In furtherance of the Biden administration’s climate goals, in early June 2022, the Bureau of Land Management (BLM) issued its first formal guidance document on
permanent underground storage of carbon dioxide (CO)2) on BLM-administered public lands. Carbon capture, utilization, and storage (CCUS) will be essential in meeting the Biden administration’s net zero GHG emission goals, as the chair of the White House Council on Environmental Quality (CEQ) acknowledges that ”
The BLM document, Instruction Memorandum 2022-041 (IM 2022-041), clarifies BLM’s authority to grant rights-of-way (ROWs) on public lands for the geologic sequestration of CO.2 in federal pore space, including all associated infrastructure, under Title V of the Federal Land Policy and Management Act of 1976 (FLPMA). This is the same ROW authority BLM uses to manage roads, transmission lines, telecommunications sites, and other surface land uses.
Pursuant to IM 2022-041, BLM may authorize ROWs to surface facilities for a minimum 30-year renewable term for site characterization, transportation, injection, capture, and the permanent storage of CO.2 at appropriately classified injection well locations. The associated ROW permit must address all aspects of the project, including construction, maintenance, and termination or decommissioning of surface facilities required to inject the CO2.
To authorize a ROW, BLM must meet several requirements. BLM must complete exploration and characterization studies to ensure the integrity of nearby formations and must ensure that the project applicant has put in place an adequate monitoring program. If necessary, BLM may issue short-term non-renewable FLPMA Title V ROWs for site testing and characterization studies related to a proposed CCUS project. Although the scope of National Environmental Policy Act (NEPA) review of a BLM CCUS ROW remains uncertain, IM 2022-041 suggests steps BLM could take to facilitate expedited NEPA review, such as compiling programmatic environmental documentation from which individual CCUS projects could tier from. BLM must also comply with FLPMA and all other applicable laws, including, for example, the Safe Drinking Water Act and the Mineral Leasing Act.
IM 2022-041 clarifies that project applicants must comply with all applicable laws, including obtaining the appropriate Class VI permit under the Underground Injection Control (UIC) program. Applicants must also submit a Development Plan as part of their application. Proposed sequestration projects must conform to the appropriate land and realty allocations within applicable Resource Management Plans (RMP). IM 2022-041 notes that public lands open for ROWs may not require an RMP amendment, although the terms and conditions of each RMP should be reviewed for conformance. Once granted a ROW, the grantee must comply with any other operations authorized under the Mineral Leasing Act and avoid damage to other mineral resources and surface or subsurface uses.
IM 2022-041 clarifies that use of public lands for geologic carbon sequestration will require fair market value compensation for use of BLM-managed surface lands and subsurface pore space in an amount to be determined by BLM in consultation with the departmental Appraisal and Valuation Services Office. . In addition to charging for occupancy for injection facilities and similar surface uses, BLM contemplates charging injection fees for CO2 and for occupancy of federal pore space on a per unit basis.
There is ongoing uncertainty surrounding CCUS projects and ownership of non-mineral geologic pore space on split estate lands. In the western states, there is a fractured pattern of land ownership, and there is uncertainty regarding the US ownership of non-mineral geologic pore space underlying split estate lands patented under the Stock-Raising Homestead Act (SRHA). SRHA land patents contained a reservation of the mineral estate for the United States. While the general rule is that geologic pore space ownership resides with the surface owner, in the 1983 Watt v. Western Nuclear Corp. The opinion, the US Supreme Court interpreted the mineral reservation broadly to conclude that the pore space was reserved to the federal government. IM 2022-41 recognizes the uncertainty but does not resolve it.
In cases of split estate where the federal government owns only the surface or the mineral estate the question of pore-space ownership may arise. In those situations, pore-space ownership should be determined early in the process. Typically, pore space is owned by the surface owner, although it may be conveyed separately. In determining pore-space ownership, title documents should be reviewed. Questions about pore-space ownership should be resolved in coordination with the Solicitor’s Office.
While IM 2022-041 recognizes that pore space is generally owned by the surface owner, it does not go as far as to say that the federal government does not own or control non-mineral geologic pore space under SRHA lands. IM 2022-41 directs questions regarding pore-space ownership to the Solicitor’s Office. In answering these questions, the Solicitor’s Office will likely have to determine whether there are any controlling state laws that may bind the federal government.
Presently, there are no approved CCUS projects on BLM-managed lands, but BLM is processing several applications. IM 2022-041 may add some consistency to the process and review for CCUS projects on public lands.
Carbon Capture, Utilization, and Storage: Class VI Wells and US State Primacy
Carbon Capture Sequestration Utilization and Storage Projects and US Federal Environmental Laws
US – Storing CO2 And Lowering Emissions (SCALE) Act
Final Carbon Capture Regulations Released by IRS
Visit us at mayerbrown.com
Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the “Mayer Brown Practices”). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Checker Advogados, a Brazilian law partnership with which Mayer Brown is associated. “Mayer Brown” and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.
Copyright 2020. The Mayer Brown Practices. All rights reserved.
This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.