Carbon Capture, Utilization, and Storage (CCUS) Task Force Administrative Actions Announced

Denver, CO (May 23, 2022) - From Governor Jared Polis:

The Carbon Capture, Utilization, and Storage (CCUS) Task Force was developed to advance one action in the Greenhouse Gas Pollution Reduction Roadmap to understand the role that CCUS may play in achieving Colorado's greenhouse gas emission targets.

Among the Task Force's near-term recommendations, there was a recognition that legislative action may be necessary for the deployment of CCUS in Colorado, especially legislative approval for the Oil and Gas Conservation Commission (COGCC) to seek authority from the US EPA for state regulation of Class VI CO2 injection wells, clarify property rights for CO2 storage, address state authority over siting of CO2 pipelines, and create a process for long-term stewardship of CO2 storage sites.

While my administration intends to pursue legislative action to develop a safe and effective regulatory regime for CCUS in Colorado in the 2023 legislative session, the development and implementation of these policies is likely to take years and we do not want that to slow progress. In the meantime, private industry and the federal government are moving ahead developing CCUS projects across the United States, including some here in Colorado. Providing regulatory certainty is critical to the success of these and future projects.

To codify those Task Force recommendations and continue making progress on an important potential tool for reducing and removing pollution, I direct the COGCC and Department of Natural Resources over the coming year, in consultation with other relevant state agencies and stakeholders to:

• Work with the Attorney General’s Office (COAG) and/or Governor’s legal counsel to evaluate legal and legislative pathways to achieve a comprehensive regulatory regime for CCUS in the state, including consideration of if, and where, legislation is required.
• Work with key stakeholders to prepare a comprehensive legislative proposal to address primacy and other legal changes necessary to create carbon sequestration opportunities in Colorado, which likely will need to address: 
  • COGCC pursuing primacy;
  • Pore space ownership, including addressing competing rights and uses for the proposed storage reservoir;
  • Unitization or spacing with the goal of creating storage opportunities across multiple pore space owners;
  • Compensation structure for non-consenting pore space owners;
  • Long-term stewardship/ownership of sequestration sites by the state after site closure, including potentially creating a CO2 storage fund to provide funding for post-closure site stewardship by the state;
  • Address State authority over CO2  pipeline and project siting;
  • Plan regional deployment of CO2 pipelines;
  • Identify existing infrastructure right-of-ways and ideal locations for potential CO2 pipeline corridors to facilitate future deployment;
  • Evaluate classifying CO2 storage to be in the public interest;
  • Any related recommendations from COGCC Class VI Report, CCUS Task Force Report, or Environmental Justice Advisory Board.
• Draft technical and procedural Class VI rules that:
  • Address all federal requirements for Class VI wells;
  • Integrate Class VI processes into current COGCC processes;
  • Incorporate any future related Colorado legislation into the rules;
  • Integrate feedback/collaboration from EPA and other stakeholders, including environmental justice stakeholders;
  • In cooperation with the COAG, ensure that laws, draft rules, and regulations provide the COGCC the proper authority to administer the UIC Class VI program.
• Consider timing to initiate formal rulemaking process for adoption of rules, which is a prerequisite to seeking primacy from EPA, and to engage stakeholders and ensure safe and effective regulation.
• Begin preparation and drafting of Class VI primacy application materials to expedite the submission process to the EPA once the rules and legislation are finalized, including:
  • Draft the Program Description that includes a narrative of the program, an organizational structure, description of procedures, description of the compliance and enforcement program, and other requirements per 40 C.F.R. § 145.23.
• Contract for additional support to complete the work until legislation authorizes additional FTE. 

I further request that the COGCC and DNR provide regular updates to me and my office on progress made on these actions.

Sincerely,

Jared Polis
Governor
State of Colorado