STATE OF OKLAHOMA

1st Session of the 52nd Legislature (2009)

SENATE BILL 492	By:	Sparks

AS INTRODUCED

An Act relating to geologic sequestration activities; providing short title; defining terms; prohibiting geologic sequestration of carbon dioxide without authorization by Department of Environmental Quality; stating exception; providing for permits; authorizing Board of Environmental Quality to promulgate rules; requiring public comment and consultation; requiring rules for certain actions; requiring certain information in applications; requiring formation of certain working group by certain date; requiring group to develop financial assurance requirements; requiring fee for application; requiring Director to recommend changes consistent with federal regulations; providing for jurisdiction over subsequent extraction of carbon dioxide for certain purposes; providing for codification; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 3-5-101 of Title 27A, unless there is created a duplication in numbering, reads as follows:
A.  This act shall be known and may be cited as the "Geologic Sequestration Activities Act".
B.  As used in the Geologic Sequestration Activities Act:
1.  “Board” means the Board of Environmental Quality;
2.  “Commission” means the Corporation Commission; and
3.  “Department” means the Department of Environmental Quality.
SECTION 2.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 3-5-102 of Title 27A, unless there is created a duplication in numbering, reads as follows:
A.  The geologic sequestration of carbon dioxide is prohibited unless authorized by a permit issued by the Department of Environmental Quality.
B.  The injection of carbon dioxide for purposes of a project for enhanced recovery of oil or other minerals approved by the Corporation Commission shall not be subject to the provisions of this chapter.
C.  If an oil and gas operator converts to geologic sequestration upon the cessation of oil and gas recovery operations, then regulation of the geologic sequestration facility and the geologic sequestration site shall be transferred to the Department.  If the oil and gas operator does not convert to geologic sequestration, the wells shall be plugged and abandoned according to the rules of the Commission.
D.  Temporary time-limited permits for pilot scale testing of technologies for geologic sequestration shall be issued by the Department based upon rules promulgated by the Environmental Quality Board.
E.  Permit requirements for geologic sequestration of carbon dioxide shall be as defined by rules promulgated by the Environmental Quality Board.
F.  The Department, after receiving public comment and after consultation with the Advisory Council created in subsection G of this section, shall recommend to the  Board rules for:
1.  The creation of subclasses of wells within the existing Underground Injection Control (UIC) program administered by the United States Environmental Protection Agency under Part C of the federal Safe Drinking Water Act, 42 USC, Section 300 et seq., to protect human health, safety and the environment and allow for the permitting of the geologic sequestration of carbon dioxide;
2.  Requirements for the content of applications for geologic sequestration permits.  Such applications shall include:
a.	a description of the general geology of the area to be affected by the injection of carbon dioxide including geochemistry, structure and faulting, fracturing and seals, stratigraphy and lithology including petrophysical attributes,
b.	a characterization of the injection zone and aquifers above and below the injection zone which may be affected including applicable pressure and fluid chemistry data to describe the projected effects of injection activities,
c.	the identification of all other drill holes and operating wells that exist within and adjacent to the proposed sequestration site,
d.	an assessment of the impact to fluid resources, on subsurface structures and the surface of lands that may reasonably be expected to be impacted and the measures required to mitigate such impacts,
e.	plans and procedures for environmental surveillance and excursion detection, prevention and control programs.  For purposes of this section, "excursion" shall mean the detection of migrating carbon dioxide at or beyond the boundary of the geologic sequestration site,
f.	a site and facilities description, including a description of the proposed geologic sequestration facilities and documentation sufficient to demonstrate that the applicant has all legal rights, including but not limited to the right to surface use, necessary to sequester carbon dioxide and associated constituents into the proposed geologic sequestration site,
g.	proof that the proposed injection wells are designed at a minimum to the construction standards set forth by the Corporation Commission,
h.	a plan for periodic mechanical integrity testing of all wells,
i.	a monitoring plan to assess the migration of the injected carbon dioxide and to insure the retention of the carbon dioxide in the geologic sequestration site,
j.	proof of bonding or financial assurance to ensure that geologic sequestration sites and facilities will be constructed, operated and closed in accordance with the purposes and provisions of this act and the rules promulgated pursuant to this act,
k.	a detailed plan for post-closure monitoring, verification, maintenance and mitigation,
l.	proof of notice to surface owners, mineral claimants, mineral owners, lessees and other owners of record of subsurface interests as to the contents of such notice.  Notice requirements shall at a minimum require:
(1)	the publishing of notice of the application in a newspaper of general circulation in each county of the proposed operation at weekly intervals for four (4) consecutive weeks,
(2)	a copy of the notice shall also be mailed to all surface owners, mineral claimants, mineral owners, lessees and other owners of record of subsurface interests which are located within one (1) mile of the proposed boundary of the geologic sequestration site.
(3)	requirements for the operator to provide immediate verbal notice to the department of any excursion after the excursion is discovered, followed by written notice to all surface owners, mineral claimants, mineral owners, lessees and other owners of record of subsurface interests within thirty (30) days of when the excursion is discovered,
(4)	procedures for the termination or modification of any applicable Underground Injection Control (UIC) permit issued under Part C of the Safe Drinking Water Act if an excursion cannot be controlled or mitigated, and
(5)	such other conditions and requirements as necessary to carry out this section.
G.  Within thirty (30) days following the effective date of this act, the Executive Director of the Department shall convene an Advisory Council for the purpose of developing an appropriate bonding procedure and other financial assurance methods to assure that adequate financial resources are provided to pay for any mitigation or reclamation costs that the state may incur as a result of default by the permit holder.  The bond or other financial assurance shall be required during the operating life of the sequestration project and throughout the post-closure care period in order to abate or remedy any violation of a permit, standard or rule established under the provisions of this act.  The Advisory Council shall recommend to the Legislature the duration of the post-closure care period.  At a minimum, the bond or other financial assurance shall provide assurance for closure and reclamation costs, post-closure inspection and maintenance costs and environmental monitoring, verification and control costs.
H.  At the time a permit application is filed, an applicant shall pay a fee to be determined by the director based upon the estimated costs of reviewing, evaluating, processing, serving notice of an application and holding any hearings.  The fee shall be credited to a separate account and shall be used by the division as required to complete the tasks necessary to process, publish and reach a decision on the permit application.  Unused fees shall be returned to the applicant.
I.  The director shall recommend any changes that may be required to provide consistency and equivalency between the rules promulgated under this section and any promulgated for the regulation of carbon dioxide sequestration by the United States Environmental Protection Agency.
J.  The Department shall have jurisdiction over any subsequent extraction of sequestered carbon dioxide that is intended for commercial or industrial purposes, except for oil and gas exploration uses.
SECTION 3.  This act shall become effective November 1, 2009.

52-1-1193	MJM	1/8/2009 2:32:09 PM