Louisiana Revised Statutes, Title 30: Minerals, Oil, and Gas and Environmental Quality, Chapter 11: Louisiana Geologic Sequestration of Carbon Dioxide Act (Louisiana CO2 Sequestration Act)

Jurisdiction(s)
Instrument Date
2009
Effective Date
Instrument Type
Primary
Relevant Regulatory Authority
Commissioner of Conservation (see § 1102(B))
Purpose and Context
The purpose of the Louisiana CO2 Sequestration Act is stated in § 1102(A)(4) as being “to provide for a coordinated statewide program related to the storage of carbon dioxide and to also fulfill the state's primary responsibility for assuring compliance with the federal Safe Drinking Water Act, including any amendments thereto related to the underground injection of carbon dioxide.”
Associated instruments

Safe Drinking Water Act

Instrument Access Date
25 September 2012
I. Regulatory scope and definitions
Definitions

Article/Section No.

§ 1103

Instrument Text

§1103. Definitions 4   Unless the context otherwise requires, the words defined in this Section have 5     the following meaning when found in this Chapter: 6     (1) "Carbon dioxide" means naturally occurring, geologically sourced, or 7   anthropogenically sourced carbon dioxide including its derivatives and all mixtures, 8            combinations, and phases, whether liquid or gaseous, stripped, segregated, or divided 9    from any other fluid stream thereof.

10 (2) "Commissioner" has the same meaning as provided in R.S. 30:3(2).

11 (3) "Gas" has the same meaning as provided in R.S. 30:3(5).

12 (4) "Geologic storage" means the long-or short-term underground storage of 13            carbon dioxide in a reservoir. 14(5) "Office" means the office of conservation, Department of Natural 15        Resources. 16 (6) "Oil" has the same meaning as provided in R.S. 30:3(4). 17        (7) "Person" means any natural person, corporation, association, partnership, 18   limited liability company, or other entity, receiver, tutor, curator, executor, 19         administrator, fiduciary, or representative of any kind. 20 (8) "Reservoir" means that portion of any underground geologic stratum, 21 formation, aquifer, or cavity or void, whether natural or artificially created, including 22        oil and gas reservoirs, salt domes or other saline formations, and coal and coalbed 23    methane seams, suitable for or capable of being made suitable for the injection and 24         storage of carbon dioxide therein. 25     (9) "Storage facility" means the underground reservoir, carbon dioxide 26     injection wells, monitoring wells, underground equipment, and surface buildings and 27      equipment utilized in the storage operation, including pipelines owned or operated 28     by the storage operator used to transport the carbon dioxide from one or more 29         capture facilities or sources to the storage and injection site. The underground 30     reservoir component of the storage facility includes any necessary and reasonable aerial buffer and subsurface monitoring zones designated by the commissioner for the purpose of ensuring the safe and efficient operation of the storage facility for the storage of carbon dioxide and shall be chosen to protect against pollution, and escape or migration of carbon dioxide.

(10) "Storage operator" means the person authorized by the commissioner to operate a storage facility. A storage operator can, but need not be, the owner of carbon dioxide injected into a storage facility. Ownership of carbon dioxide and use of geologic storage is a matter of private contract between the storage operator and owner, shipper or generator of carbon dioxide, as applicable.

(11) "Waste" in addition to its ordinary meaning, means "physical waste" as that term is generally understood in the storage industry.

Composition of CO2 stream

Summary

The definition of CO2 given in § 1103 of the Louisiana CO2 Sequestration Act expressly includes CO2 derivatives, mixtures and combinations within its scope, such that CO2 streams that include other components (i.e. mixtures or combinations that do not consist purely or overwhelmingly of CO2) may nonetheless be covered by the Act.

Article/Section No.

§ 1103

Instrument Text

§1103. Definitions 4   Unless the context otherwise requires, the words defined in this Section have 5     the following meaning when found in this Chapter: 6     (1) "Carbon dioxide" means naturally occurring, geologically sourced, or 7   anthropogenically sourced carbon dioxide including its derivatives and all mixtures, 8            combinations, and phases, whether liquid or gaseous, stripped, segregated, or divided 9    from any other fluid stream thereof.

Enhanced oil recovery (EOR)

Summary

§ 1102 of the Louisiana CO2 Sequestration Act declares that CO2 storage activities may allow for the orderly withdrawal of CO2 for use in commercial, industrial or other applications, including EOR.

§ 1104(A)(8) confirms that nothing in the Act functions to prevent EOR projects utilising CO2 injection as approved under R.S. 30:4, while under §1104(A)(9) the Commissioner of Conservation can approve conversion of an existing EOR operation into a CO2 storage facility.

Article/Section No.

§ 1102
§ 1104(A)

Instrument Text

§1102. Policy; jurisdiction

A. It is declared to be in the public interest for a public purpose and the policy of Louisiana that:

[…]

(3) Geologic storage of carbon dioxide may allow for the orderly withdrawal as appropriate or necessary, thereby allowing carbon dioxide to be available for commercial, industrial, or other uses, including the use of carbon dioxide for enhanced recovery of oil and gas.

[…]

§1104. Duties and powers of the commissioner; rules and regulations; permits

A. The office of conservation's actions under this Chapter shall be directed and controlled by the commissioner. The commissioner shall have authority to:

[…]

(8) Nothing in this Chapter shall prevent an enhanced oil and gas recovery

project utilizing injection of carbon dioxide as approved under R.S. 30:4. (9) Approve conversion of an existing enhanced oil or gas recovery operation into a storage facility, if necessary, taking into consideration prior

approvals of the commissioner regarding such enhanced oil recovery operations.

II. The scope and management of rights
Property rights

Summary

§ 1104(E) of the Louisiana CO2 Sequestration Act provides that the Commissioner of Conservation may order that:

  1. all injected CO2 is the property of the owner of such CO2, whether such ownership exists at the time of injection or pursuant to an agreed subsequent change of ownership;
  2. in no event shall CO2 be subject to the right of any owner of overlying or adjacent surface lands or of any mineral interest; and
  3. the CO2 owner has no right to gas, liquid hydrocarbons, salt, or other commercially recoverable minerals in any stratum or portion thereof not determined by the Commissioner to constitute an approved storage reservoir.

Article/Section No.

§ 1104(E)

Instrument Text

§1104. Duties and powers of the commissioner; rules and regulations; permits

[…]

E. The commissioner may issue any necessary order providing that all 22    carbon dioxide which has previously been reduced to possession and which is 23          subsequently injected into a storage reservoir shall at all times be deemed the 24            property of the party that owns such carbon dioxide, whether at the time of injection 25   or pursuant to a change of ownership by agreement while the carbon dioxide is 26     located in the storage facility, his successors and assigns; and in no event shall such 27            carbon dioxide be subject to the right of the owner of the surface of the lands or of 28        any mineral interest therein under which such storage reservoir shall lie or be 29        adjacent to or of any person other than the owner, his successors, and assigns to 30           produce, take, reduce to possession, waste, or otherwise interfere with or exercise any control there over, provided that the owner, his successors, and assigns shall 2      have no right to gas, liquid hydrocarbons, salt, or other commercially recoverable 3   minerals in any stratum or portion thereof not determined by the commissioner to 4           constitute an approved storage reservoir. The commissioner shall issue such orders, 5  rules, and regulations as may be necessary for the purpose of protecting any such 6        storage reservoir, strata, or formations against pollution or against the escape of 7      carbon dioxide therefrom, including such necessary rules and regulations as may 8 pertain to the drilling into or through such storage reservoir.

Competition with other Interests

Summary

§ 1104(C) of the Louisiana CO2 Sequestration Act stipulates that any reservoir that is producing or capable of producing oil, gas, condensate or other commercial minerals in paying quantities cannot be subject to CO2 storage activities, unless all owners in such reservoir have agreed to those activities.

In addition, § 1104(C) goes on to provide that no reservoir can be used for CO2 storage unless either:

  1. all volumes of oil, gas, condensate, salt, or other commercial minerals in the reservoir capable of being produced in paying quantities have been produced; or
  2. the reservoir has a greater value or utility for CO2 storage than for the production of the remaining volumes of oil, gas, condensate or other commercial minerals, and at least three quarters of the owners of the reservoir have consented to such use in writing.

Under § 1104(D), it is for the Commissioner to determine whether any reservoir is fully depleted of its original commercially recoverable natural gas, condensate or other commercial minerals, or the amount of any minerals remaining.

Article/Section No.

§ 1104(C)

Instrument Text

§1104. Duties and powers of the commissioner; rules and regulations; permits

[…]

C. Prior to the use of any reservoir for the storage of carbon dioxide and 20           prior to the exercise of eminent domain by any person, firm, or corporation having 21        such right under laws of the state of Louisiana, and as a condition precedent to such 22      use or to the exercise of such rights of eminent domain, the commissioner, after 23     public hearing pursuant to the provisions of R.S. 30:6, held in the parish where the 24          storage facility is to be located, shall have found all of the following:

25        (1) That the reservoir sought to be used for the injection, storage, and 26    withdrawal of carbon dioxide is suitable and feasible for such use, provided no 27    reservoir, any part of which is producing or is capable of producing oil, gas, 28 condensate, or other commercial mineral in paying quantities, shall be subject to 29            such use, unless all owners in such reservoir have agreed thereto. In addition, no 30           reservoir shall be subject to such use unless either:

(a) The volumes of original reservoir, oil, gas, condensate, salt, or other 2    commercial mineral therein which are capable of being produced in paying quantities

3       have all been produced. 4      (b) Such reservoir has a greater value or utility as a reservoir for carbon 5         dioxide storage than for the production of the remaining volumes of original 6          reservoir oil, gas, condensate, or other commercial mineral, and at least three-fourths 7  of the owners, in interest, exclusive of any "lessor" defined in R.S. 30:148.1, have 8          consented to such use in writing. 9  (2) That the use of the reservoir for the storage of carbon dioxide will not

10        contaminate other formations containing fresh water, oil, gas, or other commercial 11        mineral deposits. 12        (3) That the proposed storage will not endanger human lives or cause a 13  hazardous condition to property.

D. The commissioner shall determine with respect to any such reservoir 15 proposed to be used as a storage reservoir, whether or not such reservoir is fully 16    depleted of the original commercially recoverable natural gas, condensate, or other 17          commercial mineral therein. If the commissioner finds that such reservoir has not 18            been fully depleted, the commissioner shall determine the amount of the remaining 19      commercially recoverable natural gas, condensate, or other commercial mineral of 20       such reservoir.

Public participation

Summary

<p>§ 1105 of the Louisiana CO<sub>2</sub> Sequestration Act enables any interested person to have the Commissioner of Conservation call a hearing with respect to any matter within the Commissioner’s jurisdiction. All such hearings must be conducted in accordance with the provisions of R.S. 30:6, and be initiated by written request accompanied by payment of the applicable hearing fee. On receiving a request and the required payment, the Commissioner must promptly call the hearing, and thereafter take whatever action is deemed appropriate with regard to its subject matter.</p> <p>The Commissioner is also required to keep a book of rules, regulations, and orders made under the Act, which book must be be open for inspection:</p> <ol> <li>at all times during reasonable office hours; and</li> <li>on the website of the Department of Natural Resources.</li> </ol>

Article/Section No.

§ 1105

Instrument Text

§1105. Hearings; notice; rules of procedures; emergency; service of process; public

10        records; request for hearings; orders and compliance orders 11        A. All public hearings under this Part shall be conducted pursuant to the 12            provisions of R.S. 30:6. 13     B. All rules, regulations, and orders made by the commissioner under this 14     Chapter shall be in writing and shall be entered in full by him in a book kept for that 15       purpose. This book shall be a public record and shall be open for inspection at all 16          times during reasonable office hours and shall be available on the Department of 17        Natural Resources website. A copy of a rule, regulation, or order, certified by the 18         commissioner, shall be received in evidence in all courts of this state with the same 19 effect as the original. 20         C. Any interested person has the right to have the commissioner call a 21            hearing for the purpose of taking action in respect to a matter within the jurisdiction 22        of the commissioner as provided in this Section by making a request therefor in 23            writing and paying the hearing fee set by the commissioner, as provided by law for 24 hearing conducted pursuant to R.S. 30:6. Upon receiving the request and payment 25            of the required fees the commissioner shall promptly call a hearing. After the 26    hearing and with all convenient speed and within thirty days after the conclusion of 27     the hearing, the commissioner shall take whatever action he deems appropriate with 28 regard to the subject matter.

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

Summary

Under § 1104(A)(1) of the Louisiana CO2 Sequestration Act, the Commissioner of Conservation has the authority to, among other things, regulate the development of CO2 storage facilities, and pipelines transmitting CO2 to storage facilities.

Article/Section No.

§ 1104(A)(1)

Instrument Text

§1104. Duties and powers of the commissioner; rules and regulations; permits

A. The office of conservation's actions under this Chapter shall be directed and controlled by the commissioner. The commissioner shall have authority to:

(1) Regulate the development and operation of storage facilities and pipelines transmitting carbon dioxide to storage facilities, including in accordance with the provisions of R.S. 30:1107, the issuance of certificates of public convenience and necessity for storage facilities and pipelines serving such projects approved hereunder.

[…]

Controls on site selection

Summary

§ 1104(C) of the Louisiana CO2 Sequestration Act requires that, before any reservoir is used for CO2 storage, the Commission of Conservation must have found, after a public hearing, that:

  1. such use of the reservoir is suitable and feasible; and
  2. that the proposed storage will not endanger human lives or cause a hazard to property.

With regard to determining suitability and feasibility, § 1104(C) also provides that any reservoir that is producing or capable of producing oil, gas, condensate, or other commercial minerals in paying quantities cannot be subject to CO2 storage activities, unless all owners in such reservoir have agreed to these activities.

Article/Section No.

§ 1104(C)

Instrument Text

§1104. Duties and powers of the commissioner; rules and regulations; permits

[…]

C. Prior to the use of any reservoir for the storage of carbon dioxide and 20           prior to the exercise of eminent domain by any person, firm, or corporation having 21        such right under laws of the state of Louisiana, and as a condition precedent to such 22      use or to the exercise of such rights of eminent domain, the commissioner, after 23     public hearing pursuant to the provisions of R.S. 30:6, held in the parish where the 24          storage facility is to be located, shall have found all of the following:

25        (1) That the reservoir sought to be used for the injection, storage, and 26    withdrawal of carbon dioxide is suitable and feasible for such use, provided no 27    reservoir, any part of which is producing or is capable of producing oil, gas, 28 condensate, or other commercial mineral in paying quantities, shall be subject to 29            such use, unless all owners in such reservoir have agreed thereto. In addition, no 30           reservoir shall be subject to such use unless either:

(a) The volumes of original reservoir, oil, gas, condensate, salt, or other 2    commercial mineral therein which are capable of being produced in paying quantities

3       have all been produced. 4      (b) Such reservoir has a greater value or utility as a reservoir for carbon 5         dioxide storage than for the production of the remaining volumes of original 6          reservoir oil, gas, condensate, or other commercial mineral, and at least three-fourths 7  of the owners, in interest, exclusive of any "lessor" defined in R.S. 30:148.1, have 8          consented to such use in writing. 9  (2) That the use of the reservoir for the storage of carbon dioxide will not

10        contaminate other formations containing fresh water, oil, gas, or other commercial 11        mineral deposits. 12        (3) That the proposed storage will not endanger human lives or cause a 13  hazardous condition to property.

Environmental protection and impact assessment

Summary

Under § 1104(A) of the Louisiana CO2 Sequestration Act, the Commissioner of Conservation has the authority to make rules, regulations and orders to, among other things:

  1. prevent pollution of fresh water supplies by oil, gas, salt water or CO2; and
  2. require the removal of equipment, structures and trash, and otherwise require general site cleanups.

§ 1104(C) requires that, before any reservoir is used for CO2 storage, the Commission of Conservation must have found, after a public hearing, that:

  1. such use of the reservoir is suitable and feasible; and
  2. that the proposed storage will not endanger human lives or cause a hazard to property.

Under § 1104(E), the Commissioner of Conservation must issue orders, rules, and regulations as necessary to protect approved storage reservoirs, strata, and formations against pollution and the escape of CO2 therefrom (i.e. leakage).

Article/Section No.

§ 1104

Instrument Text

§1104. Duties and powers of the commissioner; rules and regulations; permits

A. The office of conservation's actions under this Chapter shall be directed and controlled by the commissioner. The commissioner shall have authority to:

[…]

(2) Make, after notice and hearings as provided in this Chapter, any reasonable rules, regulations, and orders that are necessary from time to time in the proper administration and enforcement of this Chapter, including rules, regulations, or orders for the following purposes:

(a) To require the drilling, casing, and plugging of wells to be done in such a manner as to prevent the escape of carbon dioxide out of one stratum to another.

(b) To prevent the intrusion of carbon dioxide into oil, gas, salt formation, or other commercial mineral strata.

(c) To prevent the pollution of fresh water supplies by oil, gas, salt water, or carbon dioxide.

(d) To require the plugging of each abandoned well and the closure of associated surface facilities, the removal of equipment, structures, and trash, and to

otherwise require a general site cleanup of such abandoned wells.

[…]

C. Prior to the use of any reservoir for the storage of carbon dioxide and 20           prior to the exercise of eminent domain by any person, firm, or corporation having 21        such right under laws of the state of Louisiana, and as a condition precedent to such 22      use or to the exercise of such rights of eminent domain, the commissioner, after 23     public hearing pursuant to the provisions of R.S. 30:6, held in the parish where the 24          storage facility is to be located, shall have found all of the following:

25        (1) That the reservoir sought to be used for the injection, storage, and 26    withdrawal of carbon dioxide is suitable and feasible for such use, provided no 27    reservoir, any part of which is producing or is capable of producing oil, gas, 28 condensate, or other commercial mineral in paying quantities, shall be subject to 29            such use, unless all owners in such reservoir have agreed thereto. In addition, no 30           reservoir shall be subject to such use unless either:

(a) The volumes of original reservoir, oil, gas, condensate, salt, or other 2    commercial mineral therein which are capable of being produced in paying quantities

3       have all been produced. 4      (b) Such reservoir has a greater value or utility as a reservoir for carbon 5         dioxide storage than for the production of the remaining volumes of original 6          reservoir oil, gas, condensate, or other commercial mineral, and at least three-fourths 7  of the owners, in interest, exclusive of any "lessor" defined in R.S. 30:148.1, have 8          consented to such use in writing. 9  (2) That the use of the reservoir for the storage of carbon dioxide will not

10        contaminate other formations containing fresh water, oil, gas, or other commercial 11        mineral deposits. 12        (3) That the proposed storage will not endanger human lives or cause a 13  hazardous condition to property.

D. The commissioner shall determine with respect to any such reservoir 15 proposed to be used as a storage reservoir, whether or not such reservoir is fully 16    depleted of the original commercially recoverable natural gas, condensate, or other 17          commercial mineral therein. If the commissioner finds that such reservoir has not 18            been fully depleted, the commissioner shall determine the amount of the remaining 19      commercially recoverable natural gas, condensate, or other commercial mineral of 20       such reservoir.

E. The commissioner may issue any necessary order providing that all 22    carbon dioxide which has previously been reduced to possession and which is 23          subsequently injected into a storage reservoir shall at all times be deemed the 24            property of the party that owns such carbon dioxide, whether at the time of injection 25   or pursuant to a change of ownership by agreement while the carbon dioxide is 26     located in the storage facility, his successors and assigns; and in no event shall such 27            carbon dioxide be subject to the right of the owner of the surface of the lands or of 28        any mineral interest therein under which such storage reservoir shall lie or be 29        adjacent to or of any person other than the owner, his successors, and assigns to 30           produce, take, reduce to possession, waste, or otherwise interfere with or exercise any control there over, provided that the owner, his successors, and assigns shall 2      have no right to gas, liquid hydrocarbons, salt, or other commercially recoverable 3   minerals in any stratum or portion thereof not determined by the commissioner to 4           constitute an approved storage reservoir. The commissioner shall issue such orders, 5  rules, and regulations as may be necessary for the purpose of protecting any such 6        storage reservoir, strata, or formations against pollution or against the escape of 7      carbon dioxide therefrom, including such necessary rules and regulations as may 8 pertain to the drilling into or through such storage reservoir.

Permitting CO2 injection and storage

Summary

Under § 1104(A)(1) of the Louisiana CO2 Sequestration Act, the Commissioner of Conservation has the authority to, among other things, regulate the development and operation of CO2 storage facilities and pipelines transmitting CO2 to such facilities.

The Commissioner also has the authority to perform any and all acts necessary to carry out the purposes and requirements of the federal Safe Drinking Water Act that relate to Louisiana’s participation in the underground injection control program established under that act, with respect to the storage and sequestration of CO2.

Article/Section No.

§ 1104(A)(1)
§ 1106(A)

Instrument Text

§1104. Duties and powers of the commissioner; rules and regulations; permits

A. The office of conservation's actions under this Chapter shall be directed and controlled by the commissioner. The commissioner shall have authority to:

(1) Regulate the development and operation of storage facilities and pipelines transmitting carbon dioxide to storage facilities, including in accordance with the provisions of R.S. 30:1107, the issuance of certificates of public convenience and necessity for storage facilities and pipelines serving such projects approved hereunder.

[…]

§1106. Underground injection control 2        A. The commissioner shall have authority to perform any and all acts 3            necessary to carry out the purposes and requirements of the federal Safe Drinking 4          Water Act, as amended, relating to this state's participation in the underground 5  injection control program established under that act with respect to the storage and 6  sequestration of carbon dioxide. To that end, the commissioner is authorized and 7   empowered to adopt, modify, repeal, and enforce procedural, interpretive, and 8   administrative rules in accordance with the provisions of this Chapter.

[…]

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

Summary

Under § 1104(A) of the Louisiana CO2 Sequestration Act, the Commissioner of Conservation has the authority to require, among other things:

  1. the keeping of records and the making of reports;
  2. the making of reports showing the location of all wells used in connection with a storage facility;
  3. the filing of logs, electrical surveys, and other drilling records; and
  4. placement on storage facilities and ancillary equipment of monitoring equipment necessary and proper to monitor and verify CO2 injections and to prevent waste.

Refusal to attach or install a monitor within a reasonable period of time when ordered to do so by the Commissioner, or tampering with a monitor so as to produce a false or inaccurate reading, constitutes a violation of the Act. 

Article/Section No.

§ 1104(A)

Instrument Text

§1104. Duties and powers of the commissioner; rules and regulations; permits

A. The office of conservation's actions under this Chapter shall be directed and controlled by the commissioner. The commissioner shall have authority to:

[…]

(3) Make such inquiries as he deems proper to determine whether or not waste, over which he has jurisdiction, exists or is imminent. In the exercise of this power the commissioner has the authority to collect data; to make investigations and inspections; to examine properties, papers, books, and records; to examine, survey, check, test, and gauge injection, withdrawal and other wells used in connection with carbon storage; to examine, survey, check, test, and gauge tanks, and modes of transportation; to hold hearings; to provide for the keeping of records and the making of reports; to require the submission of an emergency phone number by which the operator may be contacted in case of an emergency; and to take any action as

reasonably appears to him to be necessary to enforce this Chapter.

(4) Require the making of reports showing the location of all wells used in connection with a storage facility, and the filing of logs, electrical surveys, and other

drilling records.

[…]

(10) Promulgate rules and regulations requiring interested persons to place monitoring equipment of a type approved by the commissioner on all storage facilities, and ancillary equipment necessary and proper to monitor, verify carbon 2          dioxide injections, and to prevent waste. It shall be a violation of this Chapter for 3           any person to refuse to attach or install a monitor within a reasonable period of time 4      when ordered to do so by the commissioner, or in any way to tamper with the 5     monitors so as to produce a false or inaccurate reading.

Inspections

Summary

Under § 1104(A)(3) of the Louisiana CO2 Sequestration Act, the Commissioner of Conservation has the authority to, among other things:

  1. collect data;
  2. make investigations and inspections;
  3. examine properties, papers, books, and records;
  4. examine, survey, check, test, and gauge injection, withdrawal and other wells used in connection with CO2 storage; and
  5. examine, survey, check, test, and gauge tanks, and modes of transportation.

Article/Section No.

§ 1104(A)(3)

Instrument Text

§1104. Duties and powers of the commissioner; rules and regulations; permits

A. The office of conservation's actions under this Chapter shall be directed and controlled by the commissioner. The commissioner shall have authority to:

[…]

(3) Make such inquiries as he deems proper to determine whether or not waste, over which he has jurisdiction, exists or is imminent. In the exercise of this power the commissioner has the authority to collect data; to make investigations and inspections; to examine properties, papers, books, and records; to examine, survey, check, test, and gauge injection, withdrawal and other wells used in connection with carbon storage; to examine, survey, check, test, and gauge tanks, and modes of transportation; to hold hearings; to provide for the keeping of records and the making of reports; to require the submission of an emergency phone number by which the operator may be contacted in case of an emergency; and to take any action as

reasonably appears to him to be necessary to enforce this Chapter.

Enforcement

Summary

§ 1106(B) of the Louisiana CO2 Sequestration Act provides that, whenever the Commissioner of Conservation or an authorised representative of the Commissioner determines that a violation of the Act has occurred or is about to occur, the Commissioner or representative must either:

  1. issue a compliance order specifying the nature of the violation and a time within which compliance must be achieved; or
  2. commence a civil action for appropriate relief.

Persons failing to comply with a compliance order may be liable for a civil penalty of not more than five thousand dollars a day for each day of violation and for each act of violation.

The Commissioner can also, for enforcement purposes, suspend or revoke any permit, compliance order, license, or variance.

No penalty can be assessed, however, until the person charged has been given notice and an opportunity for a hearing on the applicable charge.

In determining whether or not a civil penalty is to be assessed, and in determining the amount of any penalty, consideration must be given to the gravity of the violation and any demonstrated good faith of the person charged in attempting to achieve rapid compliance after notification of a violation.

Under § 1104(A)(13), the Commissioner can promulgate regulations regarding the setting and collection of civil penalties pursuant to the Act. 

Article/Section No.

§ 1104(A)(13)
§ 1106

Instrument Text

§1104. Duties and powers of the commissioner; rules and regulations; permits

A. The office of conservation's actions under this Chapter shall be directed and controlled by the commissioner. The commissioner shall have authority to:

[…]

(13) Promulgate rules related to the setting and collection of fees and civil 15        penalties pursuant to this Chapter.

[…]

 

§1106. Underground injection control

[…]

B. Whenever the commissioner or an authorized representative of the

10     commissioner determines that a violation of any requirement of this Chapter has 11  occurred or is about to occur, the commissioner or his authorized representative shall 12         either issue an order requiring compliance within a specified time period or shall 13         commence a civil action for appropriate relief, including a temporary or permanent 14  injunction.

15     C. Any compliance order issued under this Chapter shall state with 16          reasonable specificity the nature of the violation and specify a time for compliance 17        and, in the event of noncompliance, assess a civil penalty, if any, which the 18     commissioner determines is reasonable, taking into account the seriousness of the 19         violation and any good faith efforts to comply with the applicable requirements. 20 D.(1) Except as otherwise provided by law, any person to whom a 21      compliance order is issued and who fails to take corrective action within the time 22        specified in the order or any person found by the commissioner to be in violation of 23    any requirement of this Section may be liable for a civil penalty to be assessed by the 24          commissioner or court, of not more than five thousand dollars a day for each day of

25     violation and for each act of violation. The commissioner in order to enforce the 26  provisions of this Section may suspend or revoke any permit, compliance order, 27   license, or variance that has been issued to said person in accordance with law.

28     (2) No penalty shall be assessed until the person charged has been given 29   notice and an opportunity for a hearing on such charge. In determining whether or 30       not a civil penalty is to be assessed and in determining the amount of the penalty, or the amount agreed upon in compromise, the gravity of the violation and the 2         demonstrated good faith of the person charged in attempting to achieve rapid 3       compliance, after notification of a violation, shall be considered. 4       E. The commissioner, or attorney general if requested by the commissioner, 5  shall have charge of and shall prosecute all civil cases arising out of violation of any 6   provision of this Section including the recovery of penalties. 7          F. Except as otherwise provided herein, the commissioner may settle or 8    resolve as he may deem advantageous to the state any suits, disputes, or claims for 9     any penalty under any provisions of this Section or the regulations or permit license

10        terms and conditions applicable thereto.

Site closure

Summary

Under § 1104(A) of the Louisiana CO2 Sequestration Act, the Commissioner of Conservation has the authority to, among other things:

  1. require the plugging of abandoned wells or wells of no further use, and the closure of associated surface facilities and the removal of equipment, structures and trash; and
  2. otherwise require a general site cleanup of abandoned wells.

§ 1107(B) requires the Commissioner to issue a certificate of completion of injection operations to an operator who applies for one provided that, after a public hearing pursuant to R.S. 30:6, it is determined that the operator has met all of the conditions required for such certificate, including the requirements of §1109 (which in turn provide a basis for the transfer of liability for stored CO2 from the operator to the State).

Article/Section No.

§ 1104(A)
§ 1107(B)

Instrument Text

§1104. Duties and powers of the commissioner; rules and regulations; permits

A. The office of conservation's actions under this Chapter shall be directed and controlled by the commissioner. The commissioner shall have authority to:

[…]

(2) Make, after notice and hearings as provided in this Chapter, any reasonable rules, regulations, and orders that are necessary from time to time in the proper administration and enforcement of this Chapter, including rules, regulations, or orders for the following purposes:

[…]

(d) To require the plugging of each abandoned well and the closure of associated surface facilities, the removal of equipment, structures, and trash, and to

otherwise require a general site cleanup of such abandoned wells.

[…]

(12) Require the plugging of each abandoned well or each well which is of 11       no further use and the closure of associated surface facilities, the removal of 12          equipment, structures, and trash, and other general site cleanup of such abandoned 13            or unused well sites.

[…]

§1107. Certificates of public convenience and necessity; certificate of completion 12        of injection operations

[…]

B. The commissioner shall issue a certificate of completion of injection 25  operations to the operator applying therefor, if after a public hearing pursuant to R.S. 26            30:6, it is determined that such operator has met all of the conditions required for 27            such certificate, including the requirements of R.S. 30:1109.

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

Summary

Under § 1109 of the Louisiana CO2 Sequestration Act, once ten years have elapsed since the cessation of CO2 injection into a storage facility, or such other period as may be fixed by rule, the Commissioner of Conservation must issue a certificate of completion of injection operations, upon demonstration by the storage operator that the reservoir is reasonably expected to maintain mechanical integrity, and the stored CO2 will remain reasonably emplaced.

Upon issuance of this certificate:

  1. ownership of the project and stored CO2 will transfer to the State;
  2. except in certain circumstances, all generators and owners of CO2 stored at the facility, as well as all other owners holding an interest in the facility, will be released from all duties and obligations under the Act as well as all liabilities associated with the facility which arise after the date of issuance;
  3. any performance bonds posted by the operator must be released; and
  4. continued monitoring of the site, including remediation of any well leakage, will become the principal responsibility of the Carbon Dioxide Geologic Storage Trust Fund established under §1110.

This release will not apply:

  1. to the owner or last operator of record of a storage facility if the Carbon Dioxide Geologic Storage Trust Fund contains inadequate funds to address or remediate any duty, obligation, or liability that may arise after issuance of the certificate; or
  2. to the owner or operator of a storage facility or pipeline, or the generator of CO2, if it is demonstrated that any such owner, operator, or generator intentionally and knowingly concealed or misrepresented material facts related to the mechanical integrity of the storage facility or the chemical composition of any injected CO2.

§1109 also establishes certain limitations on the civil liability that may accrue to owners or operators of storage facilities or pipelines or generators of stored CO2, and explicitly clarifies that the Act does not create:

  1. any liability or responsibility for the Commissioner or the State to pay any costs associated with site restoration other than with the funds or trusts created by the Act; or
  2. any liability or responsibility for these parties to pay any site restoration costs if such trusts are insufficient to do so.

Article/Section No.

§ 1109

Instrument Text

§1109. Cessation of storage operations; liability release 4  A.(1) Ten years, or any other time frame established by rule, after cessation 5   of injection into a storage facility, the commissioner shall issue a certificate of 6    completion of injection operations, upon a showing by the storage operator that the 7   reservoir is reasonably expected to retain mechanical integrity and the carbon 8     dioxide will reasonably remain emplaced, at which time ownership to the remaining 9         project including the stored carbon dioxide transfers to the state. Upon the issuance

10     of the certificate of completion of injection operations, the storage operator, all 11   generators of any injected carbon dioxide, all owners of carbon dioxide stored in the 12     storage facility, and all owners otherwise having any interest in the storage facility, 13   shall be released from any and all duties or obligations under this Chapter and any 14        and all liability associated with or related to that storage facility which arises after

15     the issuance of the certificate of completion of injection operations.

16     (2) Provided the provisions pertaining to site-specific trust accounts are not 17         applicable, such release from liability will not apply to the owner or last operator of 18   record of a storage facility if the Carbon Dioxide Geologic Storage Trust Fund has 19       been depleted of funds such that it contains inadequate funds to address or remediate 20       any duty, obligation, or liability that may arise after issuance of the certificate of 21      completion of injection operations.

22     (3) Such release from liability will not apply to the owner or operator of a 23            storage facility, carbon dioxide transmission pipeline, or the generator of the carbon 24 dioxide being handled by either the facility or pipeline if it is demonstrated that any 25          such owner, operator, or generator intentionally and knowingly concealed or 26  intentionally and knowingly misrepresented material facts related to the mechanical 27 integrity of the storage facility or the chemical composition of any injected carbon 28  dioxide. In addition, upon the issuance of the certificate of completion of injection 29     operations, any performance bonds posted by the operator shall be released and 30   continued monitoring of the site, including remediation of any well leakage, shall become the principal responsibility of the Carbon Dioxide Geologic Storage Trust 2      Fund. 3           (4) It is the intent of this Section that the state shall not assume or have any 4 liability by the mere act of assuming ownership of a storage facility after issuance 5          of a certificate of completion of injection operations.

6       B.(1) In any civil liability action against the owner or operator of a storage 7 facility, carbon dioxide transmission pipeline, or the generator of the carbon dioxide 8    being handled by either the facility or pipeline, the maximum amount recoverable 9     as compensatory damages for noneconomic loss shall not exceed two hundred fifty

10     thousand dollars per occurrence, except where the damages for noneconomic loss 11           suffered by the plaintiff were for wrongful death; permanent and substantial physical 12    deformity, loss of use of a limb or loss of a bodily organ system; or permanent 13  physical or mental functional injury that permanently prevents the injured person 14   from being able to independently care for himself or herself and perform life 15          sustaining activities. In such cases, the maximum amount recoverable as 16         compensatory damages for noneconomic loss shall not exceed five hundred thousand 17      dollars per occurrence.

18     (2) If Paragraph (1) of this Subsection, or the application thereof to any 19   person or circumstance, is finally determined by a court of law to be unconstitutional 20      or otherwise invalid, the maximum amount recoverable as damages for noneconomic 21         loss shall thereafter not exceed one million dollars per occurrence. This provision 22     shall not supersede any contractual agreement with respect to liability between a 23 plaintiff and an owner or operator of a storage facility, a carbon dioxide transmission 24   pipeline, or the generator of the carbon dioxide.

25        C. Nothing in this Chapter shall establish or create any liability or 26          responsibility on the part of the commissioner or the state to pay any costs associated 27      with site restoration from any source other than the funds or trusts created by this 28       Chapter, nor shall the commissioner or the state of Louisiana have any liability or 29   responsibility to make any payments for costs associated with site restoration if the 30      trusts created herein are insufficient to do so.

D. The commissioner or his agents, on proper identification, may enter the

1 2    land of another for purposes of site assessment or restoration. 3  E. The commissioner and his agents are not liable for any damages arising 4     from an act or omission if the act or omission is part of a good faith effort to carry 5        out the purpose of this Chapter. 6  F. No party contracting with the Department of Natural Resources, office of 7  conservation, or the commissioner under the provisions of this Chapter shall be 8        deemed to be a public employee or an employee otherwise subject to the provisions 9 of Parts I through IV of Chapter 15 of Title 42 of the Louisiana Revised Statutes of

10        1950.

Financial contributions to long term stewardship

Summary

§ 1110 of the Louisiana CO2 Sequestration Act establishes the Carbon Dioxide Geologic Storage Trust Fund (the Fund), to be administered by the Commissioner of Conservation.

To fund the Fund, the Commissioner is authorised under the Act to levy on storage operators:

  1. a fee for each ton of CO2 injected for storage, calculated in accordance with § 1110(C);
  2. an annual regulatory fee for storage facilities that have not received a certificate of completion of injection operations, to be based upon the annual projected costs for oversight and regulation of such storage facilities, up to a limit of $50 000 per annum; and
  3. an application fee payable by industries under the jurisdiction of the Office of Conservation.

In addition, the Fund is to contain monies received from the following sources:

  1. the fees, penalties and bond forfeitures collected pursuant to the Act;
  2. private contributions;
  3. interest earned by the Fund;
  4. civil penalties for violation of any rules or permit conditions imposed under the Act, or costs recovered for geologic storage facility closure or remediation pursuant to § 1104, 1105, 1106 and 1110;
  5. any grants, donations, and sums allocated from any source, public or private, for the purposes of the Act; and
  6. site-specific trust accounts established under § 1111 (although monies of such accounts must only be used for the facilities specified for the accounts).

The Fund can be used to pay the costs and expenses associated with:

  1. operational and long-term inspecting, testing, and monitoring of sites, including remaining surface facilities and wells;
  2. remediation of mechanical problems associated with remaining wells and surface infrastructure;
  3. repairing mechanical leaks at a site;
  4. plugging and abandoning remaining wells or conversion for use as observation wells;
  5. administration of the Act by the Commissioner;
  6. administration of the Fund or site-specific accounts established under § 1111; and
  7. acquisition of appropriate insurance for future storage facility liability, if it should become available.

The Commissioner is authorised under § 1111(7) to enter into agreements and contracts and to expend Fund monies to:

  1. fund research and development in connection with CO2 sequestration technology and methods;
  2. monitor any remaining surface facilities and wells;
  3. remediate mechanical problems associated with remaining wells or site infrastructure;
  4. repair mechanical leaks at the storage facility;
  5. contract with a private legal entity pursuant to the Act; and
  6. plug and abandon remaining wells, except for those wells to be used as observation wells. 

Article/Section No.

§ 1110

Instrument Text

§1110. Carbon Dioxide Geologic Storage Trust Fund 12   A.(1) There is hereby established a fund in the custody of the state treasurer 13    to be known as the Carbon Dioxide Geologic Storage Trust Fund, hereinafter 14  referred to as the "fund", which shall constitute a special custodial trust fund which 15           shall be administered by the commissioner, who shall make disbursements from the 16 fund solely in accordance with the purposes and uses authorized by this Chapter. 17       (2) After compliance with the requirements of Article VII, Section 9(B) of 18         the Constitution of Louisiana relative to the Bond Security and Redemption Fund, 19         and after a sufficient amount is allocated from that fund to pay all of the obligations 20          secured by the full faith and credit of the state which become due and payable within 21       any fiscal year, the treasurer shall pay into the fund, an amount equal to the monies 22  received by the state treasury pursuant to this Chapter. The monies in this fund shall 23      be used solely as provided in this Section and only in the amount appropriated by the 24        legislature. All unexpended and unencumbered monies remaining in this fund at the 25           end of the fiscal year shall remain in the fund. The monies in the fund shall be 26         invested by the state treasurer in the same manner as monies in the state general fund 27       and all returns of such investment shall be deposited to the fund. The funds received 28     shall be placed in the special trust fund in the custody of the state treasurer to be used 29    only in accordance with this Chapter and shall not be placed in the general fund. The 30  funds provided to the commissioner pursuant to this Section shall at all times be and remain the property of the commissioner. The funds shall be used only for the purposes set forth in this Chapter and for no other governmental purposes, nor shall any branch of government be allowed to borrow any portion of the funds. It is the intent of the legislature that this fund and its increments shall remain intact and inviolate.

B. The following monies shall be placed into the fund:

(1) The fees, penalties, and bond forfeitures collected pursuant to this Chapter. All fees and self-generated revenue remaining on deposit for the office of conservation at the end of any fiscal year shall be deposited into the fund.

(2) Private contributions. (3) Interest earned on the funds deposited in the fund. (4) Civil penalties for violation of any rules or permit conditions imposed

under this Chapter, or costs recovered from responsible parties for geologic storage facility closure or remediation pursuant to this Section and R.S. 30:1104, 1105, and 1106.

(5) Any grants, donations, and sums allocated from any source, public or private, for the purposes of this Chapter.

(6) Site-specific trust accounts; however, the monies of such accounts shall not be used for any geologic storage facility other than that specified for each respective account.

C. The commissioner is hereby authorized to levy on storage operators the following fees or costs for the purpose of funding the fund:

(1) A fee payable to the office of conservation, in a form and schedule prescribed by the office of conservation, for each ton of carbon dioxide injected for storage. This fee is to be determined based upon the following formula:

(a) Fx120<M (b) "F" is a per unit fee in dollars per ton set by the office of conservation. (c) "120" is the minimum number of months over which a fee is to be collected.

(d) "M" is the Maximum Payment of five million dollars and is the total 2   amount of fees to be collected before the payment of the fee can be suspended as

3       provided in this Section. 4    (e) The fee cannot exceed five million dollars divided by one hundred twenty 5         divided by the total tonnage of carbon dioxide to be injected, (($5,000,000/120)/ total 6      injection tonnage of carbon dioxide). 7   (f) Once a storage operator has contributed five million dollars to the trust 8         fund, the fee assessments to that storage operator under this Section shall cease until 9          such time as funds begin to be expended for monitoring and caretaking of any

10     completed storage facility. The treasurer of the state of Louisiana shall certify, to the 11      commissioner, the date on which the balance in the fund for a storage operator equals 12        or exceeds five million dollars. The fund fees shall not be collected or required to 13     be paid on or after the first day of the second month following the certification, 14  except that the commissioner shall resume collecting the fees on receipt of a 15  certification from the treasurer that, based on the expenditures or commitments to 16     expend monies, the fund has fallen below four million dollars for the storage 17    operator. If at any time the balance in the trust fund exceeds an authorized amount 18 determined by multiplying five million dollars by the number of active and 19            completed storage facilities within the state, the collection of fees from the operators 20 of storage facilities that have already contributed five million dollars to the trust fund 21  will be suspended until such time as the balance in the trust fund falls below such 22       authorized amount, at which time they will be reinstated.

23     (g) At the end of each fiscal year, the fee may be redetermined by the 24      commissioner based upon the estimated cost of administering and enforcing this 25        Chapter for the upcoming year divided by the tonnage of carbon dioxide expected 26  to be injected during the upcoming year. The total fee assessed shall be sufficient 27         to assure a balance in the fund not to exceed five million dollars for any active 28    storage facility within the state at the beginning of each fiscal year. Any amount 29  received that exceeds the annual balance required shall be deposited in the fund, but appropriate credits shall be given against future fees or fees associated with other storage facilities operated by the same storage operator.

(2) An annual regulatory fee for storage facilities that have not received a certificate of completion of injection operations payable to the office of conservation, in a form and schedule prescribed by the office of conservation, on the carbon dioxide storage facility in an amount not to exceed fifty thousand dollars for Fiscal Year 2010-2011 and thereafter. Such fee shall be based upon the annual projected costs to the office of conservation for oversight and regulation of such storage facilities.

(3) An application fee payable to the office of conservation, in a form and schedule prescribed by the office of conservation, by industries under the jurisdiction of the office of conservation. The commissioner may, by rule in accordance with the Administrative Procedure Act, increase any application fee to an amount not in excess of eight and one-half percent above the amount charged for the fee on July 1, 2010.

D. The provisions of the Louisiana Tax Code shall apply to the administration, collection, and enforcement of the fees imposed herein, and the penalties provided by that code shall apply to any person who fails to pay or report the fees. Proceeds from the fees, including any penalties and interest collected in connection with the fees, shall be deposited into the fund.

E. The fund shall be used solely for the following purposes:

(1) Operational and long-term inspecting, testing, and monitoring of the site, including remaining surface facilities and wells.

(2) Remediation of mechanical problems associated with remaining wells and surface infrastructure.

(3) Repairing mechanical leaks at the site.

(4) Plugging and abandoning remaining wells or conversion for use as observation wells.

(5)(a) Administration of this Chapter by the commissioner in an amount not to exceed seven hundred fifty thousand dollars each fiscal year.

(b) The Oil and Gas Regulatory Fund created by R.S. 30:21 may be used for the administration of this Chapter as authorized by this Paragraph until June 30, 2014. Any such payments from the Oil and Gas Regulatory Fund shall be repaid

from the Carbon Dioxide Storage Trust Fund by June 30, 2018. (6) Payment of fees and costs associated with the administration of the fund

or site-specific accounts. (7) Payment of fees and costs associated with the acquisition of appropriate

insurance for future storage facility liability if it should become available, either commercially or through government funding.

F. The commissioner is authorized to enter into agreements and contracts and to expend money in the fund for the following purposes:

(1) To fund research and development in connection with carbon sequestration technology and methods.

(2) To monitor any remaining surface facilities and wells.

(3) To remediate mechanical problems associated with remaining wells or site infrastructure.

(4) To repair mechanical leaks at the storage facility. (5) To contract with a private legal entity pursuant to this Chapter. (6) To plug and abandon remaining wells except for those wells to be used

as observation wells. G. The commissioner shall keep accurate accounts of all receipts and

disbursements related to the administration of the fund and site-specific trust funds and shall make a specific annual report addressing the administration of the funds to the Senate Committee on Natural Resources, the House Committee on Natural Resources and Environment, and the Senate Committee on Environmental Quality before March first.

H. Every five years the commissioner shall submit a report to the Senate Committee on Natural Resources, the House Committee on Natural Resources and Environment, and the Senate Committee on Environmental Quality before March first, that assesses the effectiveness of the fund and other related provisions in this Part and provides such other information as may be requested by the legislature to 2   allow the legislature to assess the effectiveness of this Chapter.

VI. Additional Issues
Additional Issues

Article/Section No.

§ 1107

Instrument Text

§1107. Certificates of public convenience and necessity; certificate of completion 12        of injection operations 13         A. The commissioner shall issue a certificate of public convenience and 14

         necessity or a certificate of completion of injection operations to each person 15       applying therefor if, after a public hearing pursuant to the provisions of R.S. 30.6, 16        held in the parish where the storage facility is to be located, he determines that it is 17 required by the present or future public convenience and necessity, and such decision 18         is based upon the following criteria; (1) the proposed storage facility meets the 19         requirements of R.S. 30:1104(C) and (2) the proposed storage facility meets the 20  requirements of any rules adopted under this Chapter. However, if any person has 21        previously been issued a certificate of public convenience and necessity or a 22 certificate of completion of injection operations by the commissioner, that certificate 23       continues to remain valid and in force. 24        B. The commissioner shall issue a certificate of completion of injection 25    operations to the operator applying therefor, if after a public hearing pursuant to R.S. 26     30:6, it is determined that such operator has met all of the conditions required for 27           such certificate, including the requirements of R.S. 30:1109. 28

         C. Anything in this Chapter, or in any rule, regulation, or order issued by the 29       commissioner under this Chapter to the contrary notwithstanding, accepting or acting 30

         pursuant to a certificate of public convenience and necessity or a certificate of

completion of injection operations issued under this Chapter, compliance with the 2          provisions of this Chapter, or with rules, regulations, or orders issued by the 3   commissioner under this Chapter, or voluntarily performing any act or acts which 4       could be required by the commissioner pursuant to this Chapter, or rules, regulations, 5    or orders issued by the commissioner under this Chapter, shall not have the following 6         consequences: 7          (1) Cause any storage operator or carbon dioxide transporter of carbon 8  dioxide for storage to become, or be classified as, a common carrier or a public 9  utility for any purpose whatsoever.

10        (2) Subject such storage operator or such carbon dioxide to storage 11        transporter to any duties, obligations, or liabilities as a common carrier or public 12     utility, under the constitution and laws of this state. 13            (3) Increase the liability of any storage operator or carbon dioxide for storage 14   transporter for any taxes otherwise due to the state of Louisiana in the absence of any 15      additions or amendments to any tax laws of this state.