SSHB571 3209 4035
HOUSE SUMMARY OF SENATE AMENDMENTS
HB 571 2023 Regular Session Schexnayder
ENERGY: Provides relative to carbon capture and sequestration
Synopsis of Senate Amendments
1.Changes terminology regarding transportation of carbon dioxide for geologic
sequestration.
Digest of Bill as Finally Passed by Senate
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
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economic benefits of the proposed project demonstrate that the latter outweighs the
former?
(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 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.
CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY
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Present law provides for certificates of public convenience and necessity for injection
operations and establishes conditions for the issuance thereof.
Present law precludes imposition of certain consequences against storage operators and
carbon dioxide transporters, including classification as a common carrier or public utility,
subjection to duties, obligations, or liabilities as a common carrier or public utility, or
increase of tax liability, where the storage operator or carbon dioxide transporter acts in
compliance with a certificate of public convenience and necessity or certificate of completion
of injection or acts in compliance with statutes, rules, regulations, or orders issued by the
commissioner of the Dept. of Natural Resources, office of conservation.
Proposed law retains present law.
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 must 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
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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.
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.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(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), 1107(C), 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
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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, and R.S. 56:30.5)
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