For the first time in three years, the U.S. Environmental Protection Agency (EPA) has granted primary enforcement authority to a state to administer the Class VI Underground Injection Control (UIC) program. The results of that successful application can provide guidance for other states seeking Class VI primacy — and storage facility well developers in those states — on what to expect.
On Dec. 28, 2023, the EPA granted primacy to the state of Louisiana to administer the Class VI UIC program in its state. Class VI injection wells are used to permanently sequester carbon dioxide into rock formations deep within the earth’s crust as part of the national strategy to mitigate climate change.
Louisiana is the third state to be approved by the EPA to manage the Class VI program, following North Dakota (2018) and Wyoming (2020). Several other states have applied for primacy but have not yet received approval, including Arizona, Texas and West Virginia. Louisiana is a particularly important state for the carbon capture and storage (CCS) industry, with by far the largest number of proposed projects — 22 — of any state, almost twice as many as the next state (12, in California).
Louisiana DENR Steps Up
The Louisiana Department of Energy and Natural Resources (DENR) — previously known as the Louisiana Department of Natural Resources (LDNR) — assumed primary enforcement authority for the Class VI program on Feb. 5, 2024, taking over review of 55 legacy Class VI well permit applications. The EPA will continue to provide oversight support to DENR for the next six to 12 months while the state ramps up its Class VI program. This is expected to significantly alleviate the backlog of Class VI application reviews at the EPA, which has been criticized for its slow progress in issuing permits. Many Class VI applications were submitted to the EPA years ago; as recently as January 2024, the EPA had 179 applications in the queue. As of February 2024, the EPA has issued permits for eight Class VI injection wells nationwide.
Since primacy was granted, DENR has hired several professionals to manage its new responsibilities and has plans to hire more. The Class VI permitting group is anticipated to have nine to 12 engineers, geologists and managers, as well as a section leader. DENR will not have access to the EPA’s federally funded contractors or federal laboratories for the Louisiana Class VI program, and it is considering utilizing outside consultants to support third-party reviews of selected components of the Class VI permit applications and associated plans.
Going Above and Beyond
Louisiana’s Class VI program has additional requirements that are more rigorous than the EPA’s program. These are expected to result in additional submittals or requests for additional information for some applicants. Examples include:
- Although multiple injection wells can be included in a single permit package, DENR will permit each well separately, resulting in similar information being submitted for each well. DENR strongly recommends applicants meet with it early on for assistance with organization of the application and to identify red flags and nuances.
- DENR will not approve any Class VI applications for injection well projects that propose to sequester carbon dioxide in salt caverns.
- DENR will not grant waivers to applicants seeking to inject carbon dioxide above the lowermost underground source of drinking water.
- DENR may require additional monitoring systems and operating requirements over and above those required by the EPA.
The EPA also negotiated several environmental justice conditions into the Memorandum of Agreement between Louisiana and the EPA. Designed to protect the well-being of disadvantaged communities, the requirements include:
- Measures intended to broaden public participation in the Class VI permitting process.
- Consideration of environmental justice impacts on communities in permitting decisions, including environmental hazards, exposure pathways and susceptible subpopulations.
- Mitigation measures to see that Class VI projects do not increase environmental impacts or public health risks in communities. These measures may include carbon dioxide monitoring and release notification networks, and installation of enhanced “pollution” controls.
The Biden administration intends to make these environmental justice stipulations a standard requirement for any state that pursues Class VI primacy in the future.
Limited Liability Transfer
One additional noteworthy development involves liability transfer. Once operation of an injection well is terminated, the EPA by default requires a minimum 50-year period before monitoring can be discontinued. In order to entice businesses to undertake CCS projects in their state, some states have indicated a willingness to transfer liability to the state after a shorter period. This offer had cultivated significant interest from developers.
Louisiana had originally proposed to transfer liability to the state after 10 years. However, under the terms of the EPA’s approval of primacy for Louisiana, the state agreed to keep the 50-year standard for monitoring, after which the state is willing to take on liability. The EPA did not make this a requirement when approving primacy for previous Class VI programs. In Wyoming, the state may assume liability for long-term care as soon as 20 years after CO2 injection operations have ceased and upon state issuance of a certificate of project completion. In North Dakota, long-term liability and site ownership can be transferred to the state as soon as 10 years after injection is discontinued.
It remains to be seen whether the EPA will continue to require the 50-year standard in future primacy applications.
On the Clock
DENR expects reviews of new applications under the state’s Class VI program to be completed within 12-18 months of submittal, significantly shorter than the EPA’s multiyear track record. The EPA’s online Geologic Sequestration Data Tool will continue to be used for submittal and tracking of all Louisiana Class VI applications. Other states interested in primacy will be watching how Louisiana’s experience continues to unfold.
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