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Published December 16, 2020
By Christine Reed
Professor Tara Righetti, in the University of Wyoming College of Law and School of Energy Resources (SER), and Kris Koski, an SER associate lecturer, co-wrote an energy industry study with the United States Energy Association (USEA).
The collaborative study is titled “Study on States’ Policies and Regulations per CO2-EOR-Storage Conventional, ROZ, and EOR in Shale: Permitting, Infrastructure, Incentives, Royalty Owners, Eminent Domain, Mineral-Pore Space, and Storage Lease Issues.” The full report can be found here.
“We are exceedingly proud to have our faculty members at the forefront of a decisive topic in energy development and working proactively to support Wyoming and its economy,” says SER Executive Director Holly Krutka. “This publication is an important step to bridge the gap between our energy research efforts and commercial implementation.”
The report -- in collaboration with West Virginia University colleagues -- is a strong example of faculty research directly supporting Wyoming's economy and the energy industry, Krutka says.
The study evaluates laws, policies and regulations governing CO2-EOR (carbon dioxide-enhanced oil recovery), associated CO2 storage operations, and geologic storage across 12 states and onshore federal lands. The study principally includes two regions: the eastern region, composed of the Illinois Basin and the Marcellus shale region; and the western region, composed of the Permian Basin and Rockies regions.
In anticipation of expanded interest in CO2-EOR as a result of the amended 45Q (carbon capture) tax credit and recently released draft treasury regulations, it is increasingly important for legislatures and policymakers to understand legal and regulatory challenges to more integrated and widespread implementation of CO2 storage, according to the study.
“With the recent expansion of the 45Q tax credit and passage of House Bill 200 requiring carbon capture use and storage retrofits to power plants, we expect increased interest in the legal and regulatory requirements for CO2-EOR and geologic storage,” Righetti says. “This report summarizes and illustrates the comparative completeness of Wyoming's regulatory framework as well as identifying opportunities for additional legislative and agency action.”
The project provides comprehensive and comparative analysis of four dimensions of CO2 law, regulation and policy: land use, mineral, water and pore space rights; regulation of CO2-EOR and CO2 pipelines; eminent domain; and geologic CO2 storage and incremental storage regulation.
The study suggests opportunities to harmonize energy policies and address regulatory gaps and inconsistencies. The goal of the study is to facilitate better understanding of the legal underpinnings that frame risk, uncertainty and investment in CO2 use and storage infrastructure and projects; and to provide a roadmap for changes that are conducive to regional project development.
Koski says the report also will benefit private entities seeking to engage in energy development incentives.
“Taking a look at the interstate and federal legal and regulatory landscape is the first step in any potential CO2 enhanced oil recovery or long-term storage project,” Koski says. “This research not only helps identify regulatory gaps that legislatures can tackle to incentivize such development, but it also may be helpful and save substantial time and money for private enterprise in the planning for such projects.”
In addition to the important contributions to the state, the report provides much-needed support to UW students interested in working in the energy sector, according to Koski and Righetti.
“In a transitioning energy economy, with an increased focus on limiting CO2 emissions, potential CO2 injection projects could bring substantial revenue to Wyoming in the form of severance tax and mineral royalties while, at the same time, providing job opportunities for our university's Professional Land Management Program students,” Koski says.
Research students at the UW College of Law and West Virginia University College of Law also were involved in the report. Third-year Wyoming law student Marissa Pridmore, of Limon, Colo., was one of eight law students providing support for the project.
“Working on the USEA project prepared me to work and interact with others in an online, COVID-informed environment,” Pridmore says. “During the project, I also developed an interest in how the energy industry navigates federal regulations, and I have continued to research and write on this area of the law.”
USEA hosted and recorded a webinar Dec. 3 for parties interested in summary results of the study. The authors discussed their work and presented possible pathways forward with the information.