'We're way out ahead'

CHEYENNE — As researchers study how to make the process of carbon sequestration a reality, Wyoming has already created the legal framework for when the idea becomes a reality.

"We’re way out ahead of everybody else,” said state Rep. Tom Lubnau, R-Gillette. Lubnau has become a nationally known policy expert on the emerging technique to store carbon dioxide underground instead of releasing it into the atmosphere.

Many in Wyoming, the No. 1 coal-producing state in the country, have long opposed efforts to regulate carbon emissions. But with the Environmental Protection Agency moving toward regulating carbon emissions, and with 26 states already implementing green energy standards for the electricity they purchase, carbon sequestration in Wyoming is being developed more out of economic necessity than political ideology.

"I think fundamentally, people in Wyoming are practical,” said state Rep. Mary Throne, a Cheyenne Democrat who’s worked to develop a state legal framework for carbon sequestration. “And whatever folks believe about climate change is really not relevant to protection of the economy.”

Building a policy

While carbon sequestration projects in Wyoming are still only in their planning stages, the issue has provoked a lot of discussion and debate among state policymakers for years.

Before any sequestration project can begin, fundamental legal questions had to be addressed. Who owns the underground space where the carbon is stored? Once the carbon dioxide is injected underground, who’s responsible for it -- both today and 100 years from now? Whose job is it to oversee and regulate these projects?

Since 2008, the Wyoming Legislature has passed a series of bills creating the most comprehensive legal framework for carbon sequestration of any state in the nation.

Under the state’s framework, the underground carbon storage space – or pore space – is owned by whoever owns the surface rights above it. However, under state law, the owners of the site’s mineral rights have priority – meaning if there’s a standoff over whether to drill for oil at a site or pump carbon dioxide into the ground, the oil drillers will prevail.

The stored carbon dioxide itself is legally presumed to be owned by – and, therefore, the responsibility of – whoever injected it into the ground, not the owner of the pore space.

This year, state legislators passed an important bill requiring permit applicants pay a fee to the state. That money will go toward monitoring approved carbon sequestration sites. The legislation also requires that landowners be notified of carbon sequestration proposals and mandates that carbon sequestration project operators have liability insurance and provide financial assurances to the state.

Lawmakers also appropriated $45 million in federal Abandoned Mine Lands funds to the University of Wyoming for carbon sequestration research.

Many other states are paying attention. Montana, South Dakota and Colorado have all looked to Wyoming’s efforts as they draw up their own carbon sequestration rules.

Several legislators said that Wyoming’s current set of laws appears to be adequate for the time being.

“I think we’re in good shape,” Throne said.

Working out details

However, the main task now is for the state agencies charged with overseeing carbon sequestration projects to work out the exact rules and procedures almost from scratch.

The Wyoming Department of Environmental Quality, which is in charge of overseeing most aspects of carbon sequestration projects, will bring draft rules on carbon sequestration before the state Environmental Quality Council in July. The proposed rules spell out the process and standards for obtaining a carbon sequestration permit, including detailed application requirements, proving a pore space can sequester carbon dioxide, and an extensive monitoring plan.

DEQ Groundwater Section manager Kevin Frederick developed the draft rules, drawing from EPA regulations, groundwater protection research and discussions, and existing regulations for hazardous waste wells, among other sources.

“This is groundbreaking, and I think we’re going to be the very first state to have a comprehensive rule package for carbon sequestration,” said DEQ Director John Corra.

The future

One task that remains is to draw up rules for carbon sequestration on federal lands.

The Environmental Protection Agency is drafting federal rules for sequestration. And there’s still discussion about how involved the federal government will be with such projects.

“It remains to be seen how big of a role they will need to play in the permitting of these (federal) sites,” Corra said. “We’ll just have to wait until the first site goes through the permit process.”

The same thing can be said for the state rules. For all the work that’s gone into developing the nation’s most comprehensive policy on carbon sequestration, Throne said, it’s impossible to tell how effective those rules will be until ground’s actually broken on a real-life project.

"There’s a lot of uncertainty in how this is all going to develop, so we set up a framework that we think is flexible enough to work,” Throne said. “But we won’t know until folks actually get started.”

Contact capital bureau reporter Jeremy Pelzer at (307) 632-1244 or jeremy.pelzer@trib.com.