The Wild West of CO2 storage

Presented by NRECA: Your guide to the political forces shaping the energy transformation

Apr 17, 2023 View in browser   By Arianna Skibell Presented by POLITICO illustration by Claudine Hellmuth/Photos by iStock Oil and gas companies are rushing to build carbon capture and storage projects to capitalize on the tax credits inside President Joe Biden’s landmark climate law. To get the most for their investments — and to slash planet-warming emissions — project operators need to store their captured carbon pollution for hundreds of years. And that means pumping it into the tiny pores within rock formations deep underground. That is raising all kinds of questions about land ownership rights and damage liability, writes POLITICO’s E&E News reporter Shelby Webb. Few states have laws governing carbon dioxide storage. And as proposed projects pile up — and apply for permits — states are grappling with a host of practical considerations, such as who pays for remediation if injecting millions of tons of CO2 into the earth sours groundwater supplies, triggers earthquakes or otherwise causes problems. In 2020, a CO2 pipeline rupture in Mississippi sent dozens of people to the hospital. Who owns the earth’s pores?  In North Dakota, owners of surface land also own the “pore space” underneath. Project developers must get the green light from 60 percent of the landowners of a given parcel before they can inject CO2 into it. In Wyoming, that number is 80 percent, and a Texas bill would set it at 67 percent. And in Louisiana, project developers can use eminent domain to take the land they need. In other states, pore ownership is less clear, especially when it comes to mineral rights. In many major energy-producing states, such as Texas, Oklahoma and New Mexico, the people who own land are not always the people who own the minerals below it. Only Kentucky specifies that mineral rights owners also own a property’s pore space. Who’s responsible for damage? Another major issue is liability. While companies are initially responsible for damage, some states eventually transfer that liability to the state. Wyoming assumes ownership and liability 20 years after injections end. Texas’ bill would allow project operators to pass on their liability after a decade — a major point of contention for some landowners. Ashley Watt, a West Texas rancher, is considering allowing carbon storage on her land. But she opposes liability transfer, pointing out that the state hasn’t helped with a handful of orphaned and previously plugged wells on her property that she says have started leaking. “Are we willing to bet the proverbial and literal ranch on this carbon capture working?” Watt told Shelby.   It's Monday— thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.   A message from NRECA: Keeping the lights on is vital for local communities, the economy, and national security. Today’s energy decisions will determine whether there are sufficient resources for the lights to come on tomorrow. Electric co-ops are focused on reliably powering 42 million consumer-members – a growing challenge due to the disorderly energy transition playing out across the nation. Co-ops are champions of reliability and advocate energy policies that promote reliability and affordability for all. Learn more.   Listen to today’s POLITICO Energy podcast Today in POLITICO Energy’s podcast: Zack Colman dives into U.S. and European efforts to transform the World Bank to fight climate change, and why leaders have been unwilling to provide additional funding to the institution. electric future An electric vehicle charges in 2021 at Union Station near Capitol Hill in Washington. | Drew Angerer/Getty Images The Treasury Department has knocked nine electric vehicle models off the list of cars whose buyers are eligible for a $7,500 tax credit under the Inflation Reduction Act, write Mike Lee and Hannah Northey. Under Biden’s landmark climate law, electric vehicles are eligible for the tax credit if the cars and their batteries are assembled in North America. The minerals used to make the batteries must also meet strict sourcing requirements. The result is a major win for U.S. automakers like Ford, General Motors, Stellantis and Tesla. Foreign automakers including Volvo, BMW, Volkswagen and Nissan are losing the tax credits that they had been eligible for until now, writes Tanya Snyder — though some of those may join the short list as they find ways to meet Treasury's requirements. Still, according to a statement from the Zero Emission Transportation Association, an EV trade group, more than 90 percent of electric vehicles that were previously eligible for the credit remain so.   A message from NRECA:   Power Centers Debris from Hurricane Ike in Galveston, Texas. | Scott Olson/Getty Images Insurance crisis An insurance crisis that swept across the Gulf Coast is now spilling into Texas, where a lack of property coverage has forced tens of thousands of coastal homeowners to buy policies from a state-chartered insurance program, writes Thomas Frank. The rapid growth has alarmed officials and insurers. And it’s raised concerns that if a major storm hits Texas, so many claims will be filed that the state-chartered insurer will force insurance companies and residents statewide to help pay them. Let the bargaining begin During a speech this morning, House Speaker Kevin McCarthy (R-Calif.) suggested GOP lawmakers are looking to use upcoming debt ceiling negotiations as a bargaining tool to gain traction on their energy and spending priorities, writes Jeremy Dillon. The Biden administration and Democratic lawmakers want to raise the debt ceiling to avoid a potentially devastating financial crisis. G-7 Leaders from the world's seven largest economies set more ambitious low-carbon energy targets, but did not set a deadline for phasing out new coal and methane gas investments, writes Eddy Wax. Ministers from Japan, the U.S., Canada, Italy, France, Germany and the U.K. reaffirmed their commitment to reach zero carbon emissions by 2050, and pledged to collectively boost solar power and offshore wind capacity. In Other News Report: Banks with "net-zero" pledges are among the top funders of fossil fuels. Stove wars: Chipotle plans to ditch gas grills at 100 new locations. Speaking of gas: A California city’s effort to ban natural gas hookups in new buildings was overturned by a federal circuit court today.   GO INSIDE THE 2023 MILKEN INSTITUTE GLOBAL CONFERENCE: POLITICO is proud to partner with the Milken Institute to produce a special edition "Global Insider" newsletter featuring exclusive coverage, insider nuggets and unparalleled insights from the 2023 Global Conference, which will convene leaders in health, finance, politics, philanthropy and entertainment from April 30-May 3. This year’s theme, Advancing a Thriving World, will challenge and inspire attendees to lean into building an optimistic coalition capable of tackling the issues and inequities we collectively face. Don’t miss a thing — subscribe today for a front row seat.     Subscriber Zone A showcase of some of our best subscriber content. The Ohio State University campus in Columbus, Ohio. | John Minchillo/AP Photo Ohio state Republicans have introduced a bill to make climate denial a protected viewpoint at Ohio universities to promote “intellectual diversity” in higher education. U.S. consumers paid an estimated $13.4 billion in 2021 because congested transmission lines couldn’t deliver the lowest-cost power. The Inflation Reduction Act has prompted energy companies to announce $150 billion in new clean power capital investments since the law's August passage. That's it for today, folks! Thanks for reading.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.       A message from NRECA: American families and businesses expect the lights to stay on at a cost they can afford. Our nation’s energy policies must meet this fundamental expectation. But that’s no longer a guarantee. Nine states saw rolling blackouts last December as the demand for electricity exceeded available supply. The electrification of the economy, disorderly retirement and insufficient replacement of existing generation, permitting challenges, supply chain shortages, and the availability of natural gas all impact the reliability of the electric grid. Electric cooperatives are working towards meaningful solutions to address the reliability challenges spreading across the nation. Policymakers can help by recognizing the need for time, technology development, and new transmission infrastructure while supporting policies that are inclusive of all energy sources. Learn how electric co-ops are #PoweringTomorrow.     Follow us on Twitter Arianna Skibell @ariannaskibell   Follow us

To change your alert settings, please log in at https://www.politico.com/_login?base=https%3A%2F%2Fwww.politico.com/settings This email was sent to rouf@idiot.cloudns.cc by: POLITICO, LLC 1000 Wilson Blvd. Arlington, VA, 22209, USA Please click here and follow the steps to unsubscribe.