Bill Text: IL HB0680 | 2011-2012 | 97th General Assembly | Amended

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Bill Title: Amends the Public Utilities Act. Makes a technical change in a Section concerning definitions.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Failed) 2013-01-08 - Session Sine Die [HB0680 Detail]

Download: Illinois-2011-HB0680-Amended.html

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Rep. Thomas Holbrook

Filed: 4/1/2011

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AMENDMENT TO HOUSE BILL 680
AMENDMENT NO. ______. Amend House Bill 680 by replacing
everything after the enacting clause with the following:
"Section 1. Short title. This Act may be cited as the
Carbon Dioxide Geologic Storage Act.
Section 5. Statement of policy. It is in the public
interest to promote the geologic storage of carbon dioxide.
Doing so will help ensure the viability of the Illinois coal,
natural gas, power, and other industries under a spectrum of
potential environmental regulations and will promote economic
development in Illinois. Further, geologic storage of carbon
dioxide, a potentially valuable commodity, may allow for its
ready availability if needed for commercial, industrial, or
other uses, including enhanced recovery of oil, gas, and other
minerals.
To be practical and effective, geologic storage of carbon

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dioxide requires cooperative use of surface and subsurface
property interests often across large areas. It is therefore in
the public interest to employ procedures that promote, in a
manner fair to all interests, the use of all pore space in a
clearly defined reservoir to ensure comprehensive management
of the reservoir and the efficient use of natural resources. It
is important that rules governing the use and development of
subsurface pore space be consistent with both established
precedents and subsurface private property rights.
Section 10. Definitions. As used in this Act, unless the
context requires a different meaning:
"Carbon dioxide injection well" means a well that is used
to inject carbon dioxide into a reservoir for geologic storage.
"Department" means the Department of Natural Resources.
"Geologic storage" means the underground storage of carbon
dioxide in a reservoir.
"Gross revenue" means the aggregate total revenue actually
received by the storage operator from third parties for
operation of the storage facility, including any sales of
federal, State, or other production or investment tax credits
received in connection with the operation of the storage
facility, free of any costs, charges, or deductions.
"Mineral owner" means, as identified in the tax assessor's
records for each county containing some portion of the proposed
reservoir, any owner of a whole or fractional interest in any

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or all minerals in real property above, below, or within the
proposed reservoir that has been severed from the surface
estate by grant, exception, reservation, lease, or other means.
"Pore space" means subsurface cavities or voids, whether
natural or artificially created, that can be used as storage
space for carbon dioxide or other substances.
"Pore space owner" means the person, trust, corporation, or
other entity who has title to the pore space.
"Reservoir" means any depleted oil or gas reservoir, saline
formation, coal seam, or any natural or artificial subsurface
stratum or formation with a clearly defined reservoir boundary
and pore space of sufficient porosity and permeability for
injection and storage of carbon dioxide. "Reservoir" does not
include an underground source of drinking water.
"Reservoir boundary" means the area specified in the
certificate of unit designation that delineates the vertical
and horizontal limits of the reservoir, including buffer areas,
such that any carbon dioxide injected into the reservoir will
remain within the boundary. The reservoir boundary must be
established by identifying physical parameters, such as
structural or stratigraphic geologic features, that will
constrain buoyant migration of the injected carbon dioxide such
that it will remain within the boundary. The reservoir boundary
need not include the entirety of a geologic formation if it can
be shown that physical parameters, such as geologic features,
will contain injected carbon dioxide within the boundary.

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"Reservoir permit" means a permit issued by the Department
allowing a person to establish and operate a storage facility.
"Storage facility" means the reservoir, underground
equipment, and surface facilities and equipment used or
proposed to be used in a geologic storage operation. "Storage
facility" does not include pipelines used to transport carbon
dioxide to the storage facility from the carbon dioxide source.
"Storage facility" also does not include a single carbon
dioxide injection well to be used for experimental, research,
or evaluation purposes as long as the well does not inject more
than 100,000 tons of carbon dioxide in total and does not
operate for more than 5 years.
"Storage operator" means a person holding or applying for a
certificate of unit designation and a reservoir permit under
this Act and holding or applying for a UIC permit for the
injection of carbon dioxide.
"Surface owners" means, as identified in the tax assessor's
records for each county containing some portion of the proposed
reservoir, any owner of a whole or undivided fee simple
interest or other freehold interest, which may or may not
include mineral rights, in the surface above the proposed
reservoir, but does not include an owner of a right-of-way,
easement, leasehold, or any other lesser estate.
"UIC permit" means an Underground Injection Control permit
authorized under the federal Safe Drinking Water Act's
Underground Injection Control (UIC) Program that allows a

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person to operate a carbon dioxide injection well.
Section 12. Applicability. This Act applies only to carbon
dioxide injections that commence on or after January 1, 2012.
Section 15. Reservoir permit.
(a) A storage operator must have a reservoir permit issued
by the Department to operate a storage facility in the State. A
reservoir permit may be transferred or assigned from one
storage operator to another upon written consent of the
Department.
(b) The Department shall issue a reservoir permit to the
storage operator if the Department finds that:
(1) a certificate of unit designation has been issued
as provided in Section 25;
(2) the interests of non-consenting pore space owners
within the reservoir boundary have been addressed as
provided in Section 35;
(3) the interests of mineral owners within the
reservoir boundary have been addressed as provided in
Section 40; and
(4) the storage operator has applied for a UIC permit
or has been issued a UIC permit.
The Department may condition the granting of a reservoir
permit on obtaining a UIC permit, but no State agency may delay
the processing of the reservoir permit application on the

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grounds that the application for another required permit is
pending.
(c) The Department shall issue only one reservoir permit
per reservoir. A storage operator may not apply for a reservoir
permit where the reservoir permit encompasses an area that is
included in certificate of unit designation the storage
operator does not hold. A storage operator may apply to expand
the reservoir boundary of an existing reservoir permit it does
hold.
(d) The Department shall hold a public hearing regarding a
reservoir permit application to ensure that the requirements of
subsection (b) of this Section have been satisfied.
(1) Notice of the public hearing shall include:
(A) The type of proceedings before the Department
and a general statement of purpose for such
proceedings.
(B) A description of the reservoir boundary,
including a legal description of the reservoir.
(C) A description of the proposed storage facility
and its operations.
(D) The time, date, and place of the public
hearing.
(E) The limitations on standing provided by
subsection (h) of this Section.
(2) Upon receipt of the reservoir permit application,
the Department shall fix the time and place for the public

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hearing, which shall be no less than 30 days nor more than
60 days after the date of filing of the application. The
Department shall give notice of the hearing at least 30
days prior to the hearing in the following manner:
(A) By United States first class mail directed to
all local governments with jurisdiction over some
portion of the proposed reservoir, and to all surface
owners and all mineral owners within the proposed
reservoir boundary at their last-known address as
shown by the records described for each in Section 10
of this Act. For any surface owner or mineral owner
within the proposed reservoir boundary that is not
identified in such records, the storage operator shall
be deemed to have acted in good faith, shall not be
subject to further obligations, and shall have no
liability to such owners for any legal or equitable
remedy or relief arising from, in connection with, or
otherwise relating to the storage facility, provided
the published notice required by subparagraph (B) of
paragraph (2) of this subsection (d) is given. The
storage operator shall not be liable for any errors or
omissions in such records. The Department's
certificate that it has mailed the notices is evidence
that it has done so.
(B) By publication of such notice in a newspaper of
general circulation published in each county

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containing some portion of the reservoir at least once
each week for 3 successive weeks. The first publication
shall be at least 30 days prior to the date of the
public hearing. If there is no newspaper published in a
county containing some portion of the reservoir, then
the publication shall be in a newspaper published in an
adjoining county in this State, having circulation in
the county in which that portion of the reservoir is
located.
(e) If the Department does not complete the review of a
reservoir permit application within 90 days after receipt,
including the public notice and hearing as described in
subsection (d) of this Section, then the reservoir permit shall
be issued. If the Department does not find the storage operator
to have met the requirements detailed in subsection (b) of this
Section, then the Department may either decline the application
or require amendment to the application before granting the
reservoir permit. If the Department requires amendment to the
application, then the Department shall have 30 days after the
storage operator amends its application to either grant or
decline to grant the reservoir permit or the reservoir permit.
(f) The Department may charge a fee to the storage operator
for review of the reservoir permit application. The fee must be
in the amount set by Department rule. The amount must be based
on the Department's anticipated expenses that it will incur in
reviewing the reservoir permit application and shall not exceed

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$10,000.
(g) The Department may include conditions in the reservoir
permit to carry out the reservoir permit requirements. The
reservoir permit shall contain a description of the reservoir
boundary and shall authorize the storage operator to use all
pore space within the reservoir as a storage facility.
(h) The Department shall have the right at all times to go
upon and inspect a storage facility for the purpose of
ascertaining compliance with the provisions of this Act.
Section 20. Ownership and conveyance of pore space.
(a) Title to pore space is vested in the owner of the
overlying surface estate.
(b) A conveyance of title to the surface estate conveys the
pore space in all strata underlying the surface estate.
(c) Title to pore space may not be severed from the surface
estate.
(d) Grants of easement to use or leasing of pore space is
not a severance prohibited by this Section.
(e) The grants of easement or leasing of pore space shall
not confer any right to enter upon or otherwise use the surface
of the land unless the grant of easement or lease expressly so
provides.
Section 25. Unit designation.
(a) The Department shall issue a certificate of unit

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designation to the storage operator if the Department finds
that:
(1) the reservoir has a clearly defined boundary;
(2) the reservoir is suitable for carbon dioxide
injection and storage, including the presence of physical
parameters, such as structural or stratigraphic geologic
features, to ensure injected carbon dioxide remains within
the reservoir boundary;
(3) the reservoir boundary encompasses an area of at
least 5,000 acres;
(4) the storage operator has made a good-faith effort
to identify all surface owners and all mineral owners and
their last-known addresses using the records described for
each in Section 10 of this Act;
(5) the storage operator has made a good-faith effort
to obtain ownership, grants of easement, or leaseholds from
all known pore space owners within the reservoir boundary;
and
(6) the storage operator owns or has obtained grants of
easement or leaseholds from persons who own at least 51% of
the proposed reservoir's pore space based upon the number
of surface acres within the reservoir boundary.
(b) If the Department does not complete the review of a
unit designation application within 60 days after receipt, then
the certificate of unit designation shall be issued. If the
Department does not find the storage operator to have met the

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requirements detailed in subsection (a) of this Section, then
the Department may either decline the application or require
amendment to the application before granting the certificate of
unit designation. If the Department requires amendment to the
application, then the Department shall have 30 days after the
storage operator amends the application to either grant or
decline to grant the certificate of unit designation or the
certificate of unit designation shall be issued.
(c) The Department may charge a fee to the storage operator
for review of the unit designation application. The Department
shall set the fee amount by rule, but the amount must be based
on the Department's anticipated expenses that it will incur in
reviewing the unit designation application and shall not exceed
$10,000.
Section 35. Amalgamating property interests.
(a) If a storage operator does not own, or has not obtained
grants of easement or leaseholds from persons who own, all of
the pore space within the reservoir boundary, then the
Department shall require that the pore space owned by
nonconsenting pore space owners be included in a storage
facility and subject to geologic storage for the purposes of
administering the reservoir permit. Any amalgamation of pore
space shall not include the right to use the surface above
nonconsenting pore space owners' pore space.
(b) Each nonconsenting pore space owner shall be entitled

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to compensation for the use of their pore space in the
reservoir equal to 4% of gross revenues multiplied by a
fraction, the numerator of which is the number of surface acres
within the reservoir boundary that are owned by the
nonconsenting pore space owner and the denominator of which is
the total number of surface acres within the reservoir
boundary.
(c) The Department shall have the authority to commit
State-owned pore space within the reservoir boundary to the
storage facility on the terms described in subsection (b) of
this Section.
Section 40. Mineral interests.
(a) A reservoir permit may not be issued if the interests
of mineral owners would be adversely affected. For purposes of
this Section, "adversely affected" means that the Department
finds that:
(1) the reservoir contains a commercially valuable
mineral that a mineral owner has verifiable plans to
extract and that such extraction would be precluded by
operation of the reservoir;
(2) the cost of mineral extraction of a commercially
valuable mineral that the mineral owner has verifiable
plans to extract would be significantly increased by the
operation of the reservoir; or
(3) the extraction rate of a commercially valuable

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mineral that the mineral owner has verifiable plans to
extract would be significantly reduced by the operation of
the reservoir.
(b) Mineral owners may drill through or near a reservoir to
explore for or extract minerals, provided the drilling,
extraction, and related activities are conducted in
cooperation with the storage operator and comply with
Department requirements that preserve the storage facility's
integrity.
(c) A storage operator may drill through or near a mineral
producing area to operate the storage facility, provided the
drilling, carbon dioxide storage, and related activities are
conducted in cooperation with the mineral owners and comply
with Department requirements that ensure no adverse effect on
mineral extraction.
(d) Mineral owners shall provide the storage operator
reasonable access to wells and other equipment, as necessary,
to ensure that mineral production equipment does not provide a
leakage pathway for stored carbon dioxide. Storage operators
shall compensate mineral owners for any losses associated with
loss of production or business interruption due to such
activities.
Section 45. Title to carbon dioxide; liability. The storage
operator has title to the carbon dioxide injected into and
stored in a reservoir and holds title until the Department

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issues a certificate of completion. While the storage operator
holds title, the operator is liable for any damage the carbon
dioxide may cause, including damage caused by carbon dioxide
that escapes from the storage facility. The pore space owner
shall have no liability associated with operation of a storage
facility, unless the storage operator is the pore space owner.
Section 55. Project completion and title transfer.
(a) After carbon dioxide injections at a storage facility
cease, the storage operator may apply for a certificate of
completion. Before issuing a certificate of completion, the
Department, in consultation with the issuer of the UIC permit,
must find that:
(1) the storage operator is in full compliance with all
laws governing the storage facility, including any ongoing
UIC permit requirements;
(2) the storage operator has addressed all pending
claims, if any, regarding the storage facility's
operation;
(3) all carbon dioxide injection wells have been
plugged, equipment and facilities has been removed, and
reclamation work has been completed as required by the UIC
permit issuer or the Department;
(4) the carbon dioxide in the reservoir has become
stable; stored carbon dioxide is stable if it is
essentially stationary or, if it is migrating or may

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migrate, that any migration will be unlikely to cross the
reservoir boundary;
(5) all monitoring wells, equipment, and facilities to
be used in the post-closure period are in good condition
and retain mechanical integrity; and
(6) the storage operator has transferred to the
Department a carbon storage project fund that contains
sufficient funds to carry out the site care and monitoring
activities required by the UIC permit, if applicable.
(b) If the Department does not complete the review of a
certificate of completion application within 90 days after
receipt, including the public notice and input deemed
appropriate by the Department, then the certificate of
completion shall be issued. If the Department does not find
that the requirements detailed in subsection (a) of this
Section have been met, then it may either decline the
application or require amendment to the application before
granting the certificate of completion. If the Department
requires amendment to the application, then the storage
operator shall have 30 days to amend the application.
Thereafter, the Department shall have 30 days to either grant
or decline to grant the certificate of completion or the
certificate of completion shall be issued.
(c) The Department may charge a fee to the storage operator
for reviewing the certificate of completion application. The
fee must be in the amount set by Department rule. The amount

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must be based on the Department's anticipated expenses that it
shall incur in reviewing the certificate of completion
application and shall not exceed $10,000.
(d) Once a certificate of completion is issued the
following occurs:
(1) Title to the storage facility and to the stored
carbon dioxide transfers, without compensation, to the
State.
(2) Title acquired by the State includes all rights and
interests in, and all responsibilities associated with,
the stored carbon dioxide.
(3) The storage operator is released from all
regulatory requirements associated with the storage
facility.
(4) Monitoring and managing the storage facility is the
State's responsibility to be overseen by the Department
until such time as the federal government assumes
responsibility for the long-term monitoring and management
of storage facilities.
(5) If the federal government has not assumed
responsibility for the long-term monitoring and management
of storage facilities, then the carbon storage project fund
shall be used for the purposes of monitoring and managing
the storage facility. If the federal government has assumed
responsibility for the long-term monitoring and management
of storage facilities, then the carbon storage project fund

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shall be refunded to the storage operator.
Section 60. Enhanced recovery projects.
(a) This Act does not apply to applications filed with the
Department proposing to use carbon dioxide for an enhanced oil
or gas recovery project. Such applications shall be processed
pursuant the Illinois Oil and Gas Act.
(b) The Department may allow an enhanced oil or gas
recovery project to be converted to a storage facility. In
considering whether to approve a conversion, and upon
conversion, the provisions of this Act and its implementing
rules apply, but if during the conversion process unique
circumstances arise, then the Department, may waive such
provisions or impose additional ones to better ensure that the
Act's objectives are fulfilled.
Section 65. Memorandum of Understanding. The Department
and the Illinois Environmental Protection Agency shall enter
into a Memorandum of Understanding with respect to their
respective roles under this Act and the UIC program, if
applicable. The Memorandum of Understanding shall provide for
procedures to ensure a streamlined and concurrent permitting
process for storage facilities.
Section 70. Department; home rule. The Department may adopt
rules and issue orders to enforce this Act. The Department may

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authorize its employees, qualified by training and experience,
to perform the powers and duties set forth in this Act. No
agency of State government or political subdivision of the
State may regulate a storage facility except as expressly
authorized under this Act.
Section 75. Restraint of trade. None of the rights and
responsibilities pursuant to this Act shall be held or
construed to violate any of the statutes of this State relating
to trusts, monopolies, or contracts and combinations in the
restraint of trade.
Section 97. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.".