opportunity to match the successful bid. If 27
the lessee matches the successful bid, the commissioner shall issue a carbon storage 28
exploration license to the lessee. 29
(i) A carbon storage exploration license issued under this section and a carbon 30
storage lease under AS 38.05.720 or 38.05.725 must include 31 33-GS1567\A
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(1) a covenant from the licensee not to unreasonably interfere with the 1
rights of a lessee under AS 38.05.135 - 38.05.181; and 2
(2) a clause by which the licensee indemnifies the state for any 3
unreasonable interference the licensee might cause to the rights of a lessee under 4
AS 38.05.135 - 38.05.181. 5
(j) When notice is required under this section, the department shall follow the 6
requirements for notice under AS 38.05.945(b) and (c). 7
Sec. 38.05.720. Conversion to lease by licensee. (a) The commissioner may 8
convert a carbon storage exploration license to a carbon storage lease if the licensee 9
satisfies the requirements of AS 38.05.710(b) and complies with (b) of this section. 10
(b) To convert a carbon storage exploration license to a carbon storage lease, a 11
licensee shall provide a copy of the permit obtained under AS 41.06.105 - 41.06.210 12
to the commissioner. After receiving a copy of the permit, if the licensee is in 13
compliance with AS 38.05.710(b), the commissioner shall issue a carbon storage lease 14
for those areas of the exploration license approved for carbon storage by the permit. A 15
lease issued under this section must include 16
(1) commercial terms for the lease as set out in the commissioner's 17
finding under AS 38.05.715(d); 18
(2) the agreements required under AS 38.05.715(i); and 19
(3) any other condition or obligation deemed necessary by the 20
commissioner or required by regulation. 21
Sec. 38.05.725. Concurrent carbon storage leasing. (a) A lessee under 22
AS 38.05.180 injecting under a Class II well permit shall apply for a carbon storage 23
lease from the department before engaging in injection operations that may require a 24
Class VI injection permit from the United States Environmental Protection Agency or 25
a storage facility permit under AS 41.06.125. 26
(b) The issuance of a carbon storage lease under (a) of this section is vested 27
solely in the commissioner's discretion. The commissioner may consider the 28
qualifications and abilities of the lessee to meet the commercial requirements of a 29
carbon storage lease and whether issuance of the lease is in the best interests of the 30
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(c) A carbon storage lease issued under this section must include 1
(1) the minimum commercial terms described in AS 38.05.710(c)(2); 2
(2) the agreements required under AS 38.05.715(i); 3
(3) if the carbon storage lessee is not the same entity as the responsible 4
party under the existing lease, an assumption by the carbon storage lessee of any 5
dismantlement, removal, and restoration obligations set out in the oil and gas lease; 6
and 7
(4) any other conditions and obligations deemed necessary by the 8
commissioner or required by regulation. 9
Sec. 38.05.730. Plan of development and operations; unitization. (a) The 10
commissioner shall require the filing and approval of a plan of development and 11
operation for a carbon storage lease. 12
(b) To prevent or assist in preventing waste, and to protect the correlative 13
rights of persons owning interests in the tracts of lands affected, with the approval of 14
the commissioner, lessees may validly integrate their interests to provide for the 15
unitized management, development, and operation of the tracts of land as a unit. The 16
commissioner may suspend or modify a development plan approved under (a) of this 17
section in accordance with the unit agreement. 18
(c) A lease operated under a plan approved or prescribed by the commissioner 19
is excepted from determining holdings or control under AS 38.05.140. The provisions 20
of this section concerning cooperative or unit plans are in addition to and do not affect 21
AS 31.05 and AS 41.06. 22
Sec. 38.05.735. Payments from carbon storage exploration licenses and 23
carbon storage leases. Except as otherwise provided under art. IX, sec. 15, 24
Constitution of the State of Alaska, the department shall deposit in the general fund 25
the money it collects under AS 38.05.700 - 38.05.795. 26
Sec. 38.05.795. Definitions. In AS 38.05.700 - 38.05.795, unless the context 27
requires otherwise, 28
(1) "carbon dioxide" means carbon dioxide of a quality that 29
(A) will not compromise the safety of geologic storage; and 30
(B) will not compromise the properties of a storage reservoir 31 33-GS1567\A
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that allow the reservoir to effectively enclose and contain a stored gas or stored 1
supercritical fluid; 2
(2) "carbon storage" means the permanent or short-term underground 3
storage of carbon dioxide in a geologic storage reservoir; 4
(3) "geologic storage" has the meaning given in AS 41.06.210; 5
(4) "pore space" means a geologic storage reservoir, cavity, or void in 6
a subsurface sedimentary stratum; 7
(5) "reservoir" has the meaning given in AS 41.06.210; 8
(6) "supercritical fluid" means a substance at or above its critical 9
temperature and critical pressure that is neither a liquid nor a gas but that has 10
properties of both. 11
* Sec. 15. AS 38.35.020(a) is amended to read: 12
(a) Rights-of-way on state land including rights-of-way over, under, along, 13
across, or upon the right-of-way of a public road or highway or the right-of-way of a 14
railroad or other public utility, or across, upon, over, or under a river or other body of 15
water or land belonging to or administered by the state may be granted by 16
noncompetitive lease by the commissioner for pipeline purposes for the transportation 17
of oil, products, carbon dioxide, or natural gas under those conditions prescribed by 18
law or by administrative regulation. Except to the extent authorized by an oil and gas 19
lease, a gas only lease, carbon storage lease, or an oil and gas or gas only or carbon 20
storage unit agreement approved by the state, no person may engage in any 21
construction or operation of any part of an oil, products, carbon dioxide, or natural 22
gas pipeline, which in whole or in part is or is proposed to be on state land unless that 23
person has obtained from the commissioner a right-of-way lease of the land under this 24
chapter. 25
* Sec. 16. AS 38.35.020(b) is amended to read: 26
(b) The commissioner may by regulation exempt the construction or operation 27
(1) of field gathering lines or any reasonable classification of them 28
from the requirement of a right-of-way lease under this chapter; and 29
(2) of a pipeline transporting carbon dioxide within a field for the 30
purpose of an enhanced oil recovery project or field pressurization measures 31 33-GS1567\A
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within that same field from the requirement of a right-of-way lease under this 1
chapter. 2
* Sec. 17. AS 38.35.122 is amended to read: 3
Sec. 38.35.122. Products pipeline and carbon dioxide transportation 4
pipeline leases. The commissioner has discretion to include any or all of the terms set 5
out in AS 38.35.120 in leases of state land for products pipeline right-of-way purposes 6
or carbon dioxide transportation pipeline right-of-way purposes. 7
* Sec. 18. AS 38.35.230(3) is amended to read: 8
(3) "lease" means the instrument or extension of an instrument issued 9
under this chapter granting a leasehold interest in state land for pipeline right-of-way 10
purposes to a person and authorizing the construction or operation of, or 11
transportation, service or sale by a pipeline for crude oil, natural gas, carbon dioxide, 12
or products; 13
* Sec. 19. AS 38.35.230(7) is amended to read: 14
(7) "pipeline" or "pipeline facility" means all the facilities of a total 15
system of pipe, whether owned or operated under a contract, agreement, or lease, used 16
by a carrier for transportation of crude oil, natural gas, carbon dioxide, or products for 17
delivery, for storage, or for further transportation, and including all pipe, pump or 18
compressor stations, station equipment, tanks, valves, access roads, bridges, airfields, 19
terminals and terminal facilities, including docks and tanker loading facilities, 20
operations control center for both the upstream part of the pipeline and the terminal, 21
tanker ballast treatment facilities, and fire protection system, communication system, 22
and all other facilities used or necessary for an integral line of pipe, taken as a whole, 23
to effectuate transportation, including an extension or enlargement of the line; 24
* Sec. 20. AS 38.35.230(10) is amended to read: 25
(10) "transportation" means the shipment or carriage by a pipeline of 26
crude oil, natural gas, carbon dioxide, or products from an upstream terminus in one 27
or more fields or points of production or supply of the minerals to a downstream 28
terminus in one or more points for delivery of the minerals to a purchaser or 29
consignee, for storage, or for further carriage or shipment, including shipment or 30
carriage within the state that may be classified as interstate or foreign transportation to 31 33-GS1567\A
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the extent that the transportation may constitutionally be subjected to the provisions of 1
this chapter, as well as all services necessary to effectuate shipment or carriage, 2
including, among other things, the receipt, storage, processing, handling, transfer in 3
transit, forwarding, and delivery of the minerals. 4
* Sec. 21. AS 38.35.230 is amended by adding a new paragraph to read: 5
(11) "carbon dioxide" has the meaning given in AS 38.05.795. 6
* Sec. 22. AS 41.06.005 is amended to read: 7
Sec. 41.06.005. Jurisdiction over geothermal resources. (a) The commission 8
has jurisdiction under AS 41.06.005 - 41.06.060 [THIS CHAPTER] over geothermal 9
wells to prevent waste, to protect correlative rights, and to ensure public safety. 10
(b) The Department of Natural Resources has jurisdiction under AS 41.06.005 11
- 41.06.060 [THIS CHAPTER] over management of geothermal leases and units in the 12
public interest and to effect development. 13
* Sec. 23. AS 41.06.020 is amended to read: 14
Sec. 41.06.020. Authority of commission; application. (a) The commission 15
has jurisdiction over all persons and property, public and private, necessary to carry 16
out the purposes and intent of AS 41.06.005 - 41.06.060 [THIS CHAPTER]. 17
(b) The authority of the commission applies to all land in the state lawfully 18
subject to the police power of the state, including private land, municipal land, state 19
land, land of the United States, and land subject to the jurisdiction of the United 20
States, and to all land included in a voluntary cooperative or unit plan of development 21
or operation entered into in accordance with AS 38.05.181. When land that is subject 22
to the commission's authority is committed to a unit agreement involving land subject 23
to federal jurisdiction, the operation of AS 41.06.005 - 41.06.060 [THIS CHAPTER] 24
or a part of AS 41.06.005 - 41.06.060 [THIS CHAPTER] may be suspended if 25
(1) the unit operations are regulated by the United States; and 26
(2) the conservation of geothermal resources is accomplished under the 27
unit agreement. 28
(c) The provisions of AS 41.06.005 - 41.06.060 apply [THIS CHAPTER 29
APPLIES] 30
(1) to wells drilled in search of, in support of, or for the recovery or 31 33-GS1567\A
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production of geothermal resources; 1
(2) when a person engaged in drilling activity not otherwise subject to 2
the provisions of AS 41.06.005 - 41.06.060 [THIS CHAPTER] encounters geothermal 3
resources, fluid, or water of sufficient heat or pressure to constitute a threat to human 4
life or health unless the drilling operation is subject to oil and gas drilling regulation 5
under AS 31.05; 6
(3) in areas and under conditions in which the commission determines 7
that drilling may encounter geothermal resources, fluid, or water of sufficient heat or 8
pressure to constitute a threat to human life or health. 9
(d) To the extent the provisions of AS 31.05 do not conflict with the 10
provisions of AS 41.06.005 - 41.06.060 [THIS CHAPTER], the provisions of 11
AS 31.05 are applicable to wells drilled in search of, in support of, or for the recovery 12
or production of geothermal resources. 13
(e) Nothing in AS 41.06.005 - 41.06.060 [THIS CHAPTER] limits the 14
authority of the department 15
(1) over geothermal resources under AS 38.05.181; or 16
(2) to approve and manage geothermal units or operations that include 17
state land. 18
* Sec. 24. AS 41.06.030(e) is amended to read: 19
(e) The commissioner may adopt regulations under AS 44.62 to carry out the 20
purposes and intent of AS 41.06.005 - 41.06.060 [THIS CHAPTER] for duties 21
assigned to the department, including the promotion of maximum economic recovery. 22
* Sec. 25. AS 41.06.035(b) is amended to read: 23
(b) The commission may adopt regulations under AS 44.62 and issue orders 24
appropriate to carry out the purposes and intent of AS 41.06.005 - 41.06.060 [THIS 25
CHAPTER] for duties assigned to the commission, including orders regarding the 26
establishment of drilling units for pools as set out in AS 31.05.100 and orders 27
regarding unitized operation and integration of interests as set out in AS 31.05.110. 28
* Sec. 26. AS 41.06.040(a) is amended to read: 29
(a) The commission shall adopt regulations under AS 44.62 (Administrative 30
Procedure Act), issue orders, and take other appropriate action to carry out the 31 33-GS1567\A
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purposes and intent of AS 41.06.005 - 41.06.060 [THIS CHAPTER], including 1
adopting regulations to prevent 2
(1) geothermal resources, water or other fluids, and gases from 3
escaping into strata other than that in which they are found, unless in accordance with 4
an approved reinjection program; 5
(2) contamination of surface and groundwater; 6
(3) premature degradation of a geothermal system by water 7
encroachment or otherwise; 8
(4) blowouts, cavings, and seepage; and 9
(5) unreasonable disturbance or injury to neighboring properties, prior 10
water rights, prior oil or gas rights, human life, health, and the natural environment. 11
* Sec. 27. AS 41.06.050(e) is amended to read: 12
(e) In making the determination under (d) of this section, the commission shall 13
consider whether the 14
(1) proposed well will significantly interfere with or substantially 15
impair a prior water, oil, or gas right; 16
(2) proposed well is contrary to a provision of AS 41.06.005 - 17
41.06.060 [THIS CHAPTER], a regulation adopted by the commission, another law, 18
or an order, stipulation, or term of a permit issued by the commission; and 19
(3) applicant is in violation of a provision of AS 41.06.005 - 41.06.060 20
[THIS CHAPTER], a regulation adopted by the commission, another law, or an order, 21
stipulation, or term of a permit issued by the commission; the commission shall 22
consider the magnitude of the violation. 23
* Sec. 28. AS 41.06.055(c) is amended to read: 24
(c) The commission shall determine the regulatory cost charges levied under 25
this section so that the total amount to be collected approximately equals the 26
appropriations made for the operating costs of the commission that have been incurred 27
under AS 41.06.005 - 41.06.060 [THIS CHAPTER] for the fiscal year. 28
* Sec. 29. AS 41.06.055(d) is amended to read: 29
(d) The commission shall collect the regulatory cost charges imposed under 30
this section. The Department of Administration shall identify the amount of 31 33-GS1567\A
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appropriations made for the operating costs of the commission under AS 41.06.005 - 1
41.06.060 [THIS CHAPTER] that lapse into the general fund each year. The 2
legislature may appropriate an amount that is at least equal to the lapsed amount to the 3
commission for its operating costs under AS 41.06.005 - 41.06.060 [THIS 4
CHAPTER] for the next fiscal year. If the legislature makes an appropriation to the 5
commission under this subsection that is equal to or greater than the lapsed amount, 6
the commission shall reduce the total regulatory cost charge collected for that fiscal 7
year by a comparable amount. 8
* Sec. 30. AS 41.06.060 is amended to read: 9
Sec. 41.06.060. Definitions. In AS 41.06.005 - 41.06.060 [THIS CHAPTER], 10
unless the context otherwise requires, 11
(1) "commercial use" means the sale of heat or power to a third party; 12
(2) "commission" means the Alaska Oil and Gas Conservation 13
Commission created under AS 31.05.005; 14
(3) "correlative rights" means the right of an owner of each property in 15
a geothermal system to produce without waste the owner's just and equitable share of 16
the geothermal resources in the geothermal system; a just and reasonable share is an 17
amount, so far as can be practically determined and so far as can be practically 18
produced without waste, that is substantially in proportion to the quantity of 19
recoverable geothermal resources under the owner's property relative to the total 20
recoverable geothermal resources in the geothermal system; 21
(4) "geothermal fluid" means liquids and steam at temperatures greater 22
than 120 degrees Celsius or any commercial use of liquids and steam naturally present 23
in a geothermal system at temperatures less than 120 degrees Celsius; 24
(5) "geothermal resources" 25
(A) means the natural heat of the earth at temperatures greater 26
than 120 degrees Celsius, or any use of that heat for commercial purposes, 27
measured at the point where the highest-temperature resources encountered 28
enter or contact a well or other resource extraction device or any commercial 29
use of the natural heat of the earth; 30
(B) includes 31 33-GS1567\A
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(i) the energy, including pressure, in whatever form 1
present in, resulting from, created by, or that may be extracted from 2
that natural heat; 3
(ii) the material medium, including steam and other 4
gases, hot water, and hot brines constituting the geothermal fluid 5
naturally present, as well as substances artificially introduced to serve 6
as a heat transfer medium; and 7
(iii) all dissolved or entrained minerals and gases that 8
may be obtained from the material medium, but excluding hydrocarbon 9
substances and helium; 10
(6) "geothermal system" means a stratum, pool, reservoir, or other 11
geologic formation containing geothermal resources; 12
(7) "operator" means a person drilling, maintaining, operating, 13
producing, or in control of a well; 14
(8) "owner" means the person who has the right to drill into or produce 15
from a geothermal system and to appropriate the geothermal resources produced from 16
a geothermal system for that person and others; 17
(9) "waste" means, in addition to its ordinary meaning, physical waste, 18
and includes an inefficient, excessive, or improper production, use, or dissipation of 19
geothermal resources, including 20
(A) drilling, transporting, or storage methods that cause or tend 21
to cause unnecessary surface loss of geothermal resources; 22
(B) locating, spacing, drilling, equipping, operating, producing, 23
or venting of a well in a manner that results or tends to result in reducing the 24
ultimate economic recovery of geothermal resources; 25
(10) "well" means a well drilled, converted, or reactivated for the 26
discovery, testing, production, or subsurface injection of geothermal resources. 27
* Sec. 31. AS 41.06 is amended by adding new sections to read: 28
Article 2. Carbon Dioxide Injection and Storage. 29
Sec. 41.06.105. Policy on carbon dioxide storage. For the purposes of 30
protecting health, safety, and property in the state, it is in the public interest that to the 31 33-GS1567\A
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extent economically and technologically feasible, carbon dioxide be injected into and 1
stored in oil and gas reservoirs and other geologic formations in a manner protective 2
of waters and reservoir integrity. The state recognizes that geologic storage of carbon 3
dioxide may require the cooperation of mineral interest holders and that, when 4
cooperation is not achieved, regulatory procedures that promote cooperative 5
management for protection and maximization of resources are necessary. 6
Sec. 41.06.110. Jurisdiction over storage facilities. The commission has 7
jurisdiction under AS 41.06.105 - 41.06.210 over storage facilities to prevent waste, 8
protect correlative rights, and ensure public health and safety. 9
Sec. 41.06.115. Authority of the commission. (a) The authority of the 10
commission applies to all land in the state lawfully subject to the police power of the 11
state, including private land, municipal land, state land, federal land, and land subject 12
to the jurisdiction of the United States, and to all land included in a voluntary 13
cooperative or unit plan of development or operation entered into in accordance with 14
AS 38.05.730. 15
(b) When land that is subject to the commission's authority is committed to a 16
unit agreement involving land subject to federal jurisdiction, the operation of 17
AS 41.06.105 - 41.06.210 may be suspended if 18
(1) the unit operations are regulated by the United States; and 19
(2) conservation of resources in the reservoir or pool is accomplished 20
in the agreement. 21
(c) The commission has the authority to 22
(1) regulate activities related to a storage facility, including 23
construction, operation, and closure; 24
(2) require that storage operators provide assurance, including bonds, 25
that money is available to fulfill the storage operator's duties; 26
(3) enter, at a reasonable time and manner, a storage facility to 27
(A) inspect equipment and facilities; 28
(B) observe, monitor, and investigate operation; and 29
(C) inspect records required to be maintained at the facility;
30
(4) exercise continuing jurisdiction over storage operators and storage 31 33-GS1567\A
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facilities, including the authority, after notice and hearing, to amend provisions in a 1
permit and to revoke a permit; 2
(5) dissolve or change the boundaries of any commission-established 3
oil or gas field or unit that is within or near a storage reservoir's boundaries; and 4
(6) grant, for good cause, exceptions to the requirements and 5
implementing rules of AS 41.06.105 - 41.06.210. 6
(d) To the extent AS 31.05 does not conflict with AS 41.06.105 - 41.06.210, 7
the provisions of AS 31.05 are applicable to wells drilled in search of, in support of, 8
and for carbon dioxide storage. 9
(e) Nothing in AS 41.06.105 - 41.06.210 limits the authority of the 10
Department of Natural Resources under AS 38.05.700 - 38.05.795. 11
Sec. 41.06.120. Waste prohibited; investigation. Waste in a storage facility 12
or reservoir in the state is prohibited. The commission may investigate to determine 13
whether waste exists or is imminent, or whether other facts exist that justify or require 14
action by the commission to prohibit waste. The injection of carbon dioxide and 15
substances commonly associated with carbon dioxide injection is not considered 16
waste. 17
Sec. 41.06.125. Storage facility permit. (a) A prospective storage operator is 18
required to obtain a permit from the commission. 19
(b) A permit may not be transferred unless the commission consents. 20
(c) A person applying for a permit shall 21
(1) request a pre-application meeting with the commission staff; 22
(2) comply with application requirements; 23
(3) pay a fee in an amount determined by the commission; and 24
(4) pay the commission the cost the commission incurs in reviewing an 25
application, publishing notices for hearings, and holding hearings on permit 26
applications. 27
(d) A permit application must include sufficient information to enable the 28
commission to determine whether the storage facility will interfere with or impair an 29
existing water, oil, gas, or other mineral interest. 30
(e) The amount of the fee in (c)(3) of this section must be based on the 31 33-GS1567\A
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commission's anticipated cost of processing applications, including any preliminary 1
work in advance of receipt of an application. The commission may enter into an 2
agreement with a prospective applicant that requires the applicant to reimburse the 3
commission for reasonable costs of work incurred in preparing for activities before 4
receipt of an application. 5
(f) A fee the commission receives under this section must be deposited into the 6
carbon dioxide storage facility administrative fund established in AS 41.06.165. 7
Sec. 41.06.130. Hearing on permit application. (a) Before issuing a permit 8
for a storage facility, the commission shall hold a public hearing. 9
(b) The commission shall provide notice of a public hearing under this section. 10
The notice must be provided in the same manner as a notice under AS 31.05.050(b) 11
and be provided to 12
(1) each mineral lessee, mineral owner, and mineral right owner of 13
record within the storage reservoir and within one-half mile of the storage reservoir's 14
boundaries; 15
(2) each surface owner of land overlying the storage reservoir and 16
within one-half mile of the reservoir's boundaries; and 17
(3) any additional persons that the commission requires. 18
(c) A hearing notice required by this section must comply with deadlines set 19
by the commission. 20
Sec. 41.06.135. Permit requirements. (a) The commission shall consult with 21
the Department of Environmental Conservation and the Department of Natural 22
Resources before issuing a permit under AS 41.06.125. 23
(b) Before the commission may approve a permit applied for under 24
AS 41.06.125, the commission shall find 25
(1) that the storage operator has complied with all requirements set by 26
the commission; 27
(2) that the proposed storage facility is suitable and feasible for carbon 28
dioxide injection and storage; 29
(3) that the carbon dioxide to be stored is of a quality that allows it to 30
be safely and efficiently stored in the storage reservoir; 31 33-GS1567\A
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(4) that the storage operator has made a good-faith effort to get the 1
consent of all persons with an ownership interest in the reservoir and surface owners 2
of land overlying the proposed storage reservoir; 3
(5) if the proposed storage facility contains commercially valuable 4
minerals, that the interests of the mineral owners or mineral lessees will not be 5
adversely affected or have been addressed in an arrangement entered into by the 6
mineral owners or mineral lessees and the storage operator; 7
(6) that the proposed storage facility will not adversely affect surface 8
waters or formations containing fresh water; 9
(7) that carbon dioxide is not reasonably anticipated to escape from the 10
storage reservoir; 11
(8) that substances that compromise the objectives of AS 41.06.105 - 12
41.06.210 or the integrity of a storage reservoir will not enter a storage reservoir; 13
(9) that the proposed storage facility will not endanger human health or 14
unduly endanger the environment; 15
(10) that the proposed storage facility is in the public interest; 16
(11) that the horizontal and vertical boundaries of the proposed storage 17
reservoir are defined and the boundaries include buffer areas to ensure that the storage 18
facility is operated safely and as contemplated; 19
(12) that the storage operator will establish monitoring facilities and 20
protocols to assess the location and migration of carbon dioxide injected for storage 21
and to ensure compliance with all permit, statutory, and administrative requirements; 22
(13) that all nonconsenting land owners or holders of mineral rights are 23
or will be equitably compensated; and 24
(14) that the storage operator is not in violation of a provision of 25
AS 41.06.105 - 41.06.210 or regulations adopted by the commission. 26
Sec. 41.06.140. Permit provisions. The commission may include in a permit 27
or order any parameters necessary to carry out the objectives of AS 41.06.105 - 28
41.06.210 and to protect and adjust the respective rights and obligations of persons 29
affected by geologic storage. 30
Sec. 41.06.145. Amalgamating property interests. If a storage operator does 31 33-GS1567\A
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not obtain the consent of all persons with an ownership interest in the storage 1
reservoir, the commission may order that the mineral rights of nonconsenting owners 2
be included in a storage facility and subject to geologic storage. Before the 3
commission may issue an order effectuating an amalgamation under this section, the 4
commission must provide public notice and hold a hearing. 5
Sec. 41.06.150. Certificate. When the commission issues a permit under 6
AS 41.06.125, the commission shall also issue a certificate that states the permit has 7
been issued, describes the area covered, and contains information the commission 8
deems appropriate. The storage operator may file a copy of the certificate with the 9
office of the recorder in the district the facility is located. 10
Sec. 41.06.155. Environmental protection; reservoir integrity. (a) The 11
commission shall take action to ensure that 12
(1) substances that compromise the integrity of a storage reservoir do 13
not enter a storage reservoir; and 14
(2) carbon dioxide does not escape from a storage facility. 15
(b) For the purposes of this section and in the application of other laws, carbon 16
dioxide that is stored and remains in storage under a permit is not a pollutant and does 17
not constitute a nuisance. 18
(c) The commission's authority under (a) of this section does not limit the 19
jurisdiction of the Department of Environmental Conservation. 20
Sec. 41.06.160. Preservation of rights. Nothing in AS 41.06.105 - 41.06.210 21
(1) prejudices the rights of those with property interests within a 22
storage facility to exercise rights that have not been committed to a storage facility; or 23
(2) prevents a mineral owner or mineral lessee from drilling through or 24
near a storage reservoir to explore for and develop minerals, provided the drilling, 25
production, and related activities comply with commission requirements that preserve 26
the storage facility's integrity and protect the objectives of AS 41.06.105 - 41.06.210. 27
Sec. 41.06.165. Fees; carbon dioxide storage facility administrative fund. 28
(a) A storage operator shall pay the commission a fee on each ton of carbon dioxide 29
injected for geologic storage. The fee must be in the amount set by the commission.
30
The amount must be based on the anticipated expenses that the commission will incur 31 33-GS1567\A
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in regulating storage facilities during their construction, operational, and pre-closure 1
phases. The fee shall be deposited in the carbon dioxide storage facility administrative 2
fund established in (b) of this section. 3
(b) The carbon dioxide storage facility administrative fund is established in 4
the general fund. The fund consists of 5
(1) fees received under (a) of this section; 6
(2) fees received under AS 41.06.125 and 41.06.200; and 7
(3) interest earned on the fund. 8
(c) Expenditure from the fund is subject to appropriation. The appropriation 9
may be made by general appropriation of program receipts conditioned on compliance 10
with the program review provisions of AS 37.07.080(h). The commission, however, 11
through a cooperative agreement with another state agency, may use the fund to 12
compensate the cooperating agency for expenses the cooperating agency incurs in 13
carrying out regulatory responsibilities that the agency may have over a storage 14
facility. 15
Sec. 41.06.170. Title to carbon dioxide. The storage operator has title to the 16
carbon dioxide injected into and stored in a storage reservoir and holds title until the 17
commission issues a certificate of completion under AS 41.06.175. While the storage 18
operator holds title, the operator is liable for any damage the carbon dioxide may 19
cause, including damage caused by carbon dioxide that escapes from the storage 20
facility. 21
Sec. 41.06.175. Certificate of completion, release, and transfer of title and 22
custody. (a) After carbon dioxide injections into a reservoir end and upon application 23
by the storage operator, the commission shall consider issuing a certificate of 24
completion. The certificate may only be issued after public notice and hearing. The 25
commission shall establish notice requirements for the hearing. The certificate may 26
only be issued after the commission has consulted with the Department of 27
Environmental Conservation, the Department of Natural Resources, and all persons 28
with an ownership interest in the storage reservoir. The certificate may not be issued 29
until at least 10 years after carbon dioxide injections end. 30
(b) A certificate of completion may only be issued if the storage operator 31 33-GS1567\A
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(1) is in full compliance with all laws governing the storage facility; 1
(2) shows that the operator has addressed all pending claims regarding 2
the storage facility's operation; 3
(3) shows that the underground place or pore space where the carbon 4
dioxide was injected or stored is expected to no longer expand vertically or 5
horizontally and is expected to pose no threat to human health, human safety, the 6
environment, or underground sources of drinking water; 7
(4) shows that the stored or injected carbon dioxide is unlikely to cross 8
any underground or pore space boundary and is not expected to endanger any 9
underground source of drinking water or otherwise endanger human health, human 10
safety, or the environment; 11
(5) shows that all wells, equipment, and facilities to be used in the 12
post-closure period are in good condition and retain mechanical integrity; 13
(6) shows that the operator has plugged wells, removed equipment and 14
facilities, and completed reclamation work as required by the commission; 15
(7) has paid all fees and surcharges for the facility; and 16
(8) meets any other regulatory requirements established by the state. 17
(c) Once a certificate of completion is issued, title to the storage facility and to 18
the stored carbon dioxide transfers, without payment of any compensation, to the state 19
under management of the Department of Natural Resources. Title acquired by the state 20
includes all rights and interests in, and all responsibilities associated with, the stored 21
carbon dioxide. The storage operator and all persons who generated any injected 22
carbon dioxide are released from liability to the state associated with the storage 23
facility, provided that the liability to the state shall not result in the payment of any 24
damages in excess of the balance of the carbon storage closure trust fund established 25
in AS 37.14.850. Any bonds posted by the storage operator must be released. 26
Sec. 41.06.180. Carbon storage facility injection surcharge. A storage 27
operators shall pay the commission a surcharge on each ton of carbon dioxide injected 28
for storage. The surcharge must be in the amount set by the commission. The amount 29
must be based on anticipated expenses that the state will incur in regulating storage 30
facilities during post-closure phases. The surcharge shall be deposited in the carbon 31 33-GS1567\A
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storage closure trust fund established in AS 37.14.850. 1
Sec. 41.06.185. Penalties. (a) In addition to the penalties in (b) - (d) of this 2
section, a person who violates a provision of AS 41.06.105 - 41.06.210 or a 3
commission regulation, order, or term of a permit issued under AS 41.06.105 - 4
41.06.210, is liable for a civil penalty of not more than $100,000 for the initial 5
violation and not more than $10,000 for each day after that on which the violation 6
continues. 7
(b) A person who knowingly commits an act specified in AS 11.46.630(a) for 8
the purpose of evading a provision of this chapter, a regulation adopted under this 9
chapter, or an order, stipulation, or term of a permit issued by the commission is guilty 10
of a class A misdemeanor. 11
(c) A person who knowingly aids or abets another person in the violation of a 12
provision of this chapter, a regulation adopted under this chapter, or an order, 13
stipulation, or term of a permit issued by the commission is subject to the same 14
penalty as that prescribed in this chapter for the violation by the other person. 15
(d) A person who knowingly violates a provision of this chapter, a regulation 16
adopted under this chapter, or an order, stipulation, or term of a permit issued by the 17
commission is guilty of a misdemeanor punishable by a fine of not more than $10,000 18
a day for each day of violation. 19
(e) The commission may assess the civil penalties provided in this section, 20
and, if not paid, the penalties are recoverable by suit filed by the attorney general in 21
the name and on behalf of the commission in the superior court. The payment of a 22
penalty does not relieve a person on whom the penalty is imposed from liability to any 23
other person for damages arising out of the violation. 24
(f) In determining the amount of a penalty assessed under (a) of this section, 25
the commission shall consider 26
(1) the extent to which the person committing the violation was acting 27
in good faith in attempting to comply; 28
(2) the extent to which the person committing the violation acted in a 29
wilful or knowing manner; 30
(3) the extent and seriousness of the violation and the actual or 31 33-GS1567\A
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potential threat to public health or the environment; 1
(4) the economic or environmental harm, or injury to the public, 2
caused by the violation; 3
(5) the economic value or other benefits derived by the person 4
committing the violation from the violation; 5
(6) any history of previous violations by the person committing the 6
violation; 7
(7) the need to deter similar behavior by the person committing the 8
violation and others similarly situated at the time of the violation or in the future; 9
(8) the effort made by the person committing the violation to correct 10
the violation and prevent future violations; and 11
(9) other matters justice requires. 12
Sec. 41.06.190. Enhanced oil recovery. (a) Except as provided in (b) of this 13
section, the provisions of AS 41.06.105 - 41.06.210 do not apply to applications filed 14
with the commission proposing to use carbon dioxide for enhanced oil or gas 15
recovery. 16
(b) The commission may adopt regulations that allow enhanced oil or gas 17
recovery and related well activities to be converted to a storage facility. If adopted, the 18
regulations must require that in considering whether to approve a conversion, and 19
upon conversion, AS 41.06.105 - 41.06.210 and its implementing rules apply. The 20
regulations may impose additional requirements to, or waive the requirements of, 21
AS 41.06.105 - 41.06.210 for good cause and to ensure that the objectives of 22
AS 41.06.105 - 41.06.210 are met. 23
Sec. 41.06.195. Cooperative agreements and contracts. (a) The commission 24
may enter into agreements with other governments, government entities, and state 25
agencies for the purpose of carrying out the objectives of AS 41.06.105 - 41.06.210. 26
(b) The commission may enter into contracts with private persons to assist in 27
carrying out the objectives of AS 41.06.105 - 41.06.210. If an emergency exists, the 28
commission may enter into contracts without public notice and without competitive 29
bidding. 30
Sec. 41.06.200. Determining storage amounts; carbon credits; fees. (a) The 31 33-GS1567\A
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commission, under procedures and criteria the commission may adopt, may determine 1
the amount of carbon dioxide that may be injected and stored in a reservoir, including 2
for enhanced oil or gas recovery. 3
(b) The purpose of determining storage amounts is to facilitate using the 4
stored carbon dioxide for matters including carbon credits, allowances, trading, 5
emissions allocations, and offsets. The commission may charge a reasonable fee to a 6
person requesting a storage determination. The commission shall set the fee by 7
regulation. A fee the commission receives for a storage determination must be 8
deposited into the carbon dioxide storage facility administrative fund established in 9
AS 41.06.165. 10
Sec. 41.06.210. Definitions. In AS 41.06.105 - 41.06.210, unless the context 11
requires otherwise, 12
(1) "carbon dioxide" means carbon dioxide of a quality that 13
(A) will not compromise the safety of geologic storage; and 14
(B) will not compromise the properties of a storage reservoir 15
that allow the reservoir to effectively enclose and contain a stored gas or stored 16
supercritical fluid; 17
(2) "commission" means the Alaska Oil and Gas Conservation 18
Commission created under AS 31.05.005; 19
(3) "geologic storage" means the permanent or short-term underground 20
storage of carbon dioxide in a storage reservoir; 21
(4) "permit" means a permit issued by the commission allowing a 22
person to operate a storage facility; 23
(5) "pore space" means a cavity or void in a subsurface sedimentary 24
stratum; 25
(6) "reservoir" means a subsurface sedimentary stratum, formation, 26
aquifer, cavity, or void, including pore space, oil and gas reservoirs, saline formations, 27
and coal seams suitable for or capable of being made suitable for injecting and storing 28
carbon dioxide; 29
(7) "storage facility" means the storage reservoir, underground 30
equipment, well, and surface facilities and equipment used or proposed to be used in 31 33-GS1567\A
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accordance with a permit; "storage facility" does not include pipelines, compressors, 1
surface facilities, and equipment used to transport carbon dioxide to the storage 2
facility that are unrelated to well safety and metering; 3
(8) "storage operator" means a person holding or applying for a permit; 4
(9) "storage reservoir" means a reservoir proposed, authorized, or used 5
for storing carbon dioxide; 6
(10) "supercritical fluid" means a substance at or above its critical 7
temperature and critical pressure that is neither a liquid nor a gas but that has 8
properties of both; 9
(11) "waste" means, in addition to its ordinary meaning, physical 10
waste, and includes inefficient, excessive, or improper operation of a storage facility 11
or well; 12
(12) "well" means a well that is drilled, converted, or reactivated for 13
discovery, testing, or subsurface injection into a reservoir. 14
* Sec. 32. AS 41.21.167(a) is amended to read: 15
(a) The land and water areas described in AS 41.21.161 are not open to 16
mineral entry under AS 38.05.135 - 38.05.275 and 38.05.700 - 38.05.795. 17
* Sec. 33. AS 41.21.491(d) is amended to read: 18
(d) Except for oil and gas leasing under AS 38.05.180 and carbon storage 19
licensing and leasing under AS 38.05.700 - 38.05.795, the mineral estate in the state-20
owned land and water described in (a) of this section is closed to mineral entry under 21
AS 38.05.181 - 38.05.275. 22
* Sec. 34. AS 41.21.502(c) is amended to read: 23
(c) The mineral estate in the state-owned land and water described in (a) of 24
this section is open to oil and gas leasing under AS 38.05.180 and carbon storage 25
licensing and leasing under AS 38.05.700 - 38.05.795. The mineral estate in the 26
state-owned land and water described in (a) of this section is closed to mineral entry 27
under AS 38.05.181 - 38.05.275. 28
* Sec. 35. AS 41.21.617 is amended to read: 29
Sec. 41.21.617. Other uses generally. The state land and water described in 30
AS 41.21.611(b) is closed to mineral entry under AS 38.05.135 - 38.05.275 and 31 33-GS1567\A
SB 49 -30- SB0049A
New Text Underlined [DELETED TEXT BRACKETED]
38.05.700 - 38.05.795, to commercial harvest of timber, and to sale under state land 1
disposal laws. The commissioner may lease the land described in AS 41.21.611(b) 2
under AS 38.05.070 - 38.05.105 for a purpose consistent with AS 41.21.610(a) and 3
(b). A municipality may select land within the Alaska Chilkat Bald Eagle Preserve 4
under law. 5
* Sec. 36. AS 44.37.020 is amended by adding a new subsection to read: 6
(d) The Department of Natural Resources shall administer storage facilities 7
and stored carbon transferred to the state under AS 41.06.175. 8
* Sec. 37. The uncodified law of the State of Alaska is amended by adding a new section to 9
read: 10
TRANSITION: REGULATIONS. The Department of Natural Resources and the 11
Alaska Oil and Gas Conservation Commission may adopt regulations necessary to implement 12
the changes made by this Act. The regulations take effect under AS 44.62 (Administrative 13
Procedure Act), but not before the effective date of the law implemented by the regulation. 14
* Sec. 38. The uncodified law of the State of Alaska is amended by adding a new section to 15
read: 16
REVISOR'S INSTRUCTION. The revisor of statutes is requested to change the 17
chapter heading for AS 41.06 from "Geothermal Resources" to "Geothermal Resources and 18
Carbon Storage." 19
* Sec. 39. Section 37 of this Act takes effect immediately under AS 01.10.070(c). 20