2009S0542-1 03/03/09
 
  By: Crownover H.B. No. 2669
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the injection and geologic storage of anthropogenic
  carbon dioxide.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 27.002, Water Code, is amended by adding
  Subdivisions (19) through (25) to read as follows:
               (19)  "Anthropogenic carbon dioxide" means carbon
  dioxide that would otherwise have been released to the atmosphere
  that has been:
                     (A)  stripped, segregated, or divided from any
  other fluid stream; or
                     (B)  captured from an emission source, such as:
                           (i)  an advanced clean energy project as
  defined by Section 382.003, Health and Safety Code, or another type
  of electric generation facility;
                           (ii)  an industrial source of emissions,
  together with any incidental associated substance derived from the
  source material for, or from the process of capturing, the carbon
  dioxide; and
                           (iii)  any substance added to the carbon
  dioxide to enable or improve the process of injecting the carbon
  dioxide.
               (20)  "Anthropogenic carbon dioxide injection well"
  means an artificial excavation or opening in the ground made by
  digging, boring, drilling, jetting, driving, or another method and
  used to inject or transmit anthropogenic carbon dioxide into a
  reservoir.
               (21)  "Enhanced recovery operation" means the use of
  any process for the displacement of hydrocarbons from the reservoir
  other than primary recovery and includes the use of an immiscible,
  miscible, chemical, thermal, or biological process. The term does
  not include pressure maintenance or a water disposal project.
               (22)  "Geologic storage" means underground storage of
  anthropogenic carbon dioxide in a reservoir.
               (23)  "Geologic storage facility" means the
  underground reservoir, underground equipment, and surface
  buildings and equipment used or to be used for the geologic storage
  of anthropogenic carbon dioxide and all surface and subsurface
  rights and appurtenances necessary to the operation of a facility
  for the geologic storage of anthropogenic carbon dioxide. The term
  includes any reasonable and necessary areal buffer and subsurface
  monitoring zones required to ensure the safe and efficient
  operation of the facility. The term does not include a pipeline
  used to transport carbon dioxide from the facility at which the
  carbon dioxide is captured to the injection and geologic storage
  facility site.
               (24)  "Oil or gas" means oil, natural gas, or gas
  condensate.
               (25)  "Reservoir" means a natural or artificially
  created subsurface sedimentary stratum, formation, aquifer, or
  cavity or void, including an oil or gas reservoir, saline
  formation, or coal seam, that is suitable for or capable of being
  made suitable for protecting against the escape or migration of
  anthropogenic carbon dioxide from the reservoir.
         SECTION 2.  Subchapter B, Chapter 27, Water Code, is amended
  by amending Section 27.022 and adding Section 27.0221 to read as
  follows:
         Sec. 27.022.  JURISDICTION OVER ANTHROPOGENIC CARBON
  DIOXIDE INJECTION. (a)  The commission has jurisdiction over the
  injection of anthropogenic carbon dioxide except as provided by
  Subchapter C-1.
         (b)  The commission shall adopt rules and procedures
  reasonably required for the performance of its powers, duties, and
  functions under this section [produced by a clean coal project, to
  the extent authorized by federal law, into a zone that is below the
  base of usable quality water and that is not productive of oil, gas,
  or geothermal resources by a Class II injection well, or by a Class
  I injection well if required by federal law].
         Sec. 27.0221.  LETTER FROM RAILROAD COMMISSION. (a)  A
  person making application to the commission for a permit to drill
  and operate an anthropogenic carbon dioxide injection well or
  operate a geologic storage facility shall submit with the
  application a letter from the railroad commission concluding that
  drilling or using the anthropogenic carbon dioxide injection well
  and injecting anthropogenic carbon dioxide into the subsurface
  stratum will not endanger or injure any known oil or gas reservoir.
         (b)  In a hearing on an application for a permit under this
  section, the commission may not proceed to hearing on any issues
  other than preliminary matters such as notice until the letter
  required from the railroad commission under Subsection (a) is
  provided to the commission.
         (c)  The commission shall find that there will be no
  impairment of oil or gas mineral rights if the railroad commission
  has issued a letter under Subsection (a) that concludes that
  drilling and using the anthropogenic carbon dioxide injection well
  will not endanger or injure any known oil or gas reservoir.
         SECTION 3.  Chapter 27, Water Code, is amended by adding
  Subchapter C-1 to read as follows:
  SUBCHAPTER C-1. INJECTION AND GEOLOGIC STORAGE OF ANTHROPOGENIC
  CARBON DIOXIDE
         Sec. 27.041.  JURISDICTION. (a)  The railroad commission
  has jurisdiction over injection of anthropogenic carbon dioxide
  into a reservoir that is initially productive of oil, gas, or
  geothermal resources or a saline formation directly above or below
  that reservoir.  Any well initially completed under the
  jurisdiction of the railroad commission shall remain under the
  jurisdiction of the railroad commission, notwithstanding the
  well's subsequent use for the injection of anthropogenic carbon
  dioxide.
         (b)  This subchapter does not apply to the injection of fluid
  through the use of a Class II injection well as defined by 40 C.F.R.
  Section 144.6(b) for the sole purpose of the enhanced recovery of
  oil or gas.
         Sec. 27.042.  PERMIT FROM RAILROAD COMMISSION. A person may
  not begin drilling or operating an anthropogenic carbon dioxide
  injection well or constructing or operating a geologic storage
  facility regulated under this subchapter without first obtaining a
  permit from the railroad commission.
         Sec. 27.043.  INFORMATION REQUIRED OF APPLICANT. The
  railroad commission shall require an applicant to provide any
  information the railroad commission considers necessary to
  discharge its duties under this subchapter.
         Sec. 27.044.  FEES. (a)  The railroad commission may impose
  fees to cover the cost of:
               (1)  permitting, monitoring, and inspecting
  anthropogenic carbon dioxide injection wells and geologic storage
  facilities; and
               (2)  enforcing this subchapter and rules adopted by the
  railroad commission under this subchapter.
         (b)  Fees collected by the railroad commission under this
  section shall be deposited to the credit of the anthropogenic
  carbon dioxide storage trust fund established under Section
  120.003, Natural Resources Code.
         Sec. 27.045.  LETTER FROM EXECUTIVE DIRECTOR. (a)  An
  application to the railroad commission for a permit under this
  subchapter must include a letter from the executive director
  stating that drilling and operating the anthropogenic carbon
  dioxide injection well or operating the geologic storage facility
  will not endanger any freshwater strata in that area and that the
  formation or stratum to be used for the geologic storage facility is
  not freshwater sand.
         (b)  To make the determination required by Subsection (a),
  the executive director shall review:
               (1)  the area of review and corrective action plans;
               (2)  any subsurface monitoring plans required during
  injection or post injection;
               (3)  any postinjection site care plans; and
               (4)  any other elements of the application reasonably
  required in order for the executive director to make the
  determination required by Subsection (a).
         (c)  The commission shall adopt rules to implement and
  administer this section.
         Sec. 27.046.  RULES. The railroad commission shall adopt
  rules and procedures reasonably required for the performance of its
  powers, duties, and functions under this subchapter, including
  rules for:
               (1)  the injection and geologic storage of
  anthropogenic carbon dioxide, including:
                     (A)  geologic site characterization, including
  acquisition of property rights;
                     (B)  area of review and corrective action;
                     (C)  well construction;
                     (D)  operation;
                     (E)  mechanical integrity testing;
                     (F)  monitoring;
                     (G)  well plugging;
                     (H)  postinjection site care;
                     (I)  site closure; and
                     (J)  long-term stewardship;
               (2)  the enforcement of this subchapter and rules
  adopted by the railroad commission under this subchapter; and
               (3)  the collection and administration of:
                     (A)  fees imposed under Section 27.044; and
                     (B)  penalties imposed for a violation of this
  subchapter or rules adopted by the railroad commission under this
  subchapter.
         Sec. 27.047.  CONSISTENCY WITH AND IMPLEMENTATION OF FEDERAL
  REQUIREMENTS. (a)  Rules adopted by the railroad commission under
  this subchapter must be consistent with and not more stringent than
  rules or regulations adopted by the United States Environmental
  Protection Agency or another federal agency governing the injection
  and geologic storage of anthropogenic carbon dioxide.
         (b)  If rules or regulations adopted to govern the injection
  and geologic storage of anthropogenic carbon dioxide under the
  federal Safe Drinking Water Act (42 U.S.C. Section 300f et seq.)
  allow the state to seek primary enforcement authority under the
  underground injection control program, the commission and the
  railroad commission may seek primacy to administer and enforce the
  program subject to the jurisdiction of each agency under state law.
         Sec. 27.048.  MEMORANDUM OF UNDERSTANDING. The commission
  and the railroad commission by rule shall amend as necessary the
  memorandum of understanding recorded in 16 T.A.C. Section 3.30 or
  shall enter into a new memorandum of understanding as necessary to
  comply with the provisions of this subchapter.
         Sec. 27.049.  FINANCIAL RESPONSIBILITY. A person to whom a
  permit is issued under this subchapter must provide to the railroad
  commission annually evidence of financial responsibility that is
  satisfactory to the railroad commission.
         SECTION 4.  Section 27.051, Water Code, is amended by
  amending Subsection (b) and adding Subsection (b-1) to read as
  follows:
         (b)  The railroad commission may grant an application for a
  permit under Subchapter C in whole or part and may issue the permit
  if it finds:
               (1)  that the use or installation of the injection well
  is in the public interest;
               (2)  that the use or installation of the injection well
  will not endanger or injure any oil, gas, or other mineral
  formation;
               (3)  that, with proper safeguards, both ground and
  surface fresh water can be adequately protected from pollution; and
               (4)  that the applicant has made a satisfactory showing
  of financial responsibility if required by Section 27.073 [of this
  code].
         (b-1)  The railroad commission may issue a permit under
  Subchapter C-1 if it finds that:
               (1)  the injection and geologic storage of
  anthropogenic carbon dioxide will not endanger or injure any oil,
  gas, or other mineral formation;
               (2)  with proper safeguards, both groundwater and
  surface fresh water can be adequately protected from pollution;
               (3)  the injection of anthropogenic carbon dioxide will
  not endanger human health and safety; and
               (4)  the applicant for the permit meets all of the other
  statutory and regulatory requirements for the issuance of the
  permit.
         SECTION 5.  Sections 27.071 and 27.072, Water Code, are
  amended to read as follows:
         Sec. 27.071.  POWER TO ENTER PROPERTY.  Members of the
  commission and the railroad commission and employees of the
  commission and the railroad commission may enter public or private
  property to inspect and investigate conditions relating to
  injection well, monitoring well, disposal well, [or] production
  well, anthropogenic carbon dioxide injection well, or geologic
  storage activities within their respective jurisdictions or to
  monitor compliance with a rule, permit, or other order of the
  commission or railroad commission.  Members or employees acting
  under the authority of this section who enter an establishment on
  public or private property shall observe the establishment's
  safety, internal security, and fire protection rules.
         Sec. 27.072.  POWER TO EXAMINE RECORDS.  Members of the
  commission and the railroad commission and employees of the
  commission and railroad commission may examine and copy those
  records or memoranda of a business they are investigating as
  provided by Section 27.071 [of this code] that relate to the
  operation of an injection well, monitoring well, disposal well,
  [or] production well, anthropogenic carbon dioxide injection well,
  or geologic storage facility, or any other records required to be
  maintained by law.
         SECTION 6.  Subsections (a) and (b), Section 27.073, Water
  Code, are amended to read as follows:
         (a)  A person to whom an injection well or anthropogenic
  carbon dioxide injection well permit is issued may be required by
  the commission or railroad commission to maintain a performance
  bond or other form of financial security to ensure that:
               (1)  an abandoned injection well is properly plugged;
  or
               (2)  funds are available for plugging, postinjection
  site care, and closure of an anthropogenic carbon dioxide injection
  well.
         (b)  Each state agency is authorized to receive funds as the
  beneficiary of a financial responsibility mechanism established
  under this section for the proper plugging of an injection well or
  proper management of an anthropogenic carbon dioxide injection well
  or geologic storage facility. Each state agency is authorized to
  expend such funds from a financial responsibility mechanism for the
  plugging of wells covered by that mechanism.
         SECTION 7.  Chapter 91, Natural Resources Code, is amended
  by adding Subchapter R to read as follows:
  SUBCHAPTER R. CONVERSION OF PURPOSE OF WELLS
         Sec. 91.801.  CONVERSION OF WELL TO NEW OR ADDITIONAL
  PURPOSE. (a)  The commission shall adopt rules allowing:
               (1)  a person to obtain an injection well permit for
  multiple purposes; and
               (2)  an operator of a well authorized by a permit issued
  by the commission to convert the well from its authorized purpose to
  a new or additional purpose.
         (b)  If a well is converted to or authorized as an
  anthropogenic carbon dioxide injection well as defined by Section
  27.002, Water Code, Subchapter C-1, Chapter 27, Water Code, applies
  to the well.
         SECTION 8.  Subtitle D, Title 3, Natural Resources Code, is
  amended by adding Chapter 120 to read as follows:
  CHAPTER 120. OWNERSHIP AND STEWARDSHIP OF ANTHROPOGENIC CARBON
  DIOXIDE
         Sec. 120.001.  DEFINITIONS. In this chapter:
               (1)  "Anthropogenic carbon dioxide," "anthropogenic
  carbon dioxide injection well," and "geologic storage facility"
  have the meanings assigned by Section 27.002, Water Code.
               (2)  "Commission" means the Railroad Commission of
  Texas.
               (3)  "Storage operator" means a person authorized by
  the commission to operate a geologic storage facility.
         Sec. 120.002.  OWNERSHIP OF ANTHROPOGENIC CARBON DIOXIDE.
  (a)  Unless otherwise expressly provided by a contract, bill of
  sale, deed, mortgage, deed of trust, or other legally binding
  document or by other law, anthropogenic carbon dioxide stored in a
  geologic storage facility is considered to be the personal property
  of the storage operator or the storage operator's heirs,
  successors, or assigns.
         (b)  Absent a final judgment of wilful abandonment rendered
  by a court or a regulatory determination of closure or abandonment,
  anthropogenic carbon dioxide stored in a geologic storage facility
  is not considered to be the property of the owner of the surface or
  mineral estate in the land in which the anthropogenic carbon
  dioxide is stored or of a person claiming under the owner of the
  surface or mineral estate.
         (c)  The owner, as designated by Subsection (a) or (b), of
  the anthropogenic carbon dioxide stored in a geologic storage
  facility, or the owner's heirs, successors, or assigns, may
  produce, take, or reduce to possession anthropogenic carbon dioxide
  stored in a geologic storage facility.
         Sec. 120.003.  ANTHROPOGENIC CARBON DIOXIDE STORAGE TRUST
  FUND. (a)  The anthropogenic carbon dioxide storage trust fund is
  created as a special fund in the state treasury.
         (b)  The anthropogenic carbon dioxide storage trust fund is
  an interest-bearing fund. Interest earned on money in the fund
  shall be deposited to the credit of the fund.
         (c)  Fees collected by the commission under Subchapter C-1,
  Chapter 27, Water Code, and penalties imposed for violations of
  that subchapter or rules adopted under that subchapter shall be
  deposited to the credit of the anthropogenic carbon dioxide storage
  trust fund.
         (d)  The anthropogenic carbon dioxide storage trust fund may
  be used by the commission only for:
               (1)  inspecting, monitoring, investigating, recording,
  and reporting on anthropogenic carbon dioxide injection wells and
  geologic storage facilities;
               (2)  long-term monitoring of anthropogenic carbon
  dioxide injection wells and geologic storage facilities, including
  surface facilities and wells;
               (3)  remediation of mechanical problems associated
  with anthropogenic carbon dioxide injection wells and surface
  infrastructure;
               (4)  repairing mechanical leaks at geologic storage
  facilities;
               (5)  plugging abandoned anthropogenic carbon dioxide
  injection wells;
               (6)  training and technology transfer related to
  anthropogenic carbon dioxide injection and geologic storage; and
               (7)  compliance and enforcement activities related to
  anthropogenic carbon dioxide injection and geologic storage.
         Sec. 120.004.  EXTRACTION OF STORED ANTHROPOGENIC CARBON
  DIOXIDE. (a)  The commission shall adopt rules allowing
  anthropogenic carbon dioxide stored in a geologic storage facility
  to be extracted for a commercial or industrial use.
         (b)  The commission has jurisdiction over the extraction of
  anthropogenic carbon dioxide stored in a geologic storage facility.
         SECTION 9.  (a)  In this section, "anthropogenic carbon
  dioxide," "geologic storage," and "geologic storage facility" have
  the meanings assigned by Section 27.002, Water Code.
         (b)  Not later than December 1, 2010, the Commissioner of the
  General Land Office shall file with the legislature a report on a
  recommended framework for managing activities related to geologic
  storage on state-owned land. The report shall include:
               (1)  recommended criteria for identifying candidate
  geologic storage sites in each of the following types of geological
  settings:
                     (A)  operating oil and gas fields;
                     (B)  depleted oil and gas fields;
                     (C)  unminable coal seams;
                     (D)  deep saline formations;
                     (E)  deep geological systems that may be used as
  engineered reservoirs to extract economical quantities of heat from
  geothermal resources of low permeability or porosity;
                     (F)  deep geological systems containing igneous
  formations; and
                     (G)  coal beds being used for methane recovery;
               (2)  a proposed regulatory framework for leasing
  state-owned land for geologic storage, including an assessment of
  options to ensure that the state receives fair market value for
  using state-owned land for the geologic storage;
               (3)  a proposed procedure for:
                     (A)  providing an opportunity for public review
  of, and the presentation of comments by interested persons
  regarding, any activities related to geologic storage on
  state-owned land; and
                     (B)  ensuring that the quality of the natural and
  cultural resources of state-owned land overlying the site of a
  geologic storage facility are protected from any geologic storage
  activities at the site;
               (4)  a description of the status of leasehold or
  mineral estate liability issues related to the geological
  subsurface trespass of, or caused by, anthropogenic carbon dioxide
  stored in state-owned land, including any relevant experience from
  enhanced oil recovery using carbon dioxide on state-owned land;
               (5)  recommendations for additional legislation that
  may be required to ensure that public land management and leasing
  laws are adequate to accommodate geologic storage;
               (6)  an identification of the legal and regulatory
  issues specific to geologic storage in cases in which title to the
  mineral estate is held by the state but title to the surface estate
  is not held by the state;
               (7)  an identification of the issues specific to the
  issuance of pipeline rights-of-way on state-owned land; and
               (8)  recommendations for additional legislation that
  may be required to clarify the appropriate framework for issuing
  rights-of-way for anthropogenic carbon dioxide pipelines on public
  land.
         (c)  In preparing the report under Subsection (b) of this
  section, the Commissioner of the General Land Office shall
  coordinate with:
               (1)  the Bureau of Economic Geology of The University
  of Texas at Austin;
               (2)  the Railroad Commission of Texas;
               (3)  the Texas Commission on Environmental Quality; and
               (4)  the heads of other appropriate agencies.
         (d)  This section expires December 31, 2010.
         SECTION 10.  (a) Not later than January 1 of every
  odd-numbered year, the Texas Commission on Environmental Quality
  and the Railroad Commission of Texas shall issue a joint report to
  the legislature providing an assessment of the permitting process
  for anthropogenic carbon dioxide injection wells and geologic
  storage facilities and the status of compliance with any federal
  rules regulating the injection and storage of anthropogenic carbon
  dioxide.
         (b)  The report shall include:
               (1)  the status of any applications for permits that
  have been received since the prior report;
               (2)  an update on the exchange of information between
  the Texas Commission on Environmental Quality and the Railroad
  Commission of Texas as required by the memorandum of understanding
  and Sections 27.0221 and 27.045, Water Code, as added by this Act;
               (3)  the status of any request for primary enforcement
  authority for the underground injection and geologic storage of
  anthropogenic carbon dioxide under the underground injection
  control program; and
               (4)  any recommendations for additional legislation,
  modifications to the memorandum of understanding, or new rules for
  regulating the injection and storage of anthropogenic carbon
  dioxide.
         (c)  This section expires January 1, 2019.
         SECTION 11.  Section 27.038, Water Code, is repealed.
         SECTION 12.  (a)  Not later than January 1, 2010, the
  Railroad Commission of Texas shall adopt rules under Section
  27.046, Water Code, as added by this Act.
         (b)  The Texas Commission on Environmental Quality and the
  Railroad Commission of Texas shall adopt rules under Section
  27.048, Water Code, as added by this Act, as soon as practicable
  after the effective date of this Act.
         (c)  The Railroad Commission of Texas shall adopt rules under
  Sections 91.801 and 120.004, Natural Resources Code, as added by
  this Act, as soon as practicable after the effective date of this
  Act.
         SECTION 13.  This Act takes effect September 1, 2009.