Second Regular Session
Seventy-fourth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 24-0904.01 Sarah Lozano x3858
HOUSE BILL 24-1346
House Committees Senate Committees
Energy & Environment
A BILL FOR AN ACT
C
ONCERNING ENERGY AND CARBON MANAGEMENT REGULATION IN101
C
OLORADO, AND, IN CONNECTION THEREWITH , BROADENING102
THE ENERGY AND CARBON MANAGEMENT COMMISSION 'S103
REGULATORY AUTHORITY TO INCL UDE REGULATION OF DIRECT104
AIR CAPTURE FACILITIES AND GEOLOGIC STORAGE OPERATIONS .105
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
The bill expands the authority of the energy and carbon
management commission (commission) to include the regulation of:
HOUSE SPONSORSHIP
Titone and McCormick,
SENATE SPONSORSHIP
Hansen and Priola,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. ! Facilities that use equipment to capture a significant
quantity of carbon dioxide directly from the ambient air
(direct air capture facility); and
! Activities performed for the purpose of engaging in the
injection and underground sequestration of carbon dioxide
in pore space (geologic storage operations).
The commission may:
! Reimpose any regulatory responsibility or financial
assurance obligation imposed on a person that exercises the
right to control the conduct of geologic storage operations
(geologic storage operator) if the geologic storage operator
makes a material misrepresentation or omission that causes
the commission to approve a site closure; and
! Assess and collect regulatory and permitting fees from
geologic storage operators.
The bill also allows the commission to hire and designate
employees of the commission as administrative law judges who have the
authority to administer proceedings on behalf of the commission.
Current law provides a statute of limitations of one year after the
date of an alleged violation of energy and carbon management laws
(violation). The bill changes this statute of limitations to 3 years after the
discovery of the alleged violation and provides that the 3-year statute of
limitations period does not apply if information regarding the alleged
violation is knowingly or willfully concealed by the alleged violator.
The bill also expands the following energy and carbon
management law areas to include geologic storage operations and direct
air capture facilities:
! Enforcement and civil penalty procedures;
! Use of the energy and carbon management cash fund by the
commission;
! Mitigation of adverse environmental impacts by the
commission or an operator; and
! State agency and local government authority over oil and
gas development.
The commission is required to adopt rules related to the permitting
and regulation of direct air capture facilities. When reviewing an
application for a direct air capture facility, the commission must consider
whether a setback of the direct air capture facility from certain areas is
necessary and reasonable to protect and minimize adverse impacts to
public health, safety, and welfare; the environment; and wildlife
resources. The commission may assess and collect permitting and
regulatory fees from the operators of direct air capture facilities.
The bill also establishes that:
! Ownership of a portion of a pore space necessary for
geologic storage (sequestration estate) is vested in the
HB24-1346
-2- owner of the overlying surface estate if the sequestration
estate has not been separately severed, conveyed, or
reserved;
! Any conveyance of the ownership of an overlying surface
estate also conveys the grantor's ownership of any
sequestration estate except in certain circumstances; and
! A conveyance of the ownership of a mineral estate does not
convey the grantor's ownership in the sequestration estate
unless the conveyance instrument provides for the
conveyance.
Upon application of any interested person, the commission must
hold a hearing and enter an order (order) providing for the formation of
a unit of one or more geologic storage resources (geologic storage unit)
if the commission finds that the geologic storage unit is reasonably
necessary to effectuate a geologic storage project. The order must include
terms and conditions that are just and reasonable and establish a plan for
operations of the geologic storage unit (plan). An order is effective only
if the plan has been approved by those persons that collectively own at
least 75% of the geologic storage resources included in the geologic
storage unit area (required approval) and the commission makes a finding
in the order of the required approval.
The bill also allows a local government to request that the director
of the commission appoint a technical review board to assist a local
government in analyzing and answering any technical questions regarding
the local government's land use regulations.
The bill also requires the department of public health and
environment (department) to develop carbon dioxide accounting
procedures for geologic storage operations and direct air capture
facilities. The commission must compile relevant data to support the
carbon dioxide accounting procedures and work collaboratively with the
department in implementing the carbon dioxide accounting procedures.
The commission and the department must also work collaboratively to
address air emissions from direct air capture facilities and geologic
storage operations.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 34-60-102, add (3)2
as follows:3
34-60-102. Legislative declaration. (3) I
T IS FURTHER DECLARED4
TO BE IN THE BEST INTEREST OF THE STATE FOR THE COMMISSION TO5
HB24-1346-3- IMPLEMENT AND ADMINISTER A PROGRAM FOR THE PERMITTING AND1
REGULATION OF DIRECT AIR CAPTURE FACILITIES AND GEOLOGIC STORAGE2
OPERATIONS BECAUSE THE CAPTURE AND STORAGE OF CARBON DIOXIDE :3
(a) I
S AN IMPORTANT TOOL IN ACHIEVING THE STATE 'S4
GREENHOUSE GAS EMISSION REDUCTION GOALS , AS SET FORTH IN SECTION5
25-7-102 (2)(g);6
(b) P
ROVIDES BENEFITS TO THE STATE AND GLOBAL ENVIRONMENT7
BY REDUCING CARBON DIOXIDE EMISSIONS ;8
(c) P
ROVIDES JUST TRANSITION OPPORTUNITIES TO RETAIN9
WORKERS; AND10
(d) E
NABLES THE USE OF COLORADO'S ABUNDANT NATURAL11
RESOURCES FOR THE PERMANENT STORAGE OF CARBON DIOXIDE .12
SECTION 2. In Colorado Revised Statutes, amend 34-60-103 as13
follows:14
34-60-103. Definitions - rules. As used in this article 60, unless15
the context otherwise requires:16
(1) "And" includes the word "or" and the use of the word "or"17
includes the word "and". The use of the plural includes the singular and18
the use of the singular includes the plural.19
(2) "C
ARBON DIOXIDE" MEANS NATURALLY OCCURRING ,20
GEOLOGICALLY SOURCED , OR ANTHROPOGENICALLY SOURCED CARBON21
DIOXIDE, INCLUDING ITS DERIVATIVES AND ALL MIXTURES, COMBINATIONS,22
AND PHASES, WHETHER LIQUID, GASEOUS, SUPER-CRITICAL, OR SOLID AND23
WHETHER STRIPPED, SEGREGATED, OR DIVIDED FROM ANY OTHER FLUID24
STREAM.25
(3) (a) "C
ARBON DIOXIDE FLOW LINE" MEANS A SEGMENT OF PIPE26
TRANSFERRING CARBON DIOXIDE BETWEEN THE WELLHEAD OF A CLASS VI27
HB24-1346
-4- INJECTION WELL AND A PIPELINE REGULATED BY THE PIPELINE AND1
HAZARDOUS MATERIALS SAFETY ADMINISTRATION OF THE UNITED STATES2
DEPARTMENT OF TRANSPORTATION OR THE PUBLIC UTILITIES COMMISSION .3
(b) "C
ARBON DIOXIDE FLOW LINE" DOES NOT INCLUDE PIPELINES4
REGULATED BY THE PIPELINE AND HAZARDOUS MATERIALS SAFETY5
ADMINISTRATION OF THE UNITED STATES DEPARTMENT OF6
TRANSPORTATION OR THE PUBLIC UTILITIES COMMISSION .7
(4) "C
LASS VI INJECTION WELL" MEANS A WELL DRILLED8
PURSUANT TO A PERMIT FOR A CLASS VI INJECTION WELL ISSUED UNDER9
THE FEDERAL "SAFE DRINKING WATER ACT", 42 U.S.C. SEC. 300f ET SEQ.,10
AS AMENDED.11
(2)
(5) "Commission" means the energy and carbon management12
commission created in section 34-60-104.3 (1).13
(3) (6) "Common source of supply" is synonymous with "pool" as14
defined in this section.15
(4) (7) (a) "Correlative rights" means that each owner and16
producer in a common pool or source of supply of oil and gas shall MUST17
have an equal opportunity to obtain and produce his THE OWNER'S OR18
PRODUCER'S just and equitable share of the oil and gas underlying such19
THE pool or source of supply.20
(b) A
S USED IN SECTION 34-60-142, "CORRELATIVE RIGHTS" MEANS21
THAT EACH OWNER OF A SEQUESTRATION ESTATE MUST HAVE AN EQUAL22
OPPORTUNITY TO UTILIZE THE OWNER 'S JUST AND EQUITABLE SHARE OF23
THE UNDERLYING GEOLOGIC STORAGE RESOURCE .24
(8) (a) "D
IRECT AIR CAPTURE FACILITY" MEANS A FACILITY THAT25
USES EQUIPMENT TO CAPTURE A SIGNIFICANT QUANTITY OF CARBON26
DIOXIDE DIRECTLY FROM THE AMBIENT AIR OR AS OTHERWISE DEFINED BY27
HB24-1346
-5- THE COMMISSION BY RULE.1
(b) "D
IRECT AIR CAPTURE FACILITY " DOES NOT INCLUDE A2
FACILITY THAT ENGAGES IN INCIDENTAL CAPTURE OF CARBON DIOXIDE .3
(9) "D
ISPROPORTIONATELY IMPACTED COMMUNITY " HAS THE4
MEANING SET FORTH IN SECTION 24-4-109 (2)(b)(II).5
(4.3)
(10) "Division of parks and wildlife" means the division of6
parks and wildlife identified in article 9 of title 33. C.R.S.7
(11) "E
NERGY AND CARBON MANAGEMENT OPERATIONS " MEANS8
OIL AND GAS OPERATIONS , GEOLOGIC STORAGE OPERATIONS , AND9
OPERATIONS OF DIRECT AIR CAPTURE FACILITIES.10
(12) "E
NERGY AND CARBON MANAGEMENT OPERATOR " MEANS AN11
OPERATOR, A GEOLOGIC STORAGE OPERATOR , AND AN OPERATOR OF A12
DIRECT AIR CAPTURE FACILITY.13
(4.5)
(13) "Exploration and production waste" means those wastes14
that are generated during the drilling of and production from oil and gas15
wells; during the drilling of and production from wells for deep16
geothermal operations, as defined in section 37-90.5-103 (3), regulated17
by the commission pursuant to article 90.5 of title 37; or during primary18
field operations and that are exempt from regulation as hazardous wastes19
under Subtitle C of the federal "Resource Conservation and Recovery Act20
of 1976", 42 U.S.C. secs. 6901 to 6934, as amended.21
(5) (14) "Gas" means all natural gases and all hydrocarbons not22
defined in this section as oil.23
(15) "G
EOLOGIC STORAGE" MEANS THE INJECTION AND24
UNDERGROUND SEQUESTRATION OF CARBON DIOXIDE IN A GEOLOGIC25
STORAGE RESOURCE PURSUANT TO A VALID CLASS VI PERMIT ISSUED26
PURSUANT TO THE FEDERAL "SAFE DRINKING WATER ACT", 42 U.S.C.27
HB24-1346
-6- SEC. 300f ET SEQ., AS AMENDED.1
(16) "G
EOLOGIC STORAGE FACILITY" MEANS THE SPECIFIC PART OF2
A GEOLOGIC STORAGE RESOURCE THAT IS UTILIZED FOR GEOLOGIC3
STORAGE, TOGETHER WITH THE WELL OR WELLS AND ALL SURFACE4
EQUIPMENT AND DISTURBANCES ASSOCIATED WITH THE GEOLOGIC5
STORAGE OPERATIONS AT THE GEOLOGIC STORAGE LOCATION .6
(17) "G
EOLOGIC STORAGE LOCATION" MEANS A DEFINABLE AREA7
WHERE A GEOLOGIC STORAGE OPERATOR USES OR INTENDS TO USE THE8
SURFACE OF THE LAND IN ORDER TO OPERATE A GEOLOGIC STORAGE9
FACILITY.10
(18) "G
EOLOGIC STORAGE OPERATIONS " MEANS ACTIVITIES11
PERFORMED FOR THE PURPOSE OF ENGAGING IN GEOLOGIC STORAGE IN THE12
STATE, INCLUDING:13
(a) T
HE FOLLOWING ACTIVITIES RELATED TO THE OPERATION OF A14
GEOLOGIC STORAGE FACILITY:15
(I) D
RILLING TEST BORES AND MONITORING WELLS ;16
(II) S
ITING;17
(III) I
NSTALLING AND OPERATING CARBON DIOXIDE FLOW LINES ;18
(IV) D
RILLING;19
(V) D
EEPENING;20
(VI) R
ECOMPLETING;21
(VII) R
EWORKING; AND22
(VIII) A
BANDONING;23
(b) I
NJECTING CARBON DIOXIDE FOR THE PURPOSE OF GEOLOGIC24
STORAGE;25
(c) A
NY CONSTRUCTING, SITE PREPARING, OR RECLAIMING26
ACTIVITIES ASSOCIATED WITH THE ACTIVITIES DESCRIBED IN SUBSECTION27
HB24-1346
-7- (18)(a) OR (18)(b) OF THIS SECTION; AND1
(d) A
NY OTHER ACTIVITIES DETERMINED BY THE COMMISSION TO2
BE NECESSARY TO PROTECT AND MINIMIZE ADVERSE IMPACTS ASSOCIATED3
WITH GEOLOGIC STORAGE TO PUBLIC HEALTH , SAFETY, WELFARE, THE4
ENVIRONMENT, AND NATURAL RESOURCES.5
(19) "G
EOLOGIC STORAGE OPERATOR " MEANS ANY PERSON THAT6
EXERCISES THE RIGHT TO CONTROL THE CONDUCT OF GEOLOGIC STORAGE7
OPERATIONS.8
(20) (a) "G
EOLOGIC STORAGE RESOURCE " MEANS PORE SPACE9
NECESSARY FOR GEOLOGIC STORAGE .10
(b) "G
EOLOGIC STORAGE RESOURCE " DOES NOT INCLUDE AN11
UNDERGROUND SOURCE OF DRINKING WATER , AS DEFINED IN 40 CFR12
144.3.13
(21) "G
EOLOGIC STORAGE UNIT" MEANS A UNIT OF ONE OR MORE14
GEOLOGIC STORAGE RESOURCES OR PARTS OF A GEOLOGIC STORAGE15
RESOURCE ESTABLISHED BY THE COMMISSION PURSUANT TO SECTION16
34-60-142.17
(22) "G
EOLOGIC STORAGE UNIT AREA " MEANS ANY GEOLOGIC18
STORAGE RESOURCE, OR PART OF A GEOLOGIC STORAGE RESOURCE ,19
INCLUDED IN A GEOLOGIC STORAGE UNIT .20
(5.3)
(23) "Local government" means except with regard to21
section 34-60-104 (2)(a)(I), a:22
(a) Municipality or city and county within whose boundaries an23
oil and gas location,
GEOLOGIC STORAGE LOCATION , OR DIRECT AIR24
CAPTURE FACILITY is sited or proposed to be sited; or25
(b) County, if an oil and gas location,
GEOLOGIC STORAGE26
LOCATION, OR DIRECT AIR CAPTURE FACILITY is sited or proposed to be27
HB24-1346
-8- sited within the boundaries of the county but is not located within a1
municipality or city and county.2
(5.5) (24) "Minimize adverse impacts" means, to the extent3
necessary and reasonable to protect public health, safety, and welfare; the4
environment; and wildlife resources, to:5
(a) Avoid adverse impacts from oil and gas ENERGY AND CARBON6
MANAGEMENT operations; and7
(b) Minimize and mitigate the extent and severity of those impacts8
that cannot be avoided.9
(6) (25) "Oil" means crude petroleum oil and any other10
hydrocarbons, regardless of gravities, which THAT are produced at the11
well in liquid form by ordinary production methods and which THAT are12
not the result of condensation of gas before or after it leaves the reservoir.13
(6.2) (26) "Oil and gas facility" means equipment or14
improvements used or installed at an oil and gas location for the15
exploration, production, withdrawal, treatment, or processing of crude oil,16
condensate, exploration and production waste, or gas.17
(6.4) (27) "Oil and gas location" means a definable area where an18
oil and gas operator has disturbed or intends to disturb the land surface in19
order to locate an oil and gas facility.20
(6.5) (28) "Oil and gas operations" means exploration for oil and21
gas, including:22
(a) The conduct of seismic operations and the drilling of test23
bores;24
(b) The siting, drilling, deepening, recompletion, reworking, or25
abandonment of an oil and gas well, underground injection well, or gas26
storage well;27
HB24-1346
-9- (c) Production operations related to any such well DESCRIBED IN1
SUBSECTION (28)(b) OF THIS SECTION, including the installation of flow2
lines and gathering systems;3
(d) The generation, transportation, storage, treatment, or disposal4
of exploration and production wastes; and5
(e) Any construction, site preparation, or reclamation activities6
associated with such THE operations DESCRIBED IN THIS SUBSECTION (28).7
(6.8) (29) "Operator" means any person who THAT exercises the8
right to control the conduct of oil and gas operations.9
(7) (30) "Owner" means the person who THAT has the right to drill10
into and produce from a pool and to appropriate the oil or gas he THE11
PERSON produces therefrom FROM THE POOL either for himself THE12
PERSON or others or for himself THE PERSON and others, including the13
owner of a well capable of producing oil or gas, or both.14
(7.1) (31) "Parks and wildlife commission" means the parks and15
wildlife commission created in section 33-9-101. C.R.S.16
(7.5) (32) "Permit" means any permit, sundry notice, notice of17
intention, or other approval, including any conditions of approval, which18
THAT is granted, issued, or approved by the commission.19
(8) (33) "Person" means any natural person, corporation,20
association, partnership, receiver, trustee, executor, administrator,21
guardian, fiduciary, or other representative of any kind and includes any22
department, agency, or instrumentality of the state or any governmental23
subdivision thereof OF THE DEPARTMENT, AGENCY, OR INSTRUMENTALITY24
OF THE STATE.25
(9) (34) "Pool" means an underground reservoir containing a26
common accumulation of oil or gas, or both. Each zone of a general27
HB24-1346
-10- structure, which zone is completely separated from any other zone in the1
structure, is covered by the word "pool" as used in this article ARTICLE 60.2
(35) "P
ORE SPACE" MEANS A CAVITY OR VOID, WHETHER NATURAL3
OR ARTIFICIALLY CREATED, IN A SUBSURFACE STRATUM.4
(10)
(36) "Producer" means the owner of a well capable of5
producing oil or gas, or both.6
(37) "S
EQUESTRATION ESTATE" MEANS A PORTION OF A GEOLOGIC7
STORAGE RESOURCE.8
(10.5)
(38) "Surface owner" means any person owning all or part9
of the surface of land upon which oil and gas ENERGY AND CARBON10
MANAGEMENT operations are conducted, as shown by the tax records of11
the county in which the tract of land is situated, or any person with such12
rights under a recorded contract to purchase.13
(10.7) (39) "Underground natural gas storage cavern" means a14
facility that stored natural gas in an underground cavern or abandoned15
mine on or before January 1, 2000. An underground natural gas storage16
cavern includes all surface or subsurface rights and appurtenances17
associated with the underground injection, storage, and withdrawal of18
natural gas, but does not include any compressor stations or pipeline19
facilities subject to regulation by the public utilities commission or the20
United States department of transportation.21
(11) (40) "Waste", as applied to gas:22
(a) Includes the escape, blowing, or releasing, directly or23
indirectly into the open air, of gas from wells productive of gas only, or24
gas in an excessive or unreasonable amount from wells producing oil or25
both oil and gas; and the production of gas in quantities or in such manner26
as unreasonably reduces reservoir pressure or, subject to subsection27
HB24-1346
-11- (11)(b) (40)(b) of this section, unreasonably diminishes the quantity of oil1
or gas that ultimately may be produced; excepting gas that is reasonably2
necessary in the drilling, completing, testing, and in furnishing power for3
the production of wells; and4
(b) Does not include the nonproduction of gas from a formation5
if necessary to protect public health, safety, and welfare; the environment;6
or wildlife resources as determined by the commission.7
(12) (41) "Waste", as applied to oil:8
(a) Includes underground waste; inefficient, excessive, or9
improper use or dissipation of reservoir energy, including gas energy and10
water drive; surface waste; open-pit storage; and waste incident to the11
production of oil in excess of the producer's aboveground storage12
facilities and lease and contractual requirements, but excluding storage,13
other than open-pit storage, reasonably necessary for building up or14
maintaining crude stocks and products of crude stocks for consumption,15
use, and sale; and16
(b) Does not include the nonproduction of oil from a formation if17
necessary to protect public health, safety, and welfare; the environment;18
or wildlife resources as determined by the commission.19
(13) (42) "Waste", in addition to the meanings as set forth in20
subsections (11) (40) and (12) (41) of this section:21
(a) Means, subject to subsection (13)(b) (42)(b) of this section:22
(I) Physical waste, as that term is generally understood in the oil23
and gas industry;24
(II) The locating, spacing, drilling, equipping, operating, or25
producing of any oil or gas well or wells in a manner that causes or tends26
to cause reduction in quantity of oil or gas ultimately recoverable from a27
HB24-1346
-12- pool under prudent and proper operations or that causes or tends to cause1
unnecessary or excessive surface loss or destruction of oil or gas; and2
(III) Abuse of the correlative rights of any owner in a pool due to3
nonuniform, disproportionate, unratable, or excessive withdrawals of oil4
or gas from the pool, causing reasonably avoidable drainage between5
tracts of land or resulting in one or more producers or owners in the pool6
producing more than an equitable share of the oil or gas from the pool;7
and8
(b) Does not include the nonproduction of oil or gas from a9
formation if necessary to protect public health, safety, and welfare; the10
environment; or wildlife resources as determined by the commission.11
(14) Repealed.12
(15) (43) "Wildlife resources" means fish, wildlife, and their13
aquatic and terrestrial habitats.14
SECTION 3. In Colorado Revised Statutes, 34-60-105, amend15
(1)(b) introductory portion and (1)(b)(V) as follows:16
34-60-105. Powers of commission. (1) (b) Any delegation of17
authority to any other state officer, board, or commission to administer18
any other laws of this state relating to the conservation of oil or gas, or19
either of them, is hereby rescinded and withdrawn, and that authority is20
unqualifiedly conferred upon the commission, as provided in this section;21
except that, as further specified in section 34-60-131, nothing in this22
article 60 alters, impairs, or negates the authority of:23
(V) A local government to regulate oil and gas ENERGY AND24
CARBON MANAGEMENT operations pursuant to section 29-20-104.25
SECTION 4. In Colorado Revised Statutes, 34-60-106, amend26
(9)(c)(II), (9)(c)(III)(A), (9)(c)(III)(B), (9)(c)(IV)(A), (9)(c)(IV)(C),27
HB24-1346
-13- (9)(c)(IV)(D), (9)(d) introductory portion, (9)(d)(I), (9)(d)(II), (9)(d)(III),1
and (22); repeal (9)(e)(III); and add (9)(c)(IV)(D.5) and (9)(d.5) as2
follows:3
34-60-106. Additional powers of commission - fees - rules -4
definitions - repeal. (9) (c) (II) The commission may issue and enforce5
permits as necessary for the purpose set forth in this subsection (9)(c) FOR6
GEOLOGIC STORAGE OPERATIONS AND MAY REGULATE GEOLOGIC STORAGE7
OPERATIONS after the commission makes the determination and holds the8
hearing set forth in subsection (9)(c)(I) of this section and the commission9
and the governor satisfy the requirements set forth in subsection (9)(a) of10
this section.11
(III) (A) If the class VI injection well A GEOLOGIC STORAGE12
LOCATION is proposed to be sited in an area that would affect a13
disproportionately impacted community, the commission shall weigh the14
geologic storage operator's submitted cumulative impacts analysis and15
determine whether, on balance, the class VI injection well GEOLOGIC16
STORAGE LOCATION will have a positive effect on the disproportionately17
impacted community. A proposal that will have negative net cumulative18
impacts on any disproportionately impacted community must be denied.19
The commission's decision must include a plain language summary of its20
determination.21
(B) The commission may amend by rule the cumulative effects22
IMPACTS analysis and requirements set forth in this subsection (9)(c)(III)23
if the commission finds the analysis and requirements to be inconsistent24
with, or incomplete with respect to, the federal environmental protection25
agency's requirements for class VI primacy.26
(IV) (A) The commission shall require each operator of a class VI27
HB24-1346
-14- injection well GEOLOGIC STORAGE OPERATOR to provide adequate1
financial assurance demonstrating that the
GEOLOGIC STORAGE operator2
is financially capable of fulfilling every obligation imposed on the3
operator under this article 60 and under rules that the commission adopts4
pursuant to this article 60.5
(C) The commission shall adopt rules requiring that the financial6
assurance cover the cost of obligations that are in addition to the7
obligations listed in subsection (9)(c)(IV)(B) of this section if the8
additional obligations are reasonably associated with class VI injection9
wells and
GEOLOGIC STORAGE locations.10
(D) An operator
A GEOLOGIC STORAGE OPERATOR shall maintain11
the financial assurance required under this subsection (9)(c)(IV) or under12
any rules adopted pursuant to this subsection (9)(c)(IV) until the13
commission approves site closure, as specified in rules adopted by the14
commission. Commission approval of a site closure does not otherwise15
modify an operator's responsibility to comply with applicable laws.16
(D.5) I
F A GEOLOGIC STORAGE OPERATOR MAKES A MATERIAL17
MISREPRESENTATION OR OMISSION THAT CAUSES THE COMMISSION TO18
APPROVE A SITE CLOSURE PURSUANT TO SUBSECTION (9)(c)(IV)(D) OF19
THIS SECTION, THE COMMISSION MAY REIMPOSE ANY REGULATORY20
RESPONSIBILITY OR FINANCIAL ASSURANCE OBLIGATION IMPOSED ON THE21
GEOLOGIC STORAGE OPERATOR PURSUANT TO SUBSECTION (9)(c)(IV)(A)22
OF THIS SECTION.23
(d) In issuing and enforcing permits pursuant to subsection (9)(c)
24
of this section FOR GEOLOGIC STORAGE OPERATIONS , the commission shall25
ensure, after a public hearing, that:26
(I) The permitting of a class VI injection well GEOLOGIC STORAGE27
HB24-1346
-15- LOCATION complies with a local government's siting of the proposed class1
VI injection well GEOLOGIC STORAGE location;2
(II) The proposed new or modified class VI injection well3
GEOLOGIC STORAGE LOCATION has received an ANY applicable air permit4
PERMITS from the division of administration in the department of public5
health and environment;6
(III) The
GEOLOGIC STORAGE operator of the class VI injection
7
well has received the consent of any surface owner or owners of the land8
where the surface disturbance will occur and has provided the9
commission a written contractual agreement that the surface owner or10
owners have executed; and11
(d.5) (I) F
OR THE PURPOSES OF IMPLEMENTING AND12
ADMINISTERING THIS SUBSECTION (9), THE COMMISSION MAY ASSESS AND13
COLLECT REGULATORY AND PERMITTING FEES FROM GEOLOGIC STORAGE14
OPERATORS IN AN AMOUNT AND FREQUENCY DETERMINED BY THE15
COMMISSION BY RULE.16
(II) T
HE COMMISSION SHALL TRANSFER ANY FEES ASSESSED AND17
COLLECTED PURSUANT TO SUBSECTION (9)(d.5)(I) OF THIS SECTION TO THE18
STATE TREASURER, WHO SHALL CREDIT THE FEES TO THE ENERGY AND19
CARBON MANAGEMENT CASH FUND CREATED IN SECTION 34-60-122 (5).20
(e) As used in this subsection (9), unless the context otherwise21
requires:22
(III) "Disproportionately impacted community" has the meaning
23
set forth in section 24-4-109 (2)(b)(II).24
(22) (a) The commission shall create and maintain a website that25
serves as the state portal for information and data regarding the26
commission's regulatory activities.27
HB24-1346
-16- (b) (I) FOR THE 2024-25 STATE FISCAL YEAR, THE GENERAL1
ASSEMBLY SHALL APPROPRIATE MONEY TO THE ENERGY AND CARBON2
MANAGEMENT CASH FUND FOR THE PURPOSES SPECIFIED IN THIS3
SUBSECTION (22).4
(II) T
HIS SUBSECTION (22)(b) IS REPEALED, EFFECTIVE JULY 1,5
2026.6
SECTION 5. In Colorado Revised Statutes, 34-60-108, add (10)7
as follows:8
34-60-108. Rules - hearings - process. (10) T
HE DIRECTOR OF9
THE COMMISSION MAY HIRE AND DESIGNATE EMPLOYEES OF THE10
COMMISSION AS ADMINISTRATIVE LAW JUDGES WHO HAVE THE AUTHORITY11
TO ADMINISTER OATHS, EXAMINE WITNESSES, RECEIVE EVIDENCE, AND12
CONDUCT HEARINGS, INVESTIGATIONS, AND OTHER PROCEEDINGS ON13
BEHALF OF THE COMMISSION.14
SECTION 6. In Colorado Revised Statutes, amend 34-60-115 as15
follows:16
34-60-115. Limitation on actions. (1) No
AN action or other17
proceeding based upon a violation of this article ARTICLE 60 or any rule18
regulation, or order of the commission shall NOT be commenced or19
maintained unless it has been commenced within one year from THREE20
YEARS AFTER the date of the DISCOVERY OF THE alleged violation.21
(2) T
HE THREE-YEAR PERIOD OF LIMITATION DESCRIBED IN22
SUBSECTION (1) OF THIS SECTION DOES NOT APPLY IF INFORMATION23
REGARDING THE ALLEGED VIOLATION IS KNOWINGLY OR WILLFULLY24
CONCEALED BY THE ALLEGED VIOLATOR .25
SECTION 7. In Colorado Revised Statutes, 34-60-121, amend26
(1)(a), (1)(b), (1)(c)(I)(C), (1)(c)(I)(D), (1)(d), (1)(e), (4)(c), (5), (6),27
HB24-1346
-17- (7)(a) introductory portion, and (7)(b) as follows:1
34-60-121. Violations - investigations - penalties - rules -2
definition - legislative declaration. (1) (a) Any
ENERGY AND CARBON3
MANAGEMENT operator that violates this article
ARTICLE 60, any rule or4
order of the commission, or any permit is subject to a penalty of not more5
than fifteen thousand dollars for each act of violation per day that such6
THE violation continues. A VIOLATION DESCRIBED IN THIS SUBSECTION7
(1)(a)
CONTINUES FOR EACH DAY THAT IT IS NOT CORRECTED BY THE8
ENERGY AND CARBON MANAGEMENT OPERATOR .9
(b) The commission may impose a penalty by order only after a10
hearing in accordance with section 34-60-108 or by an administrative11
order by consent entered into by the commission and the
ENERGY AND12
CARBON MANAGEMENT operator.13
(c) The commission shall:14
(I) Promulgate rules that establish a penalty schedule appropriate15
to the nature of the violation and provide for the consideration of any16
aggravating or mitigating circumstances. The rules must establish the17
basis for determining the duration of a violation for purposes of imposing18
the applicable penalty and include presumptions that:19
(C) The failure to diligently implement corrective action pursuant20
to a schedule embodied in an administrative order on consent, order21
finding violation, or other order of the commission constitutes an22
independent violation for which the
ENERGY AND CARBON MANAGEMENT23
operator may be subject to additional penalties or corrective action orders24
imposed by the commission; and25
(D) The number of days of violation does not include any period26
necessary to allow the
ENERGY AND CARBON MANAGEMENT operator to27
HB24-1346
-18- engage in good faith negotiation with the commission regarding an1
alleged violation if the
ENERGY AND CARBON MANAGEMENT operator2
demonstrates a prompt, effective, and prudent response to the violation.3
(d) An
ENERGY AND CARBON MANAGEMENT operator subject to a4
penalty order shall pay the amount due within thirty days after its5
imposition unless the
ENERGY AND CARBON MANAGEMENT operator files6
a judicial appeal. The commission may recover penalties owed under this7
section in a civil action brought by the attorney general at the request of8
the commission in the second judicial district. Money collected through9
the imposition of penalties shall
MUST be credited first to any legal costs10
and attorney fees incurred by the attorney general in the recovery action11
and then to the environmental response account in the energy and carbon12
management cash fund created in section 34-60-122 (5).13
(e) The general assembly hereby declares that the purposes of this14
subsection (1) are to deter noncompliance and to encourage any15
out-of-compliance
ENERGY AND CARBON MANAGEMENT operators to come16
into compliance as soon as possible and to those ends intends that, in17
determining the amount of a penalty, the commission should not reduce18
the number of days of violation for which a penalty is assessed below that19
number which the evidence supports.20
(4) (c) Whenever the commission or the director has reasonable21
cause to believe a violation of any provision of this article 60, any rule or22
order of the commission, or any permit has occurred, including based on23
a written complaint from any person, the commission or the director shall24
provide written notice to the
ENERGY AND CARBON MANAGEMENT25
operator whose act or omission allegedly resulted in the violation and26
require that the
ENERGY AND CARBON MANAGEMENT operator remedy the27
HB24-1346
-19- violation. The notice must be served personally or by certified mail,1
return receipt requested, to the
ENERGY AND CARBON MANAGEMENT2
operator or the
ENERGY AND CARBON MANAGEMENT operator's agent for3
service of process and must state the provision alleged to have been4
violated, the facts alleged to constitute the violation, and any corrective5
action and abatement deadlines the commission or director elects to6
require of the
ENERGY AND CARBON MANAGEMENT operator.7
(5) (a) If an
ENERGY AND CARBON MANAGEMENT operator fails to8
take corrective action required pursuant to subsection (4) of this section,9
or whenever the commission or the director has evidence that a violation10
of any provision of this article
ARTICLE 60, or of any rule regulation, or11
order of the commission, or of any permit has occurred, under12
circumstances deemed to constitute an emergency situation, the13
commission or the director may issue a cease-and-desist order to the14
ENERGY AND CARBON MANAGEMENT operator whose act or omission15
allegedly resulted in such
THE violation. Such THE cease-and-desist order16
shall MUST require such action by the ENERGY AND CARBON17
MANAGEMENT operator as the commission or director deems appropriate.18
The order shall MUST be served personally or by certified mail, return19
receipt requested, to the
ENERGY AND CARBON MANAGEMENT operator or20
the
ENERGY AND CARBON MANAGEMENT operator's agent for service of21
process and shall
MUST state the provision alleged to have been violated,22
the facts alleged to constitute the violation, the time by which the acts or23
practices cited are required to cease, and any corrective action the24
commission or the director elects to require of the
ENERGY AND CARBON25
MANAGEMENT operator.26
(b) The commission or the director may require an
ENERGY AND27
HB24-1346
-20- CARBON MANAGEMENT operator to appear for a hearing before the1
commission no sooner than fifteen days after the issuance of a2
cease-and-desist order; except that the
ENERGY AND CARBON3
MANAGEMENT operator may request an earlier hearing. At any hearing4
concerning a cease-and-desist order, the commission shall permit all5
interested parties and any complaining parties to present evidence and6
argument and to conduct cross-examination required for a full disclosure7
of the facts.8
(c) In the event
THAT an ENERGY AND CARBON MANAGEMENT9
operator fails to comply with a cease-and-desist order, the commission10
may request the attorney general to bring suit pursuant to section11
34-60-109.12
(6) If the commission determines, after a hearing conducted in13
accordance with section 34-60-108, that an
ENERGY AND CARBON14
MANAGEMENT operator has failed to perform any corrective action15
imposed under subsection (4) of this section or failed to comply with a16
cease-and-desist order issued under subsection (5) of this section with17
regard to a violation of a permit provision, the commission may issue an18
order suspending, modifying, or revoking such
THE permit or may take19
other appropriate action. An
ENERGY AND CARBON MANAGEMENT20
operator subject to an order that suspends, modifies, or revokes a permit21
shall continue the affected operations only for the purpose of bringing22
them
THE AFFECTED OPERATIONS into compliance with the permit or23
modified permit and shall do so MUST BRING THE AFFECTED OPERATIONS24
INTO COMPLIANCE under the supervision of the commission. Once the25
affected operations are in compliance to the satisfaction of the26
commission and any penalty not subject to judicial review or appeal has27
HB24-1346
-21- been paid, the commission shall reinstate the permit.1
(7) (a) The commission or the director shall issue an order to an2
ENERGY AND CARBON MANAGEMENT operator to appear for a hearing3
before the commission in accordance with section 34-60-108 whenever4
the commission or the director has evidence that an
ENERGY AND CARBON5
MANAGEMENT operator is responsible for:6
(b) If the commission finds, after such hearing, that the
ENERGY7
AND CARBON MANAGEMENT operator is responsible under the legal8
standards specified in paragraph (a) of this subsection (7), it
SUBSECTION9
(7)(a)
OF THIS SECTION, THE COMMISSION may issue an order that prohibits10
the issuance of any new permits to the
ENERGY AND CARBON11
MANAGEMENT operator, suspends any or all of the ENERGY AND CARBON12
MANAGEMENT operator's certificates of clearance, or both. When the13
ENERGY AND CARBON MANAGEMENT operator demonstrates to the14
satisfaction of the commission that it has brought each of the violations15
into compliance and that any penalty not subject to judicial review or16
appeal has been paid, the commission may vacate the order.17
SECTION 8. In Colorado Revised Statutes, 34-60-124, amend18
(3), (4)(a)(II), (6)(a), (6)(c), (7), and (8)(b) as follows:19
34-60-124. Energy and carbon management cash fund -20
definitions - repeal. (3) The money in the fund is subject to annual21
appropriation by the general assembly; except that money deposited in the22
fund constituting forfeited security or other financial assurance provided23
by
ENERGY AND CARBON MANAGEMENT operators in accordance with24
section 34-60-106 (3.5), (9)(c)(IV)(A), and (13) is continuously25
appropriated to the commission for the purpose of fulfilling obligations26
under this article 60 upon which an
ENERGY AND CARBON MANAGEMENT27
HB24-1346
-22- operator has defaulted.1
(4) The fund may be expended:2
(a) By the commission, or by the director at the commission's3
direction, prior to, during, or after the conduct of any operations subject4
to the authority of the commission to:5
(II) Gather background or baseline data on any air, water, soil, or6
biological resource that the commission determines may be so impacted7
by the conduct of oil and gas ENERGY AND CARBON MANAGEMENT8
operations; and9
(6) For the purposes provided for in subsection (4) of this section,10
the commission is authorized to:11
(a) Enter onto any lands or waters, public or private; and, except12
in emergency situations, the commission shall provide reasonable notice13
prior to such entry in order to allow a surface owner, local government14
designee,
ENERGY AND CARBON MANAGEMENT operator, or responsible15
party to be present and to obtain duplicate samples and copies of16
analytical reports;17
(c) Confiscate and sell for salvage any equipment abandoned by18
a responsible party at a location where the conduct of oil and gas
ENERGY19
AND CARBON MANAGEMENT operations has resulted in a significant20
adverse environmental impact; except that this authority shall be IS21
subject to and secondary to any valid liens, security interests, or other22
legal interests in such equipment asserted by any taxing authority or by23
any creditor of the responsible party.24
(7) If the commission determines that mitigation of a significant25
adverse environmental impact on any air, water, soil, or biological26
resource is necessary as a result of the conduct of oil and gas ENERGY27
HB24-1346
-23- AND CARBON MANAGEMENT operations, the commission shall issue an1
order requiring the responsible party to perform such THE mitigation. If2
the responsible party cannot be identified or refuses to comply with such3
THE order, the commission shall authorize the necessary expenditures4
from the fund. The commission shall bring suit in the second judicial5
district to recover such THE expenditures from any responsible party who6
THAT refuses to perform such THE mitigation or any responsible party7
who THAT is subsequently identified, such THE action to be brought8
within a two-year period from AFTER the date that final expenditures were9
authorized. Moneys MONEY recovered as a result of such THE suit shall10
MUST first be applied to the commission's legal costs and attorney fees11
and shall MUST then be credited to the fund.12
(8) As used in this section:13
(b) (I) "Responsible party" means any person who conducts an oil14
and gas ENERGY AND CARBON MANAGEMENT operation in a manner that15
violates any then-applicable provision of this article 60, or of any rule or16
order of the commission, or of any permit that threatens to cause, or17
actually causes, a significant adverse environmental impact to any air,18
water, soil, or biological resource. "Responsible party" includes any19
person who disposes of any other waste by mixing it with exploration and20
production waste that threatens to cause, or actually causes, a significant21
adverse environmental impact to any air, water, soil, or biological22
resource.23
(II) Except as otherwise provided in subsection (8)(b)(I) of this24
section, "responsible party" does not include any landowner, whether of25
the surface estate, mineral estate, or both, who does not engage in, or26
assume responsibility for, the conduct of oil and gas ENERGY AND27
HB24-1346
-24- CARBON MANAGEMENT operations.1
SECTION 9. In Colorado Revised Statutes, amend 34-60-131 as2
follows:3
34-60-131. No land use preemption. Local governments and4
state agencies, including the commission and agencies listed in section5
34-60-105 (1)(b), have regulatory authority over oil and gas development6
ENERGY AND CARBON MANAGEMENT OPERATIONS , including as specified7
in section 34-60-105 (1)(b). A local government's regulations may be8
more protective or stricter than state requirements.9
SECTION 10. In Colorado Revised Statutes, 34-60-134, repeal10
(1)(b) as follows:11
34-60-134. Reporting of water used in oil and gas operations12
- cumulative reporting - definitions - rules - repeal. (1) Definitions.13
As used in this section and in section 34-60-135, unless the context14
otherwise requires:15
(b) "Disproportionately impacted community" has the meaning set16
forth in section 24-4-109 (2)(b)(II).17
SECTION 11. In Colorado Revised Statutes, add 34-60-140,18
34-60-141, 34-60-142, 34-60-143, and 34-60-144 as follows:19
34-60-140. Permitting and regulation of direct air capture20
facilities - surface owner consent - fees - rules. (1) T
HE COMMISSION21
SHALL ADOPT RULES RELATED TO THE PERMITTING AND REGULATION OF22
DIRECT AIR CAPTURE FACILITIES.23
(2) I
N EXERCISING THE COMMISSION'S AUTHORITY PURSUANT TO24
SUBSECTION (1) OF THIS SECTION, THE COMMISSION SHALL:25
(a) R
EGULATE DIRECT AIR CAPTURE FACILITIES IN THE STATE IN A26
MANNER THAT PROTECTS PUBLIC HEALTH , SAFETY, AND WELFARE,27
HB24-1346
-25- INCLUDING THE PROTECTION OF THE ENVIRONMENT AND WILDLIFE1
RESOURCES;2
(b) E
VALUATE AND ADDRESS THE CUMULATIVE IMPACTS FROM A3
PROPOSED DIRECT AIR CAPTURE FACILITY ON THE AFFECTED AREA TO4
ENSURE THAT THE TERMS AND CONDITIONS OF A PERMIT ISSUED UNDER5
THIS SECTION ARE SUFFICIENT TO ENSURE THAT ANY NEGATIVE IMPACTS6
ARE AVOIDED, MINIMIZED TO THE EXTENT PRACTICABLE , AND, TO THE7
EXTENT THAT ANY NEGATIVE IMPACTS REMAIN , THAT THE NEGATIVE8
IMPACTS ARE MITIGATED. THE COMMISSION SHALL PROVIDE A PLAIN9
LANGUAGE SUMMARY OF HOW THE NEGATIVE IMPACTS ARE AVOIDED OR ,10
IF NOT AVOIDED, MINIMIZED AND MITIGATED AND, IF ANY, THE NEGATIVE11
IMPACTS THAT CANNOT BE MITIGATED .12
(c) I
F THE DIRECT AIR CAPTURE FACILITY IS PROPOSED TO BE SITED13
IN AN AREA THAT WOULD AFFECT A DISPROPORTIONATELY IMPACTED14
COMMUNITY, WEIGH THE DIRECT AIR CAPTURE FACILITY OPERATOR 'S15
SUBMITTED CUMULATIVE IMPACTS ANALYSIS AND DETERMINE WHETHER ,16
ON BALANCE, THE DIRECT AIR CAPTURE FACILITY WILL HAVE A POSITIVE17
EFFECT ON THE DISPROPORTIONATELY IMPACTED COMMUNITY . A18
PROPOSAL THAT WILL HAVE NEGATIVE NET CUMULATIVE IMPACTS ON THE19
DISPROPORTIONATELY IMPACTED COMMUNITY MUST BE DENIED . THE20
COMMISSION'S DECISION MUST INCLUDE A PLAIN LANGUAGE SUMMARY OF21
ITS DETERMINATION.22
(3) W
HEN REVIEWING AN APPLICATION FOR A DIRECT AIR CAPTURE23
FACILITY, THE COMMISSION SHALL CONSIDER WHETHER A SETBACK OF THE24
DIRECT AIR CAPTURE FACILITY FROM RESIDENCES , SCHOOLS, OR25
COMMERCIAL BUILDINGS IS NECESSARY AND REASONABLE TO PROTECT26
AND MINIMIZE ADVERSE IMPACTS TO PUBLIC HEALTH , SAFETY, AND27
HB24-1346
-26- WELFARE; THE ENVIRONMENT; AND WILDLIFE RESOURCES.1
(4) (a) T
HE COMMISSION MAY ASSESS AND COLLECT PERMITTING2
AND REGULATORY FEES FROM OPERATORS OF DIRECT AIR CAPTURE3
FACILITIES IN AN AMOUNT AND FREQUENCY DETERMINED BY THE4
COMMISSION BY RULE.5
(b) T
HE COMMISSION SHALL TRANSFER ALL FEES COLLECTED6
PURSUANT TO SUBSECTION (4)(a) OF THIS SECTION TO THE STATE7
TREASURER, WHO SHALL CREDIT THE FEES TO THE ENERGY AND CARBON8
MANAGEMENT CASH FUND CREATED IN SECTION 34-60-122 (5)(a).9
(5) A
N OPERATOR SHALL NOT COMMENCE CONSTRUCTION OF A10
DIRECT AIR CAPTURE FACILITY WITHOUT FIRST :11
(a) P
ROVIDING EVIDENCE TO THE COMMISSION :12
(I) T
HAT THE OPERATOR HAS FILED AN APPLICATION WITH THE13
LOCAL GOVERNMENT WITH JURISDICTION TO APPROVE THE PROPOSED14
DIRECT AIR CAPTURE FACILITY AND OF THE LOCAL GOVERNMENT 'S15
DISPOSITION OF THE APPLICATION OR THAT THE LOCAL GOVERNMENT WITH16
JURISDICTION DOES NOT REGULATE THE SITING OF DIRECT AIR CAPTURE17
FACILITIES; AND18
(II) T
HAT THE OPERATOR HAS RECEIVED THE CONSENT OF ANY19
SURFACE OWNER OR OWNERS OF THE LAND WHERE THE SURFACE20
DISTURBANCE WILL OCCUR, AS EVIDENCED BY A WRITTEN CONTRACTUAL21
AGREEMENT WITH THE SURFACE OWNER OR OWNERS ; AND22
(b) O
BTAINING AUTHORIZATION FROM THE COMMISSION PURSUANT23
TO THE RULES ADOPTED BY THE COMMISSION PURSUANT TO SUBSECTION24
(1)
OF THIS SECTION.25
34-60-141. Ownership of geologic storage resources and26
carbon dioxide - legislative declaration. (1) T
HE GENERAL ASSEMBLY27
HB24-1346
-27- DECLARES THAT THIS SECTION IS INTENDED TO ALLOW FOR THE1
PERMANENT USE OF GEOLOGIC STORAGE RESOURCES FOR GEOLOGIC2
STORAGE OPERATIONS AND IS NOT INTENDED TO IMPACT THE USE OR3
OWNERSHIP OF THE SUBSURFACE FOR CONJUNCTIVE USE OF SURFACE AND4
GROUNDWATER RESOURCES , ARTIFICIAL RECHARGE, STORAGE, AND5
EXTRACTION INTENDED TO MAXIMIZE UTILIZATION OF WATER FOR6
BENEFICIAL USE OR OTHER OPERATIONS .7
(2) (a) E
XCEPT AS SET FORTH IN SUBSECTION (6) OF THIS SECTION:8
(I) I
F OWNERSHIP OF THE SEQUESTRATION ESTATE HAS NOT BEEN9
SEPARATELY SEVERED , CONVEYED, OR RESERVED PURSUANT TO10
SUBSECTION (2)(b) OF THIS SECTION, IT IS PRESUMED THAT OWNERSHIP OF11
THE SEQUESTRATION ESTATE IN THE STATE IS VESTED IN THE OWNER OF12
THE OVERLYING SURFACE ESTATE ; AND13
(II) O
WNERSHIP OF CARBON DIOXIDE AND THE FACILITIES AND14
EQUIPMENT THAT STORE CARBON DIOXIDE IN THE STATE IS VESTED IN :15
(A) T
HE PERSON THAT INJECTS THE CARBON DIOXIDE INTO A16
GEOLOGIC STORAGE RESOURCE ; OR17
(B) A
NY PERSON CONVEYED TITLE TO THE CARBON DIOXIDE OR18
THE FACILITIES AND EQUIPMENT THAT STORE THE CARBON DIOXIDE BY THE19
PERSON DESCRIBED IN SUBSECTION (2)(a)(II)(A) OF THIS SECTION.20
(b) O
WNERSHIP OF A SEQUESTRATION ESTATE MAY BE :21
(I) S
EVERED FROM THE OWNERSHIP OF THE OVERLYING SURFACE22
ESTATE; AND23
(II) C
ONVEYED OR RESERVED IN THE SAME M ANNER AS OWNERSHIP24
OF A MINERAL ESTATE.25
(3) A
NY CONVEYANCE OF THE OWNERSHIP OF AN OVERLYING26
SURFACE ESTATE ALSO CONVEYS ALL OF THE GRANTOR 'S OWNERSHIP OF27
HB24-1346
-28- ANY SEQUESTRATION ESTATE UNLESS :1
(a) T
HE CONVEYANCE INSTRUMENT EXPRESSLY RESERVES THE2
SEQUESTRATION ESTATE, INCLUDING BY BROAD RESERVATION OF PORE3
SPACE; OR4
(b) T
HE SEQUESTRATION ESTATE HAS BEEN PREVIOUSLY SEVERED ,5
BY RESERVATION OR CONVEYANCE , FROM THE OWNERSHIP OF THE6
OVERLYING SURFACE ESTATE .7
(4) A
CONVEYANCE OF THE OWNERSHIP OF A MINERAL ESTATE OR8
ANOTHER SUBSURFACE INTEREST DOES NOT CONVEY THE GRANTOR 'S9
OWNERSHIP IN THE SEQUESTRATION ESTATE UNLESS THE CONVEYANCE10
INSTRUMENT EXPRESSLY PROVIDES FOR CONVEYANCE OF THE GRANTOR 'S11
OWNERSHIP OF THE SEQUESTRATION ESTATE .12
(5) O
WNERSHIP IN A MINERAL ESTATE IS DOMINANT OVER13
OWNERSHIP IN A SEQUESTRATION ESTATE .14
(6) N
OTWITHSTANDING ANY PROVISION OF LAW TO THE15
CONTRARY, NOTHING IN THIS SECTION:16
(a) A
FFECTS ANY OWNERSHIP OR RIGHTS TO PORE SPACE , A17
SEQUESTRATION ESTATE, OR CARBON DIOXIDE OR TO FACILITIES AND18
EQUIPMENT THAT STORE CARBON DIOXIDE THAT ARE ACQUIRED OR19
RESERVED BEFORE THE EFFECTIVE DATE OF THIS HOUSE BILL 24-___,20
ENACTED IN 2024;21
(b) C
HANGES OR ALTERS THE COMMON LAW AS OF THE EFFECTIVE22
DATE OF THIS HOUSE BILL 24-___, ENACTED IN 2024, AS IT RELATES TO23
THE OWNERSHIP OF REAL PROPERTY , INCLUDING SURFACE ESTATES, PORE24
SPACE, OR A MINERAL ESTATE, OR TO THE RIGHTS OR DOMINANCE OF A25
MINERAL ESTATE; OR26
(c) A
FFECTS THE ABILITY OF AN OWNER OF PORE SPACE TO :27
HB24-1346
-29- (I) BROADLY CONVEY OR RESERVE ALL OF THE OWNER 'S RIGHT,1
TITLE, AND INTEREST IN AND TO PORE SPACE , INCLUDING THE OWNER'S2
INTEREST IN A SEQUESTRATION ESTATE; OR3
(II) C
ONVEY OR RESERVE ANY RIGHT, TITLE, OR INTEREST IN AND4
TO ESTATES IN PORE SPACE OTHER THAN THE SEQUESTRATION ESTATE .5
34-60-142. Geologic storage units - legislative declaration -6
definitions. (1) T
HE GENERAL ASSEMBLY DECLARES THAT THE PURPOSE7
OF THIS SECTION IS THE PROTECTION OF CORRELATIVE RIGHTS ,8
FACILITATION OF COLORADO'S ENERGY RESOURCES, AND FACILITATION OF9
THE USE OF GEOLOGIC STORAGE RESOURCES FOR GEOLOGIC STORAGE10
OPERATIONS.11
(2) A
S USED IN THIS SECTION, UNLESS THE CONTEXT OTHERWISE12
REQUIRES:13
(a) "G
EOLOGIC STORAGE UNIT ORDER " MEANS AN ORDER THAT14
PROVIDES FOR THE FORMATION OF A GEOLOGIC STORAGE UNIT AND THAT15
IS ENTERED BY THE COMMISSION PURSUANT TO SUBSECTION (4)(b) OF THIS16
SECTION.17
(b) "P
LAN" MEANS A PLAN FOR GEOLOGIC STORAGE OPERATIONS18
OF THE GEOLOGIC STORAGE UNIT APPROVED BY THE COMMISSION19
PURSUANT TO SUBSECTION (4)(c)(II) OF THIS SECTION.20
(3) A
N AGREEMENT FOR GEOLOGIC STORAGE OR GEOLOGIC21
STORAGE OPERATIONS, OR FOR CARRYING ON ANY OTHER METHODS OF22
UNIT OR COOPERATIVE DEVELOPMENT OR OPERATION OF A GEOLOGIC23
STORAGE RESOURCE, IS AUTHORIZED AND MAY BE PERFORMED , AND, IF24
THE AGREEMENT IS APPROVED BY THE COMMISSION AS BEING IN THE25
PUBLIC INTEREST OR IS REASONABLY NECESSARY FOR GEOLOGIC STORAGE26
OPERATIONS, DOES NOT VIOLATE ANY STATUTES RELATING TO TRUSTS ,27
HB24-1346
-30- MONOPOLIES, OR CONTRACTS AND COMBINATIONS IN RESTRAINT OF1
TRADE.2
(4) (a) U
PON THE APPLICATION OF ANY INTERESTED PERSON , THE3
COMMISSION SHALL HOLD A HEARING TO CONSIDER THE NEED FOR A4
GEOLOGIC STORAGE UNIT.5
(b) T
HE COMMISSION SHALL ENTER AN ORDER PROVIDING FOR THE6
FORMATION OF A GEOLOGIC STORAGE UNIT IF THE COMMISSION FINDS THAT7
THE GEOLOGIC STORAGE UNIT IS REASONABLY NECESSARY TO EFFECTUATE8
A GEOLOGIC STORAGE PROJECT. THE GEOLOGIC STORAGE UNIT AREA OF A9
GEOLOGIC STORAGE UNIT MUST BE BASED ON SITE CHARACTERIZATION10
AND MODELING CONDUCTED PURSUANT TO THE FEDERAL "SAFE DRINKING11
W
ATER ACT", 42 U.S.C. SEC. 300f ET SEQ., AS AMENDED, AND ANY RULES12
ESTABLISHED BY THE COMMISSION PURSUANT TO THE FEDERAL ACT .13
(c) A
GEOLOGIC STORAGE UNIT ORDER MUST :14
(I) I
NCLUDE TERMS AND CONDITIONS THAT ARE JUST AND15
REASONABLE;16
(II) E
STABLISH A PLAN FOR OPERATIONS OF THE GEOLOGIC17
STORAGE UNIT, WHICH PLAN MUST INCLUDE:18
(A) A
DESCRIPTION OF THE GEOLOGIC STORAGE UNIT AREA ;19
(B) A
DESCRIPTION OF THE OPERATIONS THAT WILL BE CONDUCTED20
IN THE GEOLOGIC STORAGE UNIT AREA ;21
(C) A
DETERMINATION OF THE PERCENTAGE OF EACH GEOLOGIC22
STORAGE RESOURCE ALLOCATED TO EACH SEPARATELY OWNED TRACT23
WITHIN THE GEOLOGIC STORAGE UNIT AREA ;24
(D) A
DESCRIPTION OF THE METHOD BY WHICH EACH OWNER OF A25
SEQUESTRATION ESTATE INCLUDED IN THE GEOLOGIC STORAGE UNIT AREA26
WILL BE ALLOCATED COMPENSATION RELATED TO THE USE OF THE27
HB24-1346
-31- SEQUESTRATION ESTATE;1
(E) A
DESCRIPTION OF THE MANNER IN WHICH THE GEOLOGIC2
STORAGE UNIT AREA WILL BE SUPERVISED AND MANAGED AND , IF3
APPLICABLE, HOW COSTS RELATED TO OPERATIONS OF THE GEOLOGIC4
STORAGE UNIT WILL BE ALLOCATED AND PAID ;5
(F) T
HE TIME WHEN OPERATIONS OF THE GEOLOGIC STORAGE UNIT6
WILL COMMENCE AND THE MANNER IN WHICH , AND THE CIRCUMSTANCES7
UNDER WHICH, OPERATIONS OF THE GEOLOGIC STORAGE UNIT WILL8
TERMINATE; AND9
(G) A
NY ADDITIONAL PROVISIONS THAT ARE FOUND TO BE10
APPROPRIATE FOR CONDUCTING OPERATIONS OF THE GEOLOGIC STORAGE11
UNIT AND FOR THE PROTECTION OF CORRELATIVE RIGHTS .12
(d) A
GEOLOGIC STORAGE UNIT ORDER IS EFFECTIVE ONLY IF :13
(I) T
HE PLAN HAS BEEN APPROVED IN WRITING BY THOSE PERSONS14
THAT, PURSUANT TO THE GEOLOGIC STORAGE UNIT ORDER , COLLECTIVELY15
OWN AT LEAST SEVENTY -FIVE PERCENT OF THE GEOLOGIC STORAGE16
RESOURCES INCLUDED IN THE GEOLOGIC STORAGE UNIT AREA ; AND17
(II) T
HE COMMISSION MAKES A FINDING IN THE GEOLOGIC STORAGE18
UNIT ORDER THAT THE PLAN HAS BEEN APPROVED IN ACCORDANCE WITH19
SUBSECTION (4)(d)(I) OF THIS SECTION.20
(5) A
GEOLOGIC STORAGE UNIT ORDER MAY BE AMENDED BY AN21
ORDER MADE BY THE COMMISSION IN THE SAME MANNER AND SUBJECT TO22
THE SAME CONDITIONS AS THE ORIGINAL GEOLOGIC STORAGE UNIT ORDER .23
(6) A
NY OWNER OF A SEQUESTRATION ESTATE INCLUDED IN THE24
GEOLOGIC STORAGE UNIT AREA THAT IS NOT INCLUDED IN THE GEOLOGIC25
STORAGE UNIT ORDER MAY PETITION THE COMMISSION FOR INCLUSION IN26
THE GEOLOGIC STORAGE UNIT ORDER .27
HB24-1346
-32- (7) NOTWITHSTANDING ANY PROVISION OF LAW TO THE1
CONTRARY:2
(a) N
OTHING IN THIS SECTION CONFERS ON ANY PERSON THE RIGHT3
OF EMINENT DOMAIN; AND4
(b) A
GEOLOGIC STORAGE UNIT ORDER DOES NOT GRANT TO ANY5
PERSON THE RIGHT OF EMINENT DOMAIN .6
(8) G
EOLOGIC STORAGE OPERATIONS CONDUCTED PURSUANT TO7
A GEOLOGIC STORAGE UNIT ORDER , INCLUDING THE COMMENCEMENT ,8
DRILLING, OR OPERATION OF A CLASS VI INJECTION WELL ON ANY PORTION9
OF THE GEOLOGIC STORAGE UNIT AREA , CONSTITUTE, FOR ALL PURPOSES,10
GEOLOGIC STORAGE OPERATIONS ON EACH SEPARATELY OWNED TRACT IN11
THE GEOLOGIC STORAGE UNIT AREA BY THE OWNERS OF SEQUESTRATION12
ESTATES INCLUDED IN THE GEOLOGIC STORAGE UNIT AREA .13
(9) A
GEOLOGIC STORAGE UNIT ORDER MUST NOT BE CONSTRUED14
TO RESULT IN A TRANSFER OF ALL OR ANY PART OF THE TITLE OF ANY15
PERSON TO THE SEQUESTRATION ESTATE OR ASSOCIATED RIGHTS IN ANY16
TRACT IN THE GEOLOGIC STORAGE UNIT AREA .17
34-60-143. Technical assistance to local governments. T
O18
PROVIDE A LOCAL GOVERNMENT WITH TECHNICAL ASSISTANCE REGARDING19
THE LOCAL GOVERNMENT 'S DEVELOPMENT OF LAND USE AND SITING20
REGULATIONS FOR GEOLOGIC STORAGE OPERATIONS AND OPERATIONS OF21
DIRECT AIR CAPTURE FACILITIES, THE LOCAL GOVERNMENT THAT HAS22
LAND USE JURISDICTION MAY REQUEST THAT THE DIRECTOR OF THE23
COMMISSION APPOINT A TECHNICAL REVIEW BOARD TO ASSIST THE LOCAL24
GOVERNMENT BY ANALYZING AND ANSWERING ANY TECHNICAL25
QUESTIONS NECESSARY FOR THE LOCAL GOVERNMENT TO DEVELOP THE26
LOCAL GOVERNMENT 'S ASSOCIATED LAND USE REGULATIONS .27
HB24-1346
-33- 34-60-144. Coordination between the department of public1
health and environment and the commission on direct air capture2
facilities and geologic storage operations - definition. (1) A
S USED IN3
THIS SECTION, UNLESS THE CONTEXT OTHERWISE REQUIRES ,4
"
DEPARTMENT" MEANS THE DEPARTMENT OF PUBLIC HEALTH AND5
ENVIRONMENT.6
(2) (a) T
HE DEPARTMENT SHALL DEVELOP CARBON DIOXIDE7
ACCOUNTING PROCEDURES FOR DIRECT AIR CAPTURE FACILITIES AND8
GEOLOGIC STORAGE OPERATIONS . THE COMMISSION SHALL COMPILE9
RELEVANT DATA PURSUANT TO THE COMMISSION 'S REGULATORY10
AUTHORITY TO SUPPORT THE CARBON DIOXIDE ACCOUNTING PROCEDURES11
DEVELOPED BY THE DEPARTMENT .12
(b) T
HE COMMISSION AND THE DEPARTMENT SHALL WORK13
COLLABORATIVELY TO IMPLEMENT SUBSECTION (2)(a) OF THIS SECTION14
AND TO SHARE DATA TO FACILITATE THE MONITORING , VERIFICATION, AND15
ACCOUNTING OF CARBON DIOXIDE IN DIRECT AIR CAPTURE FACILITIES AND16
GEOLOGIC STORAGE OPERATIONS .17
(3) T
HE COMMISSION AND THE DEPARTMENT SHALL WORK18
COLLABORATIVELY TO FACILITATE APPLICATION OF THE DEPARTMENT 'S19
REGULATORY AUTHORITY TO ADDRESS AIR EMISSIONS FROM DIRECT AIR20
CAPTURE FACILITIES AND GEOLOGIC STORAGE OPERATIONS . THE21
COMMISSION SHALL REQUIRE OPERATORS OF DIRECT AIR CAPTURE22
FACILITIES AND GEOLOGIC STORAGE FACILITIES TO OBTAIN ANY RELEVANT23
PERMITS FROM THE DEPARTMENT .24
SECTION 12. In Colorado Revised Statutes, 24-30-1003, amend25
(1) as follows:26
24-30-1003. Administrative law judges - appointment -27
HB24-1346
-34- qualifications - standards of conduct. (1) The executive director of the1
department of personnel may appoint such administrative law judges,2
except those employed pursuant to sections 24-50-103 (7), 34-60-108,3
and 40-2-104, C.R.S., as may be necessary to provide services to each4
state agency; except
THAT the state personnel board, THE ENERGY AND5
CARBON MANAGEMENT COMMISSION , and the public utilities commission6
entitled to
MAY use administrative law judges. Administrative law judges7
shall MUST be appointed in accordance with the provisions of section 138
of article XII of the state constitution and the laws and rules governing9
the state personnel system.10
SECTION 13. In Colorado Revised Statutes, 2-3-128, amend11
(1)(d) as follows:12
2-3-128. Oil and gas - performance audit - report - definitions13
- repeal. (1) As used in this section, unless the context otherwise14
requires:15
(d) "Operator" has the meaning set forth in section 34-60-103.16
(6.8).17
SECTION 14. In Colorado Revised Statutes, 25-7-132, amend18
(2)(a)(I) as follows:19
25-7-132. Emission data - public availability - submission of20
2023 reports to state auditor - definitions - repeal. (2) (a) As used in21
this subsection (2), unless the context otherwise requires:22
(I) "Operator" has the meaning set forth in section 34-60-103.23
(6.8).24
SECTION 15. In Colorado Revised Statutes, 25-15-101, amend25
(6)(b)(IX) and (6)(b)(X) as follows:26
25-15-101. Definitions. As used in this article 15, unless the27
HB24-1346
-35- context otherwise requires:1
(6) (b) "Hazardous waste" does not include:2
(IX) Waste from oil and gas operations, as defined in section3
34-60-103, (6.5), or from deep geothermal operations, as defined in4
section 37-90.5-103 (3), including, but not limited to, drilling fluids,5
produced water, and other wastes associated with the exploration,6
development, or production of crude oil, natural gas, or geothermal7
resources, that is disposed of in accordance with the requirements of the8
energy and carbon management commission pursuant to article 90.5 of9
title 37 and article 60 of title 34, as applicable; and10
(X) Exploration and production waste, as defined in section11
34-60-103. (4.5).12
SECTION 16. In Colorado Revised Statutes, 25-15-603, amend13
(15) as follows:14
25-15-603. Definitions - repeal. As used in this part 6, unless the15
context otherwise requires:16
(15) "Oil and gas operations" has the meaning set forth in section17
34-60-103. (6.5).18
SECTION 17. In Colorado Revised Statutes, 29-20-104, amend19
(1)(h) introductory portion, (1)(h)(II), and (3)(a)(I) as follows:20
29-20-104. Powers of local governments - definition.21
(1) Except as expressly provided in section 29-20-104.2 or 29-20-104.5,22
the power and authority granted by this section does not limit any power23
or authority presently exercised or previously granted. Except as provided24
in section 29-20-104.2, each local government within its respective25
jurisdiction has the authority to plan for and regulate the use of land by:26
(h) Regulating the surface impacts of oil and gas operations, as27
HB24-1346
-36- defined in section 34-60-103 (6.5) ENERGY AND CARBON MANAGEMENT1
OPERATIONS, AS DEFINED IN SECTION 34-60-103, deep geothermal2
operations, as defined in section 37-90.5-103 (3), class VI injection wells,3
and intrastate underground natural gas storage facilities, as defined in4
section 34-64-102 (3.5), in a reasonable manner to address matters5
specified in this subsection (1)(h) and to protect and minimize adverse6
impacts to public health, safety, and welfare and the environment.7
Nothing in this subsection (1)(h) is intended to alter, expand, or diminish8
the authority of local governments to regulate air quality under section9
25-7-128. As used in this subsection (1)(h), "minimize adverse impacts"10
means, to the extent necessary and reasonable, to protect public health,11
safety, and welfare and the environment by avoiding adverse impacts12
from oil and gas operations, as defined in section 34-60-103 (6.5) ENERGY13
AND CARBON MANAGEMENT OPERATIONS , AS DEFINED IN SECTION14
34-60-103, deep geothermal operations, as defined in section 37-90.5-10315
(3), class VI injection wells, and intrastate underground natural gas16
storage facilities, as defined in section 34-64-102 (3.5), and minimizing17
and mitigating the extent and severity of those impacts that cannot be18
avoided. The following matters are covered by this subsection (1)(h):19
(II) The location and siting of oil and gas facilities and oil and gas20
locations, as those terms are defined in section 34-60-103; (6.2) and (6.4);21
deep geothermal operations, as defined in section 37-90.5-103 (3); class22
VI injection wells ENERGY AND CARBON MANAGEMENT OPERATIONS , AS23
DEFINED IN SECTION 34-60-103; and intrastate underground natural gas24
storage facilities, as defined in section 34-64-102 (3.5);25
(3) (a) To provide a local government with technical expertise26
regarding whether a preliminary or final determination of the location of27
HB24-1346
-37- an oil and gas facility or oil and gas location within its respective1
jurisdiction could affect oil and gas resource recovery:2
(I) Once an operator, as defined in section 34-60-103, (6.8), files3
an application for the location and siting of an oil and gas facility or oil4
and gas location and the local government has made either a preliminary5
or final determination regarding the application, the local government6
having THAT HAS land use jurisdiction may ask the director of the energy7
and carbon management commission pursuant to section 34-60-104.5 (3)8
to appoint a technical review board to conduct a technical review of the9
preliminary or final determination and issue a report that contains the10
board's conclusions.11
SECTION 18. In Colorado Revised Statutes, 30-20-101, amend12
(6)(b)(VI) as follows:13
30-20-101. Definitions. As used in this part 1, unless the context14
otherwise requires:15
(6) (b) "Solid waste" does not include:16
(VI) Exploration and production wastes, as defined in section17
34-60-103, (4.5), C.R.S., except as such THE EXPLORATION AND18
PRODUCTION wastes may be deposited at a commercial solid waste19
facility;20
SECTION 19. In Colorado Revised Statutes, 39-29-112, amend21
(8)(a)(I) as follows:22
39-29-112. Procedures and reports - definitions - repeal.23
(8) (a) As used in this subsection (8), unless the context otherwise24
requires:25
(I) "Operator" has the meaning set forth in section 34-60-103.26
(6.8).27
HB24-1346
-38- SECTION 20. Safety clause. The general assembly finds,1
determines, and declares that this act is necessary for the immediate2
preservation of the public peace, health, or safety or for appropriations for3
the support and maintenance of the departments of the state and state4
institutions.5
HB24-1346
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