Bill Text: CA SB905 | 2021-2022 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Carbon sequestration: Carbon Capture, Removal, Utilization, and Storage Program.

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Passed) 2022-09-16 - Chaptered by Secretary of State. Chapter 359, Statutes of 2022. [SB905 Detail]

Download: California-2021-SB905-Amended.html

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Amended  IN  Senate  February 18, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Senate Bill

No. 905

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Introduced by Senator Skinner
(Coauthor: Senator Becker)

February 02, 2022

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An act to amend Section 39740.2 of the Health ans Safety Code, relating to air pollution. add Part 3.9 (commencing with Section 71280) to Division 34 of the Public Resources Code, relating to greenhouse gases.

LEGISLATIVE COUNSEL'S DIGEST

SB 905, as amended, Skinner. Natural Resources Agency: Natural and Working Lands Climate Smart Strategy. Decarbonized Cement and Geologic Carbon Sequestration Demonstration Act.

(1) The California Global Warming Solutions Act of 2006 designates the State Air Resources Board as the state agency charged with monitoring and regulating sources of emissions of greenhouse gases. The act requires the state board to approve a statewide greenhouse gas emissions limit equivalent to the statewide greenhouse gas emissions level in 1990 to be achieved by 2020 and to ensure that statewide greenhouse gas emissions are reduced to at least 40% below the 1990 level by 2030. The act requires the state board to prepare and approve a scoping plan for achieving the maximum technologically feasible and cost-effective reductions in greenhouse gas emissions and to update the scoping plan at least once every 5 years.

This bill would establish the Decarbonized Cement and Geologic Carbon Sequestration Demonstration Act, which would require the state board to develop and administer the Geologic Carbon Sequestration Demonstration Initiative to evaluate and demonstrate the efficacy, safety, and viability of geologic sequestration of carbon dioxide not associated with enhanced oil recovery or fossil fuel production, among other things. The bill would require the state board, in consultation with the State Energy Resources Conservation and Development Commission and the State Water Resources Control Board, to award funding under the initiative, as specified, to at least one, but no more than 3, geologic carbon sequestration demonstration projects that each meet specified criteria, including that the project has the technical capacity to begin operation no later than September 1, 2023. The bill would require the state board, prior to awarding funds under the initiative and no later than July 1, 2023, to develop guidelines for implementation of the initiative and the development of geologic carbon sequestration demonstration projects and criteria for the selection of eligible projects, as specified. The bill would require the state board, no later than January 1, 2024, to approve at least one geologic carbon sequestration demonstration project for funding pursuant to the initiative. The bill also would prescribe requirements for title and the transfer of title to any geologic storage reservoir, and the rights and liabilities of an operator of a geologic carbon sequestration project, other than a project approved by the state board pursuant to the initiative.

This bill would require the state board, on or before January 1, 2025, to adopt regulations to create a coordinated state permitting process for approval of geologic carbon sequestration projects, including a single unified permit for submission by developers or sponsors of projects that incorporates the requirements for approvals from all state and local agencies necessary to approve a project. The bill would designate the state board as the lead agency under the California Environmental Quality Act for environmental review of carbon sequestration projects and designate responsible agencies, as specified.

This bill would establish the Hub for Innovation in Geologic Carbon Sequestration and would require the state board, in consultation with the commission, to administer the innovation hub to advance the development of geologic carbon sequestration technology and projects not associated with enhanced oil recovery or fossil fuel production, among other things. The bill would require the innovation hub, if feasible, to be located at a University of California, California State University, or California Community College campus and to include facilities for use by state agencies, researchers, and others.

(2) Existing law defines “public works,” for purposes of regulating public works contracts, as, among other things, construction, alteration, demolition, installation, or repair work done under contract and paid for, in whole or in part, out of public funds. Existing law further requires that, except as specified, not less than the general prevailing rate of per diem wages be paid to workers employed on public works and imposes misdemeanor penalties for a willful violation of this requirement.

This bill would require that a geologic carbon sequestration demonstration project funded by the state board pursuant to the initiative constitutes a public works project for which prevailing wages are required to be paid. Because the willful violation of prevailing wage requirements when engaged in these public works projects would result in the imposition of misdemeanor penalties, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law requires, no later than July 1, 2023, the Natural Resources Agency, in coordination with certain state agencies, to establish the Natural and Working Lands Climate Smart Strategy.

This bill would require the Natural Resources Agency, in coordination with those agencies, to update the strategy every 4 years.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NOYES  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 The Legislature finds and declares all of the following:

(a) Climate change poses a severe threat to California’s people, places, resources, and institutions that is already manifesting in the form of extreme heat, wildfires, drought, species loss, and other disruptions to the state’s environment and ecosystems.

(b) Leading climate experts, including the United Nations’ Intergovernmental Panel on Climate Change, have found that deep reductions in carbon dioxide and other greenhouse gases in the coming decades will be necessary to prevent catastrophic global warming in excess of 1.5 and 2 degrees Celsius.

(c) Carbon already emitted into the atmosphere and carbon emitted through natural and industrial processes can be captured and injected into underground geological formations through a process known as geologic carbon sequestration. Geologic carbon sequestration may be a vital strategy to achieve the carbon reductions needed to prevent catastrophic global warming.

(d) California has several geologic formations that are known to have the potential for large-scale carbon storage. Carbon storage in these geologic formations could play an integral role in achieving the state’s target of reducing greenhouse gas emissions to at least 40 percent below 1990 levels by 2030 and the Executive Order No. B-55-18 target of achieving statewide carbon neutrality by 2045.

(e) Several other promising carbon storage mechanisms exist, including mineralization, a process that can permanently store carbon dioxide in rocks.

(f) Carbon capture and storage projects would provide jobs for California’s skilled and trained workforce consistent with the state’s commitment to an equitable and just clean energy transition. Carbon capture projects are skilled-labor intensive and represent a viable pathway for new skilled and trained jobs in the green economy.

(g) Senate Bill 596 (Chapter 246 of the Statutes of 2021) identified California’s cement industry as a top priority for the development of carbon-neutral industrial operations, including by setting a goal of net-zero greenhouse gas emissions associated with cement used within the state by 2045.

(h) As California pushes to reduce greenhouse gas emissions associated with domestic cement pollution, the state needs to also focus on reduction of copollutants, including sulfur dioxide, nitrogen oxide, and carbon monoxide emissions, associated with cement production that can impact the health of local communities.

(i) It is in the state’s interest to evaluate and demonstrate the safety, efficacy, and benefits of geologic carbon sequestration for cement production as part of a public-private partnership, to establish clear legal standards for geologic carbon sequestration, and to accelerate the deployment of geologic carbon sequestration by 2025 in order to prevent catastrophic global warming.

(j) It is the intent of the Legislature that California establish pathways for safe and effective geologic carbon sequestration that promote workforce and local community benefits and advances the state’s leadership in the global effort to reduce greenhouse gas emissions and mitigate climate change.

SEC. 2.

 Part 3.9 (commencing with Section 71280) is added to Division 34 of the Public Resources Code, to read:

PART 3.9. Decarbonized Cement and Geologic Carbon Sequestration Demonstration Act

71280.

 This part shall be known, and may be cited, as the Decarbonized Cement and Geologic Carbon Sequestration Demonstration Act.

71281.

 For purposes of this part, the following terms have the following meanings:

(a) “Carbon dioxide stream” means carbon dioxide captured for the purpose of geologic carbon sequestration.

(b) “Commission” means the State Energy Resources Conservation and Development Commission.

(c) “Geologic carbon sequestration” means the permanent underground storage of carbon dioxide streams in a geologic storage complex.

(d) “Geologic carbon sequestration demonstration project” means a project for geologic carbon sequestration that is approved by the state board pursuant to the requirements of this part.

(e) “Geologic carbon sequestration project operator” means a person owning or operating a geologic carbon sequestration project, including a geologic carbon sequestration demonstration project approved by the state board pursuant to this part.

(f) “Geologic storage complex” means one or more geologic storage reservoirs and any associated facilities or infrastructure necessary to convey, inject, or store carbon dioxide streams at the site of a geologic storage reservoir.

(g) “Geologic storage reservoir” means a cavity or void in a subsurface stratum or formation, whether natural or artificially created, suitable for injection and geologic storage of carbon dioxide in the state.

(h) “Initiative” means the Geologic Carbon Sequestration Demonstration Initiative developed by the state board pursuant to Section 71283.

(i) “Innovation hub” means the Hub for Innovation in Geologic Carbon Sequestration established pursuant to Section 71287.

(j) “Permanent” means that sequestered carbon dioxide will remain within a geologic storage complex for at least 100 years.

(k) “State board” means the State Air Resources Board.

71283.

 (a) The state board shall develop and administer the Geologic Carbon Sequestration Demonstration Initiative to do all of the following:

(1) Evaluate and demonstrate the efficacy, safety, and viability of geologic sequestration of carbon dioxide not associated with enhanced oil recovery or fossil fuel production.

(2) Enhance air quality and reduce greenhouse gas emissions.

(3) Promote workforce and community benefits.

(b) The state board, in consultation with the commission and the State Water Resources Control Board, shall award funding under the initiative to at least one, and no more than three, geologic carbon sequestration demonstration projects that each do all of the following:

(1) Demonstrate the feasibility of one or more geologic carbon sequestration strategies by facilitating the capture, removal, and geologic sequestration of carbon dioxide generated at one or more new or existing cement production facilities in the state to one or more geologic storage complexes.

(2) Achieve the capability to annually sequester at least 1,000,000 metric tons of carbon dioxide equivalent in greenhouse gas emissions.

(3) Achieve the capability to permanently sequester carbon dioxide in a geologic storage complex at a total capacity of at least 50,000,000 metric tons of carbon dioxide equivalent.

(4) Incorporate strategies to reduce copollutant emissions from a cement production facility participating in the carbon sequestration demonstration project and limit air pollution, water pollution, and construction-related impacts in the community or communities adjacent to any geologic storage complexes used for the project.

(5) Include monitoring and reporting schedules to state regulatory agencies.

(6) Promote workforce development and create employment opportunities in the community or communities in which the carbon sequestration demonstration project is located.

(7) Advance the state’s net-zero cement industry goal and the strategy developed by the state board pursuant to Section 38561.2 of the Health and Safety Code.

(8) Include an infrastructure path for construction of, or reuse of existing, pipelines to connect geologic storage complexes to carbon dioxide sources.

(9) Include facilities, site access, and technical capacity available to support the innovation hub.

(10) Have the technical capacity to begin operation no later than September 1, 2023.

(c) In awarding funds pursuant to this part, the state board shall prioritize geologic carbon sequestration demonstration projects that do all of the following:

(1) Are likely to generate the greatest net reduction in greenhouse gas emissions.

(2) Represent appropriate land use and minimize potential environmental, noise, air quality, traffic, and other construction-related impacts to the community or communities in which the project is located.

(3) Promote the goals of the environmental justice element of any applicable general plan pursuant to subdivision (h) of Section 65302 of the Government Code.

(4) Provide benefits to disadvantaged communities, as identified by the California Environmental Protection Agency pursuant to Section 39711 of the Health and Safety Code.

(5) Leverage private funding sources and public-private partnership structures alongside state funding sources.

(d) A geologic carbon sequestration demonstration project funded pursuant to this part is a public works project for which prevailing wages shall be paid in accordance with Chapter 1 (commencing with Section 1720) of Part 7 of Division 2 of the Labor Code.

(e) (1) The state board shall require, as a condition of funding pursuant to this part, that a recipient of funding provide an enforceable commitment to the state board that, in accordance with Chapter 2.9 (commencing with Section 2600) of Part 1 of Division 2 of the Public Contract Code, all contractors and subcontractors at every tier will use a skilled and trained workforce, as defined in subdivision (d) of Section 2601 of the Public Contract Code, to perform all project work that falls within an apprenticeable occupation in the building and construction trades.

(2) This subdivision shall not apply if the work is covered by a project labor agreement that requires all contractors and subcontractors at every tier to use a skilled and trained workforce, as defined in subdivision (d) of Section 2601 of the Public Contract Code.

(f) The state board shall, no later than January 1, 2024, approve at least one geologic carbon sequestration demonstration project eligible for funding under this part.

(g) No geologic carbon sequestration project that is associated with, incorporates, or connects to enhanced oil recovery or fossil fuel production shall qualify as a geologic carbon sequestration demonstration project or be eligible for or receive funding under this part.

71285.

 (a) Prior to awarding funds pursuant to this part, and no later than July 1, 2023, the state board, in consultation with the commission, the California Geological Survey, the State Water Resources Control Board, the State Fire Marshal, the Department of Fish and Wildlife, the State Lands Commission, local air quality management districts and air pollution control districts, regional water quality control boards, and other state entities as needed, shall develop both of the following:

(1) Guidelines for the implementation of the initiative and development of geologic carbon sequestration demonstration projects consistent with Section 71283, and including, but not limited to, best practices and agreement templates for all of the following:

(A) Well site, reservoir, and project site health and safety standards.

(B) Technology development and transfer for future deployment of geologic carbon sequestration in the state.

(C) Community benefits associated with geologic carbon sequestration, including workforce and economic development, housing and community services, and access to federal, state, and other funding sources.

(D) Skilled and trained workforce, antidiscrimination, collective bargaining, dispute resolution, and other project labor standards.

(2) Criteria for selection of eligible carbon sequestration demonstration projects, including, but not limited to, the project eligibility and prioritization criteria listed in subdivisions (b) and (c) of Section 71283.

(b) (1) (A) Prior to adopting the guidelines and the selection criteria described in subdivision (a), the state board shall conduct at least three public workshops to receive comments from the public on the draft guidelines and selection criteria, and shall consider all comments received in adopting the guidelines and selection criteria.

(B) The state board shall hold at least one public workshop in each of the following areas:

(i) Northern California.

(ii) The central valley.

(iii) Southern California.

(C) The state board shall publish the draft guidelines and selection criteria on its internet website at least 30 days prior to each public meeting.

(2) The state board shall conduct outreach to disadvantaged communities, as identified by the California Environmental Protection Agency pursuant to Section 39711 of the Health and Safety Code, to encourage residents of these communities to participate in the public workshops and submit comments pursuant to this subdivision.

(3) The state board shall consider all comments received during the public workshops held pursuant to this subdivision in adopting the guidelines and selection criteria described in subdivision (a).

(c) (1) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code does not apply to the state board’s development and adoption of the guidelines and selection criteria pursuant to this section.

(2) Guidelines and selection criteria developed by the state board pursuant to this section shall not abridge, alter, or amend any regulations or protocols issued by the state board relating to participation of a geologic carbon sequestration demonstration project in the Low Carbon Fuel Standard Program (Subarticle 7 (commencing with Section 95480) of Article 4 of Subchapter 10 of Chapter 1 of Division 3 of Title 17 of the California Code of Regulations).

(3) Guidelines and selection criteria developed by the state board pursuant to this section shall not promote or facilitate enhanced oil recovery or fossil fuel production.

(d) Upon the adoption of the guidelines and selection criteria pursuant to this section, the state board shall submit, in compliance with Section 9795 of the Government Code, copies of the guidelines and selection criteria to the fiscal and appropriate policy committees of the Legislature.

71287.

 (a) The Hub for Innovation in Geologic Carbon Sequestration is hereby established.

(b) The state board, in consultation with the commission, shall administer the innovation hub to do all of the following:

(1) Advance the development of geologic carbon sequestration technology and projects not associated with enhanced oil recovery or fossil fuel production.

(2) Coordinate research efforts regarding geologic carbon sequestration technology.

(3) Promote commercial applications of geologic carbon sequestration technology in furtherance of the state’s greenhouse gas reduction goals.

(c) (1) The innovation hub, if feasible, shall be located at a University of California, California State University, or California Community College campus in physical proximity to one or more of the geologic carbon sequestration demonstration projects approved by the state board pursuant to this part.

(2) The innovation hub shall include facilities for use by state agencies, University of California, California State University, and California Community College researchers, economic development organizations, and industry members to develop and collaborate on innovative geologic carbon sequestration strategies and technologies not associated with enhanced oil recovery or fossil fuel production.

71291.

 For purposes of this part, the provisions of Article 3 (commencing with Section 3640) of Chapter 3.5 of Division 3 respecting unit agreements shall apply as if incorporated herein.

71293.

 (a) Title to any geologic storage reservoir is vested in the owner of the overlying surface estate unless it has been severed and separately conveyed.

(b) A conveyance of the surface ownership of real property shall be a conveyance of any geologic storage reservoir below the surface of the real property unless the ownership interest in the geologic storage reservoir previously has been severed from the surface ownership or is explicitly excluded in the conveyance. The ownership of a geologic storage reservoir may be conveyed in the manner provided by law for the transfer of mineral interests in real property. No agreement or instrument conveying a mineral or other interest underlying the surface shall act to convey ownership of a geologic storage reservoir unless the agreement explicitly conveys that ownership interest.

(c) (1) An instrument that transfers the rights to a geologic storage reservoir under this section shall include both of the following:

(A) A description of the scope of any right of the owner of the geologic storage reservoir to use the surface estate.

(B) A specific description of the location of the geologic storage reservoir, including a subsurface geologic or seismic survey or a metes and bounds description of the surface overlying the geologic storage reservoir and any depths or portions of the subsurface that are excluded from the geologic storage reservoir being transferred.

(2) The owner of a geologic storage reservoir right shall have no right to use the surface estate beyond that set out in a properly recorded instrument.

(d) Nothing in this section shall alter, amend, diminish, or invalidate a right to the use of a geologic storage reservoir that was acquired by contract or lease prior to the effective date of this part.

71295.

 For purposes of a geologic carbon sequestration project other than a geologic carbon sequestration demonstration project approved by the state board pursuant to this part, the geologic carbon sequestration project operator, or its designee, shall have title to the carbon dioxide injected into and stored in a geologic storage reservoir associated with the project, including all rights and interests in, and all responsibilities associated with, carbon dioxide stored in the geologic storage reservoir, and liability for any and all damages caused by the project.

71297.

 (a) For purposes of environmental review pursuant to the California Environmental Quality Act (CEQA) (Division 13 (commencing with Section 21000)) of a geologic carbon sequestration project, including, a geologic carbon sequestration demonstration project approved by the state board pursuant to this part, the state board is the lead agency.

(b) For purposes of environmental review pursuant to CEQA of a geologic carbon sequestration project, including a geologic carbon sequestration demonstration project approved by the state board pursuant to this part, the responsible agencies are as follows:

(1) The State Geologist, for all activities related to the subsurface, well and reservoir engineering, wellhead infrastructure, and well site safety.

(2) The State Fire Marshal, for carbon dioxide pipelines.

(3) The State Water Resources Control Board, for impacts to water quality.

(4) The local air quality management district or air pollution control district, for impacts to air quality and carbon dioxide monitoring, reporting, and verification requirements.

(5) The Department of Fish and Wildlife, for impacts to species and natural resources.

71298.

 (a) On or before January 1, 2025, the state board shall adopt regulations creating a coordinated state permitting process for approval of geologic carbon sequestration projects, including a single unified permit for submission by developers or sponsors of geologic carbon sequestration projects. The single unified permit described in this subdivision shall incorporate the requirements for all approvals from state and local agencies necessary to approve a geologic carbon sequestration project, as applicable, including, but not limited to:

(1) The state board and local air quality management districts and air pollution control districts, for air quality and greenhouse gas matters.

(2) The State Water Resources Control Board and regional water quality control boards, for underground injection and water quality matters.

(3) The State Fire Marshal, for pipeline safety matters.

(4) The Public Utilities Commission, for pipeline permitting matters.

(5) The State Lands Commission and local zoning, land use, and planning agencies, for pipeline siting matters.

(6) Local zoning, land use, and planning agencies, for local land use and pore space ownership matters.

(b) The state board shall consult with each of the agencies described in subdivision (a), and any other state or local agencies identified by the state board, to develop the single unified permit process described in subdivision (a).

(c) In developing the single unified permit process described in subdivision (a), the state board shall, where possible, do both of the following:

(1) Consult with relevant federal agencies and local governments regarding the process.

(2) Incorporate relevant federal permits into the process.

(d) The state board shall oversee the single unified permit process described in subdivision (a). The state board shall adopt regulations as necessary to implement the single unified permit process and ensure a streamlined application process for applicants.

(e) The single unified permit process developed by the state board pursuant to subdivision (a) shall not eliminate, abridge, or reduce the substantive review or approval of the individual permits for which requirements are included in the process. As part of single unified permit process, the state board shall, where possible, eliminate or streamline duplicative administrative requirements.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SECTION 1.Section 39740.2 of the Health and Safety Code is amended to read:

39740.2.

(a)No later than July 1, 2023, the Natural Resources Agency, in coordination with the California Environmental Protection Agency, the state board, the Department of Food and Agriculture, and other relevant state agencies, shall establish the Natural and Working Lands Climate Smart Strategy and shall update the strategy every four years thereafter. In developing this strategy, the agencies shall do all of the following:

(1)Create a framework to advance the state’s climate goals.

(2)Consider, based on the best available estimates, how increasing fire risk, warming temperatures, decreasing precipitation, and other climate change impacts will affect the ability of the state to sequester carbon on natural and working lands.

(3)Support the economic and resource value of the lands and consider multiple benefits.

(4)Support pathways for sectors, such as agriculture and forestry, to participate in the transition to a carbon neutrality economy.

(5)Collect public feedback and conduct outreach.

(6)Seek to align funding mechanisms to advance the strategy.

(b)The state board, as part of its scoping plan prepared pursuant to Section 38561, shall establish carbon dioxide removal targets for 2030 and beyond, and shall take into consideration the Natural and Working Lands Climate Smart Strategy, science-based data, cost-effectiveness, and technological feasibility in setting the targets pursuant to this subdivision. The state board shall consider a range of targets, including those in line with the special report prepared by the United Nations’ Intergovernmental Panel on Climate Change (IPCC) entitled “Global Warming of 1.5 degrees Celsius,” issued October 6, 2018, and leading carbon removal commitments globally, as well as recent and emerging research on carbon dioxide removal potential in California and market and technology conditions.