Regular Session 2023-2024 Senate Bill 0831 P.N. 1514

PRIOR PRINTER'S NOS. 921, 1434

PRINTER'S NO. 1514

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

831

Session of

2023

INTRODUCED BY YAW, ROBINSON, STEFANO AND VOGEL, JUNE 20, 2023

AS AMENDED ON THIRD CONSIDERATION, APRIL 8, 2024

AN ACT

Providing for the injection of carbon dioxide into an

underground reservoir for the purpose of carbon

sequestration, for the ownership of pore space in strata

below surface lands and waters of the Commonwealth, for

conveyance of the surface ownership of real property;

imposing duties on the Department of Environmental

Protection; and establishing the Carbon Dioxide Storage

Facility Fund.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Carbon

Capture and Sequestration Act.

Section 2. Findings and declarations.

The General Assembly finds and declares as follows:

(1) It is in the public interest to promote the geologic

storage of carbon dioxide.

(2) The capture and geologic storage of carbon dioxide

will benefit this Commonwealth and the global environment by

reducing greenhouse gas emissions and will help to ensure the

viability of the energy and power industries of this

Commonwealth, to the economic benefit of Pennsylvania and its

residents.

(3) Carbon dioxide is a potentially valuable commodity

and geologic storage may allow for its ready availability if

needed for commercial, industrial or other uses.

(4) The use of any subsurface stratum, formations,

cavities or voids, and any materials and fluids contained

therein, for geologic storage of carbon dioxide is a

reasonable and beneficial use.

Section 3. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Carbon dioxide injection well." A well that is used to

inject carbon dioxide into a reservoir for carbon sequestration

under a UIC Class VI permit.

"Carbon dioxide plume." The physical extent underground of

the injected carbon dioxide stream.

"Carbon sequestration." The underground storage of carbon

dioxide in a reservoir.

"Carbon sequestration project." A project that involves the

underground storage of carbon dioxide in a reservoir pursuant to

at least one UIC Class VI permit.

"Department." The Department of Environmental Protection of

the Commonwealth.

"Escrow." To place in trust with a third party to be held

segregated from other funds for the secured interest of the

department.

"Fund." The Carbon Dioxide Storage Facility Fund established

under section 10(a).

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"Pore space." Subsurface strata, formations, cavities or

voids, whether natural or artificially created, that can be used

as a storage space for carbon dioxide or other media.

"Secretary." The Secretary of Environmental Protection of

the Commonwealth.

"Storage facility." The subsurface area consisting of the

extent of a carbon dioxide plume which is required to be

delineated on an approved UIC Class VI permit or an amendment to

a UIC Class VI permit of a storage operator.

"Storage operator." An individual, corporation or other

legal entity that operates a carbon sequestration project.

"Subsurface property interest owner." A property interest

owner identified by the records of the recorder of deeds for

each county containing a portion of the proposed storage

facility who holds a fee simple interest, other freehold

interest or leasehold interest in the subsurface of the

property, which may include minerals, including coal, or oil and

gas rights. The term does not include the owner of a right-of-

way or an easement.

"Surface property interest owner." A property interest owner

identified by the records of the recorder of deeds for each

county containing a portion of the proposed storage facility who

holds a fee simple interest or other freehold interest in the

surface of the property, which may include minerals, including

coal, or oil and gas rights. The term does not include the owner

of a right-of-way, an easement or a leasehold.

"UIC Class VI permit." A permit issued under 40 CFR Pt. 144

(relating to underground injection control program) that allows

the operation of a carbon dioxide injection and storage well.

"Underground storage of carbon dioxide." The injection and

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storage of carbon dioxide into underground strata and formations

under at least one UIC Class VI permit.

Section 4. Ownership of pore space.

(a) General rule.--The ownership of all pore space in all

strata below the surface lands and waters of the Commonwealth

shall be vested in the surface property interest owner above the

pore space.

(b) Conveyance.--A conveyance of the surface ownership of

real property shall be a conveyance of the pore space in all

strata below the surface of the real property unless the

ownership interest in the pore space previously has been

expressly excepted and reserved, conveyed or otherwise severed

from the surface ownership. The ownership of pore space in

strata may be conveyed in the manner provided by law for the

transfer of real property interests. No agreement conveying

minerals, including coal, oil and gas, or other interests

underlying the surface shall act to convey pore space in the

stratum unless the agreement expressly includes conveyance of

the pore space.

(1) No provision of law or regulation requiring notice

to be given to a surface property interest owner, subsurface

property interest owner or both, shall be construed to

require notice to individuals holding ownership interest in

pore space in the underlying strata unless the applicable law

specifies notice to the individuals is required.

(2) Nothing in this section shall be construed to change

or alter the common law existing as of the effective date of

this paragraph with respect to the rights belonging to, or

the dominance of, the mineral, including coal, estate or oil

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and gas estate. For the purpose of determining the priority

of subsurface uses between a mineral, including coal, or oil

and gas estate and pore space, the mineral, including coal,

or oil and gas estate is dominant, including the surface use

necessary for the subsurface development of the mineral,

including coal, or oil and gas estate, regardless of whether

ownership of the pore space is vested in the surface property

interest owner or is owned separately from the surface.

(3) Nothing in this section shall alter, amend, diminish

or invalidate rights to an existing use of subsurface pore

space that were acquired by contract or lease prior to the

effective date of this paragraph, notwithstanding that the

contract or lease was entered into with a subsurface property

interest owner or a predecessor to the subsurface property

interest owner.

(d) Transfer instruments.--

(1) Instruments that transfer the rights to pore space

under this section shall describe the scope of any right to

use the surface estate. The owner of a pore space right shall

have no right to use the surface estate beyond that set out

in a properly recorded instrument.

(2) After the effective date of this paragraph, a

transfer instrument shall include a specific description of

the location of the pore space being transferred. The

description may include a metes and bounds description of the

surface lying over the transferred pore space and

identification of the subsurface strata, formations or

reservoirs. In the event only a description of the surface is

used, the transfer shall be deemed to include pore space at

all depths underlying the described surface area unless

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specifically excluded. The validity of pore space rights

under this paragraph shall not affect the respective

liabilities of a party and liabilities shall operate in the

same manner as if the pore space transfer were valid.

Section 5. Cotenants, ownership of pore space by multiple

cotenants and collective storage.

(a) General rule.--If a storage operator does not obtain the

consent of all persons that own the storage facility's pore

space to the construction and operation of a storage facility,

the secretary may require that the pore space owned by

nonconsenting owners be included in a storage facility and

subject to geologic storage. The following shall apply:

(1) The permit applicant and prospective storage

operator shall negotiate with the pore space owners and

acquire rights needed to access the pore space.

(2) If, after good-faith negotiation, the applicant or

storage operator cannot locate or cannot reach an agreement

with all necessary pore space owners but has secured written

consent or agreement from the owners of at least 60% of the

ownership interest in the pore space for the storage

facility, all of the pore space of said interests for which

an agreement has not been reached shall be declared to be

included within the proposed storage facility if the

secretary finds that the requirements of this section have

been met. For the purposes of this subsection, an unknown or

nonlocatable owner shall be deemed to have consented or

agreed to the use of the pore space, provided that the

storage operator has complied with the publication

requirements of this act.

(b) Collective storage.--

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(1) The storage operator shall provide a list to the

secretary of all persons reasonably known to own an interest

in pore space proposed to be collectively used in an

application to the secretary for a collective storage order.

A collective storage order shall be made only after the

secretary provides notice to all pore space owners proposed

to be included within the order.

(2) The secretary shall set and collect a fee adequate

to pay expenses associated with the conduct of administrative

hearings for the collective storage of pore space.

(3) If the proposed collective storage order concerns

pore space with an unknown or nonlocatable owner, the storage

operator shall publish one notice in the newspaper of the

largest circulation in each county in which the pore space is

located. The notice shall appear no more than 30 days prior

to the initial application for the collective storage order.

The applicant shall file proof of notice with the division

DEPARTMENT concurrently with the application. The notice

shall:

(i) State that an application for a collective

storage order has been filed with the department.

(ii) Describe the pore space proposed to be

collectively used.

(iii) In the case of an unknown pore space owner,

indicate the name of the last known owner.

(iv) In the case of a nonlocatable pore space owner,

identify the owner and the owner's last known address.

(v) State that a person claiming an interest in the

pore space proposed to be collectively used should notify

the secretary and the storage operator at the published

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address within 20 days of the publication date.

(4) A collective storage order shall authorize the long-

term storage of carbon dioxide beneath the tract or portion.

The order shall also specify, where necessary, the location

of and how to access carbon DIOXIDE injection wells,

outbuildings, roads and monitoring equipment. The collective

storage order shall identify the compensation to be paid to

unknown, nonlocatable and nonconsenting pore space owners and

the basis for fair market valuation of the collective

interest of the pore space owners.

(5) A certified copy of a collective storage order and a

survey of the storage field shall be recorded by the storage

operator in the office of the county clerk of the county in

which all or a portion of the collective tract is located.

The secretary shall provide a copy of the collective storage

order to those required to be notified. For purposes of this

section, an unknown or nonlocatable owner shall be deemed to

have received notice, provided that the storage operator has

complied with the publication requirements under this

subsection.

Section 5.1. Seismic exploration.

(a) Seismic activity review.--A storage operator shall

prepare a seismic activity review in accordance with existing

requirements for a UIC Class VI permit.

(b) Seismic survey or assessment.--Prior to application for

a UIC Class VI permit developed by the department, a storage

operator may conduct a seismic survey or assessment across the

vicinity of a potential storage facility.

reasonably negotiate with a surface owner for the right to

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conduct a seismic survey on lands owned by the surface owner,

the secretary may issue an order for the entry onto the lands by

the storage operator. In this instance, the storage operator

shall pay the surface owner just and reasonable compensation as

established by the secretary.

(d) Limitations and claims.--A seismic survey shall be

limited to geologic storage and shall remain confidential and

proprietary. The storage operator shall defend, indemnify and

hold harmless the property owner for all claims arising out of

entry onto the property by the storage operator, its contractors

and its agents.

Section 6. Authorization of projects.

(a) Carbon sequestration.--Carbon sequestration projects are

authorized in this Commonwealth for the purposes of:

(1) Injecting carbon dioxide into the pore space of an

underground storage facility through at least one carbon

dioxide injection well under a UIC Class VI permit.

(2) Employing the underground storage of carbon dioxide.

(b) Conditions for authorization.--

(1) To operate a carbon sequestration project under this

section, a storage operator must obtain, and must be in

compliance with, a UIC Class VI permit and all other permits

as required by applicable statutes and regulations. Upon

submission of a UIC Class VI permit application, the storage

operator shall provide notice of application to the surface

property interest owners and subsurface property interest

owners in the vicinity of the storage facility.

(2) The following apply to seismic monitoring:

(i) A storage operator shall deploy prior to carbon

sequestration, and periodically operate during carbon

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sequestration, a seismicity monitoring system to

determine the presence or absence, magnitude and the

hypocenter location to the best of the storage operator's

ability of seismic activity within the vicinity of the

storage facility as may be necessary to perform an array

and a risk analysis and as required by the department. A

storage operator may apply to the department for a waiver

of this requirement if the storage operator presents a

geohazard assessment and historical injection data

demonstrating that induced seismicity does not pose

significant risk.

(ii) If a storage operator is unable to reasonably

negotiate with a surface property interest owner for the

right to conduct seismic monitoring on lands owned by the

surface property interest owner, the secretary may issue

an order for the entry onto the lands by the storage

operator. In this instance, the storage operator shall

pay the surface property interest owner just and

reasonable compensation as established by the secretary.

(iii) The storage operator shall defend, indemnify

and hold harmless the surface property interest owner and

subsurface property interest owner for all claims arising

out of entry onto the property by the storage operator,

its contractors and its agents.

(iv) A storage operator shall provide for the

submission to the department of any seismic data above a

seismic threshold or frequency determined by the

department in a manner provided for by the department.

(3) To operate a carbon sequestration project under this

section, a storage operator shall design the carbon

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sequestration project to isolate any existing or future

production from the mineral, including of the coal, or oil and

gas estate, from the carbon dioxide plume and shall indicate

whether the storage facility contains commercially valuable

mineral, including the coal, or oil and gas estates, and, if it

does, a permit may be issued only if the department is satisfied

that the interests of the mineral, including coal, or oil and

gas estate, will not be adversely affected and have been

addressed in an agreement entered into by the storage operator

and the subsurface property interest owners.

Section 7. Ownership of material injected into storage

facilities and liability for holding interests

related to a storage facility or giving consent to

allow carbon sequestration activities.

(a) General rule.--All carbon dioxide, and other substances

injected incidental to the injection of carbon dioxide, injected

into a storage facility for the purpose of carbon sequestration

shall be presumed to be owned by the storage operator of the

material and all rights, benefits, burdens and liabilities of

the ownership shall belong to the storage operator. This

presumption may be rebutted by an individual claiming contrary

ownership by a preponderance of the evidence in an action to

establish ownership.

(b) Liability.--No owner of pore space, other individual

holding any right to control pore space or other surface

property interest owner or subsurface property interest owner,

shall be liable for the effects of injecting carbon dioxide for

carbon sequestration activities, or for the effects of injecting

other substances for the purpose of carbon sequestration which

substances are injected incidental to the injection of carbon

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dioxide, solely by virtue of their interest in the pore space or

surface or subsurface rights.

Section 8. Liability of storage operator.

(a) General rule.--A claim for damages due to injection or

migration of carbon dioxide shall not be actionable against a

storage operator conducting carbon sequestration in accordance

with a valid UIC Class VI permit unless the claimant proves that

the injection or migration of carbon dioxide:

(1) is injurious to health, or an obstruction to the

free use of property so as essentially to interfere with the

comfortable enjoyment of life or property; or

(2) has caused injury to an individual, animal or real

or personal property.

(b) Redress and damages.--

(1) A surface property interest owner or subsurface

property interest owner or lessee who incurs injury or damage

or loss of property value as a result of the injection or

migration of carbon dioxide described in subsection (a) shall

have a right of action against the storage operator for

injunction, damages or other appropriate civil or equitable

relief.

(2) A surface property interest owner, subsurface

property interest owner or lessee may seek recovery for any

of the following:

(i) General and special damages, including actual

damages, for the diminution in property value resulting

from the injection and migration of carbon dioxide beyond

the storage facility.

(ii) Punitive damages.

(iii) Reasonable attorney fees and costs.

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(iv) Injunctive and other equitable relief.

(v) Other relief which the court deems necessary and

proper.

(3) A surface property interest owner, subsurface

property interest owner or lessee may not seek punitive

damages due to injection or migration of carbon dioxide if

the storage operator is determined to have had a reasonable

basis for believing that the carbon sequestration project

would not result in migration of carbon dioxide beyond the

storage facility.

Section 9. Operation and storage fees FEE.

(a) Requirement.--Storage operators shall pay the department

a fee on each ton of carbon dioxide injected for storage.

(b) Amount.--The fee under this section shall be in an

amount set by the Environmental Quality Board. The following

apply:

(1) The fee shall be based on the department's

anticipated expenses associated with:

(i) Regulating storage facilities during their

construction, operation and preclosure phases.

(ii) Long-term monitoring and management of the

storage facility following issuance of the certificate of

project completion under section 11.

(2) The department shall transmit to the Legislative

Reference Bureau for publication in the next available issue

of the Pennsylvania Bulletin a schedule of fees THE FEE SET

under this section.

under this section shall be segregated as follows:

(1) Fifty percent of fees imposed for the purpose of

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covering the activities described in section 10(c)(1), (2)

and (3) shall be deposited to the credit of the fund, and 50%

of the fees shall be held in escrow by the storage operator

pursuant to rules promulgated by the department, provided

that rules permit investment of the escrowed funds.

(2) One hundred percent of the fees imposed for the

purpose of covering the activities described in section 10(c)

(4) shall be held in escrow by the storage operator pursuant

to rules promulgated by the Environmental Quality Board,

provided that rules permit investment of the escrowed funds.

SECTION SHALL BE DEPOSITED AS FOLLOWS:

(1) FIFTY PERCENT OF THE FEE SHALL BE DEPOSITED INTO THE

FUND.

(2) FIFTY PERCENT OF THE FEE SHALL BE DEPOSITED INTO THE

RESTRICTED ACCOUNT WITHIN THE FUND ESTABLISHED UNDER SECTION

10(A)(2).

(d) Penalties.--Penalties imposed for violations of this act

or regulations promulgated under this act and funds received by

the department from financial responsibility mechanisms shall be

remitted to the fund.

Section 10. Fund.

(a) Establishment.--The Carbon Dioxide Storage Facility Fund

is established as a separate fund within the State Treasury.

(b) Administration.--The department shall administer the

fund.

department's expenses associated with:

(1) Processing permit applications.

(2) Regulating storage facilities during construction,

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operational and preclosure phases.

(3) Making storage amount determinations.

(4) Long-term monitoring and management of a closed

storage facility.

(d) Interest.--Interest earned by the fund shall be

deposited into the fund.

(e) Transfer.--Money in the fund may not be transfered to

the General Fund or another fund.

(f) Deposit.--At the time a certificate of project

completion is issued by the department, the storage operator

shall deposit to the credit of the fund all money accumulated by

the storage operator in escrow under section 9(c), provided that

the total amount credited by the storage operator shall not

exceed the anticipated cost of oversight and management

following closure of the geologic storage facility and

associated carbon dioxide injection wells, as determined by the

department.

(A) ESTABLISHMENT.--

(1) THE CARBON DIOXIDE STORAGE FACILITY FUND IS

ESTABLISHED AS A SEPARATE FUND WITHIN THE STATE TREASURY.

(2) A RESTRICTED ACCOUNT IS ESTABLISHED WITHIN THE FUND

FOR THE PURPOSE PROVIDED UNDER SUBSECTION (C)(2).

(B) ADMINISTRATION.--THE DEPARTMENT SHALL ADMINISTER THE

FUND.

(1) THE FUND SHALL BE USED ONLY FOR DEFRAYING THE

DEPARTMENT'S EXPENSES ASSOCIATED WITH:

(I) PROCESSING PERMIT APPLICATIONS.

(II) REGULATING STORAGE FACILITIES DURING

CONSTRUCTION, OPERATIONAL AND PRECLOSURE PHASES.

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(III) MAKING STORAGE AMOUNT DETERMINATIONS.

(2) THE RESTRICTED ACCOUNT SHALL BE USED ONLY FOR

DEFRAYING THE COSTS ASSOCIATED WITH LONG-TERM MONITORING AND

MANAGEMENT OF A CLOSED STORAGE FACILITY FOLLOWING THE

ISSUANCE OF THE CERTIFICATE OF PROJECT COMPLETION UNDER

SECTION 11.

(D) INTEREST.--

(1) INTEREST EARNED BY THE FUND SHALL BE DEPOSITED INTO

THE FUND.

(2) INTEREST EARNED BY THE RESTRICTED ACCOUNT SHALL BE

DEPOSITED INTO THE RESTRICTED ACCOUNT.

(E) TRANSFER.--MONEY IN THE FUND MAY NOT BE TRANSFERRED TO

THE GENERAL FUND OR ANOTHER FUND.

(F) APPROPRIATION.--MONEY IN THE FUND AND RESTRICTED ACCOUNT

SHALL BE ANNUALLY APPROPRIATED BY THE GENERAL ASSEMBLY.

Section 11. Certificate of project completion.

(a) Issuance.--After all carbon dioxide injections

underground or into pore space are completed and upon

application by the storage operator, the department may issue a

certificate of project completion. The department shall issue a

certificate upon satisfaction of the conditions imposed under

this section and after providing public notice of the

application, an opportunity for public comment and a public

hearing on the application.

(b) Timing.--A certificate of project completion shall not

be issued until at least 10 years after carbon dioxide

injections end.

not be issued until the storage operator establishes with a

degree of certainty that satisfies the department that:

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(1) The storage operator is in full compliance with all

laws governing the injection and storage of the carbon

dioxide.

(2) The storage operator has addressed pending claims

regarding the injection and storage of the carbon dioxide.

(3) The carbon dioxide that has been injected

underground for storage is not expected to expand vertically

or horizontally and poses no threat to human health, human

safety, the environment or underground sources of drinking

water.

(4) The carbon dioxide that has been injected

underground for storage is unlikely to cross any underground

or pore space boundary and is not expected to endanger any

underground source of drinking water or otherwise endanger

human health, human safety or the environment.

(5) All wells, equipment and facilities to be used in

maintaining and managing the stored carbon dioxide are in

good condition and will retain mechanical integrity.

(6) The storage operator has plugged injection wells and

has completed all reclamation required by the department.

(d) After issuance.--Upon the issuance of a certificate of

project completion under this section:

(1) In exchange for assuming responsibility and

liability for the stored carbon dioxide as provided in this

section, title to the stored or injected carbon dioxide, and

any facilities used to inject or store the carbon dioxide,

without payment of compensation, shall be transferred to the

Commonwealth.

(2) Title acquired by the Commonwealth includes all

rights, and interests in, and all responsibilities associated

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with, the stored or injected carbon dioxide, subject to

limitations provided within this subsection.

(3) Except in situations provided below, and except for

criminal and contractual liability, primary responsibility

and liability for the stored or injected carbon dioxide shall

be transferred to the Commonwealth:

(i) situations in which the operator violated a duty

imposed on the operator by Pennsylvania law or regulation

prior to approval of site closure and any applicable

statutes of limitation have not run;

(ii) situations in which the department determines,

after notice and hearing, that the operator provided

deficient or erroneous information that was material and

relied upon by the department to support approval of site

closure;

(iii) situations in which the department determines,

after notice and hearing, that there is carbon dioxide

migration for which the operator is responsible that

causes or threatens imminent and substantial endangerment

to an underground source of drinking water; or

(iv) the balance of the escrow or the fund is

insufficient to cover costs arising from storage

facilities and associated carbon dioxide injection wells

after site closure.

(4) The storage operator and all individuals who

generated, injected or stored carbon dioxide shall be forever

released from all regulatory requirements associated with the

continued storage and maintenance of the injected carbon

dioxide, except as provided in paragraph (3).

(5) A bond or financial assurance submitted to the

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department shall be released.

(6) The department shall assume responsibility to manage

and monitor the stored carbon dioxide until a time when the

Federal Government assumes responsibility for the long-term

monitoring and management of stored carbon dioxide.

(e) Construction.--Nothing in this section shall be

construed as a waiver of sovereign immunity by the Commonwealth.

Section 12. Effective date.

This act shall take effect immediately.

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