North Dakota Century Code Chapter 38-22 Carbon Dioxide Underground Storage (North Dakota CO2 Storage Statute)

Jurisdiction(s)
Instrument Date
Effective Date
Instrument Type
Primary
Relevant Regulatory Authority
North Dakota Industrial Commission
Purpose and Context
The North Dakota CO2 Storage Statute forms a chapter within the part of the North Dakota Century Code addressing mining and petroleum activities. It focuses on processes for issuing CO2 injection and storage permits, including protections for other resource interests and health and environmental risks, and provides for a complete transfer of the liability for a CO2 storage site from the operator to the state. It also accommodates the possibility of temporary rather than permanent storage of CO2, including for industrial and commercial purposes such as enhanced oil recovery.
Instrument Access Date
18 June 2012
I. Regulatory scope and definitions
Definitions

Summary

38-22-02. Definitions.
As used in this chapter, unless the context requires otherwise:
1. "Carbon dioxide" means carbon dioxide produced by anthropogenic sources which is
of such purity and quality that it will not compromise the safety of geologic storage and will not compromise those properties of a storage reservoir which allow the reservoir to effectively enclose and contain a stored gas.
2. "Commission" means the industrial commission.
3. "Geologic storage" means the permanent or short-term underground storage of carbon
dioxide in a storage reservoir.
4. "Permit" means a permit issued by the commission allowing a person to operate a
storage facility.
5. "Pore space" means a cavity or void, whether natural or artificially created, in a
subsurface sedimentary stratum.
6. "Reservoir" means a subsurface sedimentary stratum, formation, aquifer, cavity, or
void, whether natural or artificially created, including oil and gas reservoirs, saline formations, and coal seams suitable for or capable of being made suitable for injecting and storing carbon dioxide.
7. "Storage facility" means the reservoir, underground equipment, and surface facilities and equipment used or proposed to be used in a geologic storage operation. It does not include pipelines used to transport carbon dioxide to the storage facility.
8. "Storage operator" means a person holding or applying for a permit.
9. "Storage reservoir" means a reservoir proposed, authorized, or used for storing carbon
dioxide.

Article/Section No.

Section 38-22-02

Instrument Text

38-22-02. Definitions.
As used in this chapter, unless the context requires otherwise: 
1. "Carbon dioxide" means carbon dioxide produced by anthropogenic sources which is
of such purity and quality that it will not compromise the safety of geologic storage and will not compromise those properties of a storage reservoir which allow the reservoir to effectively enclose and contain a stored gas.
2. "Commission" means the industrial commission. 
3. "Geologic storage" means the permanent or short-term underground storage of carbon
dioxide in a storage reservoir. 
4. "Permit" means a permit issued by the commission allowing a person to operate a
storage facility. 
5. "Pore space" means a cavity or void, whether natural or artificially created, in a
subsurface sedimentary stratum. 
6. "Reservoir" means a subsurface sedimentary stratum, formation, aquifer, cavity, or
void, whether natural or artificially created, including oil and gas reservoirs, saline formations, and coal seams suitable for or capable of being made suitable for injecting and storing carbon dioxide.
7. "Storage facility" means the reservoir, underground equipment, and surface facilities and equipment used or proposed to be used in a geologic storage operation. It does not include pipelines used to transport carbon dioxide to the storage facility.
8. "Storage operator" means a person holding or applying for a permit. 
9. "Storage reservoir" means a reservoir proposed, authorized, or used for storing carbon
dioxide.

Classification of CO2

Summary

The policy statement set out in section 38-22-01 of the North Dakota CO2 Storage Statute acknowledges that CO2 is “a potentially valuable commodity”, and may have commercial, industrial or other uses, including for enhanced oil recovery.

In this way, CO2 sequestration is characterised in the Statute as a means of storing CO2 for potential later use in such applications. Correspondingly, the Statute’s definition of "geologic storage" covers permanent and short-term storage of CO2.

Section 38-22-12 expressly states that, for the purposes of the Statute and other laws, CO2 stored in accordance with it (and which does not leak) does not constitute a pollutant or nuisance. 

Article/Section No.

Section 38-22-01
Section 38-22-12

Instrument Text

38-22-01. Policy.
It is in the public interest to promote the geologic storage of carbon dioxide. Doing so will benefit the state and the global environment by reducing greenhouse gas emissions. Doing so will help ensure the viability of the state's coal and power industries, to the economic benefit of North Dakota and its citizens. Further, geologic storage of carbon dioxide, a potentially valuable commodity, may allow for its ready availability if needed for commercial, industrial, or other uses, including enhanced recovery of oil, gas, and other minerals. Geologic storage, however, to be practical and effective requires cooperative use of surface and subsurface property interests and the collaboration of property owners. Obtaining consent from all owners may not be feasible, requiring procedures that promote, in a manner fair to all interests, cooperative management, thereby ensuring the maximum use of natural resources.
[…]
38-22-12. Environmental protection - Reservoir integrity.
1. The commission shall take action to ensure that a storage facility does not cause pollution or create a nuisance. For the purposes of this provision and in applying other laws, carbon dioxide stored, and which remains in storage under a commission permit, is not a pollutant nor does it constitute a nuisance.

Composition of CO2 stream

Summary

The definition of “carbon dioxide” given in section 38-22-02 of the North Dakota CO2 Storage Statue requires CO2 streams for injection and storage to be:

  1. “of such purity and quality” that it will not compromise the safety of geologic storage or the properties of the storage complex; and
  2. of anthropogenic origin.

This definition may allow scope for the presence of incidental or associated substances in CO2 streams, provided they do not breach the conditions specified above

Article/Section No.

Section 38-22-02

Instrument Text

38-22-02. Definitions.

As used in this chapter, unless the context requires otherwise:

1.         "Carbon dioxide" means carbon dioxide produced by anthropogenic sources which is

of such purity and quality that it will not compromise the safety of geologic storage and will not compromise those properties of a storage reservoir which allow the reservoir to effectively enclose and contain a stored gas.

Enhanced oil recovery (EOR)

Summary

The policy statement set out in section 38-22-01 of the North Dakota CO2 Storage Statute acknowledges that CO2 is “a potentially valuable commodity”, and may be used for EOR, as well as other commercial and industrial applications.

Nonetheless, section 38-22-19 explicitly states that the Statute does not apply to EOR, which is instead regulated by Chapter 38-08 of the North Dakota Century Code. The Statute does, however, empower the North Dakota Industrial Commission to:

  1. allow conversion of an EOR project to a CO2 storage facility (see section 38-22-19); and

determine the amount of CO2 stored in a reservoir as part of an EOR project, for the purposes of issuance and trading of carbon credits in respect of the stored CO2 (see section 38-22-23).

Article/Section No.

Section 38-22-01
Section 38-22-19
Section 38-22-23

Associated Legislation:
North Dakota Century Code Chapter 38-08

Instrument Text

38-22-01. Policy.
It is in the public interest to promote the geologic storage of carbon dioxide. Doing so will benefit the state and the global environment by reducing greenhouse gas emissions. Doing so will help ensure the viability of the state's coal and power industries, to the economic benefit of North Dakota and its citizens. Further, geologic storage of carbon dioxide, a potentially valuable commodity, may allow for its ready availability if needed for commercial, industrial, or other uses, including enhanced recovery of oil, gas, and other minerals. Geologic storage, however, to be practical and effective requires cooperative use of surface and subsurface property interests and the collaboration of property owners. Obtaining consent from all owners may not be feasible, requiring procedures that promote, in a manner fair to all interests, cooperative management, thereby ensuring the maximum use of natural resources.
[…]
38-22-19. Enhanced recovery projects.
1. This chapter does not apply to applications filed with the commission proposing to use carbon dioxide for an enhanced oil or gas recovery project, rather such applications will be processed under chapter 38-08.
2. The commission may allow an enhanced oil or gas recovery project to be converted to a storage facility. In considering whether to approve a conversion, and upon conversion, the provisions of this chapter and its implementing rules apply, but if during the conversion process unique circumstances arise, the commission, to better ensure that the chapter's objectives are fulfilled, may waive such provisions and may impose additional ones.
[…]
38-22-23. Determining storage amounts - Carbon credits - Fee.
1. The commission, under procedures and criteria it may adopt, shall determine the amount of injected carbon dioxide stored in a reservoir that has been or is being used for an enhanced oil or gas recovery project. The commission may also make such a determination for carbon dioxide stored under this chapter.
2. The purpose for determining storage amounts is to facilitate using the stored carbon dioxide for such matters as carbon credits, allowances, trading, emissions allocations, and offsets, and for other similar purposes.
3. The commission may charge a reasonable fee to the person requesting a storage determination. The fee must be set by rule.
4. Fees the commission receives for storage determinations must be deposited into the carbon dioxide storage facility administrative fund.

II. The scope and management of rights
Property rights

Summary

Under section 38-22-16 of the North Dakota CO2 Storage Statute, operators own CO2 injected and stored up until the issuance of a certificate of project completion by the North Dakota Industrial Commission in accordance with section 38-22-17 (during which period operators will also be liable for damage caused by the CO2, including through leakage).

 

Section 38-22-10 empowers the Commission to adjust the rights of persons affected by CO2 storage, including by requiring non-consenting pore space owners to accept CO2 storage within their pore space, subject to certain conditions. 

Article/Section No.

Section 38-22-09
Section 38-22-10
Section 38-22-13
Section 38-22-16

Instrument Text

38-22-09. Permit provisions.

The commission may include in a permit or order all things necessary to carry out this chapter's objectives and to protect and adjust the respective rights and obligations of persons affected by geologic storage.

 

38-22-10. Amalgamating property interests.

If a storage operator does not obtain the consent of all persons who own the storage reservoir's pore space, the commission may require that the pore space owned by nonconsenting owners be included in a storage facility and subject to geologic storage.

[…]

38-22-13. Preservation of rights.

Nothing in this chapter nor the issuing of a permit: 1.   Prejudices the rights of property owners within a storage facility to exercise rights that

have not been committed to a storage facility.

2.            Prevents a mineral owner or mineral lessee from drilling through or near a storage reservoir to explore for and develop minerals, provided the drilling, production, and related activities comply with commission requirements that preserve the storage facility's integrity and protect this chapter's objectives.

[…]

38-22-16. Title to carbon dioxide.

The storage operator has title to the carbon dioxide injected into and stored in a storage reservoir and holds title until the commission issues a certificate of project completion. While the storage operator holds title, the operator is liable for any damage the carbon dioxide may cause, including damage caused by carbon dioxide that escapes from the storage facility.

Competition with other Interests

Summary

Section 38-22-06 of the North Dakota CO2 Storage Statute requires that, before the North Dakota Industrial Commission issues a CO2 storage permit:

  1. a public hearing must be held;
  2. notice of the hearing must be given to each mineral lessee, mineral owner, pore space owner and surface land owner within the storage reservoir and within one-half mile of the reservoir's boundaries;
  3. storage operators must try in good faith to obtain consent for the project from all persons who own the storage reservoir's pore space, and in any event must secure consent from persons who own at least sixty percent of such pore space; and
  4. all non-consenting pore space owners must be equitably compensated.

 

In addition, and importantly for other resource owners, under section 38-22-08, before issuing a CO2 storage permit the Commission must also determine whether the storage site contains commercially valuable minerals.

If the site does contain such minerals, the Commission can only issue the permit if it is satisfied that the interests of the mineral owners or lessees will not be adversely affected by the CO2 storage activities, or have otherwise been addressed in an arrangement between the mineral owners and lessees and the storage operator.

In the absence of agreement or other cooperation, section 38-22-09 empowers the Commission to adjust the rights of persons affected by CO2 storage, including by requiring non-consenting pore space owners to accept CO2 storage within their pore space, subject to certain conditions.

This notwithstanding, section 38-22-13 provides that the Statute does not prevent a mineral owner or lessee from drilling through or near a storage reservoir to explore for and develop minerals, provided these activities comply with any requirements imposed to protect the integrity of the reservoir and the relevant legislative objectives.

Article/Section No.

Section 38-22-06
Section 38-22-08
Section 38-22-09
Section 38-22-10
Section 38-22-13

Instrument Text

38-22-06. Permit hearing - Hearing notice.

1.         The commission shall hold a public hearing before issuing a permit.

2.         Notice of the hearing must be published for two consecutive weeks in the official newspaper of the county or counties where the storage reservoir is proposed to be located and in any other newspaper the commission requires. Publication deadlines must comply with commission requirements.

3.         Notice of the hearing must be given to each mineral lessee, mineral owner, and pore space owner within the storage reservoir and within one-half mile of the storage reservoir's boundaries.

4.         Notice of the hearing must be given to each surface owner of land overlying the storage reservoir and within one-half mile of the reservoir's boundaries.

5.         Notice of the hearing must be given to any additional persons that the commission requires.

6.         Service of hearing notices required by this section must conform to personal service provisions in rule 4 of the North Dakota Rules of Civil Procedure.

7.         Hearing notices required by this section must comply with deadlines set by the commission.

8.         Hearing notices required by this section must contain the information the commission requires.

[…]

38-22-08. Permit requirements.

Before issuing a permit, the commission shall find:

[…]

4.         That the storage operator has made a good-faith effort to get the consent of all persons who own the storage reservoir's pore space.

5.         That the storage operator has obtained the consent of persons who own at least sixty percent of the storage reservoir's pore space.

6.         Whether the storage facility contains commercially valuable minerals and, if it does, a permit may be issued only if the commission is satisfied that the interests of the mineral owners or mineral lessees will not be adversely affected or have been addressed in an arrangement entered into by the mineral owners or mineral lessees and the storage operator.

7.         That the proposed storage facility will not adversely affect surface waters or formations containing fresh water.

14.      That all nonconsenting pore space owners are or will be equitably compensated.

 

38-22-09. Permit provisions.

The commission may include in a permit or order all things necessary to carry out this chapter's objectives and to protect and adjust the respective rights and obligations of persons affected by geologic storage.

 

38-22-10. Amalgamating property interests.

If a storage operator does not obtain the consent of all persons who own the storage reservoir's pore space, the commission may require that the pore space owned by nonconsenting owners be included in a storage facility and subject to geologic storage.

[…]

38-22-13. Preservation of rights.

Nothing in this chapter nor the issuing of a permit: 1.   Prejudices the rights of property owners within a storage facility to exercise rights that

have not been committed to a storage facility.

2.            Prevents a mineral owner or mineral lessee from drilling through or near a storage reservoir to explore for and develop minerals, provided the drilling, production, and related activities comply with commission requirements that preserve the storage facility's integrity and protect this chapter's objectives.

Preferential rights between CCS operators

Summary

Section 38-22-05 of the North Dakota CO2 Storage Statute requires the North Dakota Industrial Commission, in processing applications for CO2 storage permits, to give priority to applicants intending to store CO2 produced in North Dakota.

Article/Section No.

Section 38-22-05

Instrument Text

38-22-05. Permit applications, fees, costs, and priorities - Carbon dioxide storage facility administrative fund.

2.            In processing permit applications the commission shall give priority to storage operators who intend to store carbon dioxide produced in North Dakota.

Public participation

Summary

<p>Section 38-22-06 of the North Dakota CO<sub>2</sub> Storage Statute requires that a public hearing be held before a CO<sub>2</sub> storage permit is issued. Notice of the hearing must be published for two consecutive weeks in the official newspaper of the county or counties where the storage reservoir is to be located. </p>

Article/Section No.

Section 38-22-06

Instrument Text

38-22-06. Permit hearing - Hearing notice.

1.         The commission shall hold a public hearing before issuing a permit.

2.         Notice of the hearing must be published for two consecutive weeks in the official newspaper of the county or counties where the storage reservoir is proposed to be located and in any other newspaper the commission requires. Publication deadlines must comply with commission requirements.

3.         Notice of the hearing must be given to each mineral lessee, mineral owner, and pore space owner within the storage reservoir and within one-half mile of the storage reservoir's boundaries.

4.         Notice of the hearing must be given to each surface owner of land overlying the storage reservoir and within one-half mile of the reservoir's boundaries.

5.         Notice of the hearing must be given to any additional persons that the commission requires.

6.         Service of hearing notices required by this section must conform to personal service provisions in rule 4 of the North Dakota Rules of Civil Procedure.

7.         Hearing notices required by this section must comply with deadlines set by the commission.

8.            Hearing notices required by this section must contain the information the commission requires.

III. Permitting storage site exploration, project development and CO2 injection
Controls on site selection

Summary

Section 38-22-08 of the North Dakota CO2 Storage Statute requires that, before the North Dakota Industrial Commission issues a CO2 storage permit, it must be satisfied that, among other things:

  1. the proposed storage facility is suitable for CO2 injection and storage;
  2. the proposed storage facility will not adversely affect surface waters or fresh water;
  3. CO2 will not escape from the storage reservoir;
  4. the storage reservoir will not be contaminated by substances that might compromise its integrity as a storage reservoir;
  5. the storage facility will not endanger human health or unduly endanger the environment; and

that the storage facility is in the public interest. 

Article/Section No.

Section 38-22-08

Instrument Text

38-22-08. Permit requirements.

Before issuing a permit, the commission shall find:

2.         That the storage facility is suitable and feasible for carbon dioxide injection and storage.

7.         That the proposed storage facility will not adversely affect surface waters or formations containing fresh water.

8.         That carbon dioxide will not escape from the storage reservoir.

9.         That substances that compromise the objectives of this chapter or the integrity of a storage reservoir will not enter a storage reservoir. 10.   That the storage facility will not endanger human health nor unduly endanger the environment.

11.      That the storage facility is in the public interest.

12.          That the horizontal and vertical boundaries of the storage reservoir are defined. These boundaries must include buffer areas to ensure that the storage facility is operated safely and as contemplated.

Environmental protection and impact assessment

Summary

Section 38-22-08 of the North Dakota CO2 Storage Statute requires that, before the North Dakota Industrial Commission issues a CO2 storage permit, it must be satisfied that, among other things:

  1. the storage facility will not endanger human health;
  2. the storage facility will not unduly endanger the environment;
  3. the proposed storage facility is suitable for CO2 injection and storage;
  4. the CO2 to be stored is of a quality that can be safely and efficiently stored in the storage reservoir;
  5. the proposed storage facility will not adversely affect surface waters or fresh water;
  6. CO2 will not escape from the storage reservoir;
  7. the storage reservoir will not be contaminated by substances that might compromise its integrity as a storage reservoir;
  8. the boundaries of the storage reservoir are defined, and include buffer areas to ensure that the storage facility is operated safely; and
  9. the storage facility is in the public interest.

 

Under section 38-22-07, the Commission must also consult the state department of health before the permit.

 

Section 38-22-12 requires the Commission to ensure that:

  1. storage facilities do not cause pollution or create a nuisance;
  2. storage reservoirs are not contaminated by substances that might compromise their integrity as storage reservoirs; and
  3. CO2 does not escape from storage reservoirs.

 

Section 38-22-12 expressly states, however, that for the purposes of the Statute and other laws, CO2 stored in accordance with it (and which does not leak) does not constitute a pollutant or nuisance.

Article/Section No.

Section 38-22-07
Section 38-22-08
Section 38-22-12

Instrument Text

38-22-07. Permit consultation.

Before issuing a permit, the commission shall consult the state department of health.

 

38-22-08. Permit requirements.

Before issuing a permit, the commission shall find:

3.         That the carbon dioxide to be stored is of a quality that allows it to be safely and efficiently stored in the storage reservoir.

7.         That the proposed storage facility will not adversely affect surface waters or formations containing fresh water.

8.         That carbon dioxide will not escape from the storage reservoir.

9.         That substances that compromise the objectives of this chapter or the integrity of a storage reservoir will not enter a storage reservoir. 10.   That the storage facility will not endanger human health nor unduly endanger the environment.

11.      That the storage facility is in the public interest.

12.      That the horizontal and vertical boundaries of the storage reservoir are defined. These boundaries must include buffer areas to ensure that the storage facility is operated safely and as contemplated.

[…]

38-22-12. Environmental protection - Reservoir integrity.

1.         The commission shall take action to ensure that a storage facility does not cause pollution or create a nuisance. For the purposes of this provision and in applying other laws, carbon dioxide stored, and which remains in storage under a commission permit, is not a pollutant nor does it constitute a nuisance.

2.         The commission's authority in subsection 1 does not limit the jurisdiction held by the state department of health. Nothing else in this chapter limits the jurisdiction held by the state department of health.

3.         The commission shall take action to ensure that substances that compromise the objectives of this chapter or the integrity of a storage reservoir do not enter a storage reservoir.

4.            The commission shall take action to ensure that carbon dioxide does not escape from a storage facility.

Permitting CO2 injection and storage

Summary

Under section 38-22-04 of the North Dakota CO2 Storage Statute, a permit issued by the North Dakota Industrial Commission is required to undertake geological storage of CO2.

 

Applications for CO2 storage permits must comply with the requirements established by the Commission in accordance with section 38-22-05, and include payment of applicable fees and costs.

 

Issuance of a permit is, however, subject to a number of conditions set out in sections 38-22-06 and 38-22-08, as outlined below.

 

For the purposes of stakeholder engagement and the management of competing interests, the Statute requires that, before the Commission issues a CO2 storage permit:

  1. a public hearing must be held;
  2. notice of the hearing must be published for two consecutive weeks in the official newspaper of the county or counties where the storage reservoir is to be located, and given to each mineral lessee, mineral owner, pore space owner and surface land owner within the storage reservoir and within one-half mile of the reservoir's boundaries;
  3. storage operators must try in good faith to obtain consent for the project from all persons who own the storage reservoir's pore space, and in any event must secure consent from persons who own at least sixty percent of such pore space; and
  4. all non-consenting pore space owners must be equitably compensated.

 

The Commission must also determine, before issuing the permit, whether the storage site contains commercially valuable minerals.

 

If the site does contain such minerals, the Commission can only issue the permit if it is satisfied that the interests of the mineral owners or lessees will not be adversely affected by the CO2 storage activities, or have otherwise been addressed in an arrangement between the mineral owners and lessees and the storage operator.

 

For the purpose of protecting health and the environment, the Statute requires that, before issuing a permit, the Commission must be satisfied that:

  1. the storage facility will not endanger human health;
  2. the storage facility will not unduly endanger the environment;
  3. the proposed storage facility is suitable for CO2 injection and storage;
  4. the CO2 to be stored is of a quality that can be safely and efficiently stored in the storage reservoir;
  5. the proposed storage facility will not adversely affect surface waters or fresh water;
  6. CO2 will not escape from the storage reservoir;
  7. the storage reservoir will not be contaminated by substances that might compromise its integrity as a storage reservoir;
  8. the boundaries of the storage reservoir are defined, and include buffer areas to ensure that the storage facility is operated safely; and
  9. the storage facility is in the public interest.

 

Under section 38-22-07, the Commission must also consult the state department of health before issuing a permit.

 

Section 38-22-09 provides that the Commission can include in a permit all provisions necessary to:

  1. carry out the objectives of the Statue; and
  2. protect and adjust the rights and obligations of persons affected by the storage.

 

Section 38-22-11 requires that, on issuing a permit, the Commission must also issue a certificate of such issuance, a copy of which must be filed with the county recorder in the county or counties where the storage facility is located.

Article/Section No.

Section 38-22-04
Section 38-22-05
Section 38-22-06
Section 38-22-07
Section 38-22-08
Section 38-22-09
Section 38-22-11

Instrument Text

38-22-04. Permit required - Permit transfer.

Geologic storage is allowed if permitted by the commission. A permit may be transferred if the commission consents.

 

38-22-05. Permit applications, fees, costs, and priorities - Carbon dioxide storage facility administrative fund.

1.         A person applying for a permit shall:

a.         Comply with application requirements set by the commission.

b.         Pay a fee in an amount set by the commission. The amount of the fee must be

set by rule and must be based on the commission's anticipated cost of processing the application. The fee must be deposited in the carbon dioxide storage facility administrative fund.

c.         Pay to the commission the costs the commission incurs in publishing notices for hearings and holding hearings on permit applications.

2.         In processing permit applications the commission shall give priority to storage operators who intend to store carbon dioxide produced in North Dakota.

 

38-22-06. Permit hearing - Hearing notice.

1.         The commission shall hold a public hearing before issuing a permit.

2.         Notice of the hearing must be published for two consecutive weeks in the official newspaper of the county or counties where the storage reservoir is proposed to be located and in any other newspaper the commission requires. Publication deadlines must comply with commission requirements.

3.         Notice of the hearing must be given to each mineral lessee, mineral owner, and pore space owner within the storage reservoir and within one-half mile of the storage reservoir's boundaries.

4.         Notice of the hearing must be given to each surface owner of land overlying the storage reservoir and within one-half mile of the reservoir's boundaries.

5.         Notice of the hearing must be given to any additional persons that the commission requires.

6.         Service of hearing notices required by this section must conform to personal service provisions in rule 4 of the North Dakota Rules of Civil Procedure.

7.         Hearing notices required by this section must comply with deadlines set by the commission.

8.         Hearing notices required by this section must contain the information the commission requires.

 

38-22-07. Permit consultation.

Before issuing a permit, the commission shall consult the state department of health.

 

38-22-08. Permit requirements.

Before issuing a permit, the commission shall find: 1.   That the storage operator has complied with all requirements set by the commission.

2.         That the storage facility is suitable and feasible for carbon dioxide injection and storage.

3.         That the carbon dioxide to be stored is of a quality that allows it to be safely and efficiently stored in the storage reservoir.

4.         That the storage operator has made a good-faith effort to get the consent of all persons who own the storage reservoir's pore space.

5.         That the storage operator has obtained the consent of persons who own at least sixty percent of the storage reservoir's pore space.

6.         Whether the storage facility contains commercially valuable minerals and, if it does, a permit may be issued only if the commission is satisfied that the interests of the mineral owners or mineral lessees will not be adversely affected or have been addressed in an arrangement entered into by the mineral owners or mineral lessees and the storage operator.

7.         That the proposed storage facility will not adversely affect surface waters or formations containing fresh water.

8.         That carbon dioxide will not escape from the storage reservoir.

9.         That substances that compromise the objectives of this chapter or the integrity of a storage reservoir will not enter a storage reservoir. 10.   That the storage facility will not endanger human health nor unduly endanger the

environment.

11.      That the storage facility is in the public interest.

12.      That the horizontal and vertical boundaries of the storage reservoir are defined. These boundaries must include buffer areas to ensure that the storage facility is operated safely and as contemplated.

13.      That the storage operator will establish monitoring facilities and protocols to assess the location and migration of carbon dioxide injected for storage and to ensure compliance with all permit, statutory, and administrative requirements.

14.      That all nonconsenting pore space owners are or will be equitably compensated.

 

38-22-09. Permit provisions.

The commission may include in a permit or order all things necessary to carry out this chapter's objectives and to protect and adjust the respective rights and obligations of persons affected by geologic storage.

[…]

38-22-11. Certificate.

When the commission issues a permit it shall also issue a certificate stating that the permit has been issued, describing the area covered, and containing other information the commission deems appropriate. The commission shall file a copy of the certificate with the county recorder in the county or counties where the storage facility is located.

IV. Operating and closing storage facilities
Monitoring, reporting and verification

Summary

Section 38-22-08 of the North Dakota CO2 Storage Statute requires that, before the North Dakota Industrial Commission issues a CO2 storage permit, it must be satisfied that the applicant will establish monitoring facilities and protocols to:

  1. assess the location and migration of injected CO2; and
  2. ensure compliance with applicable requirements.

 

The Commission, however, will be responsible under section 38-22-23 for determining the amount of CO2 stored in a reservoir (whether for permanent storage or as part of an enhanced oil or gas recovery project), to facilitate the issuance and trading of carbon credits in respect of the stored CO2.

Article/Section No.

Section 38-22-08
Section 38-22-23

Instrument Text

38-22-08. Permit requirements.

Before issuing a permit, the commission shall find:

13.      That the storage operator will establish monitoring facilities and protocols to assess the location and migration of carbon dioxide injected for storage and to ensure compliance with all permit, statutory, and administrative requirements.

[…]

38-22-23. Determining storage amounts - Carbon credits - Fee.

1.         The commission, under procedures and criteria it may adopt, shall determine the amount of injected carbon dioxide stored in a reservoir that has been or is being used for an enhanced oil or gas recovery project. The commission may also make such a determination for carbon dioxide stored under this chapter.

2.         The purpose for determining storage amounts is to facilitate using the stored carbon dioxide for such matters as carbon credits, allowances, trading, emissions allocations, and offsets, and for other similar purposes.

3.         The commission may charge a reasonable fee to the person requesting a storage determination. The fee must be set by rule.

4.            Fees the commission receives for storage determinations must be deposited into the carbon dioxide storage facility administrative fund.

Inspections

Summary

Section 38-22-03(3) of the North Dakota CO2 Storage Statute empowers the North Dakota Industrial Commission to:

  1. enter storage facilities to inspect equipment and facilities;
  2. observe, monitor, and investigate operations; and

inspect records required to be maintained at the facility.

Article/Section No.

Section 38-22-03(3)

Instrument Text

38-22-03. Commission authority.

The commission has authority:

3.            To enter, at a reasonable time and manner, a storage facility to inspect equipment and facilities; to observe, monitor, and investigate operations; and to inspect records required to be maintained at the facility. 

Operational liabilities

Summary

Under section 38-22-16 of the North Dakota CO2 Storage Statute, operators:

  1. own CO2 injected and stored; and
  2. are liable for damage caused by stored CO2, including as a result of leakage,

until the North Dakota Industrial Commission issues a certificate of project completion for the storage facility in accordance with section 38-22-17.

Article/Section No.

Section 38-22-16

Instrument Text

38-22-16. Title to carbon dioxide.

The storage operator has title to the carbon dioxide injected into and stored in a storage reservoir and holds title until the commission issues a certificate of project completion. While the storage operator holds title, the operator is liable for any damage the carbon dioxide may cause, including damage caused by carbon dioxide that escapes from the storage facility.

Financial security

Summary

Under section 38-22-03(4) of the North Dakota CO2 Storage Statute, the North Dakota Industrial Commission can require operators to provide assurance of access to adequate money to fulfill the operator’s duties.

Any such bond is to be released upon issuance of a certificate of project completion in accordance with Section 38-22-17(6).

Article/Section No.

Section 38-22-03(4)
Section 38-22-17(6)

Instrument Text

38-22-03. Commission authority.

The commission has authority:

4.         To require that storage operators provide assurance, including bonds, that money is available to fulfill the storage operator's duties.

[…]

38-22-17. Certificate of project completion - Release - Transfer of title and custody.

6.         Once a certificate is issued:

d.            Any bonds posted by the storage operator must be released.

Enforcement

Summary

Section 32-22-18 of the North Dakota CO2 Storage Statute provides that violations of the Statue are subject to civil penalty in the form of a fine.

 

The amount of any fine is to be determined by reference to a number of factors, including:

  1. the nature of the violation, including its circumstances, gravity, and hazards;
  2. any economic or environmental harm caused by the violation;
  3. any economic value or other advantage gained by the violation;
  4. any history of previous violations;
  5. the need to deter future violations; and
  6. Any efforts made to correct the violation.

Article/Section No.

Section 32-22-18

Instrument Text

38-22-18. Penalties.

1.         A person who violates a provision of this chapter or a commission rule or order under this chapter is subject to a civil penalty imposed by the commission or a court not to exceed twelve thousand five hundred dollars for each offense, and each day's violation is a separate offense. Paying the penalty does not make legal an illegal act nor relieve a person on whom the penalty is imposed from correcting the violation or from liability for damages caused by the violation.

2.         In determining the amount of the penalty, the commission shall consider:

a.         The nature of the violation, including its circumstances and gravity, and the hazard or potential hazard to the public's or a private person's health, safety, and economic welfare.

b.         The economic or environmental harm caused by the violation.

c.         The economic value or other advantage gained by the person committing the violation.

d.         The history of previous violations.

e.         The amount necessary to deter future violations.

f. Efforts to correct the violation.

g.             Other matters justice requires.

Site closure

Summary

Section 38-22-17of the North Dakota CO2 Storage Statue enables operators, once CO2 injection has ceased, to apply to the North Dakota Industrial Commission for a certificate of project completion.

 

Issuance of a certificate of project completion will be subject to the following conditions:

  1. At least ten years must have passed since the cessation of injection.
  2. A public hearing regarding the certificate must be held, with notice given in accordance with the requirements established by the Commission.
  3. The Commission must have consulted with the state department of health regarding the certificate.

 

In addition, the operator must demonstrate that:

  1. it is fully compliant with all laws governing the storage facility;
  2. it has addressed all pending claims regarding the storage facility's operation;
  3. the storage reservoir is reasonably expected to retain the CO2 stored in it;
  4. all wells, equipment, and facilities to be used in the post-closure period are in good condition; and
  5. it has plugged wells, removed equipment and facilities, and completed reclamation work as required by the Commission.

 

Upon issuance of a certificate of project completion:

  1. title to the storage facility and stored CO2, and all associated rights and obligations, transfers to the state of North Dakota (without compensation to the operator);
  2. the operator and parties who generated the stored CO2 are released from all regulatory requirements associated with the storage facility;
  3. any bonds posted by the operator must be released; and

responsibility for monitoring and managing the storage facility becomes the responsibility of the state of North Dakota, to be overseen by the North Dakota Industrial Commission, until the American federal government assumes responsibility for the long-term monitoring and management of CO2 storage facilities.

Article/Section No.

Section 38-22-17

Instrument Text

38-22-17. Certificate of project completion - Release - Transfer of title and custody.

1.         After carbon dioxide injections into a reservoir end and upon application by the storage operator, the commission shall consider issuing a certificate of project completion.

2.         The certificate may only be issued after public notice and hearing. The commission

shall establish notice requirements for this hearing. 3. The certificate may only be issued after the commission has consulted with the state

department of health.

4.         The certificate may not be issued until at least ten years after carbon dioxide injections end.

5.         The certificate may only be issued if the storage operator:

a.         Is in full compliance with all laws governing the storage facility.

b.         Shows that it has addressed all pending claims regarding the storage facility's operation.

c.         Shows that the storage reservoir is reasonably expected to retain the carbon dioxide stored in it.

d.         Shows that the carbon dioxide in the storage reservoir has become stable. Stored carbon dioxide is stable if it is essentially stationary or, if it is migrating or may migrate, that any migration will be unlikely to cross the storage reservoir boundary.

e.         Shows that all wells, equipment, and facilities to be used in the postclosure period are in good condition and retain mechanical integrity.

f.          Shows that it has plugged wells, removed equipment and facilities, and completed reclamation work as required by the commission.

6.         Once a certificate is issued:

a.         Title to the storage facility and to the stored carbon dioxide transfers, without payment of any compensation, to the state.

b.         Title acquired by the state includes all rights and interests in, and all responsibilities associated with, the stored carbon dioxide.

c.         The storage operator and all persons who generated any injected carbon dioxide are released from all regulatory requirements associated with the storage facility.

d.         Any bonds posted by the storage operator must be released.

e.             Monitoring and managing the storage facility is the state's responsibility to be overseen by the commission until such time as the federal government assumes responsibility for the long-term monitoring and management of storage facilities.

V. Management of long-term responsibilities and liabilities
Allocation of long term responsibilities & liabilities

Summary

Section 38-22-17 of the North Dakota CO2 Storage Statute provides that, upon issuance of a certificate of project completion for a storage facility:

  1. title to the storage facility and stored CO2, and all associated rights and obligations, transfers to the state of North Dakota (without compensation to the operator);
  2. the operator and parties who generated the stored CO2 are released from all regulatory requirements associated with the storage facility;
  3. any bonds posted by the operator must be released; and

responsibility for monitoring and managing the storage facility becomes the responsibility of the state of North Dakota, to be overseen by the North Dakota Industrial Commission, until the American federal government assumes responsibility for the long-term monitoring and management of CO2 storage facilities.

Article/Section No.

Section 38-22-17

Instrument Text

38-22-17. Certificate of project completion - Release - Transfer of title and custody.

1.         After carbon dioxide injections into a reservoir end and upon application by the storage operator, the commission shall consider issuing a certificate of project completion.

2.         The certificate may only be issued after public notice and hearing. The commission

shall establish notice requirements for this hearing. 3. The certificate may only be issued after the commission has consulted with the state

department of health.

4.         The certificate may not be issued until at least ten years after carbon dioxide injections end.

5.         The certificate may only be issued if the storage operator:

a.         Is in full compliance with all laws governing the storage facility.

b.         Shows that it has addressed all pending claims regarding the storage facility's operation.

c.         Shows that the storage reservoir is reasonably expected to retain the carbon dioxide stored in it.

d.         Shows that the carbon dioxide in the storage reservoir has become stable. Stored carbon dioxide is stable if it is essentially stationary or, if it is migrating or may migrate, that any migration will be unlikely to cross the storage reservoir boundary.

e.         Shows that all wells, equipment, and facilities to be used in the postclosure period are in good condition and retain mechanical integrity.

f.          Shows that it has plugged wells, removed equipment and facilities, and completed reclamation work as required by the commission.

6.         Once a certificate is issued:

a.         Title to the storage facility and to the stored carbon dioxide transfers, without payment of any compensation, to the state.

b.         Title acquired by the state includes all rights and interests in, and all responsibilities associated with, the stored carbon dioxide.

c.         The storage operator and all persons who generated any injected carbon dioxide are released from all regulatory requirements associated with the storage facility.

d.         Any bonds posted by the storage operator must be released.

e.             Monitoring and managing the storage facility is the state's responsibility to be overseen by the commission until such time as the federal government assumes responsibility for the long-term monitoring and management of storage facilities.

Financial contributions to long term stewardship

Summary

Section 38-22-15 of the North Dakota CO2 Storage Statute requires operators to pay a fee on each ton of CO2 injected, at a rate calculated by the North Dakota Industrial Commission based on its anticipated expenses for the long-term monitoring and management of closed CO2 storage facilities.

Fees are to be paid into a carbon dioxide storage facility trust fund, which may be used only to meet the expenses the Commission incurs in such long-term monitoring and management.

Article/Section No.

Section 38-22-15

Instrument Text

38-22-15. Fees - Carbon dioxide storage facility trust fund - Continuing appropriation.

1.         Storage operators shall pay the commission a fee on each ton of carbon dioxide injected for storage. The fee must be in the amount set by commission rule. The amount must be based on the commission's anticipated expenses associated with the long-term monitoring and management of a closed storage facility.

2.         The fee must be deposited in the carbon dioxide storage facility trust fund. The fund must be maintained as a special fund and all money in the fund is appropriated and may be used only for defraying expenses the commission incurs in long-term monitoring and management of a closed storage facility. The commission, however, through a cooperative agreement with another state agency, may use the fund to compensate the cooperating agency for expenses the cooperating agency incurs in carrying out regulatory responsibilities that agency may have over a storage facility. Interest earned by the fund must be deposited in the fund.

3.            The industrial commission shall file with the director of the legislative council a report discussing whether the amount in the carbon dioxide storage facility trust fund and fees being paid into it are sufficient to satisfy the fund's objectives. The first report is due in December of 2014 and subsequent reports are due every four years thereafter.

VI. Additional Issues
Additional Issues

Article/Section No.

Section 38-22-14

Instrument Text

38-22-14. Fees - Carbon dioxide storage facility administrative fund - Continuing appropriation.

1.         Storage operators shall pay the commission a fee on each ton of carbon dioxide injected for storage. The fee must be in the amount set by commission rule. The amount must be based on the commission's anticipated expenses that it will incur in regulating storage facilities during their construction, operational, and preclosure phases.

2.            The fee must be deposited in the carbon dioxide storage facility administrative fund. The fund must be maintained as a special fund and all money in the fund is appropriated and may be used only for defraying the commission's expenses in processing permit applications; regulating storage facilities during their construction, operational, and preclosure phases; and making storage amount determinations under section 38-22-23. The commission, however, through a cooperative agreement with another state agency, may use the fund to compensate the cooperating agency for expenses the cooperating agency incurs in carrying out regulatory responsibilities that agency may have over a storage facility. Interest earned by the fund must be deposited in the fund.