Recommendations to legislators issued almost simultaneous with introduction of first bill. Will this be hotly debated? Absolutely!
by Allen Best
Coloradans intent on figuring out how to shrink greenhouse gas emissions associated with the state’s economy 90% by 2050 will soon be discussing how carbon capture and sequestration may be part of that future.
Or not. This is already a hot topic, able to cause those who would otherwise disagree about most everything, especially regarding the energy transition, to find common ground in seeing this technology as a foolish waste of money. (See story on page 12, “Scientific consensus.”)
A report ordered by Gov. Jared Polis was filed on Feb. 20. It outlines in great detail the legal framework that Colorado will need to govern the injection of carbon dioxide emissions into underground geological formations. Called “Creating Colorado’s Carbon Sequestration Framework: a Legislative Proposal,” the report can be found here.
Almost simultaneously, two Democratic legislators introduced a bill that would fund a “carbon management roadmap” for Colorado–but also make industrial and manufacturing operations eligible for grants under clean air programs. That bill, HB23-1210, Carbon Management, sponsored by Rep. Ruby Dickson and Sen. Chris Hansen, is scheduled to get its first hearing on Thursday, March 9, before the House Energy & Environment Committee.
The idea of injecting carbon dioxide underground is not new. It is done so in northwestern Colorado already to force out oil from the Rangely oil field. Colorado also exports carbon dioxide from the state’s southwest corner to the Permian Basin oil wells in Texas and New Mexico.
New are the greater economic motivations. The Inflation Reduction Act of 2022 boosted the tax credits available from $50 per metric ton to $85 a metric ton or, if used for enhanced oil recovery, by lesser amounts. The law also lowers the threshold for qualifying for the tax credits and provides a longer timeline.
The report cites three projects in Colorado moving toward feasibility study.
“With several projects already moving forward, additional funding becoming available, and added interest in CCUS throughout the state, Colorado may become a CCUS hub in the not-so-distant future,” the report says.
CCUS stands for carbon capture utilization and storage. CCS the same sans utilization.
Kathryn Valdez, director of carbon-free technology for Xcel Energy, told the Colorado House Energy and Environment Committee on Feb. 22 that her company is interested in carbon capture technology in conjunction with its natural gas plants.
Even before that legislation, several companies in Colorado had set out to sequester carbon with the motivation of making money.
Owners of the Holcim/LaFarge cement plant at Florence have investigated the potential. Production of cement produces carbon emissions, and we have a lot of concrete in our lives. The BBC several years ago reported that cement is the source of about 8% of the world’s carbon dioxide emissions. It contributes more C02 than aviation fuel (2.5%) and is not far behind global agriculture (12%).
Might there be a way to create cement without the gigantic emissions? Possibly. In Longmont, an entrepreneur has work underway to produce a low-carbon cement.
The Florence cement plant received a $1.5 million federal grant to complete feasibility work for a project that would remove two million tons of CO2 per year from cement manufacturing and natural gas-fired steam generation. The C02 would be sequestered.
Other projects are contemplated in conjunction with ethanol plants at Yuma and Sterling in northeastern Colorado. A project is also contemplated on the Ute Mountain Ute reservation in southwestern Colorado.
There is great mistrust, at least in part because some of the money for pushing carbon capture and storage has come from oil companies.
For a small sample, see this op/ed from the New York Times from August 2022: “Every Dollar Spent on This Climate Technology Is a Waste.”
The writers – a professor at MIT and a chief executive of a mining company said this:
“Fifteen years ago, before the cost of renewable energy plummeted, carbon capture seemed like a good idea. We should know: When we began a start-up 14 years ago — the first privately funded company to make use of C.C.S. in the United States — the idea was that the technology could compete as a way to produce carbon-free electricity by capturing the carbon dioxide emissions emitted from power plants and burying them. But now it’s clear that we were wrong, and that every dollar invested in renewable energy — instead of C.C.S. power — will eliminate far more carbon emissions.”
As for Colorado’s journey, it was spawned by the Colorado Greenhouse Gas Pollution Reduction Roadmap issued in January 2021, which said much about carbon capture, including in this summary paragraph:
“Unlike the 2030 goal, achieving the 2050 goal likely will require further technical innovation and economies of scale to bring costs down and allow deployment at scale in a number of sectors. Important technologies may include green hydrogen, long duration energy storage, carbon capture and storage, advanced biofuels, and synthetic fuels based on air capture of carbon.”
The roadmap called for convening a task force in 2021 to come up with recommendations. That was done through the Colorado School of Mines. That six-page report—relatively brief compared with these new recommendations—was completed in February 2022.
In addition, a law passed in 2021, HB21-264, sponsored by Sen. Chris Hansen and Rep. Alex Valdez and Rep. Tracey Bernett, directed the Oil and Gas Conservation Commission to conduct a study “that would be needed to ensure the safe and effective regulation of injection wells used for sequestration of greenhouse gases.”
In May 2022, Polis ordered this new study done in concert with key stakeholders to prepare a comprehensive legislation proposal to address the many issues of governance.
“While my administration intends to pursue legislative action to develop a safe and effective regulatory regime for CCUS in Colorado in the 2023 legislative session, the development and implementation of these policies is likely to take years, and we do not want to slow progress. In the meantime, private industry and the federal government are moving ahead developing CCUS projects across the United States, including some here in Colorado. Providing regulatory certainty is critical to the success of these and future projects.”
This new 62-page report is rich with thoughtful explanations and gorgeous (but basically irrelevant) photos of mountain goats and timberline tarns. It explains the choices for Colorado and explains the choices Wyoming, North Dakota, Louisiana, Nebraska, and Montana have made.
What does this new report say?
It explains why Colorado thinks that CCUS must be on the table for Colorado to meet its goals for emission reductions:
“CCUS has been identified as an essential tool for hard-to-decarbonize sectors. This includes the industrial sector where there has historically been a lack of alternatives to reduce on-site energy and process emissions, including sectors such as cement, iron and steel, chemical production, and others where carbon emissions are prohibitively expensive or very difficult to abate with current technology. Lack of clarity in the regulatory and permitting process has been identified as a significant barrier for emerging transitional energy industries, including carbon sequestration.”
Class VI wells primacy
It also tackles item by item the major issues that need to be addressed. Foremost is whether Colorado will have primacy in administering the underground injection control Class VI wells. Only two states have that primacy, but to be sure this can go forward, states must set up regulatory framework that ensures protection of underground sources of drinking water.
“The application must show that the state’s statutes and rules are at least as stringent as all federal requirements and demonstrate the state’s capability to implement a safe and effective UIC Class VI program.”
The Infrastructure Investment and Jobs Act includes federal funding for state Class VI programs. The EPA estimates that the grant details and funding should become available by the middle or end of 2023.
Pore space ownership
Who owns the tiny spaces between the sedimentary rocks in which the CO2 is to be sequestered? “We recommend that the legislature adopt the majority position and declare that, in Colorado, ownership of pore space is vested in the surface owner unless it has been severed and separately conveyed.”
Aggregating property rights
What if one or two of the property owners say nope, not going to go there? “Provide a mechanism, applicable only to geologic storage, for aggregating property rights, including nonconsenting owners,” the report recommends to legislators. “Legislators should establish a threshold for consenting owners.” “This would allow a declaration that CCUS is in the public interest, which would create a pathway for involuntary aggregation of pore space rights.”
Several recommendations are delivered, including a 20-year post-injection monitoring period during which the operator retains ownership of and liability for the stored C02 and storage facility.
Other recommendations cover pipelines and the question of whether Colorado should accept C02 exported from other states. The Colorado Geologic Survey estimates Colorado has 720 billion tons of CO2 sequestration potential, primarily in the Denver Basin, Cañon City Embayment, Piceance Basin, and Sand Wash Basin. The latter two are in northwestern Colorado.
Hydrogen and geothermal
“Underground hydrogen storage has been identified as an important factor for the success of future, large-scale hydrogen production and use,” the report says. “Potential storage reservoirs for hydrogen include salt covers, deep saline reservoirs, and depleted oil-and-gas reservoirs.”
Several issues need to be sorted out by state legislators, the report says.
The report recommends Colorado pursue a technical study of the state’s geothermal resources, including a “resource evaluation, technology assessment, an evaluation of potential impacts, an economic analysis, and evaluating the potential to repurpose existing infrastructure.”
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