Texas 2009 - 81st Regular

Texas Senate Bill SB1387 Compare Versions

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1	1	2009S0542-1 03/03/09
2	2	By: Seliger S.B. No. 1387
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the injection and geologic storage of anthropogenic
8	8	carbon dioxide.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 27.002, Water Code, is amended by adding
11	11	Subdivisions (19) through (25) to read as follows:
12	12	(19) "Anthropogenic carbon dioxide" means carbon
13	13	dioxide that would otherwise have been released to the atmosphere
14	14	that has been:
15	15	(A) stripped, segregated, or divided from any
16	16	other fluid stream; or
17	17	(B) captured from an emission source, such as:
18	18	(i) an advanced clean energy project as
19	19	defined by Section 382.003, Health and Safety Code, or another type
20	20	of electric generation facility;
21	21	(ii) an industrial source of emissions,
22	22	together with any incidental associated substance derived from the
23	23	source material for, or from the process of capturing, the carbon
24	24	dioxide; and
25	25	(iii) any substance added to the carbon
26	26	dioxide to enable or improve the process of injecting the carbon
27	27	dioxide.
28	28	(20) "Anthropogenic carbon dioxide injection well"
29	29	means an artificial excavation or opening in the ground made by
30	30	digging, boring, drilling, jetting, driving, or another method and
31	31	used to inject or transmit anthropogenic carbon dioxide into a
32	32	reservoir.
33	33	(21) "Enhanced recovery operation" means the use of
34	34	any process for the displacement of hydrocarbons from the reservoir
35	35	other than primary recovery and includes the use of an immiscible,
36	36	miscible, chemical, thermal, or biological process. The term does
37	37	not include pressure maintenance or a water disposal project.
38	38	(22) "Geologic storage" means underground storage of
39	39	anthropogenic carbon dioxide in a reservoir.
40	40	(23) "Geologic storage facility" means the
41	41	underground reservoir, underground equipment, and surface
42	42	buildings and equipment used or to be used for the geologic storage
43	43	of anthropogenic carbon dioxide and all surface and subsurface
44	44	rights and appurtenances necessary to the operation of a facility
45	45	for the geologic storage of anthropogenic carbon dioxide. The term
46	46	includes any reasonable and necessary areal buffer and subsurface
47	47	monitoring zones required to ensure the safe and efficient
48	48	operation of the facility. The term does not include a pipeline
49	49	used to transport carbon dioxide from the facility at which the
50	50	carbon dioxide is captured to the injection and geologic storage
51	51	facility site.
52	52	(24) "Oil or gas" means oil, natural gas, or gas
53	53	condensate.
54	54	(25) "Reservoir" means a natural or artificially
55	55	created subsurface sedimentary stratum, formation, aquifer, or
56	56	cavity or void, including an oil or gas reservoir, saline
57	57	formation, or coal seam, that is suitable for or capable of being
58	58	made suitable for protecting against the escape or migration of
59	59	anthropogenic carbon dioxide from the reservoir.
60	60	SECTION 2. Subchapter B, Chapter 27, Water Code, is amended
61	61	by amending Section 27.022 and adding Section 27.0221 to read as
62	62	follows:
63	63	Sec. 27.022. JURISDICTION OVER ANTHROPOGENIC CARBON
64	64	DIOXIDE INJECTION. (a) The commission has jurisdiction over the
65	65	injection of anthropogenic carbon dioxide except as provided by
66	66	Subchapter C-1.
67	67	(b) The commission shall adopt rules and procedures
68	68	reasonably required for the performance of its powers, duties, and
69	69	functions under this section [produced by a clean coal project, to
70	70	the extent authorized by federal law, into a zone that is below the
71	71	base of usable quality water and that is not productive of oil, gas,
72	72	or geothermal resources by a Class II injection well, or by a Class
73	73	I injection well if required by federal law].
74	74	Sec. 27.0221. LETTER FROM RAILROAD COMMISSION. (a) A
75	75	person making application to the commission for a permit to drill
76	76	and operate an anthropogenic carbon dioxide injection well or
77	77	operate a geologic storage facility shall submit with the
78	78	application a letter from the railroad commission concluding that
79	79	drilling or using the anthropogenic carbon dioxide injection well
80	80	and injecting anthropogenic carbon dioxide into the subsurface
81	81	stratum will not endanger or injure any known oil or gas reservoir.
82	82	(b) In a hearing on an application for a permit under this
83	83	section, the commission may not proceed to hearing on any issues
84	84	other than preliminary matters such as notice until the letter
85	85	required from the railroad commission under Subsection (a) is
86	86	provided to the commission.
87	87	(c) The commission shall find that there will be no
88	88	impairment of oil or gas mineral rights if the railroad commission
89	89	has issued a letter under Subsection (a) that concludes that
90	90	drilling and using the anthropogenic carbon dioxide injection well
91	91	will not endanger or injure any known oil or gas reservoir.
92	92	SECTION 3. Chapter 27, Water Code, is amended by adding
93	93	Subchapter C-1 to read as follows:
94	94	SUBCHAPTER C-1. INJECTION AND GEOLOGIC STORAGE OF ANTHROPOGENIC
95	95	CARBON DIOXIDE
96	96	Sec. 27.041. JURISDICTION. (a) The railroad commission
97	97	has jurisdiction over injection of anthropogenic carbon dioxide
98	98	into a reservoir that is initially productive of oil, gas, or
99	99	geothermal resources or a saline formation directly above or below
100	100	that reservoir. Any well initially completed under the
101	101	jurisdiction of the railroad commission shall remain under the
102	102	jurisdiction of the railroad commission, notwithstanding the
103	103	well's subsequent use for the injection of anthropogenic carbon
104	104	dioxide.
105	105	(b) This subchapter does not apply to the injection of fluid
106	106	through the use of a Class II injection well as defined by 40 C.F.R.
107	107	Section 144.6(b) for the sole purpose of the enhanced recovery of
108	108	oil or gas.
109	109	Sec. 27.042. PERMIT FROM RAILROAD COMMISSION. A person may
110	110	not begin drilling or operating an anthropogenic carbon dioxide
111	111	injection well or constructing or operating a geologic storage
112	112	facility regulated under this subchapter without first obtaining a
113	113	permit from the railroad commission.
114	114	Sec. 27.043. INFORMATION REQUIRED OF APPLICANT. The
115	115	railroad commission shall require an applicant to provide any
116	116	information the railroad commission considers necessary to
117	117	discharge its duties under this subchapter.
118	118	Sec. 27.044. FEES. (a) The railroad commission may impose
119	119	fees to cover the cost of:
120	120	(1) permitting, monitoring, and inspecting
121	121	anthropogenic carbon dioxide injection wells and geologic storage
122	122	facilities; and
123	123	(2) enforcing this subchapter and rules adopted by the
124	124	railroad commission under this subchapter.
125	125	(b) Fees collected by the railroad commission under this
126	126	section shall be deposited to the credit of the anthropogenic
127	127	carbon dioxide storage trust fund established under Section
128	128	120.003, Natural Resources Code.
129	129	Sec. 27.045. LETTER FROM EXECUTIVE DIRECTOR. (a) An
130	130	application to the railroad commission for a permit under this
131	131	subchapter must include a letter from the executive director
132	132	stating that drilling and operating the anthropogenic carbon
133	133	dioxide injection well or operating the geologic storage facility
134	134	will not endanger any freshwater strata in that area and that the
135	135	formation or stratum to be used for the geologic storage facility is
136	136	not freshwater sand.
137	137	(b) To make the determination required by Subsection (a),
138	138	the executive director shall review:
139	139	(1) the area of review and corrective action plans;
140	140	(2) any subsurface monitoring plans required during
141	141	injection or post injection;
142	142	(3) any postinjection site care plans; and
143	143	(4) any other elements of the application reasonably
144	144	required in order for the executive director to make the
145	145	determination required by Subsection (a).
146	146	(c) The commission shall adopt rules to implement and
147	147	administer this section.
148	148	Sec. 27.046. RULES. The railroad commission shall adopt
149	149	rules and procedures reasonably required for the performance of its
150	150	powers, duties, and functions under this subchapter, including
151	151	rules for:
152	152	(1) the injection and geologic storage of
153	153	anthropogenic carbon dioxide, including:
154	154	(A) geologic site characterization, including
155	155	acquisition of property rights;
156	156	(B) area of review and corrective action;
157	157	(C) well construction;
158	158	(D) operation;
159	159	(E) mechanical integrity testing;
160	160	(F) monitoring;
161	161	(G) well plugging;
162	162	(H) postinjection site care;
163	163	(I) site closure; and
164	164	(J) long-term stewardship;
165	165	(2) the enforcement of this subchapter and rules
166	166	adopted by the railroad commission under this subchapter; and
167	167	(3) the collection and administration of:
168	168	(A) fees imposed under Section 27.044; and
169	169	(B) penalties imposed for a violation of this
170	170	subchapter or rules adopted by the railroad commission under this
171	171	subchapter.
172	172	Sec. 27.047. CONSISTENCY WITH AND IMPLEMENTATION OF FEDERAL
173	173	REQUIREMENTS. (a) Rules adopted by the railroad commission under
174	174	this subchapter must be consistent with and not more stringent than
175	175	rules or regulations adopted by the United States Environmental
176	176	Protection Agency or another federal agency governing the injection
177	177	and geologic storage of anthropogenic carbon dioxide.
178	178	(b) If rules or regulations adopted to govern the injection
179	179	and geologic storage of anthropogenic carbon dioxide under the
180	180	federal Safe Drinking Water Act (42 U.S.C. Section 300f et seq.)
181	181	allow the state to seek primary enforcement authority under the
182	182	underground injection control program, the commission and the
183	183	railroad commission may seek primacy to administer and enforce the
184	184	program subject to the jurisdiction of each agency under state law.
185	185	Sec. 27.048. MEMORANDUM OF UNDERSTANDING. The commission
186	186	and the railroad commission by rule shall amend as necessary the
187	187	memorandum of understanding recorded in 16 T.A.C. Section 3.30 or
188	188	shall enter into a new memorandum of understanding as necessary to
189	189	comply with the provisions of this subchapter.
190	190	Sec. 27.049. FINANCIAL RESPONSIBILITY. A person to whom a
191	191	permit is issued under this subchapter must provide to the railroad
192	192	commission annually evidence of financial responsibility that is
193	193	satisfactory to the railroad commission.
194	194	SECTION 4. Section 27.051, Water Code, is amended by
195	195	amending Subsection (b) and adding Subsection (b-1) to read as
196	196	follows:
197	197	(b) The railroad commission may grant an application for a
198	198	permit under Subchapter C in whole or part and may issue the permit
199	199	if it finds:
200	200	(1) that the use or installation of the injection well
201	201	is in the public interest;
202	202	(2) that the use or installation of the injection well
203	203	will not endanger or injure any oil, gas, or other mineral
204	204	formation;
205	205	(3) that, with proper safeguards, both ground and
206	206	surface fresh water can be adequately protected from pollution; and
207	207	(4) that the applicant has made a satisfactory showing
208	208	of financial responsibility if required by Section 27.073 [of this
209	209	code].
210	210	(b-1) The railroad commission may issue a permit under
211	211	Subchapter C-1 if it finds that:
212	212	(1) the injection and geologic storage of
213	213	anthropogenic carbon dioxide will not endanger or injure any oil,
214	214	gas, or other mineral formation;
215	215	(2) with proper safeguards, both groundwater and
216	216	surface fresh water can be adequately protected from pollution;
217	217	(3) the injection of anthropogenic carbon dioxide will
218	218	not endanger human health and safety; and
219	219	(4) the applicant for the permit meets all of the other
220	220	statutory and regulatory requirements for the issuance of the
221	221	permit.
222	222	SECTION 5. Sections 27.071 and 27.072, Water Code, are
223	223	amended to read as follows:
224	224	Sec. 27.071. POWER TO ENTER PROPERTY. Members of the
225	225	commission and the railroad commission and employees of the
226	226	commission and the railroad commission may enter public or private
227	227	property to inspect and investigate conditions relating to
228	228	injection well, monitoring well, disposal well, [or] production
229	229	well, anthropogenic carbon dioxide injection well, or geologic
230	230	storage activities within their respective jurisdictions or to
231	231	monitor compliance with a rule, permit, or other order of the
232	232	commission or railroad commission. Members or employees acting
233	233	under the authority of this section who enter an establishment on
234	234	public or private property shall observe the establishment's
235	235	safety, internal security, and fire protection rules.
236	236	Sec. 27.072. POWER TO EXAMINE RECORDS. Members of the
237	237	commission and the railroad commission and employees of the
238	238	commission and railroad commission may examine and copy those
239	239	records or memoranda of a business they are investigating as
240	240	provided by Section 27.071 [of this code] that relate to the
241	241	operation of an injection well, monitoring well, disposal well,
242	242	[or] production well, anthropogenic carbon dioxide injection well,
243	243	or geologic storage facility, or any other records required to be
244	244	maintained by law.
245	245	SECTION 6. Subsections (a) and (b), Section 27.073, Water
246	246	Code, are amended to read as follows:
247	247	(a) A person to whom an injection well or anthropogenic
248	248	carbon dioxide injection well permit is issued may be required by
249	249	the commission or railroad commission to maintain a performance
250	250	bond or other form of financial security to ensure that:
251	251	(1) an abandoned injection well is properly plugged;
252	252	or
253	253	(2) funds are available for plugging, postinjection
254	254	site care, and closure of an anthropogenic carbon dioxide injection
255	255	well.
256	256	(b) Each state agency is authorized to receive funds as the
257	257	beneficiary of a financial responsibility mechanism established
258	258	under this section for the proper plugging of an injection well or
259	259	proper management of an anthropogenic carbon dioxide injection well
260	260	or geologic storage facility. Each state agency is authorized to
261	261	expend such funds from a financial responsibility mechanism for the
262	262	plugging of wells covered by that mechanism.
263	263	SECTION 7. Chapter 91, Natural Resources Code, is amended
264	264	by adding Subchapter R to read as follows:
265	265	SUBCHAPTER R. CONVERSION OF PURPOSE OF WELLS
266	266	Sec. 91.801. CONVERSION OF WELL TO NEW OR ADDITIONAL
267	267	PURPOSE. (a) The commission shall adopt rules allowing:
268	268	(1) a person to obtain an injection well permit for
269	269	multiple purposes; and
270	270	(2) an operator of a well authorized by a permit issued
271	271	by the commission to convert the well from its authorized purpose to
272	272	a new or additional purpose.
273	273	(b) If a well is converted to or authorized as an
274	274	anthropogenic carbon dioxide injection well as defined by Section
275	275	27.002, Water Code, Subchapter C-1, Chapter 27, Water Code, applies
276	276	to the well.
277	277	SECTION 8. Subtitle D, Title 3, Natural Resources Code, is
278	278	amended by adding Chapter 120 to read as follows:
279	279	CHAPTER 120. OWNERSHIP AND STEWARDSHIP OF ANTHROPOGENIC CARBON
280	280	DIOXIDE
281	281	Sec. 120.001. DEFINITIONS. In this chapter:
282	282	(1) "Anthropogenic carbon dioxide," "anthropogenic
283	283	carbon dioxide injection well," and "geologic storage facility"
284	284	have the meanings assigned by Section 27.002, Water Code.
285	285	(2) "Commission" means the Railroad Commission of
286	286	Texas.
287	287	(3) "Storage operator" means a person authorized by
288	288	the commission to operate a geologic storage facility.
289	289	Sec. 120.002. OWNERSHIP OF ANTHROPOGENIC CARBON DIOXIDE.
290	290	(a) Unless otherwise expressly provided by a contract, bill of
291	291	sale, deed, mortgage, deed of trust, or other legally binding
292	292	document or by other law, anthropogenic carbon dioxide stored in a
293	293	geologic storage facility is considered to be the personal property
294	294	of the storage operator or the storage operator's heirs,
295	295	successors, or assigns.
296	296	(b) Absent a final judgment of wilful abandonment rendered
297	297	by a court or a regulatory determination of closure or abandonment,
298	298	anthropogenic carbon dioxide stored in a geologic storage facility
299	299	is not considered to be the property of the owner of the surface or
300	300	mineral estate in the land in which the anthropogenic carbon
301	301	dioxide is stored or of a person claiming under the owner of the
302	302	surface or mineral estate.
303	303	(c) The owner, as designated by Subsection (a) or (b), of
304	304	the anthropogenic carbon dioxide stored in a geologic storage
305	305	facility, or the owner's heirs, successors, or assigns, may
306	306	produce, take, or reduce to possession anthropogenic carbon dioxide
307	307	stored in a geologic storage facility.
308	308	Sec. 120.003. ANTHROPOGENIC CARBON DIOXIDE STORAGE TRUST
309	309	FUND. (a) The anthropogenic carbon dioxide storage trust fund is
310	310	created as a special fund in the state treasury.
311	311	(b) The anthropogenic carbon dioxide storage trust fund is
312	312	an interest-bearing fund. Interest earned on money in the fund
313	313	shall be deposited to the credit of the fund.
314	314	(c) Fees collected by the commission under Subchapter C-1,
315	315	Chapter 27, Water Code, and penalties imposed for violations of
316	316	that subchapter or rules adopted under that subchapter shall be
317	317	deposited to the credit of the anthropogenic carbon dioxide storage
318	318	trust fund.
319	319	(d) The anthropogenic carbon dioxide storage trust fund may
320	320	be used by the commission only for:
321	321	(1) inspecting, monitoring, investigating, recording,
322	322	and reporting on anthropogenic carbon dioxide injection wells and
323	323	geologic storage facilities;
324	324	(2) long-term monitoring of anthropogenic carbon
325	325	dioxide injection wells and geologic storage facilities, including
326	326	surface facilities and wells;
327	327	(3) remediation of mechanical problems associated
328	328	with anthropogenic carbon dioxide injection wells and surface
329	329	infrastructure;
330	330	(4) repairing mechanical leaks at geologic storage
331	331	facilities;
332	332	(5) plugging abandoned anthropogenic carbon dioxide
333	333	injection wells;
334	334	(6) training and technology transfer related to
335	335	anthropogenic carbon dioxide injection and geologic storage; and
336	336	(7) compliance and enforcement activities related to
337	337	anthropogenic carbon dioxide injection and geologic storage.
338	338	Sec. 120.004. EXTRACTION OF STORED ANTHROPOGENIC CARBON
339	339	DIOXIDE. (a) The commission shall adopt rules allowing
340	340	anthropogenic carbon dioxide stored in a geologic storage facility
341	341	to be extracted for a commercial or industrial use.
342	342	(b) The commission has jurisdiction over the extraction of
343	343	anthropogenic carbon dioxide stored in a geologic storage facility.
344	344	SECTION 9. (a) In this section, "anthropogenic carbon
345	345	dioxide," "geologic storage," and "geologic storage facility" have
346	346	the meanings assigned by Section 27.002, Water Code.
347	347	(b) Not later than December 1, 2010, the Commissioner of the
348	348	General Land Office shall file with the legislature a report on a
349	349	recommended framework for managing activities related to geologic
350	350	storage on state-owned land. The report shall include:
351	351	(1) recommended criteria for identifying candidate
352	352	geologic storage sites in each of the following types of geological
353	353	settings:
354	354	(A) operating oil and gas fields;
355	355	(B) depleted oil and gas fields;
356	356	(C) unminable coal seams;
357	357	(D) deep saline formations;
358	358	(E) deep geological systems that may be used as
359	359	engineered reservoirs to extract economical quantities of heat from
360	360	geothermal resources of low permeability or porosity;
361	361	(F) deep geological systems containing igneous
362	362	formations; and
363	363	(G) coal beds being used for methane recovery;
364	364	(2) a proposed regulatory framework for leasing
365	365	state-owned land for geologic storage, including an assessment of
366	366	options to ensure that the state receives fair market value for
367	367	using state-owned land for the geologic storage;
368	368	(3) a proposed procedure for:
369	369	(A) providing an opportunity for public review
370	370	of, and the presentation of comments by interested persons
371	371	regarding, any activities related to geologic storage on
372	372	state-owned land; and
373	373	(B) ensuring that the quality of the natural and
374	374	cultural resources of state-owned land overlying the site of a
375	375	geologic storage facility are protected from any geologic storage
376	376	activities at the site;
377	377	(4) a description of the status of leasehold or
378	378	mineral estate liability issues related to the geological
379	379	subsurface trespass of, or caused by, anthropogenic carbon dioxide
380	380	stored in state-owned land, including any relevant experience from
381	381	enhanced oil recovery using carbon dioxide on state-owned land;
382	382	(5) recommendations for additional legislation that
383	383	may be required to ensure that public land management and leasing
384	384	laws are adequate to accommodate geologic storage;
385	385	(6) an identification of the legal and regulatory
386	386	issues specific to geologic storage in cases in which title to the
387	387	mineral estate is held by the state but title to the surface estate
388	388	is not held by the state;
389	389	(7) an identification of the issues specific to the
390	390	issuance of pipeline rights-of-way on state-owned land; and
391	391	(8) recommendations for additional legislation that
392	392	may be required to clarify the appropriate framework for issuing
393	393	rights-of-way for anthropogenic carbon dioxide pipelines on public
394	394	land.
395	395	(c) In preparing the report under Subsection (b) of this
396	396	section, the Commissioner of the General Land Office shall
397	397	coordinate with:
398	398	(1) the Bureau of Economic Geology of The University
399	399	of Texas at Austin;
400	400	(2) the Railroad Commission of Texas;
401	401	(3) the Texas Commission on Environmental Quality; and
402	402	(4) the heads of other appropriate agencies.
403	403	(d) This section expires December 31, 2010.
404	404	SECTION 10. (a) Not later than January 1 of every
405	405	odd-numbered year, the Texas Commission on Environmental Quality
406	406	and the Railroad Commission of Texas shall issue a joint report to
407	407	the legislature providing an assessment of the permitting process
408	408	for anthropogenic carbon dioxide injection wells and geologic
409	409	storage facilities and the status of compliance with any federal
410	410	rules regulating the injection and storage of anthropogenic carbon
411	411	dioxide.
412	412	(b) The report shall include:
413	413	(1) the status of any applications for permits that
414	414	have been received since the prior report;
415	415	(2) an update on the exchange of information between
416	416	the Texas Commission on Environmental Quality and the Railroad
417	417	Commission of Texas as required by the memorandum of understanding
418	418	and Sections 27.0221 and 27.045, Water Code, as added by this Act;
419	419	(3) the status of any request for primary enforcement
420	420	authority for the underground injection and geologic storage of
421	421	anthropogenic carbon dioxide under the underground injection
422	422	control program; and
423	423	(4) any recommendations for additional legislation,
424	424	modifications to the memorandum of understanding, or new rules for
425	425	regulating the injection and storage of anthropogenic carbon
426	426	dioxide.
427	427	(c) This section expires January 1, 2019.
428	428	SECTION 11. Section 27.038, Water Code, is repealed.
429	429	SECTION 12. (a) Not later than January 1, 2010, the
430	430	Railroad Commission of Texas shall adopt rules under Section
431	431	27.046, Water Code, as added by this Act.
432	432	(b) The Texas Commission on Environmental Quality and the
433	433	Railroad Commission of Texas shall adopt rules under Section
434	434	27.048, Water Code, as added by this Act, as soon as practicable
435	435	after the effective date of this Act.
436	436	(c) The Railroad Commission of Texas shall adopt rules under
437	437	Sections 91.801 and 120.004, Natural Resources Code, as added by
438	438	this Act, as soon as practicable after the effective date of this
439	439	Act.
440	440	SECTION 13. This Act takes effect September 1, 2009.