BILL NUMBER: SB 1139 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Rubio
FEBRUARY 21, 2012
An act to amend Section 659 of the Civil Code, to amend Section
51010.5 of the Government Code, to add Section 38575 to the Health
and Safety Code, and to add Section 3239 to the Public Resources
Code, relating to greenhouse gas.
LEGISLATIVE COUNSEL'S DIGEST
SB 1139, as introduced, Rubio. Greenhouse gas: carbon capture and
storage.
(1) Existing law requires the Division of Oil, Gas, and Geothermal
Resources to regulate the construction and operation of wells. Under
existing federal law, the division has been delegated with the
responsibility of regulating class II wells under the federal
Underground Injection Control program.
This bill would specifically require the division to regulate
carbon dioxide enhanced oil recovery projects that seek to
demonstrate carbon sequestration for various laws providing for the
reduction of greenhouse gas emissions.
(2) The California Global Warming Solutions Act of 2006 requires
the State Air Resources Board to establish regulations to achieve
specified greenhouse gas emissions reduction goals. The act
authorizes the state board to include market-based compliance
mechanisms in achieving those reduction goals.
This bill would require the state board, by January 1, 2015, to
adopt a final methodology for carbon capture and storage projects
seeking to demonstrate sequestration under various laws providing for
the reduction of greenhouse gas emissions.
(3) The Elder California Pipeline Safety Act of 1981 vests the
State Fire Marshal with the exclusive safety regulatory and
enforcement authority over intrastate hazardous liquid pipelines and,
to the extent authorized by an agreement between the State Fire
Marshal and the United States Department of Transportation,
interstate hazardous liquid pipelines.
This bill would additionally vest exclusive safety regulatory and
enforcement authority over pipelines transporting a fluid consisting
of more than 90% carbon dioxide compressed to a supercritical state.
(4) Existing law defines land as a material of earth and includes
free or occupied space for an indefinite upward or downward distance
for the purpose of prescribing ownership of land.
This bill would specify that free space includes pore space that
can be possessed and used for the storage of greenhouse gas.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This measure shall be known and may be cited as the
Carbon Capture and Storage Act of 2012.
SEC. 2. (a) The Legislature finds and declares all of the
following:
(1) California has established stringent short-term and long-term
greenhouse gas (GHG) reduction goals that are functionally similar to
the federal and international emission reduction goals. Executive
Order S-3-05 committed California to reduce the GHG emissions to year
2000 levels by 2010 and to year 1990 levels by 2020, and to 80
percent below the year 1990 levels by 2050, a level consistent with
the current scientific evidence regarding emission reductions needed
to stabilize the climate. The California Global Warming Solutions Act
of 2006 (Division 25.5 (commencing with Section 38500) of the Health
and Safety Code) separately obligates California to reduce GHG
emissions to the year 1990 levels by 2020.
(2) The scope plan adopted pursuant to the California Global
Warming Solutions Act of 2006 recognizes the critical role that
carbon capture and storage (CCS) can play in helping the state meet
its GHG reduction goals. Cap-and-trade programs worldwide, including
the Kyoto Protocol to the United Nations Framework Convention on
Climate Change (UN Doc. FCCC/CP/1997/7/Add.1, 37 ILM 22) and the
European Union Emissions Trading Scheme (Directive 2003/87/EC, as
amended), include CCS as a key means for compliance. The 2010 Cancun
Agreements under the Kyoto Protocol (UN Doc. FCCC/CP/2010/7/Add.1)
envision that CCS will be able to generate certified emissions
reductions (CERs) under the clean development mechanism (CDM). The
2011 Durban Platform under the Kyoto Protocol (UN Doc.
FCCC/CP/2011/L.10) provides modalities and procedures regarding
specifically how CCS projects may generate CERs under the CDM.
(3) The geologic storage of carbon dioxide is expected to provide
an effective means of storing carbon dioxide over geologic time
periods. The International Panel on Climate Change (IPCC), in its
2005 Special Report on Carbon Capture and Storage, states that
"o]bservations from engineered and natural analogues as well as
models suggest that the fraction retained in approximately selected
and managed geological reservoirs is very likely to exceed 99% over
100 years and is likely to exceed 99% over 1,000 years."
(4) California will be unlikely to achieve its GHG emission
reduction goals without the deployment of CCS. The International
Energy Agency's 2011 World Energy Outlook describes CCS as a "key
abatement option" that accounts for 18 percent of emission savings in
a key modeled scenario. The International Energy Agency further
reports that CCS investment must be made "now" if emission reductions
are to be achieved economically. The August 2010 report of the
President's Interagency Task Force on CCS describes the technology as
one that can "greatly reduce" GHG emissions while playing an
"important role in achieving national and global" GHG reduction
goals. In its December 2010 report, the California Carbon Capture and
Storage Review Panel states that "t]here is a public benefit from
long-term geologic storage of carbon dioxide] as a strategy for
reducing GHG emissions to the atmosphere as required by California
laws and policies."
(5) Despite the existence of comprehensive federal CCS
regulations, impediments to the deployment of CCS technology in
California remain, including specific gaps in California laws and
regulation. Many of these gaps are identified and discussed by the
California Carbon Capture and Storage Review Panel's December 2010
report. These gaps include clarifying ownership of the pore space and
clarifying regulatory responsibility for permitting CCS projects.
(6) By exercising a leadership role in CCS technology, California
will position its economy, technology centers, financial
institutions, and businesses to benefit from efforts to reduce
emissions of GHGs through CCS.
(7) California has ample geologic storage capacity for carbon
dioxide. In a 2005 report, the United States Department of Energy
determined that the state has a "huge potential for geological
sequestration capacity." The study found that the saline formations
have a storage capacity of 146 to 840 gigatons of carbon dioxide.
Moreover, those formations also have large numbers of oil and gas
fields and significant potential for carbon dioxide enhanced oil
recovery (CO2-EOR). The CO2-EOR technology is a proven mature
technology that results in the sequestration of carbon dioxide.
(8) In another 2005 study, the United States Department of Energy
documented the potential energy production and GHG storage potential
of CO2-EOR technology for California. That study reached several
conclusions, including California has a large "stranded oil" resource
base that will be left in the ground following the use of today's
oil recovery practices, much of California's large "stranded oil"
resource base is amenable to CO2-EOR, application of miscible and
immiscible CO2-EOR would enable a significant portion of the
California's "stranded oil" to be recovered, and the successful
introduction and wide scale use of CO2-EOR in California would
stimulate the economy, provide new higher paying jobs, and lead to
higher tax revenues for the state.
(9) Carbon dioxide capture is subject to comprehensive federal
regulations. The United States Environmental Protection Agency
(USEPA) regulates air emissions of GHGs through several regulatory
programs, including the Prevention of Significant Deterioration (PSD)
and Title V permitting programs under the federal Clean Air Act (42
U.S.C. Sec. 7401 et seq.). The USEPA's PSD and Title V Permitting
Guidance for Greenhouse Gases states that permit writers must
consider CCS technology to be "available" as part of the five-step
Best Available Control Technology assessment process. Subpart PP
(commencing with Section 98.420) of, subpart RR (commencing with
Section 98.440) of, and subpart UU (commencing with Section 98.470)
of, Part 98 of Title 40 of the Code of Federal Regulations
prescribing GHG reporting rules separately require companies engaged
in CCS-related operations to report their atmospheric emission of
GHGs. These regulations apply in California.
(10) Carbon dioxide transport is subject to comprehensive federal
regulation by all modes, including pipeline, road, or ground. These
regulations apply in California.
(11) The pipeline transport of carbon dioxide is a proven mature
technology. In its 2005 special report of CCS, the IPCC states that
the "p]ipeline transport of carbon dioxide] operates as a mature
market technology (in the United States], over 2,500 kilometers] of
pipelines transport more than 40 metric tons of carbon dioxide] per
year)." Federal government data demonstrate that carbon dioxide
pipelines are safe. Meanwhile, the trucking industry has safely
transported significant quantities of carbon dioxide for decades for
a variety of commercial end users, including the carbonated beverage
industry.
(12) Carbon dioxide injection and storage is subject to
comprehensive federal regulations. In December 2010, the USEPA
finalized its class VI regulations (76 Fed. Reg. 56982) under the
Underground Injection Control program (UIC), and since that time the
USEPA has issued detailed implementation guidance. Those regulations
do not impact ongoing CO2-EOR operations but provide a mechanism by
which CO2-EOR owners or operators that elect to conduct concurrent
oil production and sequestration operations may do so under the UIC
class II well program, which governs CO2-EOR operations. The UIC
class VI well program regulations apply in California and are
implemented by the USEPA. The UIC class II well program regulations
apply in California and USEPA has delegated its implementation
responsibilities to the Division of Oil, Gas, and Geothermal
Resources of the Department of Conservation.
(13) The goals of creating a regulatory framework that ensures the
safe deployment of CCS technology in a manner consistent with the
state's goals for GHG reduction can best be accomplished by
clarifying the ownership of the pore space and the regulatory
responsibility of permitting CCS projects.
(b) It is the intent of the Legislature to create a clear and
comprehensive permitting regime for CCS projects in California.
(c) In enacting this act, the Legislature does not intend to
require the deployment of CCS technology but only to provide a clear
and certain regulatory structure for CCS projects.
SEC. 3. Section 659 of the Civil Code is amended to read:
659. (a) Land is the material of the earth,
whatever may be the ingredients of which it is composed, whether
soil, rock, or other substance, and includes free or occupied space
for an indefinite distance upwards as well as downwards, subject to
limitations upon the use of airspace imposed, and rights in the use
of airspace granted, by law.
(b) (1) The free space specified in subdivision (a) includes pore
space that can be possessed and used for the storage of greenhouse
gas in the state.
(2) This subdivision does not change or alter the law as it
relates to the rights belonging to, and the dominance of, the mineral
estate, and does not change or alter the incidents of ownership or
other rights of the owners of the mineral estate, including the right
to mine, drill, complete, or abandon a well, the right to inject
substances to facilitate production, the right to implement enhanced
recovery for the purposes of recovery of oil, gas, or other minerals,
or the dominance of the mineral estate.
SEC. 4. Section 51010.5 of the Government Code is amended to read:
51010.5. As used in this chapter, the following definitions
apply:
(a) "Pipeline" includes every intrastate pipeline used for the
transportation of hazardous liquid substances , carbon dioxide,
or highly volatile liquid substances, including a common
carrier pipeline, and all piping containing those substances located
within a refined products bulk loading facility which
that is owned by a common carrier and is served
by a pipeline of that common carrier, and the common carrier owns and
serves by pipeline at least five such of
these facilities in the state. "Pipeline" does not include the
following:
(1) An interstate pipeline subject to Part 195 of Title 49 of the
Code of Federal Regulations.
(2) A pipeline for the transportation of a hazardous liquid
substance in a gaseous state.
(3) A pipeline for the transportation of crude oil that operates
by gravity or at a stress level of 20 percent or less of the
specified minimum yield strength of the pipe.
(4) Transportation of petroleum in onshore gathering lines located
in rural areas.
(5) A pipeline for the transportation of a hazardous liquid
substance offshore located upstream from the outlet flange of each
facility on the Outer Continental Shelf where hydrocarbons are
produced or where produced hydrocarbons are first separated,
dehydrated, or otherwise processed, whichever facility is farther
downstream.
(6) Transportation of a hazardous liquid by a flow line.
(7) A pipeline for the transportation of a hazardous liquid
substance through an onshore production, refining, or manufacturing
facility, including a storage or inplant piping system associated
with that facility.
(8) Transportation of a hazardous liquid substance by vessel,
aircraft, tank truck, tank car, or other vehicle or terminal
facilities used exclusively to transfer hazardous liquids between
those modes of transportation.
(b) "Flow line" means a pipeline which
that transports hazardous liquid substances from the well head
to a treating facility or production storage facility.
(c) "Hydrostatic testing" means the application of internal
pressure above the normal or maximum operating pressure to a segment
of pipeline, under no-flow conditions for a fixed period of time,
utilizing a liquid test medium.
(d) "Local agency" means a city, county, or fire protection
district.
(e) "Rural area" means a location which
that lies outside the limits of any incorporated or
unincorporated city or city and county, or other residential or
commercial area, such as a subdivision, a business, a shopping
center, or a community development.
(f) "Gathering line" means a pipeline eight inches or less in
nominal diameter that transports petroleum from a production
facility.
(g) "Production facility" means piping or equipment used in the
production, extraction, recovery, lifting, stabilization, separation,
or treatment of petroleum or associated storage or measurement. (To
be a production facility under this definition, piping or equipment
must be used in the process of extracting petroleum from the ground
and transporting it by pipeline.)
(h) "Public drinking water well" means a wellhead that provides
drinking water to a public water system as defined in Section 116275
of the Health and Safety Code, that is regulated by the State
Department of Health Services and that is subject to Section 116455
of the Health and Safety Code.
(i) "GIS mapping system" means a geographical information system
that will collect, store, retrieve, analyze, and display
environmental geographical data in a data base that is accessible to
the public.
(j) "Motor vehicle fuel" includes gasoline, natural gasoline,
blends of gasoline and alcohol, or gasoline and oxygenates, and any
inflammable liquid, by whatever name the liquid may be known or sold,
which is used or is usable for propelling motor vehicles operated by
the explosion type engine. It does not include kerosene, liquefied
petroleum gas, or natural gas in liquid or gaseous form.
(k) "Oxygenate" means an organic compound containing oxygen that
has been approved by the United States Environmental Protection
Agency as a gasoline additive to meet the requirements for an
"oxygenated fuel" pursuant to Section 7545 of Title 42 of the United
States Code.
(l) "Carbon dioxide" means a fluid consisting of more than 90
percent carbon dioxide molecules compressed to a supercritical state.
SEC. 5. Section 38575 is added to the Health and Safety Code, to
read:
38575. (a) On or before January 1, 2015, the state board shall
adopt a final methodology for carbon capture and storage projects
seeking to demonstrate sequestration under the greenhouse gas
emission performance standard pursuant to Chapter 3 (commencing with
Section 8340) of Division 4.1 of the Public Utilities Code or the
regulations implementing a cap-and-trade program pursuant to this
division, or create greenhouse gas emission compliance instruments or
offset credit pursuant to this division.
(b) The methodology adopted pursuant to subdivision (a) shall be
suitable for any of the following:
(1) The regulations for the mandatory reporting of greenhouse gas
emissions (Article 2 (commencing with Section 95100) of Subchapter 10
of Chapter 1 of Division 3 of Title 17 of the California Code of
Regulations).
(2) The demonstration of sequestration under the greenhouse gas
emission performance standard established pursuant to Chapter 3
(commencing with Section 8340) of Division 4.1 of the Public
Utilities Code.
(3) The demonstration of sequestration for the purposes of the
regulations implementing the market-based compliance mechanisms
pursuant to this division.
(4) A compliance offset protocol for use in the regulations
implementing the market-based mechanisms pursuant to this division.
(c) The methodology shall include a methodology for assessing
emission reductions for carbon dioxide enhanced oil recovery projects
seeking to demonstrate sequestration pursuant to the greenhouse gas
emission performance standard or regulations implementing the
market-based compliance mechanisms, or to create greenhouse gas
emission compliance instruments or offset credits pursuant to this
division by demonstrating simultaneous sequestration of injected
carbon dioxide. The methodology shall address multiple modes of
carbon dioxide transportation, including pipeline, rail, and road
transportation.
(d) In adopting the methodology, the state board shall, to the
maximum extent feasible, harmonize the adopted methodology with
greenhouse gas storage or sequestration quantification methodologies
used by other state, federal, or international greenhouse gas
emission reduction programs.
SEC. 6. Section 3239 is added to the Public Resources Code, to
read:
3239. The Division of Oil, Gas, and Geothermal Resources shall
regulate a carbon dioxide enhanced oil recovery project seeking to
demonstrate sequestration of greenhouse gas pursuant to the
greenhouse gas emission performance standard under the greenhouse gas
emission performance standard pursuant to Chapter 3 (commencing with
Section 8340) of Division 4.1 of the Public Utilities Code or the
regulations implementing a cap-and-trade program pursuant to the
California Global Warming Solutions Act of 2006 (Division 25.5
(commencing with Section 38500) of the Health and Safety Code), or
create greenhouse gas emission compliance instruments or offset
credit pursuant to the California Global Warming Solutions Act of
2006 pursuant to this division and under its regulatory authority to
permit class II injection wells in the state pursuant to the
authority delegated to the Division of Oil, Gas, and Geothermal
Resources pursuant to Section 1425 of the federal Safe Drinking Water
Act (42 U.S.C. Sec. 311h-4).