The Environmental Protection Agency regulates CCS under the Safe Drinking Water Act (SDWA), which applies to various categories of injection wells, including “wells used for the geologic sequestration of carbon dioxide,” or “Class VI wells.” See 40 C.F.R. § 144.6(f). EPA can delegate this authority—or grant “primacy”—to states who have their own regulatory programs that meet certain minimum requirements. North Dakota, Wyoming, and Louisiana have primacy. EPA maintains a “Class VI Well Permit Tracker” page on its website that indicates it has issued four Class VI well permits and is reviewing 150 permit applications. States that have primacy are acting more quicky; for example, since being granted primacy in 2018, North Dakota has issued eight Class VI permits for three facilities.
To get a permit, the Class VI regulations require a complex engineering demonstration that the injection equipment, well casings, and geologic formation will contain the CO2, which is stored a mile or more down in uniquely suitable reservoirs. The permit process typically lasts two years or more. While the risk of a large or dangerous leak is very low, some interested parties oppose CCS projects. Some imagine that CCS might prolong the use of fossil fuels, while others speculate that the technology is unproven. Curiously, some local governments have jumped into the fray and opposed CCS by enacting moratoria banning Class VI wells, despite the climate change and local economic benefit of CCS projects. Some activist groups have pursued a different angle by opposing primacy applications. We look at each below.
In Louisiana, Livingston Parish enacted a moratorium banning Class VI wells. A CCS project developer challenged the moratorium on preemption grounds and won, in a manner that affords some unique insights into how preemption may play out nationwide.
Air Products, a chemical company, plans to build a CCS facility in Livingston’s Lake Maurepas. Air Prod. Blue Energy, LLC v. Livingston Par. Gov’t, 2022 WL 17904535, at *1 (M.D. La. Dec. 26, 2022). In response, Livingston Parish enacted an ordinance banning wells “specific” to the “injecting of CO2 for long term storage,” citing concerns over the safety of their drinking water and the health of Lake Maurepas, which is essential to the Parish’s fishing industry. Id. (quoting Livingston Parish Ordinance 22-49); Wesley Muller, Louisiana Residents Ask State to Halt Next Phase of Carbon Capture Project, La. Illuminator (Aug. 3, 2023). Air Products moved to enjoin the ordinance on preemption grounds, arguing that “the SDWA directly prevents the States and their subdivisions from altogether prohibiting [underground injection] activity.” Air Prod. Blue Energy, LLC, 2022 WL 17904535, at *2. The court disagreed, citing the SDWA’s “savings clause,” which states that the SDWA shall not “diminish any authority of a State or political subdivision to adopt or enforce any law or regulation respecting underground injection but no such law or regulation shall relieve any person of any requirement otherwise applicable under this subchapter.” Because Congress “rejected the need for uniformity in the regulation of underground injection activity and recognized that there is value in encouraging the development of local standards stricter than federal minimums,” the court concluded the ordinance was not preempted by federal law. Id.
But a local ordinance can also be prevented from taking effect if it is preempted by state law, so the court next analyzed whether Louisiana law preempted Livingston Parish from banning the injection of CO2 for sequestration. The Louisiana Constitution prevents local governments from taking “action that would abridge the police power of the State.” Id. at *6. Louisiana’s authority to regulate underground injection wells, the court reasoned, “is an exercise of the police power of the State.” Id. Because Louisiana “has enacted an extensive body of laws and regulations governing the subsurface injection of hazardous and nonhazardous waste fluids, subsurface storage of liquid and gaseous fluids, mineral solution mining, injection for enhanced oil recovery, and carbon dioxide sequestration,” the court concluded that the state legislature “intended to preempt the field of underground injection control in its entirety.” Id. Less than a year later, Air Products began drilling its wells. Wesley Muller, Air Products Moves Large Drilling Rig into Lake Maurepas, La. Illuminator (Aug. 3, 2023).
Also in Louisiana, the St. Helena Parish passed a similar moratorium. Jacqueline DeRobertis & Lara Nicholson, Residents in Livingston, St. Helena Continue Pushback Against Carbon Capture Technology, The Advocate (Oct. 13, 2022). The St. Helena ban appears to remain in place. No CCS projects are underway there, so any preemption challenge to that ban would be premature. The Blue Energy case therefore remains instructive. The case suggests that CCS projects that address a global problem might hinge entirely on local government politics because of the SDWA’s broad savings clause. On the other hand, CCS proponents in states seeking primacy should promote the enactment of a state Class VI law that limits the authority of its local governments to regulate and ban such wells. Regardless of the outcome of these preemption challenges, they may delay Class VI well permitting and complicate their regulation.
In January 2024, EPA granted Louisiana primacy over Class VI wells. Less than six weeks later, several local advocacy groups—the Deep South Center for Environmental Justice, Healthy Gulf, and Alliance for Affordable Energy—challenged that grant of primacy in the Court of Appeals for the Fifth Circuit. Petition for Review, Deep S. Ctr. for Env’t Just. v. U.S. EPA, Case No. 24-60084 (5th Cir. Feb. 22, 2024).
The advocacy groups based their challenge on this provision in Louisiana’s Class VI program statutes:
Upon the issuance of the certification of completion of injection operations, the storage operator, all generators of any injected carbon dioxide, all owners of carbon dioxide stored in the storage facility, and all owners otherwise having any interest in the storage facility shall be released from any and all future duties or obligations under this Chapter and any and all liability associated with or related to that storage facility which arises after the issuance of the certification of completion of injection operations.
La. Rev. Stat. § 30:1109(A)(3) (emphasis added). They argued that this provision “waives liability under the Safe Drinking Water Act and other federal environmental statutes.” Brief of Petitioners at 27, Deep S. Ctr. for Envt’l Just. v. U.S. EPA, Case No. 24-60084 (5th Cir. 2024). Specifically, if a Class VI well were to leak and if that leak were to “contain a listed hazardous waste” or “mobilize substances in the subsurface that could react with groundwater to produce listed hazardous substances, creating liability under the CAA, CERCLA, or RCRA,” then the “any and all liability” language in the Louisiana statute would grant the well operator an unlawful waiver of liability under those statutes. Id. at 29–30. Adopting such a “broad” liability provision, they argued, was “contrary to the Safe Drinking Water’s Act Express enforcement protections” and made Louisiana’s program impermissibly “less stringent than federal regulations.” Id. at 30, 31. The upshot under their view is that “Louisiana’s statute waives liability that otherwise would have existed under EPA’s program, leaving communities unprotected and at high risks of harm,” which, according to the local advocacy groups, “is particularly concerning because CCS is an unproven, emerging technology that has widely acknowledged long-term risks.” Reply of Petitioners at 1, Deep S. Ctr. for Envt’l Just. v. U.S. EPA, Case No. 24-60084 (5th Cir. 2024).
EPA interpreted Louisiana’s liability provision differently, explaining that it “applies only after all site closure regulations have been met” and after a “certificate of completion of injection operations has been issued.” Reply of Respondent at 15, Deep S. Ctr. for Envt’l Just. v. U.S. EPA, Case No. 24-60084 (5th Cir. 2024). These site closure regulations impose “extensive” obligations on the well operator, and the “certificate may be issued only after post-injection monitoring for fifty years or for an alternative site-specific monitoring period established under the State’s rules.” Respondent Brief at 15–16, Deep S. Ctr. for Envt’l Just. v. U.S. EPA, Case No. 24-60084 (5th Cir. 2024). Plus, after the certificate is issued, the “provision allows for limited transfer of any future liability” to the state. Id. at 17–18. Therefore, EPA argued, the provision is “consistent with the federal requirements that [it] established” and “does not undermine the stringency of Louisiana’s program.” Id. at 16, 20. Likewise, the provision does not “extinguish” “liability under federal environmental law,” first because “it is doubtful that the Louisiana provision, by its own force, could even discharge liabilities under federal environmental laws,” and second because “the provision would at most transfer any liability to the state-administered, industry funded trust fund.” Id. at 32–33.
Several industry groups have intervened in the case, including the American Petroleum Institute on the side of EPA. Br. of Intervenor Am. Petroleum Inst., Deep S. Ctr. for Envt’l Just. v. U.S. EPA, Case No. 24-60084 (5th Cir. 2024). Briefing closed in September, and a ruling before the end of the year is unlikely.
Overall, the advocacy groups’ challenge is very narrow. As EPA points out, the groups “do not dispute Louisiana’s compliance with most of EPA’s requirements for approval of a state underground injection control program.” Respondent Brief, supra, at 1. Otherwise, the groups only raise generalized complaints that Louisiana failed to explain how it would outsource certain compliance functions. Petitioners Brief, supra, at 47.
Also, both Wyoming’s and North Dakota’s Class VI programs include similar provisions that waive (or largely waive) long-term liability for carbon storage wells. The advocacy groups distinguished these provisions from Louisiana’s, explaining that “Wyoming adopted its liability waiver after EPA approved the Class VI program, so the liability waiver is not part of the Class VI UIC program and is not part of federal law,” and that “North Dakota’s ownership transfer to the state does not mention liability, let alone waive or release it.” Reply of Petitioners, supra, at 14. On the other hand, as EPA observes, none of the delegated programs can simply waive liability under unrelated federal statutes.
The permitting and buildout of CCS projects is rapidly increasing, but with contrasting narratives. The preemption and primacy cases discussed above echo a loud refrain by some who claim that CCS is a false promise as a climate change solution or who raise hypothetical safety risks, despite the strict Class VI regulatory requirements. CCS project proponents, and states seeking primacy, promote CCS as the renaissance of a technology that adds an engineering solution—injection and permanent storage—to the climate change problem.
Public policy that heavily incentivizes CCS is likely to continue. Nevertheless, history teaches that the door never closes on disputes in the environmental law realm. CCS proponents and states seeking primacy should navigate CCS with an eye toward potential legal challenges like those described here.
