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HOUSE BILL 458
57TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 2025
INTRODUCED BY
Meredith A. Dixon and William E. Sharer and Jack Chatfield
and Nathan P. Small and Steve D. Lanier
AN ACT
RELATING TO THE ENVIRONMENT; ENACTING THE GEOLOGIC CARBON
DIOXIDE STORAGE STEWARDSHIP ACT; PROVIDING RULEMAKING
AUTHORITY; CREATING A FUND; PERMITTING TRANSFER OF STEWARDSHIP
TO THE STATE; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be
cited as the "Geologic Carbon Dioxide Storage Stewardship Act".
SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the
Geologic Carbon Dioxide Storage Stewardship Act:
A. "carbon dioxide" means carbon dioxide produced
by anthropogenic sources or captured from the atmosphere,
including qualified carbon oxide as defined pursuant to
applicable federal law and carbon dioxide stream as may be
defined in federal law and regulations pertaining to class VI
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carbon dioxide injection wells;
B. "division" means the oil conservation division
of the energy, minerals and natural resources department;
C. "geologic sequestration" means the long- or
short-term underground sequestration of carbon dioxide within a
geologic stratum, formation, aquifer, cavity or void, whether
naturally or artificially created, including deep saline
aquifers, oil and gas reservoirs and unminable coal seams, such
that injected carbon dioxide does not escape to the atmosphere;
D. "operator" means a person who has the right to
inject carbon dioxide for geologic sequestration into a
sequestration facility, whether for the person's own account or
for the account of others;
E. "sequestration facility" means carbon dioxide
injection wells, monitoring wells and devices, science wells,
but excluding stratigraphic and similar wells for assessing the
nature of the subsurface, and other wells used for the
injection of carbon dioxide in subsurface geologic formations,
including the underground equipment, pipelines and surface
equipment and buildings used for the purpose of geologic
sequestration of carbon dioxide. "Sequestration facility"
includes a facility that injects carbon dioxide for secure
geologic sequestration pursuant to applicable federal laws,
including a geologic sequestration project as may be defined in
federal regulations pertaining to federal environmental
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protection agency class VI underground injection control wells
for carbon dioxide injection wells; and
F. "sequestration unit" means the geologic
formation or formations proposed for the injection of carbon
dioxide for geologic sequestration and the lands to be included
within the unit. "Sequestration unit" does not include oil and
gas units where carbon dioxide is injected for purposes of
enhancing oil and gas production.
SECTION 3. [NEW MATERIAL] APPLICABILITY--DIVISION
AUTHORITY--RULEMAKING.--
A. The Geologic Carbon Dioxide Storage Stewardship
Act applies to sequestration facilities that commence injection
of carbon dioxide after the effective date of that act;
provided that sequestration facilities that commenced injection
of carbon dioxide before the effective date of that act may
apply to the division for a certificate of completion of
injection operations and for the transfer of the continuing
stewardship responsibilities to the state pursuant to
applicable statutes and rules and after payment of a fee
equivalent to the fee that the division would otherwise have
collected pursuant to Section 5 of that act.
B. The division has the jurisdiction and authority
necessary to enforce the provisions of the Geologic Carbon
Dioxide Storage Stewardship Act and may adopt and promulgate
rules and issue orders for the implementation of the provisions
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of that act.
C. The fees collected from operators and deposited
in the geologic carbon dioxide long-term storage stewardship
fund shall not relieve a facility owner or operator from
responsibility for posting and maintaining financial assurance
mechanisms as required by applicable statutes and rules or from
any liability caused by conditions or operation of a
sequestration facility prior to transfer of stewardship.
SECTION 4. [NEW MATERIAL] CERTIFICATE OF CLOSURE FOR
GEOLOGIC SEQUESTRATION UNITS.--
A. An operator that has obtained a permit for
geologic carbon dioxide sequestration may ask for a certificate
of closure for that site; provided that the operator can
demonstrate that the storage has demonstrated long-term
security, monitoring of the site has not shown significant risk
of future leakage and the conditions as provided in Subsection
E of Section 6 of the Geologic Carbon Dioxide Storage
Stewardship Act are satisfied.
B. The lands to be included on the certificate of
closure shall be the reasonably ascertained areal extent of
migration of the sequestered carbon dioxide within the
formation or formations and shall include all necessary and
reasonable areal buffer and subsurface monitoring zones as
required by federal or state law, rule, regulation, order or
permit.
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C. The commissioner of public lands or a state
agency may grant to an operator a certificate of closure for
geologic sequestration on lands subject to the agency's
jurisdiction on such terms as the agency finds are reasonable.
D. The division may grant to an operator a
certificate of closure after completion of injection activities
and satisfaction of the requirements of the Geologic Carbon
Dioxide Storage Stewardship Act, allowing for the transfer of
stewardship to the state.
SECTION 5. [NEW MATERIAL] GEOLOGIC CARBON DIOXIDE LONG-
TERM STORAGE STEWARDSHIP FUND CREATED.--
A. The "geologic carbon dioxide long-term storage
stewardship fund" is created as a nonreverting fund in the
state treasury. The fund consists of fees collected from
operators at a rate of ten cents ($.10) per metric ton of
carbon dioxide injected for storage pursuant to applicable
statutes and rules, distributions, appropriations, gifts,
grants and donations. All fees collected pursuant to this
section shall be transmitted to the state treasurer for credit
to the fund. All money in the fund is appropriated to the
division for the sole purpose of ensuring the long-term storage
security of geologic sequestration facilities. Disbursements
from the fund shall be made by warrant of the secretary of
finance and administration pursuant to vouchers signed by the
secretary of energy, minerals and natural resources.
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B. The division shall administer the geologic
carbon dioxide long-term storage stewardship fund, and money in
the fund shall be used for:
(1) long-term monitoring of geologic
sequestration facilities and associated class VI injection
wells;
(2) remediation of mechanical problems
associated with geologic sequestration facilities and
associated carbon dioxide class VI injection wells;
(3) repairing mechanical leaks at geologic
sequestration facilities;
(4) plugging abandoned carbon dioxide class VI
injection wells used for geologic sequestration;
(5) remediation of surface facilities, access,
and rights of way related to a geologic sequestration site;
(6) training and technology transfer related
to carbon dioxide injection and geologic sequestration;
(7) compliance and enforcement activities
related to geologic sequestration facility operation and
associated class VI injection wells;
(8) oversight and management of geologic
sequestration facilities and associated class VI injection
wells after site closure; and
(9) emergency response as deemed necessary by
the director of the division.
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SECTION 6. [NEW MATERIAL] CERTIFICATE OF COMPLETION OF
INJECTION OPERATIONS--LIABILITY RELEASE.--
A. The division shall issue a certificate of
completion of injection operations upon a showing by the
operator of a sequestration facility and a division finding
that the requirements of Subsection E of this section have been
satisfied.
B. Upon the issuance of a certificate of completion
of injection operations:
(1) all stewardship and legal responsibilities
for the sequestration facility, including the stored carbon
dioxide, shall transfer to the state;
(2) the operator, owners and all persons who
generated, transported or injected carbon dioxide into the
sequestration unit and all owners otherwise having an interest
in the sequestration unit and sequestration facility or the
injected carbon dioxide shall be released from all stewardship
responsibilities associated with or related to the
sequestration unit and sequestration facility;
(3) all bonds posted by or on behalf of the
operator shall be released; and
(4) the state shall succeed and be subject to
the terms of all agreements, permits, rules, regulations and
orders applicable to the owner or operator and its successors,
and the sequestration facility and all monitoring, repair and
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remediation required by law shall become the state's
responsibility to be overseen by the division, unless and until
the federal government assumes responsibility for the long-term
monitoring and management of the sequestration unit and
sequestration facility.
C. The release from stewardship responsibilities
provided pursuant to this section shall not apply to an owner
or operator or generators or transporters of injected carbon
dioxide if, after notice and hearing, the division determines
that:
(1) the person provided deficient or erroneous
information that was material and relied upon by the division
to support approval of the sequestration facility's
certification of completion;
(2) the person concealed or misrepresented
facts relating to the mechanical integrity of the sequestration
facility or sequestration unit or the chemical composition of
the injected carbon dioxide;
(3) the operator violated a state statute or
rule related to the sequestration facility that was not
remedied prior to approval of site closure and any applicable
statutes of limitation have not run;
(4) liability arises from the operator's
conduct associated with the sequestration facility or
sequestration unit that, if known, would have materially
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affected the division's decision in issuing the certification
of completion;
(5) the division determines that there is
fluid migration for which the owner or operator is responsible
that causes or threatens imminent and substantial endangerment
to an underground source of drinking water; or
(6) the division determines that the geologic
carbon dioxide long-term storage stewardship fund is
insufficient to cover costs arising from the sequestration unit
or sequestration facility.
D. The division shall set the certification matter
for hearing and, in addition to notice otherwise required by
law or the division's rules, shall cause the operator to give
notice of the hearing, specifying the time and place of the
hearing and describing briefly the hearing's purpose and the
land and formations affected, to be mailed by certified mail at
least thirty days prior to the hearing to all persons whose
names and addresses are required to be listed in the
application.
E. The certificate of completion of injection
operations shall be issued upon a showing by the operator and
division findings that:
(1) the operator is in full compliance with
all laws governing the sequestration unit and sequestration
facility;
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(2) the operator has resolved all claims,
pending or perfected, regarding the sequestration unit and
sequestration facility;
(3) the sequestration unit is reasonably
expected to retain the carbon dioxide stored in it;
(4) the carbon dioxide in the sequestration
unit is stable and does not show a significant risk of future
movement and leakage;
(5) all wells, monitoring devices, equipment
and facilities to be used following the cessation of injection
are in good condition and retain mechanical integrity; and
(6) the operator has plugged all wells and
removed all equipment and facilities, unless the equipment and
facilities are needed for use following the cessation of
injection, and has completed all reclamation work required by
law.
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