HLS 23RS-105 REENGROSSED
2023 Regular Session
HOUSE BILL NO. 571
BY REPRESENTATIVE SCHEXNAYDER
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
ENERGY: Provides relative to carbon capture and sequestration
1 AN ACT
2To amend and reenact the heading of Subpart A-3 of Part II of Chapter 2 of Subtitle I of
3 Title 30 of the Louisiana Revised Statutes of 1950, R.S. 30:209(4)(e)(introductory
4 paragraph), 1105(A), 1109(A), 1110(C)(introductory paragraph) and (1)(introductory
5 paragraph) and (f) and (g), (E)(2), (F), (G), and (H) and to enact R.S. 30:6(H) and
6 149, the heading of Subpart A-4 of Part II of Chapter 2 of Subtitle I of Title 30 of the
7 Louisiana Revised Statutes of 1950, R.S. 30:209.2, 1104.1, 1107.1, 1109(G),
8 1110(C)(1)(h) and (I), and 1112, Part II of Chapter 6 of Subtitle II of Title 47 of the
9 Louisiana Revised Statutes of 1950, to be comprised of R.S. 47:651, and R.S.
10 56:30.5, relative to carbon capture and sequestration; to provide for notice to parishes
11 regarding certain well permit applications, State Mineral and Energy Board operating
12 agreements, and geophysical surveys related to carbon dioxide sequestration; to
13 provide for the distribution of funds received by the state for the storage of carbon
14 dioxide; to provide relative to certificates of completion of injection operations; to
15 provide relative to release from liability; to provide relative to the Carbon Dioxide
16 Geologic Storage Trust Fund; to provide for collections of fees for the fund; to
17 provide for uses of the fund; to provide for recordation of notices of geologic storage
18 agreements; to create a tax on carbon dioxide extracted under certain circumstances;
19 and to provide for related matters.
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1Be it enacted by the Legislature of Louisiana:
2 Section 1. The heading of Subpart A-3 of Part II of Chapter 2 of Subtitle I of Title
330 of the Louisiana Revised Statutes of 1950, R.S. 30:209(4)(e)(introductory paragraph),
41105(A), 1109(A), 1110(C)(introductory paragraph) and (1)(introductory paragraph) and (f)
5and (g), (E)(2), (F), (G), and (H) are hereby amended and reenacted and R.S. 30:6(H) and
6149, the heading of Subpart A-4 of Part II of Chapter 2 of Subtitle I of Title 30 of the
7Louisiana Revised Statutes of 1950, R.S. 30:209.2, 1104.1, 1107.1, 1109(G), 1110(C)(1)(h)
8and (I), and 1112 are hereby enacted to read as follows:
9 §6. Hearings; notice; rules of procedure; emergency; service of process; public
10 records; request for hearings; orders and compliance orders
11 * * *
12 H. When an application for any permit to construct or drill a Class V or
13 Class VI well related to the geologic sequestration of carbon dioxide becomes
14 complete, the commissioner shall notify the governing authority of any parish
15 included in the permit application. The notice to the governing authority of the
16 parish shall be made no later than the date on which public notice is issued in
17 accordance with applicable law or regulations. Such notice may be made by
18 electronic mail to the parish president, policy jury president, or mayor-president,
19 depending on the form of parish government.
20 * * *
21 SUBPART A-3. DISTRIBUTION OF FUNDS FROM STORAGE OF CARBON
22 DIOXIDE
23 §149. Storage of carbon dioxide; distribution of funds
24 A. For purposes of this Section, "specific area of interest" means an
25 individual tract of property that is the subject of any contractual agreement entered
26 into by the State Mineral and Energy Board for the purpose of injection, storage,
27 sequestration, transportation, shipment, or withdrawal of carbon dioxide.
28 B. Any revenues collected by the office of mineral resources pursuant to any
29 contractual agreement for the storage of carbon dioxide beneath state-owned land or
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1 water bottoms shall be immediately forwarded to the state treasurer for deposit into
2 the state treasury. After complying with the provisions of Article VII, Section 9(B)
3 of the Constitution of Louisiana relative to the Bond Security and Redemption Fund,
4 the state treasurer shall remit the funds as follows:
5 (1) Thirty percent of the revenue shall be remitted to the Mineral and Energy
6 Operation Fund. The revenue remitted to the Mineral and Energy Operation Fund
7 under this Subsection shall be in lieu of any other revenues collected pursuant to any
8 contractual agreement for the storage of carbon dioxide beneath the state-owned land
9 or water bottoms that is required by law to be remitted to the Mineral and Energy
10 Operation Fund.
11 (2) Thirty percent of the revenue shall be remitted to the governing authority
12 of the parish located in a specific area of interest. If the specific area of interest is
13 located in more than one parish, the monies shall be divided between the parishes in
14 proportion to the amount of property located in each parish pursuant to the
15 contractual agreement.
16 (3) The remaining revenue shall be deposited into the state general fund.
17 C. Nothing in this Section shall impact existing constitutional or statutory
18 dedications from funds collected by the office of mineral resources on behalf of a
19 state department or an agency as defined in R.S. 30:151.
20 SUBPART A-3 A-4. LOUISIANA ROYALTY RELIEF
21 DRY HOLE CREDIT PROGRAM
22 * * *
23 §209. State Mineral and Energy Board; authority
24 In order to carry out the provisions of R.S. 30:208, the State Mineral and
25 Energy Board may:
26 * * *
27 (4)
28 * * *
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1 (e) Upon a two-thirds vote of the members of the State Mineral and Energy
2 Board and after notification to the governing authority of the affected parish, which
3 may be made by electronic mail to the parish president, policy jury president, or
4 mayor-president, depending on the form of parish government, and a public hearing
5 conducted by a hearing officer appointed by the assistant secretary for the office of
6 mineral resources in the each affected parish pursuant to R.S. 30:6, enter into
7 operating agreements whereby the state receives a share of revenues from the storage
8 of oil, natural gas, liquid or liquefied hydrocarbons, or carbon dioxide, in whole or
9 in part, as may be agreed upon by the parties, and assumes all or a portion of the risk
10 of the cost of the activity in those situations where the board determines it is in the
11 best interest of the state either in equity or in the promotion of conservation to do so,
12 such as but not limited to the following illustrations:
13 * * *
14 §209.2. Storage of carbon dioxide; distribution of funds
15 A. For purposes of this Section, "specific area of interest" means an
16 individual tract of property that is the subject of any contractual agreement entered
17 into by the State Mineral and Energy Board for the purpose of injection, storage,
18 sequestration, transportation, shipment, or withdrawal of carbon dioxide.
19 B. Any revenues collected by the office of mineral resources pursuant to any
20 contractual agreement for the storage of carbon dioxide beneath state-owned land or
21 water bottoms shall be immediately forwarded to the state treasurer for deposit into
22 the state treasury. After complying with the provisions of Article VII, Section 9(B)
23 of the Constitution of Louisiana relative to the Bond Security and Redemption Fund,
24 the state treasurer shall remit the funds as follows:
25 (1) Thirty percent of the revenue shall be remitted to the Mineral and Energy
26 Operation Fund. The revenue remitted to the Mineral and Energy Operation Fund
27 under this Subsection shall be in lieu of any other revenues collected pursuant to any
28 contractual agreement for the storage of carbon dioxide beneath the state-owned land
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1 or water bottoms that is required by law to be remitted to the Mineral and Energy
2 Operation Fund.
3 (2) Thirty percent of the revenue shall be remitted to the governing authority
4 of the parish located in a specific area of interest. If the specific area of interest is
5 located in more than one parish, the monies shall be divided between the parishes in
6 proportion to the amount of property located in each parish pursuant to the
7 contractual agreement.
8 (3) The remaining revenue shall be deposited into the state general fund.
9 C. Nothing in this Section shall impact existing constitutional or statutory
10 dedications from funds collected by the office of mineral resources on behalf of a
11 state department or an agency as defined in R.S. 30:151.
12 * * *
13 §1104.1. Environmental analysis
14 A. The applicant for a permit for a Class VI injection well shall submit an
15 environmental analysis as part of the permit application.
16 B. The environmental analysis required by this Section shall be used to
17 satisfy the public trustee requirements of Article IX, Section 1 of the Constitution of
18 Louisiana and shall address the following questions regarding the proposed permit
19 activity:
20 (1) Have the potential and real adverse environmental effects of the proposed
21 permit activity been avoided to the maximum extent possible?
22 (2) Does a cost-benefit analysis of the environmental impact costs versus the
23 social and economic benefits of the proposed activities demonstrate that the latter
24 outweighs the former?
25 (3) Are there alternative activities which would offer more protection to the
26 environment than the proposed activity without unduly curtailing non-environmental
27 benefits?
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1 (4) Are there alternative sites which would offer more protection to the
2 environment than the proposed site without unduly curtailing non-environmental
3 benefits?
4 (5) Are there mitigating measures which would offer more protection to the
5 environment than the proposed activity without unduly curtailing non-environmental
6 benefits?
7 §1105. Hearings; notice; rules of procedures; emergency; service of process; public
8 records; request for hearings; orders and compliance orders
9 A. All public hearings under this Part Chapter shall be conducted pursuant
10 to the provisions of R.S. 30:6. In addition to the requirements of R.S. 30:6, any
11 notice required pursuant to this Chapter shall also be provided to the governing
12 authority of any affected parish. Such notice may be made by electronic mail to the
13 parish president, police jury president, or mayor-president, depending on the form
14 of parish government.
15 * * *
16 §1107.1. Reporting; record keeping
17 A. The owner or operator of a permitted Class VI well shall provide
18 quarterly reports to the commissioner containing, at a minimum, the following:
19 (1) Any changes to the physical, chemical, and other relevant characteristics
20 of the carbon dioxide stream from the proposed operating data or parameters.
21 (2) Monthly average, maximum, and minimum values for injection pressure,
22 flow rate and volume, and annular pressure.
23 (3) The monthly volume or mass of the carbon dioxide stream injected over
24 the reporting period and the volume injected cumulatively over the life of the project.
25 (4) Additional reporting as required by applicable administrative rules.
26 B. At a minimum, the owner or operator of a permitted Class VI well shall
27 provide a report within twenty-four hours of the occurrence of any of the following:
28 (1) Evidence that the injected carbon dioxide stream or associated pressure
29 front may endanger an underground source of drinking water.
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1 (2) Noncompliance with a permit condition, or malfunction of the injection
2 system, which may cause fluid migration into or between underground sources of
3 drinking water.
4 (3) Failure to maintain mechanical integrity.
5 C. Owners or operators of Class VI wells shall retain records as required by
6 applicable administrative rules.
7 * * *
8 §1109. Cessation of storage operations; limited liability release
9 A.(1) Ten Fifty years after cessation of injection into a storage facility, or
10 any other time frame established on a site-specific basis by rule application of the
11 rules regarding the time frame for a storage operator's post-injection site care and site
12 closure plan, after cessation of injection into a storage facility, the commissioner
13 shall issue a certificate of completion of injection operations, upon a showing by the
14 current storage operator that the of all of the following:
15 (a) The reservoir is reasonably expected to retain mechanical integrity. and
16 the
17 (b) The carbon dioxide will reasonably remain emplaced, at which time.
18 (c) The storage facility does not pose an endangerment to underground
19 sources of drinking water, or the health and safety of the public.
20 (d) The current storage operator has complied with all applicable regulations
21 related to post-injection monitoring and the issuance of the certificate of completion
22 of injection operations.
23 (e) The storage facility has been closed in accordance with all applicable
24 regulations related to site closure.
25 (2) Upon issuance of the certificate of completion of injection operations,
26 ownership to the remaining project including the stored carbon dioxide transfers to
27 the state.
28 (3) Upon the issuance of the certificate of completion of injection operations,
29 the storage operator, all generators of any injected carbon dioxide, all owners of
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1 carbon dioxide stored in the storage facility, and all owners otherwise having any
2 interest in the storage facility, shall be released from any and all future duties or
3 obligations under this Chapter and any and all liability, other than contractual
4 obligations and criminal liability, associated with or related to that storage facility
5 which arises after the issuance of the certificate of completion of injection
6 operations. The release from duties or obligations under this Chapter shall not apply
7 to a current or former owner or operator of a storage facility when such duties or
8 obligations arise from that owner or operator's noncompliance with applicable laws
9 and regulations, including underground injection control regulations, prior to
10 issuance of the certificate of completion of injection operations, nor shall it apply
11 when the commissioner determines that there is fluid migration for which the
12 operator is responsible that causes or threatens imminent and substantial
13 endangerment to an underground source of drinking water.
14 (2) (4) Provided the provisions pertaining to site-specific trust accounts are
15 not applicable, such release from liability will not apply to the owner or last operator
16 of record of a storage facility if the Carbon Dioxide Geologic Storage Trust Fund has
17 been depleted of funds such that it contains inadequate funds to address or remediate
18 any duty, obligation, or liability that may arise after issuance of the certificate of
19 completion of injection operations.
20 (3) Such release from liability will (5) The release provided in Paragraphs
21 (3) and (4) of this Subsection shall not apply to the any owner of a storage facility,
22 any storage operator, any operator of a or operator of a storage facility, carbon
23 dioxide transmission pipeline, or the any generator of the carbon dioxide being
24 handled by either the storage facility or carbon dioxide transmission pipeline if it is
25 demonstrated that any such owner, storage operator, operator, or generator
26 intentionally and knowingly concealed or intentionally and knowingly
27 misrepresented material facts related to the mechanical integrity of the storage
28 facility or the chemical composition of any injected carbon dioxide or if the
29 commissioner determines that the operator provided deficient or erroneous
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1 information that was material and relied upon by the commissioner to support
2 approval of site closure or issuance of a certificate of completion of injection
3 operations. In addition, upon the issuance of the certificate of completion of
4 injection operations, any performance bonds posted by the operator shall be released
5 and continued monitoring of the site, including remediation of any well leakage,
6 shall become the principal responsibility of the Carbon Dioxide Geologic Storage
7 Trust Fund.
8 (4) (6) It is the intent of this Section that the state shall not assume or have
9 any liability by the mere act of assuming ownership of a storage facility after
10 issuance of a certificate of completion of injection operations.
11 * * *
12 G. The commissioner shall implement this Section in a manner consistent
13 with and as he deems necessary to carry out the purposes and requirements of the
14 federal Safe Drinking Water Act, as amended, relating to the state's participation in
15 the underground injection control program established under that act with respect to
16 the storage and sequestration of carbon dioxide, including but not limited to the
17 state's authority to restrain any person from engaging in any unauthorized activity
18 which is endangering or causing damage to public health or the environment.
19 * * *
20 §1110. Carbon Dioxide Geologic Storage Trust Fund
21 * * *
22 C. The commissioner is hereby authorized to levy on storage operators each
23 storage facility the following fees or costs for the purpose of funding the fund:
24 (1) A fee payable to the office of conservation, in a form and schedule
25 prescribed by the office of conservation, for each ton of carbon dioxide injected for
26 storage into that storage facility. This fee is to be determined based upon the
27 following formula:
28 * * *
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1 (f) Once a storage operator has contributed five million dollars to the trust
2 fund five million dollars has been contributed to the fund for a storage facility, the
3 fee assessments to that storage operator facility under this Section shall cease until
4 such time as funds begin to be expended for monitoring and caretaking of any
5 completed that storage facility. The treasurer of the state of Louisiana secretary of
6 the Department of Natural Resources shall certify, to the commissioner, the date on
7 which the balance in the fund for a storage operator facility equals or exceeds five
8 million dollars. The fund fees shall not be collected or required to be paid on or after
9 the first day of the second month following the certification, except that the
10 commissioner shall resume collecting the fees on receipt of a certification from the
11 treasurer secretary of the Department of Natural Resources that, based on the
12 expenditures or commitments to expend monies, the fund has fallen below four
13 million dollars for the that storage operator facility. If at any time the balance in the
14 trust fund exceeds an authorized amount determined by multiplying five million
15 dollars by the number of active and completed storage facilities within the state, the
16 collection of fees from the operators of storage facilities that have already
17 contributed five million dollars to the trust fund will be suspended until such time
18 as the balance in the trust fund falls below such authorized amount, at which time
19 they will be reinstated.
20 (g) Notwithstanding the total number of storage facilities owned or operated
21 by a storage operator, once ten million dollars has been contributed to the fund by
22 a storage operator, the fee assessment to that storage operator under this Section shall
23 cease until such time as funds begin to be expended for any storage facility owned
24 or operated by that storage operator. The secretary of the Department of Natural
25 Resources shall certify to the commissioner the date on which the balance in the fund
26 for a storage operator equals or exceeds ten million dollars. The fund fees shall not
27 be collected or required to be paid on or after the first day of the second month
28 following the certification, except that the commissioner shall resume collecting the
29 fees upon receipt of a certification from the secretary of the Department of Natural
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1 Resources that, based on the expenditures or commitments to expend monies, the
2 fund has fallen below eight million dollars for that storage operator.
3 (g) (h) At the end of each fiscal year, the fee may be redetermined by the
4 commissioner based upon the estimated cost of administering and enforcing this
5 Chapter for the upcoming year divided by the tonnage of carbon dioxide expected
6 to be injected during the upcoming year. The total fee assessed shall be sufficient
7 to assure a balance in the fund not to exceed five million dollars for any active
8 storage facility within the state at the beginning of each fiscal year. Any amount
9 received that exceeds the annual balance required shall be deposited in the fund, but
10 appropriate credits shall be given against future fees or fees associated with other
11 storage facilities operated by the same storage operator.
12 * * *
13 E. The fund shall be used solely for the following purposes:
14 * * *
15 (2) Remediation associated with, arising from, or related to the site,
16 including remediation of property and of any mechanical problems associated with
17 remaining wells and surface site infrastructure.
18 * * *
19 F. No additional purposes for use of the fund may be added unless approved
20 by a two-thirds vote of the elected members of each house of the legislature.
21 F. G. The commissioner is authorized to enter into agreements and contracts
22 and to expend money in the fund for the following purposes:
23 (1) To fund research and development in connection with carbon
24 sequestration technology and methods.
25 (2) To monitor any remaining surface facilities and wells.
26 (3) To remediate any mechanical problems associated with remaining wells
27 or site infrastructure, or any other remediation associated with, arising from, or
28 related to the site, including remediation of property.
29 (4) To repair mechanical leaks at the storage facility.
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1 (5) To contract with a private legal entity pursuant to this Chapter.
2 (6) To plug and abandon remaining wells except for those wells to be used
3 as observation wells.
4 (7) To contract for professional services to assist with permit or application
5 reviews.
6 G. H. The commissioner shall keep accurate accounts of all receipts and
7 disbursements related to the administration of the fund and site-specific trust funds
8 and shall make a specific annual report addressing the administration of the funds to
9 the Senate Committee on Natural Resources, the House Committee on Natural
10 Resources and Environment, and the Senate Committee on Environmental Quality
11 before March first.
12 H. I. Every five years the commissioner shall submit a report to the Senate
13 Committee on Natural Resources, the House Committee on Natural Resources and
14 Environment, and the Senate Committee on Environmental Quality before March
15 first, that assesses the effectiveness of the fund and other related provisions in this
16 Part Chapter and provides such other information as may be requested by the
17 legislature to allow the legislature to assess the effectiveness of this Chapter.
18 * * *
19 §1112. Notice of geologic storage agreements; recordation
20 A. (1) In lieu of recording an agreement for the geologic storage of carbon
21 dioxide or any amendment or modification thereof, as provided by Civil Code
22 Article 3338, a party may record a notice of geologic storage agreement, signed by
23 the grantor who executed the agreement.
24 (2) Recordation of a notice shall make the geologic storage agreement and
25 any subsequent amendment or modification effective as to third persons to the same
26 extent as recordation of the instrument.
27 (3) The notice of geologic storage agreement shall contain the following:
28 (a) A declaration that the property is subject to the geologic storage
29 agreement and the names and addresses of the parties who executed the agreement.
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1 (b) A description of the surface and depths covered by the geologic storage
2 agreement.
3 (c) The effective date of the geologic storage agreement, its term, and the
4 provisions of any other extensions and renewals of the term provided for in the
5 agreement.
6 (d) A description of any restrictions on drilling through or otherwise
7 penetrating the carbon dioxide storage reservoir for purposes of exploring,
8 developing, or producing minerals from or below the reservoir.
9 B.(1) A change in a geologic storage agreement with respect to any matter
10 that is required to be included in a notice of geologic storage agreement pursuant to
11 Subsection A of this Section is not effective as to third persons unless the parties
12 record a signed amendment to the notice that describes the change.
13 (2) Notwithstanding Paragraph (1) of this Subsection, if the change is a
14 transfer of a party's rights, the parties may do either of the following:
15 (a) Record an amendment to the notice signed by the transferor and
16 transferee evidencing the transfer.
17 (b) Record the instrument transferring the party's rights.
18 C. The effect of recordation of a notice of geologic storage agreement ceases
19 on occurrence of either of the following:
20 (1) Upon recordation of an instrument signed by the parties to the agreement
21 or their successors declaring that the geologic storage agreement has terminated.
22 (2) On the date that the geologic storage agreement may finally terminate as
23 set forth in the notice of geologic storage agreement.
24 D. The provisions of this Section authorizing the filing of a notice of
25 geologic storage agreement are remedial and shall be applied retroactively to any
26 notice of geologic storage agreement theretofore filed for record which is in
27 substantial compliance with the provisions of Subsection A of this Section, and such
28 a notice shall affect third persons as of the date of recordation.
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1 E. The grantee of any recorded notice of geologic storage agreement shall
2 notify the governing authority of the parish in which the instrument is recorded
3 within thirty days after recordation. Such notice may be made by electronic mail to
4 the parish president, policy jury president, or mayor-president, depending on the
5 form of parish government.
6 Section 2. Part II of Chapter 6 of Subtitle II of Title 47 of the Louisiana Revised
7Statutes of 1950, comprised of R.S. 47:651, is hereby enacted to read as follows:
8 PART II. CARBON DIOXIDE EXTRACTION
9 §651. Tax on carbon dioxide extraction
10 A. There shall be a tax levied upon the extraction of carbon dioxide when the
11 extraction occurs subsequent to the storage of carbon dioxide in accordance with the
12 Louisiana Geologic Sequestration of Carbon Dioxide Act. The rate of the tax shall
13 be equal to twenty cents per ton extracted from the storage facility.
14 B. The tax shall be due by the owner at the time of the extraction in the
15 manner prescribed by the Department of Revenue. The tax shall be reported and paid
16 by the owner on or before the twentieth day of the month following the month to
17 which the tax is applicable. The department may promulgate rules in accordance
18 with the Administrative Procedure Act as are necessary to implement the provisions
19 of this Part.
20 C. All taxes collected by the Department of Revenue pursuant to this Part
21 shall be immediately forwarded to the state treasurer for deposit into the state
22 treasury. After complying with the provisions of Article VII, Section 9(B) of the
23 Constitution of Louisiana relative to the Bond Security and Redemption Fund, the
24 state treasurer shall remit seventy-five percent of the tax levied pursuant to this Part
25 to the governing authority of the parish in which the extraction occurs. If the storage
26 facility from which the carbon dioxide is extracted is located in more than one
27 parish, the monies shall be divided between the parishes in proportion to the amount
28 of property located in each parish.
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1 D. This Part shall not apply to the extraction of carbon dioxide which was
2 injected pursuant to a secondary, tertiary, or enhanced oil and gas recovery project
3 or to the extraction of carbon dioxide for operational or safety purposes.
4 Section 3. R.S. 56:30.5 is hereby enacted to read as follows:
5 §30.5. Notice to parish governing authorities
6 An applicant seeking a permit or permission to operate for geophysical and
7 geological surveys related to exploration for the geologic sequestration of carbon
8 dioxide shall notify the governing authority of the parish within which the proposed
9 survey is to occur in accordance with rules promulgated by the department. Such
10 notice may be made by electronic mail to the parish president, police jury president,
11 or mayor-president, depending on the form of parish government.
12 Section 4. If any provision of this Act or the application thereof is held invalid, such
13invalidity shall not affect other provisions or applications of this Act which can be given
14effect without the invalid provisions or applications, and to this end the provisions of this
15Act are hereby declared severable.
16 Section 5.(A) This Section and Sections 1, 3, and 4 of this Act shall become
17effective upon signature of this Act by the governor or, if not signed by the governor, upon
18expiration of the time for bills to become law without signature by the governor, as provided
19by Article III, Section 18 of the Constitution of Louisiana. If this Act is vetoed by the
20governor and subsequently approved by the legislature, this Section and Sections 1, 3, and
214 of this Act shall become effective on the day following such approval.
22 (B) Section 2 of this Act shall become effective if and when the Department of
23Natural Resources promulgates rules for the extraction of carbon dioxide which was stored
24in accordance with the Louisiana Geologic Sequestration of Carbon Dioxide Act.
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 571 Reengrossed 2023 Regular Session Schexnayder
Abstract: Provides relative to the regulation of carbon capture and sequestration.
NOTICE REQUIREMENTS
Present law provides procedures for notice and hearings by the office of conservation.
Proposed law retains present law and adds that the commissioner must notify the governing
authority of any affected parish of completed applications for Class V or Class VI well
permits related to the geologic sequestration of carbon dioxide at the same time that notice
is required to be published and that such notice may be by email to the parish president,
police jury president, or mayor-president, depending on the form of parish government.
Proposed law further provides that any time notice is required under the La. Geologic
Sequestration of Carbon Dioxide Act, notice must also be provided to the governing
authority affected parishes and that such notice may be made by email to the parish
president, police jury president, or mayor-president, depending on the form of parish
government.
Present law imposes requirements on the State Mineral and Energy Board to enter into
operating agreements for the storage of carbon dioxide, including a public hearing in the
affected parish.
Proposed law adds a requirement that the governing authority of any affected parish be given
notice, which may be made by email to the parish president, police jury president, or mayor-
president, depending on the form of parish government. Further requires that a hearing be
held in each parish affected, and provides that the assistant secretary for the office of mineral
resources may appoint a hearing officer to conduct the required public hearings.
Present law gives the La. Dept. of Wildlife and Fisheries authority to regulate geophysical
and geological surveys.
Proposed law requires an applicant seeking to conduct geophysical and geological surveys
related to exploration for carbon dioxide sequestration to notify the governing authority of
any parish where the proposed surveys would occur in accordance with rules promulgated
by the department.
ENVIRONMENTAL ANALYSIS
Proposed law requires the submission of an environmental analysis as part of the application
for a Class VI injection well permit.
Proposed law requires the environmental analysis to address the following questions:
(1)Have the potential and real adverse environmental effects of the proposed permit
activity been avoided to the maximum extent possible?
(2)Does a cost-benefit analysis of the environmental impact costs versus the social and
economic benefits of the proposed project demonstrate that the latter outweighs the
former?
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(3)Are there alternative projects which would offer more protection to the environment
than the proposed project without unduly curtailing non-environmental benefits?
(4)Are there alternative sites which would offer more protection to the environment
than the proposed site without unduly curtailing non-environmental benefits?
(5)Are there mitigating measures which would offer more protection to the environment
than the proposed project without unduly curtailing non-environmental benefits?
REPORTING AND RECORDKEEPING
Proposed law requires the owner or operator of a Class VI injection well shall to provide
quarterly reports on the following:
(1)Any changes to the physical, chemical, and other relevant characteristics of the
carbon dioxide stream from the proposed operating data.
(2)Monthly average, maximum, and minimum values for injection pressure, flow rate
and volume, and annular pressure.
(3)The monthly volume or mass of the carbon dioxide stream injected over the
reporting period and the volume injected cumulatively over the life of the project.
(4)Additional reporting as required by applicable administrative rules.
Proposed law requires the owner or operator of a Class VI injection well to report the
following occurrences within 24 hours:
(1)Evidence that the injected carbon dioxide stream or associated pressure front may
endanger an underground source of drinking water.
(2)Noncompliance with a permit condition, or malfunction of the injection system,
which may cause fluid migration into or between underground sources of drinking
water.
(3)Failure to maintain mechanical integrity.
Proposed law further requires owners and operators to retain records as required by
administrative rules.
DISTRIBUTION OF FUNDS
Proposed law provides for the following allocation of funds collected by the office of
mineral resources from any contractual agreements for the storage of carbon dioxide on
state-owned lands or water bottoms:
(1)30% will be remitted to the Mineral and Energy Operation Fund.
(2)30% will be remitted to parishes included in the agreement. If one or more parishes
is included in the agreement, the 30% will be divided based on the amount of land
in each parish included in the agreement.
(3)The remaining funds will be deposited into the state general fund.
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LIABILITY
Present law allows a storage facility operator to apply for a certificate of completion of
injection operations 10 years after injection into a storage facility has ceased, or any other
time frame established by rule.
Proposed law changes the time period from 10 years to 50 years, or any other time frame
established by rule, after the injection has ceased for a storage operator to apply for a
certificate of completion of injection operations.
Proposed law provides for additional criteria the storage operator shall meet to receive the
certificate of completion of injection operations.
Present law provides that upon issuance of the certificate of completion of injection
operations, all generators of any injected carbon dioxide, owners of carbon dioxide stored
in the storage facility, and all owners otherwise having any interest in the storage facility,
will be released from any and all duties or obligations under present law and any and all
liability associated with or related to that storage facility which arises after the issuance of
the certificate of completion of injection operations.
Present law provides exceptions to the liability release for the following circumstances:
(1)Funds in the Carbon Dioxide Geologic Storage Trust Fund become inadequate.
(2)Where an owner intentionally or knowingly conceals or misrepresents material facts
related to the mechanical integrity of a storage facility or the chemical composition
of any injected carbon dioxide.
Proposed law adds that the liability release will not apply when the duties or obligations
arise from any of the following:
(1)Contractual obligations.
(2)Criminal liability.
(3)Noncompliance with applicable laws or regulations, including underground injection
control regulations, prior to issuance of the certificate of completion of injection
operations.
(4)Where an operator is responsible for fluid migration that endangers an underground
source of drinking water.
(5)Where an operator provides deficient or erroneous information material to a decision
on site closure or the issuance of a certificate of completion.
Proposed law requires the commissioner to implement provisions of present law and
proposed law in accordance with the federal Safe Drinking Water Act.
CARBON DIOXIDE GEOLOGIC STORAGE TRUST FUND
Present law establishes the Carbon Dioxide Geologic Storage Trust Fund and provides for
fees to be collected by the commissioner for deposit into the fund.
Present law authorizes the commissioner to levy a fee on each storage operator based on a
rate of tonnage injected over a minimum of 144 months. Present law further provides that
fee assessments will be suspended once the balance of the fund associated with that storage
operator has reached $5 million and will be resumed if the balance of the fund falls below
$4 million.
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Proposed law authorizes the commissioner to levy the fee under present law on each storage
facility, rather than each storage operator, where payments will be suspended once $5
million has been paid by each facility and resumed if the balance associated with that facility
falls below $4 million.
Proposed law further provides that, regardless of the total number of storage facilities owned
or operated by the storage operator, a storage operator's payments will be suspended when
they have contributed a total of $10 million and that the commissioner must resume
collecting the fee if the balance of the fund attributable to that operator has fallen below $8
million.
Present law provides purposes for which the fund shall be used, including remediation of
mechanical problems with wells and surface infrastructure.
Proposed law retains the purposes provided under present law and adds remediation
associated with, arising from, or related to the site, including property remediation.
Proposed law further provides that no additional uses of the fund may be added to proposed
law purposes without a 2/3 vote of the elected members of each house of the legislature.
Present law authorizes the commissioner to spend money in the fund for specified purposes,
including remediation of mechanical problems with wells and surface infrastructure.
Proposed law retains the purposes provided under present law and adds remediation
associated with, arising from, or related to the site, including property remediation.
RECORDATION
Present law preserves the rights and obligations established in certain instruments related to
immovable property against third parties if the instrument is filed in the appropriate
mortgage or conveyance records.
Proposed law retains present law and provides the same protection to the rights and
obligations in agreements for the geologic storage of carbon dioxide upon filing a notice
thereof.
Proposed law requires certain information to be contained in the notice. Proposed law
further requires the grantee to notify the governing authority in the parish in which the notice
is recorded within 30 days after recordation and authorizes the notice to be made by email.
Requires the notice be sent via email to the president of the political subdivision.
EXTRACTION TAX
Proposed law creates a carbon extraction tax at a rate of 20 cents per ton extracted when the
extraction occurs subsequent to the storage of carbon dioxide pursuant to the La. Geologic
Sequestration of Carbon Dioxide Act.
Proposed law remits 75% to the governing authority of the parish in which the extracted
occurs. Further provides that if the storage facility is located in more than one parish, the
revenue will be divided between the parishes based on the amount of property located in
each parish.
Proposed law provides that the tax will become effective if and when the Dept. of Natural
Resources promulgates rules for the extraction of carbon dioxide which was stored in
accordance with the La. Geologic Sequestration of Carbon Dioxide Act.
All other provisions are effective upon signature of governor or lapse of time for
gubernatorial action.
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(Amends the heading of Subpart A-3 of Part II of Chapter 2 of Subtitle I of Title 30, R.S.
30:209(4)(e)(intro. para.), 1105(A), 1109(A), 1110(C)(intro. para.) and (1)(intro. para.) and
(f) and (g), (E)(2), (F), (G), and (H); Adds R.S. 30:6(H) and 149, the heading of Subpart A-4
of Part II of Chapter 2 of Subtitle I of Title 30, R.S. 30:209.2, 1104.1, 1107.1, 1109(G),
1110(C)(1)(h) and (I), and 1112, R.S. 47:651, and R.S. 56:30.5)
Summary of Amendments Adopted by House
The Committee Amendments Proposed by House Committee on Natural Resources and
Environment to the original bill:
1. Require that notice be provided to parish "governing authorities" rather than
parish "chief executive officers".
2. Specify particular parish officials that may be sent notice by electronic mail.
3. Add a new section of law that requires applicants for Class VI injection wells to
submit an environmental analysis for the purpose of satisfying the public trustee
requirements of Art. IX, Sec. 1 of the La. Constitution.
4. Add an overarching provision regarding notice to affected parishes by providing
that any time notice is required under the La. Geologic Sequestration of Carbon
Dioxide Act, notice must also be provided to affected parishes.
5. Add a new section of law that requires quarterly reporting of certain data by
owners and operators of Class VI injection wells, reporting within twenty-four
hours of certain triggers, and record keeping per administrative regulation.
6. Add exceptions to the application of liability release provisions for owners and
operators that are issued a certificate of completion of injection for contractual
obligations, criminal liability, where an operator is responsible for fluid
migration that endangers an underground source of drinking water, and where an
operator provides deficient or erroneous information material to a decision on
site closure or the issuance of a certificate of completion.
7. Restores a provision of present law which states that the state does not assume
liability for a completed storage facility by assuming ownership following the
issuance of a certificate of completion.
8. Make technical changes.
The Committee Amendments Proposed by House Committee on Appropriations to the
engrossed bill:
1. Make technical changes.
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