Oklahoma Statutes Title 27A, Chapter 3: Oklahoma Carbon Capture and Geologic Sequestration Act (Oklahoma CCS Act)

Jurisdiction(s)
Instrument Date
Effective Date
Instrument Type
Primary
Relevant Regulatory Authority
Oklahoma Corporations Commission and Oklahoma Department of Environmental Quality, in accordance with § 27A-3-5-103.
Purpose and Context
The Oklahoma CCS Act sets out certain key principles in relation to the regulation of CO2 sequestration in Oklahoma, including in relation to permitting requirements, property and resource rights, and the jurisdiction and powers of relevant government agencies.
Relevant links
Instrument Access Date
19 October 2012
I. Regulatory scope and definitions
Definitions

Article/Section No.

§27A-3-5-102

Instrument Text

§27A-3-5-102. Definitions.
As used in the Oklahoma Carbon Capture and Geologic Sequestration Act:
1. "Agency" means the Corporation Commission or the Department of Environmental Quality, as the case may be and as described in Section 3-5-103 of this title;
2. "Anthropogenic carbon dioxide" or "man-made carbon dioxide" means the carbon dioxide compound manufactured, mechanically formed or otherwise caused to occur, as a result of either:
a. a chemical process performed by or involving efforts of a person, or
b. separation of carbon dioxide from natural gas.
The term shall not include carbon dioxide that is naturally present in underground locations;
3. "Approved reservoir" means a reservoir that is determined by the Agency with jurisdiction to be suitable for the receipt, storage and/or sequestration of injected carbon dioxide therein;
4. "Carbon dioxide" or "CO2" means an inorganic compound containing one carbon atom and two oxygen atoms, and exists as a gas at standard temperature and pressure. Carbon dioxide is an inert, stable, colorless, odorless, nontoxic, incombustible, inorganic gas that is dissolvable in water and is naturally present, such as in underground locations and in the atmosphere as a trace gas;
5. "Carbon sequestration" means long-term or short-term underground storage or sequestration of anthropogenic carbon dioxide in one or more reservoirs;
6. "CO2 injection well" means an artificial excavation or opening in the ground made by digging, boring, drilling, jetting, driving, or another method and is used to inject or transmit anthropogenic carbon dioxide into one or more reservoirs;
7. "CO2 capture and compression equipment" means the equipment, separation units, processing units, processing plants, pipe, buildings, pumps, compressors, meters, facilities, motors, fixtures, materials, and machinery, and all other improvements used in the operation of any of them, and property, real or personal, intangible or tangible, either attributable to or relating to, or located thereon, used for the purpose of:
a. capturing carbon dioxide from a source that produces anthropogenic carbon dioxide, and/or
b. compressing or otherwise increasing the pressure of anthropogenic carbon dioxide;
8. "CO2 pipeline" means any pipeline, compressors, pumps, meters, facilities, valves, fittings, right-of-way markers, cathodic protection ground beds, anodes, rectifiers, and any other cathodic

Composition of CO2 stream

Summary

§27A-3-5-102 of the Oklahoma CCS Act adopts the following definitions relevant to the composition of CO2 streams:

  1. “anthropogenic carbon dioxide” is defined as CO2 manufactured, mechanically formed or otherwise caused to occur, as a result of either a chemical process performed by a person or separation of CO2 from natural gas;
  2. “carbon dioxide” is defined as an inorganic compound containing one carbon atom and two oxygen atoms, which exists as a gas at standard temperature and pressure; and
  3. “carbon sequestration” is defined as the short- or long-term underground storage or sequestration of anthropogenic CO2 in one or more reservoirs.

 

The Act therefore focuses on injection and sequestration of anthropogenic CO2 alone, and does not make provision for injection of associated, incidental or other substances, as part of a CO2 stream. 

Article/Section No.

§27A-3-5-102

Instrument Text

Definitions.
As used in the Oklahoma Carbon Capture and Geologic Sequestration Act:
[…]
2. "Anthropogenic carbon dioxide" or "man-made carbon dioxide" means the carbon dioxide compound manufactured, mechanically formed or otherwise caused to occur, as a result of either:
a. a chemical process performed by or involving efforts of a person, or
b. separation of carbon dioxide from natural gas.
The term shall not include carbon dioxide that is naturally present in underground locations;
[…]
4. "Carbon dioxide" or "CO2" means an inorganic compound containing one carbon atom and two oxygen atoms, and exists as a gas at standard temperature and pressure. Carbon dioxide is an inert, stable, colorless, odorless, nontoxic, incombustible, inorganic gas that is dissolvable in water and is naturally present, such as in underground locations and in the atmosphere as a trace gas;
5. "Carbon sequestration" means long-term or short-term underground storage or sequestration of anthropogenic carbon dioxide in one or more reservoirs;
[…]

Enhanced oil recovery (EOR)

Summary

Under §27A-3-5-105(C) of the Oklahoma CCS Act, where an operator conducts enhanced oil or gas recovery operations on a compulsory unit formed under Oklahoma Statutes Title 52 §287.1 et seq. or its predecessor unitisation act, while such unit is in operation the operator will be relieved of any obligation to:

1.  plug and abandon any well within the unit that is intended to be used in enhanced oil or gas recovery operations, unless required pursuant to Oklahoma Statutes Title 17 §53; or

2.  remove surface equipment associated with any such well and intended to be used in enhanced oil or gas recovery operations.

 

§27A-3-5-106(B) provides that the Act does not alter the incidents of ownership or other rights of mineral estate owners, and must not adversely affect enhanced oil or gas recovery efforts. 

Article/Section No.

§27A-3-5-105
§27A-3-5-106

Instrument Text

§27A-3-5-105. Carbon dioxide property rights - Obligations relieved - Jurisdiction.
[…]
C. The facility operator, with permission of the facility owner, may produce, take, extract or reduce to possession any carbon dioxide injected, stored or sequestered in a CO2 sequestration facility. In the event an operator informs the Commission that it intends to conduct enhanced oil or gas recovery operations on a compulsory unit formed pursuant to Section 287.1 et seq. of Title 52 of the Oklahoma statutes, or its predecessor unitization act, then during the time that such unit is in operation, such operator shall be relieved of any obligation to either:
1. Plug and abandon any injection or production well within such unit that is intended to be used in such enhanced oil or gas recovery operations, unless required by the Commission pursuant to Section 53 of Title 17 of the Oklahoma Statutes; or
2. Remove any surface equipment that is associated with any such well and intended to be used in such enhanced oil or gas recovery operations, or both.
D. The Agency having jurisdiction over the injection of carbon dioxide under this act shall also have jurisdiction over a facility operator that produces, takes, extracts or reduces to possession any injected, stored or sequestered carbon dioxide in a CO2 sequestration facility.
Added by Laws 2009, c. 429, § 5, emerg. eff. June 1, 2009.
§27A-3-5-106. Construction of act.
A. Nothing in this act shall supersede the provisions of the Oklahoma Carbon Sequestration Enhancement Act, Section 3-4-101 et seq. of Title 27A of the Oklahoma Statutes.
B. Nothing in this act shall alter the incidents of ownership, or other rights, of the owners of the mineral estate or adversely affect enhanced oil or gas recovery efforts in the state.
[…]

II. The scope and management of rights
Property rights

Summary

§27A-3-5-105(A) of the Oklahoma CCS Act provides that, unless some other legal arrangement is made, injected CO2 will be the personal property of the owner of the CO2 sequestration facility. §27A-3-5-105(B) in turn confirms that injected CO2 will ordinarily not belong to the owner of the surface or mineral estate in the relevant land.

 

If, however, the facility owner permits, the facility operator may extract or reduce to possession CO2 sequestered in the facility.

Article/Section No.

§27A-3-5-105

Instrument Text

§27A-3-5-105. Carbon dioxide property rights - Obligations relieved - Jurisdiction.
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, carbon dioxide injected into a CO2 sequestration facility is considered to be the personal property of the facility owner.
B. Absent a final judgment of willful abandonment rendered by a court of competent jurisdiction, or a regulatory determination of willful abandonment, carbon dioxide injected into a CO2 sequestration facility is not considered to be the property of the owner of the surface or mineral estate in the land encompassing the geographic boundary of the CO2 sequestration facility, or any person claiming under the owner of the surface or mineral estate.
C. The facility operator, with permission of the facility owner, may produce, take, extract or reduce to possession any carbon dioxide injected, stored or sequestered in a CO2 sequestration facility. In the event an operator informs the Commission that it intends to conduct enhanced oil or gas recovery operations on a compulsory unit formed pursuant to Section 287.1 et seq. of Title 52 of the Oklahoma statutes, or its predecessor unitization act, then during the time that such unit is in operation, such operator shall be relieved of any obligation to either:
1. Plug and abandon any injection or production well within such unit that is intended to be used in such enhanced oil or gas recovery operations, unless required by the Commission pursuant to Section 53 of Title 17 of the Oklahoma Statutes; or
2. Remove any surface equipment that is associated with any such well and intended to be used in such enhanced oil or gas recovery operations, or both.
D. The Agency having jurisdiction over the injection of carbon dioxide under this act shall also have jurisdiction over a facility operator that produces, takes, extracts or reduces to possession any injected, stored or sequestered carbon dioxide in a CO2 sequestration facility.
Added by Laws 2009, c. 429, § 5, emerg. eff. June 1, 2009.

Competition with other Interests

Summary

§27A-3-5-106(B) of the Oklahoma CCS Act provides that the Act does not alter the incidents of ownership or other rights of mineral estate owners, and must not adversely affect enhanced oil or gas recovery efforts.

 

§27A-3-5-106(B) clarifies that the grant of rights to a facility operator pursuant to the Act will not prejudice the right of surface and mineral owners, including working interest and royalty owners, to drill through the relevant reservoir in a manner compliant with agency requirements imposed to protect the reservoir against the escape of CO2.

 

Finally, §27A-3-5-106(D) provides that nothing in the Act serves to grant a private operator the right of condemnation or eminent domain, for any purpose.

Article/Section No.

§27A-3-5-106

Instrument Text

Construction of act.
A. Nothing in this act shall supersede the provisions of the Oklahoma Carbon Sequestration Enhancement Act, Section 3-4-101 et seq. of Title 27A of the Oklahoma Statutes.
B. Nothing in this act shall alter the incidents of ownership, or other rights, of the owners of the mineral estate or adversely affect enhanced oil or gas recovery efforts in the state.
C. Any right granted to a facility operator pursuant to this act shall be without prejudice to the rights of any surface owner or mineral owner, including working interest and royalty owner, of the land encompassed within the defined geographic boundary of the CO2 sequestration facility, as established by the Agency, to drill or bore through the approved reservoir in a manner as shall comply with orders, rules and regulations issued for the purpose of protecting the approved reservoir against the escape of CO2. For purposes of this subsection, the Agency with jurisdiction under other state law for regulating the well being drilled or bored through the approved reservoir is the Agency having jurisdiction to adopt orders and rules for such well in order to protect the CO2 sequestration facility, regardless of which Agency has jurisdiction to permit the CO2 sequestration facility pursuant to Section 3 of this act. If the Agency with jurisdiction under other state law for regulating the well being drilled or bored through the approved reservoir is not the Agency that has jurisdiction to permit the CO2 sequestration facility pursuant to Section 3 of this act, then the former shall promptly notify the latter in writing of the receipt of an application for the drilling or boring of such a well and shall consider all timely submitted comments of the latter in approving, denying, or setting conditions for the well being drilled or bored. The additional cost of complying with such orders, rules or regulations in order to protect the CO2 sequestration facility shall be borne by the facility operator.
D. Nothing in this act shall grant a private operator the right of condemnation or eminent domain for any purpose.
Added by Laws 2009, c. 429, § 6, emerg. eff. June 1, 2009.

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

Summary

§27A-3-5-104(B) of the Oklahoma CCS Act requires operators of CO2 sequestration facilities to obtain a permit before operating the facility.

Before obtaining such a permit:
1. the relevant agency (as determined in accordance with 27A-3-5-103) must, if requested, hold a hearing; and
2. the operator must provide notice of the hearing to various stakeholders in accordance with §27A-3-5-104(D).

A permit will not be required, however, if the operator has permission to inject or sequester CO2 from the relevant agency pursuant to Oklahoma’s federally approved Underground Injection Control Program (see §27A-3-5-104(B).

Under §27A-3-5-104(C), the relevant agency has the power to make orders and rules necessary for the regulation of the drilling of CO2 injection wells, CO2 injection and withdrawal, operation of CO2 sequestration facilities, CO2 injection well plugging and abandonment, removal of surface buildings and equipment, and for any other purpose necessary to implement the Act. Such rules and orders may address the establishment of fees, financial surety or bond requirements, and facility monitoring.

In addition, under §27A-3-5-104(E) the relevant agency has the authority to perform acts necessary under the federal Safe Drinking Water Act and Oklahoma’s participation in the Underground Injection Control Program, with respect to CO2 sequestration and storage.

Article/Section No.

§27A-3-5-104

Instrument Text

Memorandum of understanding - Permits - Rules - Notice requirements - Powers and duties.
A. The Corporation Commission and the Department of Environmental Quality shall execute a Memorandum of Understanding to address areas in which the implementation of this act will require interagency cooperation or interaction, including procedures for directing applicants through the application process.
B. The operator of a CO2 sequestration facility shall obtain a permit pursuant to this act from the Agency having jurisdiction prior to the operation of a CO2 sequestration facility, after the Operator provides notice of the application for such permit pursuant to subsection D of this section, and the Agency has a hearing thereon upon request; provided that no permit pursuant to this act is required if the facility operator obtains permission, by permit or order, by the Agency pursuant to the rules and regulations of the state’s federally approved Underground Injection Control Program and such permission authorizes carbon sequestration or injection of carbon dioxide underground and incorporates any additional requirements adopted pursuant to subsection C of this section.
C. To the extent not already authorized by laws governing the state’s federally approved Underground Injection Control Program, the Agency having jurisdiction may issue and enforce such orders, and may adopt, modify, repeal and enforce such rules, including establishment of appropriate and sufficient fees, financial sureties or bonds, and monitoring at CO2 sequestration facilities, as may be necessary, for the purpose of regulating the drilling of CO2 injection wells related to a CO2 sequestration facility, the injection and withdrawal of carbon dioxide, the operation of the CO2 sequestration facility, CO2 injection well plugging and abandonment, removal of surface buildings and equipment of the CO2 sequestration facility and for any other purpose necessary to implement the provisions of this act.
D. The applicant for any permit to be issued pursuant to this act shall give all surface owners and mineral owners, including working interest and royalty owners, of the land to be encompassed within the defined geographic boundary of the CO2 sequestration facility as established by the Agency, and whose addresses are known or could be known through the exercise of due diligence, at least fifteen (15) days’ notice of the hearing by mail, return receipt requested. The applicant shall also give notice by one publication, at least fifteen (15) days prior to the hearing, in some newspaper of general circulation published in Oklahoma County, and by one publication, at least fifteen (15) days prior to the date of the hearing, in some newspaper published in the county, or in each county, if there be more than one, in which the defined geographic boundary of the CO2 sequestration facility, as established by the Agency, is situated. The applicant shall file proof of publication and an affidavit of mailing with the Agency prior to the hearing.
E. In addition to all other powers and duties prescribed in this act or otherwise by law, and unless otherwise specifically set forth in this act, the Agency having jurisdiction shall have the authority to perform any and all acts necessary to carry out the purposes and requirements of the federal Safe Drinking Water Act, as amended, relating to this state’s participation in the federal Underground Injection Control Program established under that act with respect to the storage and/or sequestration of carbon dioxide.
Added by Laws 2009, c. 429, § 4, emerg. eff. June 1, 2009.

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

Summary

Under §27A-3-5-104(C) of the Oklahoma CCS Act, the relevant agency (as determined in accordance with 27A-3-5-103) has the power to make orders and rules addressing, among other things, the monitoring of CO2 sequestration facilities. 

Article/Section No.

§27A-3-5-104(C)

Instrument Text

Memorandum of understanding - Permits - Rules - Notice requirements - Powers and duties.
[…]
C. To the extent not already authorized by laws governing the state’s federally approved Underground Injection Control Program, the Agency having jurisdiction may issue and enforce such orders, and may adopt, modify, repeal and enforce such rules, including establishment of appropriate and sufficient fees, financial sureties or bonds, and monitoring at CO2 sequestration facilities, as may be necessary, for the purpose of regulating the drilling of CO2 injection wells related to a CO2 sequestration facility, the injection and withdrawal of carbon dioxide, the operation of the CO2 sequestration facility, CO2 injection well plugging and abandonment, removal of surface buildings and equipment of the CO2 sequestration facility and for any other purpose necessary to implement the provisions of this act.
[…]

Financial security

Summary

Under §27A-3-5-104(C) of the Oklahoma CCS Act, the relevant agency (as determined in accordance with 27A-3-5-103) has the power to make orders and rules addressing, among other things, the establishment of financial surety or bond requirements. 

Article/Section No.

§27A-3-5-104(C)

Instrument Text

Memorandum of understanding - Permits - Rules - Notice requirements - Powers and duties.

[…]

C.  To the extent not already authorized by laws governing the state’s federally approved Underground Injection Control Program, the Agency having jurisdiction may issue and enforce such orders, and may adopt, modify, repeal and enforce such rules, including establishment of appropriate and sufficient fees, financial sureties or bonds, and monitoring at CO2 sequestration facilities, as may be necessary, for the purpose of regulating the drilling of CO2 injection wells related to a CO2 sequestration facility, the injection and withdrawal of carbon dioxide, the operation of the CO2 sequestration facility, CO2 injection well plugging and abandonment, removal of surface buildings and equipment of the CO2 sequestration facility and for any other purpose necessary to implement the provisions of this act.

[…]

Site closure

Summary

Under §27A-3-5-104(C) of the Oklahoma CCS Act, the relevant agency (as determined in accordance with 27A-3-5-103) has the power to make orders and rules necessary for the regulation of, among other things, CO2 injection well plugging and abandonment, and removal of surface buildings and equipment.

 

Such rules and orders may address the establishment of fees, financial surety or bond requirements, and facility monitoring.

Article/Section No.

§27A-3-5-104(C)

Instrument Text

Memorandum of understanding - Permits - Rules - Notice requirements - Powers and duties.

[…]

C.  To the extent not already authorized by laws governing the state’s federally approved Underground Injection Control Program, the Agency having jurisdiction may issue and enforce such orders, and may adopt, modify, repeal and enforce such rules, including establishment of appropriate and sufficient fees, financial sureties or bonds, and monitoring at CO2 sequestration facilities, as may be necessary, for the purpose of regulating the drilling of CO2 injection wells related to a CO2 sequestration facility, the injection and withdrawal of carbon dioxide, the operation of the CO2 sequestration facility, CO2 injection well plugging and abandonment, removal of surface buildings and equipment of the CO2 sequestration facility and for any other purpose necessary to implement the provisions of this act.

[…]

V. Management of long-term responsibilities and liabilities