Accelerating Carbon Capture and Sequestration Projects: Analysis and Comparison of Policy Approaches

AbstractMany states and countries have adopted or are in the process of crafting policies to enable geologic carbon sequestration projects. These efforts reflect the recognition that existing statutory and regulatory frameworks leave ambiguities or gaps that elevate project risk for private companies considering carbon sequestration projects, and/or are insufficient to address a government’s mandate to protect the public interest. We have compared the various approaches that United States’ state and federal governments have taken to provide regulatory frameworks to address carbon sequestration. A major purpose of our work is to inform the development of any future legislation in California, should it be deemed necessary to meet the goals of Assembly Bill 1925 (2006) to accelerate the adoption of cost-effective geologic sequestration strategies for the long-term management of industrial carbon dioxide in the state.Our analysis shows that diverse issues arecovered by adopted and proposed carbon capture and sequestration (CCS) legislation and that many of the new laws focus on defining regulatory frameworks for underground injection of CO2, ambiguities in property issues, or assigning legal liability. While these approaches may enable the progress of early projects, future legislation requires a longer term and broader view that includes a quantified integration of CCS into a government’s overall climate change mitigation strategy while considering potentially counterproductive impacts on CCS of other climate change mitigation strategies. Furthermore, legislation should be crafted in the context of a vision for CCS as an economically viable and widespread industry.In California, CCS is not included quantitatively as a strategy to reduce future greenhouse gas (GHG) emissions. In part, this reflects the focus of most state agencies on short term goals, such as the AB 32 goal to return California emissions to 1990 levels by 2020. It also reflects the lack of data necessary to predict how rapidly and to what degree CCS could be deployed to meet short or long term goals. The lack of timely consideration of CCS as a mitigation alternative, however, has the potential to lead, albeit unintentionally, to policies which may make CCS adoption less likely and more expensive in the long run. For example, consideration of the economic and other risks associated with CCS is presently a disincentive to adopt CCS if other alternatives, such as fuel switching, can meet legislated requirements to reduce carbon emissions.While an important function of new CCS legislation is enabling early projects, it must be kept in mind that applying the same laws or protocols in the future to a widespread CCS industry may result in business disincentives and compromise of the public interest in mitigating GHG emissions, particularly in cases where different stakeholders are responsible for capture, transport, and sequestration elements of a project. Protection of the public interest requires that monitoring and verification track the long term fate of pipelined CO2 regardless of its end use in order to establish that climate change goals are being met. Legislative mandates that require CO2 producers to verify carbon reductions via sequestration, and which are crafted under the assumption that CO2 capture, transport and storage is linear and maintained under a single stewardship, may result in reducing the incentive to participate in the efficiencies of a collective transport and sequestration system