HB 458/a
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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. SHORT TITLE.--This act may be cited as the
"Geologic Carbon Dioxide Storage Stewardship Act".
SECTION 2. 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 6
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 HB 458/a
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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. "pore space" means the empty space between rock
grains, fractures and voids in the earth's subsurface; "pore
space" is the available space within, and contained by,
geologic formations;
F. "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 protection agency class 6 underground injection
control wells for carbon dioxide injection wells; and
G. "sequestration unit" means the geologic
formation or formations proposed for the injection of carbon HB 458/a
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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. 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 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 HB 458/a
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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. 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.
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 HB 458/a
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reasonable.
D. The division may grant to an operator a
certificate of closure not less than five years 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. 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 not less than ten cents ($.10) per
metric ton of carbon dioxide injected for storage pursuant to
applicable statutes and rules, distributions, appropriations,
gifts, grants and donations. The oil conservation commission
shall establish by rule a fee schedule sufficient to meet the
projected needs of the fund. 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 HB 458/a
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resources.
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 6 injection
wells;
(2) remediation of mechanical problems
associated with geologic sequestration facilities and
associated carbon dioxide class 6 injection wells;
(3) repairing mechanical leaks at geologic
sequestration facilities;
(4) plugging abandoned carbon dioxide class
6 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 6 injection wells;
(8) oversight and management of geologic
sequestration facilities and associated class 6 injection
wells after site closure; and HB 458/a
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(9) emergency response as deemed necessary
by the director of the division.
SECTION 6. 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 responsibilities for the
sequestration facility that are covered in Subsection B of
Section 5 of the Geologic Carbon Dioxide Storage Stewardship
Act, 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 HB 458/a
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(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 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 HB 458/a
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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
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 HB 458/a
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division findings that:
(1) the operator is in full compliance with
all laws governing the sequestration unit and sequestration
facility;
(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.
SECTION 7. OWNERSHIP OF PORE SPACE WITHIN THE EARTH.--
A. Absent specific language in a severing
instrument to the contrary, the surface estate includes the
pore space, and the ownership of all pore space in all strata HB 458/a
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below the surface lands and waters of this state is declared
to be vested in the several owners of the surface above the
strata or formations.
B. To the extent the dominant mineral estate is
reasonably utilizing the surface estate for the production of
minerals located thereon and therein, the formations so used
shall not be interfered with.
C. A conveyance of the surface ownership of real
property shall be a conveyance of the pore space in all
formations and strata below the surface of the real property
unless the ownership interest in the pore space was
previously severed from the surface ownership or is
explicitly excluded in the conveyance.
D. The ownership of pore space in any formations
or strata may be conveyed in the manner provided by law for
the transfer of interests in real property. No agreement
conveying minerals or other interests underlying the surface
shall act to convey ownership of any pore space in the
formation or stratum unless the agreement explicitly conveys
that ownership interest.
E. No provision of law, including a lawfully
adopted rule or regulation, requiring notice to be given to a
surface owner, to an owner of a mineral interest or to both
shall be construed to require notice to persons holding
ownership interests in any pore space in the underlying HB 458/a
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formations or strata unless the law specifies that notice to
the persons is required.