management operations,” including all “activities performed for the purpose of engaging in geologic storage in the state,” such as the construction, drilling and operation of injection wells, flow lines and related facilities used in the subsurface storage of carbon dioxide. 9 The Act authorizes the Commission to issue and enforce permits, collect fees, and establish other rules necessary to administer its statutory directions. 10 The Act empowers the Commission to issue unit orders that establish terms and conditions for the unitized operation of geologic storage facilities. The Commission may, upon application and hearing, issue a “geologic storage unit order” if such unitized development “is reasonably necessary to effectuate a geologic storage project.” 11 Each geologic storage unit order must be just and reasonable and establish a plan for unit operations. Specifically, the unit plan must include: (1) a description of the geologic storage area and proposed storage operations to be conducted; (2) an explanation of how storage rights are allocated in the unit area and how those several owners will be compensated for the proposed operations; and (3) a description of the proposed management, operation, term, and cost liability for the proposed storage unit. 12 Like unitized oil and gas development, all operations conducted pursuant to an effective geologic storage unit order on any portion of the unit area will constitute operations on each separately owned tract within the unit area. A storage unit order shall not be construed to transfer or convey any owner’s title to any part of the sequestration estate within the unit area. 13 For a geologic storage unit order to take effect, the unit plan must be “approved in writing by those persons that, pursuant to the geologic storage unit order, collectively own at least [75%] of the geologic storage resources included in the geologic storage unit area.” 14 An owner of a sequestration estate that was not included in a storage unit order may petition the Commission for inclusion. 15 In several aspects, the Act also broadens the scope of prior statutes such that Commission authority and procedure will extend to geologic storage operations much like they already applied to oil and gas development. For example, administrative penalties for violations set forth in C.R.S. § 34-60-121 were amended to cover
all “energy and carbon management” operators and operations. Similarly, the existing statutory promotion of local government jurisdiction over oil and gas operations also applies to geologic storage. 16 On the other hand, the Act, or any geologic storage unit order issued thereunder, expressly does not confer eminent domain authority on any approved unit operator. 17 regarding geologic storage siting and land use decisions to request that the Commission appoint a technical review board to assist the local government’s analysis of a given operation or decision. 18 The Act also directs the Commission to establish accounting procedures for CO 2 storage operations and to work together with the state’s Finally, the Act provides an avenue to local governments that are seeking technical assistance Department of Public Health and Environment “to facilitate the monitoring, verification and accounting of carbon dioxide in geologic storage operations.” 19
About the Author:
Jim Tartaglia , is an attorney with Steptoe & Johnson PLLC He concentrates his practice in the area of energy and natural resources law. Mr. Tartaglia regularly assists clients with a variety of transactional needs, including mineral title and due diligence, corporate and securities matters, and oil and gas lending.
[9] See C.R.S. § 34-60-103(10), -103(17). [10] See id. at -106(9)(c-d).
[11] C.R.S. § 34-60-141(4)(a-b). The size of the geologic storage unit area “must be based on site characterization and modeling conducted pursuant to the” federal Safe Drinking Water Act and any Commission rules adopted pursuant thereto. [12] See id. at -141(4)(c)(II). [13] See id . at -141(8-9). [14] Id. at -141(4)(d).
[15] Id. at -141(6). [16] See id. at -131. [17] See id. at -141(7)(a-b).
[18] See id. at -142. [19] See id. at -143.
G rowth T hrough E ducat i on - O c tober / N ov ember / D e c ember 2024 9
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