This is the second of a three-part series discussing select legal or policy aspects of EPA’s proposed rule for regulating commercial scale carbon and capture (CCS) projects, scheduled to close for public comment November 24, 2008.  Friday’s post addressed the proposal’s treatment of financial assurance requirements for project owners and operators.  Today’s post analyzes the proposed standards for care and monitoring of a CCS injection site following closure of the facility.   The final post in the series will analyze the proposal’s treatment of long-term liability issues associated with CCS projects. 

These issues can influence investment in, and public support for, CCS as a climate change mitigation strategy. As such, EPA’s framework must establish the necessary human health and environmental safeguards, without posing unnecessary barriers or costs to deployment of CCS.  In critical respects, EPA’s proposal provide insufficient for stakeholders to evaluate the validity of proposed requirements.

Example 2:  Post-closure monitoring requirements at CCS facilities

With the designed storage life for CCS facilities reaching from hundreds to thousands of years, the time period during which active monitoring and management of CCS sites must continue after sequestration activities cease and closure activities are completed is critical in assessing the practical and economic viability of a specific CCS project. 

EPA proposes that, “the owner or operator shall . . . conduct monitoring . . . for at least 50 years following the cessation of injection,” unless EPA shortens or extends the monitoring requirement, based on its assessment of whether the site may pose endangerment to a drinking water source.  EPA provides little substantive basis for its default time frame of 50 years for post-closure monitoring.  EPA appears to have simply decided that “a 50-year timeframe represents a reasonable mid-point for the default time frame,” between EPA’s 10-year short option and its 100-year long-option.  

The presumptive 50-year time frame may be technically justified for some sites under some conditions.  As a default assumption, however, some stakeholders will rightfully question whether EPA has made the necessary case.  Indeed, the two closest analogues to the proposed CCS program, EPA’s hazardous waste injection well standards and the proposed European Directive on CCS, do not establish any presumptive post-closure monitoring period. 

EPA also fails to identify any standard for determining when a closed site would “pose endangerment” to US drinking water sources.  EPA’s rationale for its 50-year default monitoring requirement provides no useful information on how EPA would decide whether to shorten - or lengthen - a project’s post-closure monitoring obligations.  EPA’s blanket authority to adjust costly site management requirements by decades with no standards or criteria for how it would exercise such discretion creates enormous regulatory uncertainty for project developers and investors. 

To submit comments on EPA’s CCS framework, follow directions provided in the proposed rule.

Click here to read the first blog post in the series on the financial assurance requirements for CCS projects.  Click here to view the final post on long term liability for geologic sequestration.

For further information about this topic, please contact Akin Gump.