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CHEYENNE - The Legislature gave preliminary approval to three bills that would help to define the state’s regulatory structure for the underground storage of carbon dioxide.
Wyoming was the first state in the nation to address the carbon storage issue last year. State officials say crafting laws on carbon capture and storage projects will be vital to the state’s economy, which depends heavily on coal production to supply power plants in the state and elsewhere.
Wyoming last year established that the owners of surface real estate also own underground storage rights.
One bill that received preliminary approval Friday in the House would specify that those who inject carbon dioxide emissions remain responsible for the gas once it’s underground. Another bill says the minerals portion of real estate takes legal precedence over right to store gas.
The third bill would require that no “pore space,” or underground storage area, containing paying quantities of hydrocarbons could be used without written consent of the mineral rights owner.
Rep. Tom Lubnau, R-Gillette and a lawyer, has been a prime architect of Wyoming’s carbon storage laws. He has emphasized that private industry needs clear rules to be able to assess its liability before carbon storage projects will be commercially viable.
“No one has ever done this before, no one knows what it looks like,” Lubnau said. “Step by step, we’re building the infrastructure for a new industry.”
Rep. Tom Lockhart, R-Casper, agreed that Wyoming has seen projects delayed or abandoned over uncertainty about regulations.
“There are a lot of us who are now of the opinion that we have to figure out how to work in a carbon-constrained environment,” Lockhart said.
Speaking in favor of the bills in the House on Friday, Lubnau said it’s no accident that Wyoming has received visits from officials from other countries and other states to assess carbon storage issues since the state passed the first law on the issue last year.
He noted that the entities have committed to pilot projects in the state worth more than $100 million in the past year.
The U.S. Department of Energy announced recently that it has awarded nearly $67 million for a test project to store more than 2 million tons of carbon dioxide underground in western Wyoming. The Big Sky Regional Carbon Sequestration Partnership is led by Montana State University.
Lubnau said there’s some suggestion at the federal level that the federal government ought to assume liability for long-term carbon storage.
Lubnau said the bill specifying that the owner of the mineral rights on a piece of property holding paying quantities of hydrocarbons must give permission for carbon storage would protect the state’s underground resources.
Rep. David Miller, R-Riverton, said he is concerned that the bill didn’t take minerals other than hydrocarbons into consideration.
“I think the bill is very lacking,” Miller said, adding that some brines in underground aquifers can produce lithium gas, which could have industrial applications.
“What we’re not addressing are the minerals that we’re going to use in the 21st century. I think this bill needs some work,” Miller said.
Rep. Mary Throne, D-Cheyenne, has worked with Lubnau to draft the bills. She emphasized that the Wyoming Department of Environmental Quality will review applications to inject carbon gas before issuing permits.
“The DEQ is not going to go in a back room somewhere and issue a permit, it will be a very public process, subject to debate,” Throne said.
The House has yet to hear a fourth carbon bill, which would require companies to file an application with the Wyoming Oil and Gas Conservation Commission. The companies would be required to “unitize” underground storage space, which would allow a determination of its value.
The bill would specify that if most of the storage space owners want to proceed with a storage project, the state could direct the remaining owners to participate.
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