BILL ANALYSIS
AB 705
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Date of Hearing: April 23, 2007
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Loni Hancock, Chair
AB 705 (Huffman) - As Amended: April 17, 2007
SUBJECT : Geologic carbon sequestration.
SUMMARY : Requires the Division of Oil, Gas and Geothermal
Resources (DOGGR), in consultation with the California
Environmental Protection Agency (CalEPA) and the Geological
Survey, to develop and adopt, by January 1, 2011, standards and
regulations governing geologic carbon sequestration.
EXISTING LAW :
1)The California Global Warming Solutions Act (AB 32 (Nunez),
Chapter 488, Statutes of 2006) requires the California Air
Resources Board (ARB) to adopt a statewide greenhouse gas
(GHG) emissions limit equivalent to 1990 levels by 2020 and
adopt regulations to achieve maximum technologically feasible
and cost-effective GHG emission reductions. The AB 32
implementation process requires ARB to develop and adopt, by
January 1, 2009, a scoping plan for achieving these
reductions, which requires, among other things, identification
of opportunities for emission reductions from carbon
sequestration projects. ARB is required to convene an
environmental justice advisory committee to advise it in
developing the scoping plan and any other pertinent matter in
implementing AB 32.
2)Prohibits "load-serving entities" (public or private electric
utilities and other providers of electric service) from
building or contracting base-load generation unless the
generation meets a GHG emission performance standard which
does not exceed the GHG emissions of a combined-cycle natural
gas power plant. (SB 1368 (Perata), Chapter 598, Statutes of
2006)
3)Requires the California Energy Commission (CEC) to submit a
report and recommendations to the Legislature by November 1,
2007, regarding geologic sequestration strategies for the
long-term management of industrial carbon dioxide (CO2). (AB
1925 (Blakeslee), Chapter 471, Statutes of 2006)
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THIS BILL :
1)Requires DOGGR, in consultation with CalEPA and the Geological
Survey, to develop and adopt, by January 1, 2011, standards
and regulations governing specified technical elements of
geologic carbon sequestration.
2)Requires DOGGR and CalEPA each to make reasonable efforts to
enter into memoranda of understanding with the United States
Environmental Protection Agency (USEPA) on the development of
these standards and regulations to establish appropriate
jurisdiction under USEPA's Underground Injection Control
Program.
3)Requires DOGGR, in collaboration with CalEPA and the Resources
Agency, to:
a. Take reasonable efforts to follow the
recommendations of the CEC's AB 1925 report and explain
deviations from the CEC's recommendations.
b. Develop regulations that provide for reporting and
public disclosure of information and data to maximize
transparency and accountability throughout the carbon
capture and geologic storage chain of operations while
balancing concerns of commercial and corporate
sensitivity.
c. Submit to the Legislature a progress report on the
adoption of the standards and regulations.
4)Provides that DOGGR's regulations apply to the injection of
CO2 and other allowable "injectants" in allowable types of
geological formations undertaken for the purposes of reducing
GHG emissions to the atmosphere through long-term geological
sequestration, and do not apply to the injection of fluids for
the purpose of enhanced oil recovery.
FISCAL EFFECT : Unknown
COMMENTS :
1)Background
"Sequestration" refers to removing CO2 from the atmosphere and
storing it. A variety of means of artificially capturing and
storing CO2, as well as of enhancing natural sequestration
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processes, are being explored to reduced the climate impacts
of CO2 in the atmosphere.
Geologic sequestration involves injecting CO2 directly into
underground geological formations. Declining oil fields,
saline aquifers and unminable coal seams have been suggested
as storage sites. Caverns and old mines, commonly used to
store natural gas, are not considered, because of a lack of
storage safety.
CO2 has been injected into declining oil fields for more than
30 years to increase oil recovery. This option is attractive
because the storage costs are offset by the sale of additional
oil that is recovered. Further benefits are the existing
infrastructure, and the geophysical and geological information
about the oil field that is available from oil exploration
activities.
Disadvantages of old oil fields are their geographic
distribution and their limited capacity. Unminable coal seams
can be used to store CO2, because CO2 adsorbs to the coal
surface, indicating safe long term storage. In the process it
releases methane, that was previously adsorbed to the coal
surface, and that may be recovered. Again the sale of the
methane can be used to offset the cost of the CO2 storage.
The U.S. Department of Energy (DOE) and U.S. Geological Survey
are currently studying the potential of various carbon
sequestration methods. DOE and the CEC, through its Public
Interest Energy Research program, are funding the West Coast
Regional Carbon Sequestration Partnership (WESTCARB).
While many are looking to sequestration as a tool to reduce
atmospheric CO2 and mitigate climate change impacts, there are
no protocols, standards, or regulations governing the
operation of sequestration sites. Last year, the Legislature
passed AB 1925 to solicit recommendations on this subject from
the CEC.
According to the CEC, data being developed in the WESTCARB
project will provide the necessary foundational data and
analysis to ensure an appropriate regulatory framework for
geologic carbon sequestration, including the development of
site certification protocols, integrity and longevity
standards, and mitigation, remediation, and indemnification
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strategies. The WESTCARB project is scheduled for completion
in 2010, so a significant amount of data, which would be
valuable for formulation of recommendations required by AB
1925, will not be available until then.
2)Problems with sequestration and leakage
A 2006 article published in the scientific journal Geology
reported that researchers testing the deep geologic disposal
of the GHG CO2 are finding that sequestered CO2 is dissolving
a surprising amount of the mineral that helps keep the gas
where it is put, including carbonate minerals. The loss of
carbonates is particularly worrisome since these naturally
occurring chemicals seal pores and fractures in rock, which if
opened, could release CO2 as well as contaminate the overlying
aquifers that supply drinking water and irrigation.
The authors of the article concluded that the problems
associated with CO2 appear to be something of a lasting
legacy; "Whatever we do [with CO2], there are environmental
implications that we have to deal with. [The results] suggest
an aspect of risk we have not considered before," and, there
is a "new potential risk should CO2 leak into shallow
aquifers."
3)Is this bill premature?
According to the author:
California will likely lead the nation in hosting
the first large-scale, commercial CCS site for power
generation. Such projects will touch on a wide range
of technical and legal issues, many of which have
not been addressed before. It is paramount that a
well-designed regulatory framework exist, ensuring
appropriate performance standards, ample safeguards,
and also clarifying the requirements that industry
will be called to meet.
The bill's sponsor, NRDC, is concerned about the deployment of
commercial sequestration in the absence of appropriate
standards and contends that action this year is necessary,
although the bill permits the agencies until 2011 to adopt
regulations. Utility supporters indicate that adoption of
sequestration standards will support investment and the
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development of clean coal technologies.
Given that the CEC/WESTCARB research will only begin to bear
results later this year, and won't be complete for two to
three more years, and ARB has yet to address the potential
role of sequestration in meeting AB 32's requirements, it may
be premature for the Legislature to turn over authority to
adopt sequestration standards to the agencies. If the
Legislature waited for the AB 1925 report and enacted a bill
next year, the 2011 deadline for adoption of regulations in
this bill could still be met. Alternatively, if the
preference is to move this bill this year prior to receiving
the pending research and recommendations, the author and the
committee may wish to consider requiring the standards
developed by the agencies to be returned to the Legislature
for review and ratification.
4)Should sequestration be addressed in the AB 32 implementation
process?
AB 32 lays out a general framework and implementation schedule
for addressing matters related to reduction of GHGs. If
sequestration is to play a role in California's GHG reduction
strategies, it can be expected to come up in the later stages
of AB 32 implementation, following the adoption of the scoping
plan in 2009 and perhaps coinciding with the implementation of
GHG reduction measures in 2012.
Opponents make the point that this bill skirts the
implementation process outlined in AB 32, including review by
the environmental justice advisory committee, and assert that
sequestration presents particular environmental justice
concerns. The author and the committee may wish to consider
whether the environmental justice advisory committee should be
afforded a formal role in the process of developing carbon
sequestration standards, either by giving the committee a role
in the DOGGR process or by making the development and adoption
of sequestration regulations part of the AB 32 process.
REGISTERED SUPPORT / OPPOSITION :
Support
Clean Power Campaign
Environment California
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Mayor Antonio Villaraigosa
Natural Resources Defense Council (sponsor)
Pacific Power
Southern California Edison
Union of Concerned Scientists
Opposition
California Communities Against Toxics
California Safe Schools
California Environmental Rights Alliance
CLEAN
Del Amo Action Committee
Greenaction
Coalition for a Safe Environment
Desert Citizens Against Pollution
Society for Positive Action
Analysis Prepared by : Lawrence Lingbloom / NAT. RES. / (916)
319-2092