Full Text of HB0680 97th General Assembly
HB0680ham001 97TH GENERAL ASSEMBLY | Rep. Thomas Holbrook Filed: 4/1/2011
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| 1 | | AMENDMENT TO HOUSE BILL 680
| 2 | | AMENDMENT NO. ______. Amend House Bill 680 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. Short title. This Act may be cited as the | 5 | | Carbon Dioxide Geologic Storage Act . | 6 | | Section 5. Statement of policy. It is in the public | 7 | | interest to promote the geologic storage of carbon dioxide. | 8 | | Doing so will help ensure the viability of the Illinois coal, | 9 | | natural gas, power, and other industries under a spectrum of | 10 | | potential environmental regulations and will promote economic | 11 | | development in Illinois. Further, geologic storage of carbon | 12 | | dioxide, a potentially valuable commodity, may allow for its | 13 | | ready availability if needed for commercial, industrial, or | 14 | | other uses, including enhanced recovery of oil, gas, and other | 15 | | minerals.
| 16 | | To be practical and effective, geologic storage of carbon |
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| 1 | | dioxide requires cooperative use of surface and subsurface | 2 | | property interests often across large areas. It is therefore in | 3 | | the public interest to employ procedures that promote, in a | 4 | | manner fair to all interests, the use of all pore space in a | 5 | | clearly defined reservoir to ensure comprehensive management | 6 | | of the reservoir and the efficient use of natural resources. It | 7 | | is important that rules governing the use and development of | 8 | | subsurface pore space be consistent with both established | 9 | | precedents and subsurface private property rights.
| 10 | | Section 10. Definitions. As used in this Act, unless the | 11 | | context requires a different meaning:
| 12 | | "Carbon dioxide injection well" means a well that is used | 13 | | to inject carbon dioxide into a reservoir for geologic storage. | 14 | | "Department" means the Department of Natural Resources.
| 15 | | "Geologic storage" means the underground storage of carbon | 16 | | dioxide in a reservoir.
| 17 | | "Gross revenue" means the aggregate total revenue actually | 18 | | received by the storage operator from third parties for | 19 | | operation of the storage facility, including any sales of | 20 | | federal, State, or other production or investment tax credits | 21 | | received in connection with the operation of the storage | 22 | | facility, free of any costs, charges, or deductions.
| 23 | | "Mineral owner" means, as identified in the tax assessor's | 24 | | records for each county containing some portion of the proposed | 25 | | reservoir, any owner of a whole or fractional interest in any |
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| 1 | | or all minerals in real property above, below, or within the | 2 | | proposed reservoir that has been severed from the surface | 3 | | estate by grant, exception, reservation, lease, or other means.
| 4 | | "Pore space" means subsurface cavities or voids, whether | 5 | | natural or artificially created, that can be used as storage | 6 | | space for carbon dioxide or other substances.
| 7 | | "Pore space owner" means the person, trust, corporation, or | 8 | | other entity who has title to the pore space.
| 9 | | "Reservoir" means any depleted oil or gas reservoir, saline | 10 | | formation, coal seam, or any natural or artificial subsurface | 11 | | stratum or formation with a clearly defined reservoir boundary | 12 | | and pore space of sufficient porosity and permeability for | 13 | | injection and storage of carbon dioxide. "Reservoir" does not | 14 | | include an underground source of drinking water.
| 15 | | "Reservoir boundary" means the area specified in the | 16 | | certificate of unit designation that delineates the vertical | 17 | | and horizontal limits of the reservoir, including buffer areas, | 18 | | such that any carbon dioxide injected into the reservoir will | 19 | | remain within the boundary. The reservoir boundary must be | 20 | | established by identifying physical parameters, such as | 21 | | structural or stratigraphic geologic features, that will | 22 | | constrain buoyant migration of the injected carbon dioxide such | 23 | | that it will remain within the boundary. The reservoir boundary | 24 | | need not include the entirety of a geologic formation if it can | 25 | | be shown that physical parameters, such as geologic features, | 26 | | will contain injected carbon dioxide within the boundary. |
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| 1 | | "Reservoir permit" means a permit issued by the Department | 2 | | allowing a person to establish and operate a storage facility.
| 3 | | "Storage facility" means the reservoir, underground | 4 | | equipment, and surface facilities and equipment used or | 5 | | proposed to be used in a geologic storage operation. "Storage | 6 | | facility" does not include pipelines used to transport carbon | 7 | | dioxide to the storage facility from the carbon dioxide source. | 8 | | "Storage facility" also does not include a single carbon | 9 | | dioxide injection well to be used for experimental, research, | 10 | | or evaluation purposes as long as the well does not inject more | 11 | | than 100,000 tons of carbon dioxide in total and does not | 12 | | operate for more than 5 years.
| 13 | | "Storage operator" means a person holding or applying for a | 14 | | certificate of unit designation and a reservoir permit under | 15 | | this Act and holding or applying for a UIC permit for the | 16 | | injection of carbon dioxide.
| 17 | | "Surface owners" means, as identified in the tax assessor's | 18 | | records for each county containing some portion of the proposed | 19 | | reservoir, any owner of a whole or undivided fee simple | 20 | | interest or other freehold interest, which may or may not | 21 | | include mineral rights, in the surface above the proposed | 22 | | reservoir, but does not include an owner of a right-of-way, | 23 | | easement, leasehold, or any other lesser estate.
| 24 | | "UIC permit" means an Underground Injection Control permit | 25 | | authorized under the federal Safe Drinking Water Act's | 26 | | Underground Injection Control (UIC) Program that allows a |
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| 1 | | person to operate a carbon dioxide injection well. | 2 | | Section 12. Applicability. This Act applies only to carbon | 3 | | dioxide injections that commence on or after January 1, 2012. | 4 | | Section 15. Reservoir permit.
| 5 | | (a) A storage operator must have a reservoir permit issued | 6 | | by the Department to operate a storage facility in the State. A | 7 | | reservoir permit may be transferred or assigned from one | 8 | | storage operator to another upon written consent of the | 9 | | Department. | 10 | | (b) The Department shall issue a reservoir permit to the | 11 | | storage operator if the Department finds that:
| 12 | | (1) a certificate of unit designation has been issued | 13 | | as provided in Section 25;
| 14 | | (2) the interests of non-consenting pore space owners | 15 | | within the reservoir boundary have been addressed as | 16 | | provided in Section 35;
| 17 | | (3) the interests of mineral owners within the | 18 | | reservoir boundary have been addressed as provided in | 19 | | Section 40;
and | 20 | | (4) the storage operator has applied for a UIC permit | 21 | | or has been issued a UIC permit. | 22 | | The Department may condition the granting of a reservoir | 23 | | permit on obtaining a UIC permit, but no State agency may delay | 24 | | the processing of the reservoir permit application on the |
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| 1 | | grounds that the application for another required permit is | 2 | | pending. | 3 | | (c) The Department shall issue only one reservoir permit | 4 | | per reservoir. A storage operator may not apply for a reservoir | 5 | | permit where the reservoir permit encompasses an area that is | 6 | | included in certificate of unit designation the storage | 7 | | operator does not hold. A storage operator may apply to expand | 8 | | the reservoir boundary of an existing reservoir permit it does | 9 | | hold.
| 10 | | (d) The Department shall hold a public hearing regarding a | 11 | | reservoir permit application to ensure that the requirements of | 12 | | subsection (b) of this Section have been satisfied.
| 13 | | (1) Notice of the public hearing shall include:
| 14 | | (A) The type of proceedings before the Department | 15 | | and a general statement of purpose for such | 16 | | proceedings.
| 17 | | (B) A description of the reservoir boundary, | 18 | | including a legal description of the reservoir.
| 19 | | (C) A description of the proposed storage facility | 20 | | and its operations. | 21 | | (D) The time, date, and place of the public | 22 | | hearing. | 23 | | (E) The limitations on standing provided by | 24 | | subsection (h) of this Section. | 25 | | (2) Upon receipt of the reservoir permit application, | 26 | | the Department shall fix the time and place for the public |
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| 1 | | hearing, which shall be no less than 30 days nor more than | 2 | | 60 days after the date of filing of the application. The | 3 | | Department shall give notice of the hearing at least 30 | 4 | | days prior to the hearing in the following manner:
| 5 | | (A) By United States first class mail directed to | 6 | | all local governments with jurisdiction over some | 7 | | portion of the proposed reservoir, and to all surface | 8 | | owners and all mineral owners within the proposed | 9 | | reservoir boundary at their last-known address as | 10 | | shown by the records described for each in Section 10 | 11 | | of this Act. For any surface owner or mineral owner | 12 | | within the proposed reservoir boundary that is not | 13 | | identified in such records, the storage operator shall | 14 | | be deemed to have acted in good faith, shall not be | 15 | | subject to further obligations, and shall have no | 16 | | liability to such owners for any legal or equitable | 17 | | remedy or relief arising from, in connection with, or | 18 | | otherwise relating to the storage facility, provided | 19 | | the published notice required by subparagraph (B) of | 20 | | paragraph (2) of this subsection (d) is given. The | 21 | | storage operator shall not be liable for any errors or | 22 | | omissions in such records.
The Department's | 23 | | certificate that it has mailed the notices is evidence | 24 | | that it has done so. | 25 | | (B) By publication of such notice in a newspaper of | 26 | | general circulation published in each county |
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| 1 | | containing some portion of the reservoir at least once | 2 | | each week for 3 successive weeks. The first publication | 3 | | shall be at least 30 days prior to the date of the | 4 | | public hearing. If there is no newspaper published in a | 5 | | county containing some portion of the reservoir, then | 6 | | the publication shall be in a newspaper published in an | 7 | | adjoining county in this State, having circulation in | 8 | | the county in which that portion of the reservoir is | 9 | | located. | 10 | | (e) If the Department does not complete the review of a | 11 | | reservoir permit application within 90 days after receipt, | 12 | | including the public notice and hearing as described in | 13 | | subsection (d) of this Section, then the reservoir permit shall | 14 | | be issued. If the Department does not find the storage operator | 15 | | to have met the requirements detailed in subsection (b) of this | 16 | | Section, then the Department may either decline the application | 17 | | or require amendment to the application before granting the | 18 | | reservoir permit. If the Department requires amendment to the | 19 | | application, then the Department shall have 30 days after the | 20 | | storage operator amends its application to either grant or | 21 | | decline to grant the reservoir permit or the reservoir permit.
| 22 | | (f) The Department may charge a fee to the storage operator | 23 | | for review of the reservoir permit application. The fee must be | 24 | | in the amount set by Department rule. The amount must be based | 25 | | on the Department's anticipated expenses that it will incur in | 26 | | reviewing the reservoir permit application and shall not exceed |
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| 1 | | $10,000.
| 2 | | (g) The Department may include conditions in the reservoir | 3 | | permit to carry out the reservoir permit requirements. The | 4 | | reservoir permit shall contain a description of the reservoir | 5 | | boundary and shall authorize the storage operator to use all | 6 | | pore space within the reservoir as a storage facility.
| 7 | | (h) The Department shall have the right at all times to go | 8 | | upon and inspect a storage facility for the purpose of | 9 | | ascertaining compliance with the provisions of this Act.
| 10 | | Section 20. Ownership and conveyance of pore space.
| 11 | | (a) Title to pore space is vested in the owner of the | 12 | | overlying surface estate.
| 13 | | (b) A conveyance of title to the surface estate conveys the | 14 | | pore space in all strata underlying the surface estate.
| 15 | | (c) Title to pore space may not be severed from the surface | 16 | | estate.
| 17 | | (d) Grants of easement to use or leasing of pore space is | 18 | | not a severance prohibited by this Section.
| 19 | | (e) The grants of easement or leasing of pore space shall | 20 | | not confer any right to enter upon or otherwise use the surface | 21 | | of the land unless the grant of easement or lease expressly so | 22 | | provides.
| 23 | | Section 25. Unit designation.
| 24 | | (a) The Department shall issue a certificate of unit |
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| 1 | | designation to the storage operator if the Department finds | 2 | | that:
| 3 | | (1) the reservoir has a clearly defined boundary;
| 4 | | (2) the reservoir is suitable for carbon dioxide | 5 | | injection and storage, including the presence of physical | 6 | | parameters, such as structural or stratigraphic geologic | 7 | | features, to ensure injected carbon dioxide remains within | 8 | | the reservoir boundary;
| 9 | | (3) the reservoir boundary encompasses an area of at | 10 | | least 5,000 acres; | 11 | | (4) the storage operator has made a good-faith effort | 12 | | to identify all surface owners and all mineral owners and | 13 | | their last-known addresses using the records described for | 14 | | each in Section 10 of this Act; | 15 | | (5) the storage operator has made a good-faith effort | 16 | | to obtain ownership, grants of easement, or leaseholds from | 17 | | all known pore space owners within the reservoir boundary; | 18 | | and | 19 | | (6) the storage operator owns or has obtained grants of | 20 | | easement or leaseholds from persons who own at least 51% of | 21 | | the proposed reservoir's pore space based upon the number | 22 | | of surface acres within the reservoir boundary.
| 23 | | (b) If the Department does not complete the review of a | 24 | | unit designation application within 60 days after receipt, then | 25 | | the certificate of unit designation shall be issued. If the | 26 | | Department does not find the storage operator to have met the |
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| 1 | | requirements detailed in subsection (a) of this Section, then | 2 | | the Department may either decline the application or require | 3 | | amendment to the application before granting the certificate of | 4 | | unit designation. If the Department requires amendment to the | 5 | | application, then the Department shall have 30 days after the | 6 | | storage operator amends the application to either grant or | 7 | | decline to grant the certificate of unit designation or the | 8 | | certificate of unit designation shall be issued.
| 9 | | (c) The Department may charge a fee to the storage operator | 10 | | for review of the unit designation application. The Department | 11 | | shall set the fee amount by rule, but the amount must be based | 12 | | on the Department's anticipated expenses that it will incur in | 13 | | reviewing the unit designation application and shall not exceed | 14 | | $10,000. | 15 | | Section 35. Amalgamating property interests.
| 16 | | (a) If a storage operator does not own, or has not obtained | 17 | | grants of easement or leaseholds from persons who own, all of | 18 | | the pore space within the reservoir boundary, then the | 19 | | Department shall require that the pore space owned by | 20 | | nonconsenting pore space owners be included in a storage | 21 | | facility and subject to geologic storage for the purposes of | 22 | | administering the reservoir permit. Any amalgamation of pore | 23 | | space shall not include the right to use the surface above | 24 | | nonconsenting pore space owners' pore space.
| 25 | | (b) Each nonconsenting pore space owner shall be entitled |
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| 1 | | to compensation for the use of their pore space in the | 2 | | reservoir equal to 4% of gross revenues multiplied by a | 3 | | fraction, the numerator of which is the number of surface acres | 4 | | within the reservoir boundary that are owned by the | 5 | | nonconsenting pore space owner and the denominator of which is | 6 | | the total number of surface acres within the reservoir | 7 | | boundary.
| 8 | | (c) The Department shall have the authority to commit | 9 | | State-owned pore space within the reservoir boundary to the | 10 | | storage facility on the terms described in subsection (b) of | 11 | | this Section.
| 12 | | Section 40. Mineral interests.
| 13 | | (a) A reservoir permit may not be issued if the interests | 14 | | of mineral owners would be adversely affected. For purposes of | 15 | | this Section, "adversely affected" means that the Department | 16 | | finds that:
| 17 | | (1) the reservoir contains a commercially valuable | 18 | | mineral that a mineral owner has verifiable plans to | 19 | | extract and that such extraction would be precluded by | 20 | | operation of the reservoir;
| 21 | | (2) the cost of mineral extraction of a commercially | 22 | | valuable mineral that the mineral owner has verifiable | 23 | | plans to extract would be significantly increased by the | 24 | | operation of the reservoir; or
| 25 | | (3) the extraction rate of a commercially valuable |
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| 1 | | mineral that the mineral owner has verifiable plans to | 2 | | extract would be significantly reduced by the operation of | 3 | | the reservoir.
| 4 | | (b) Mineral owners may drill through or near a reservoir to | 5 | | explore for or extract minerals, provided the drilling, | 6 | | extraction, and related activities are conducted in | 7 | | cooperation with the storage operator and comply with | 8 | | Department requirements that preserve the storage facility's | 9 | | integrity.
| 10 | | (c) A storage operator may drill through or near a mineral | 11 | | producing area to operate the storage facility, provided the | 12 | | drilling, carbon dioxide storage, and related activities are | 13 | | conducted in cooperation with the mineral owners and comply | 14 | | with Department requirements that ensure no adverse effect on | 15 | | mineral extraction.
| 16 | | (d) Mineral owners shall provide the storage operator | 17 | | reasonable access to wells and other equipment, as necessary, | 18 | | to ensure that mineral production equipment does not provide a | 19 | | leakage pathway for stored carbon dioxide. Storage operators | 20 | | shall compensate mineral owners for any losses associated with | 21 | | loss of production or business interruption due to such | 22 | | activities.
| 23 | | Section 45. Title to carbon dioxide; liability.
The storage | 24 | | operator has title to the carbon dioxide injected into and | 25 | | stored in a reservoir and holds title until the Department |
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| 1 | | issues a certificate of completion. While the storage operator | 2 | | holds title, the operator is liable for any damage the carbon | 3 | | dioxide may cause, including damage caused by carbon dioxide | 4 | | that escapes from the storage facility. The pore space owner | 5 | | shall have no liability associated with operation of a storage | 6 | | facility, unless the storage operator is the pore space owner.
| 7 | | Section 55. Project completion and title transfer.
| 8 | | (a) After carbon dioxide injections at a storage facility | 9 | | cease, the storage operator may apply for a certificate of | 10 | | completion. Before issuing a certificate of completion, the | 11 | | Department, in consultation with the issuer of the UIC permit, | 12 | | must find that:
| 13 | | (1) the storage operator is in full compliance with all | 14 | | laws governing the storage facility, including any ongoing | 15 | | UIC permit requirements;
| 16 | | (2) the storage operator has addressed all pending | 17 | | claims, if any, regarding the storage facility's | 18 | | operation; | 19 | | (3) all carbon dioxide injection wells have been | 20 | | plugged, equipment and facilities has been removed, and | 21 | | reclamation work has been completed as required by the UIC | 22 | | permit issuer or the Department; | 23 | | (4) the carbon dioxide in the reservoir has become | 24 | | stable; stored carbon dioxide is stable if it is | 25 | | essentially stationary or, if it is migrating or may |
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| 1 | | migrate, that any migration will be unlikely to cross the | 2 | | reservoir boundary; | 3 | | (5) all monitoring wells, equipment, and facilities to | 4 | | be used in the post-closure period are in good condition | 5 | | and retain mechanical integrity; and | 6 | | (6) the storage operator has transferred to the | 7 | | Department a carbon storage project fund that contains | 8 | | sufficient funds to carry out the site care and monitoring | 9 | | activities required by the UIC permit, if applicable.
| 10 | | (b) If the Department does not complete the review of a | 11 | | certificate of completion application within 90 days after | 12 | | receipt, including the public notice and input deemed | 13 | | appropriate by the Department, then the certificate of | 14 | | completion shall be issued. If the Department does not find | 15 | | that the requirements detailed in subsection (a) of this | 16 | | Section have been met, then it may either decline the | 17 | | application or require amendment to the application before | 18 | | granting the certificate of completion. If the Department | 19 | | requires amendment to the application, then the storage | 20 | | operator shall have 30 days to amend the application. | 21 | | Thereafter, the Department shall have 30 days to either grant | 22 | | or decline to grant the certificate of completion or the | 23 | | certificate of completion shall be issued.
| 24 | | (c) The Department may charge a fee to the storage operator | 25 | | for reviewing the certificate of completion application. The | 26 | | fee must be in the amount set by Department rule. The amount |
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| 1 | | must be based on the Department's anticipated expenses that it | 2 | | shall incur in reviewing the certificate of completion | 3 | | application and shall not exceed $10,000.
| 4 | | (d) Once a certificate of completion is issued the | 5 | | following occurs:
| 6 | | (1) Title to the storage facility and to the stored | 7 | | carbon dioxide transfers, without compensation, to the | 8 | | State.
| 9 | | (2) Title acquired by the State includes all rights and | 10 | | interests in, and all responsibilities associated with, | 11 | | the stored carbon dioxide.
| 12 | | (3) The storage operator is released from all | 13 | | regulatory requirements associated with the storage | 14 | | facility.
| 15 | | (4) Monitoring and managing the storage facility is the | 16 | | State's responsibility to be overseen by the Department | 17 | | until such time as the federal government assumes | 18 | | responsibility for the long-term monitoring and management | 19 | | of storage facilities.
| 20 | | (5) If the federal government has not assumed | 21 | | responsibility for the long-term monitoring and management | 22 | | of storage facilities, then the carbon storage project fund | 23 | | shall be used for the purposes of monitoring and managing | 24 | | the storage facility. If the federal government has assumed | 25 | | responsibility for the long-term monitoring and management | 26 | | of storage facilities, then the carbon storage project fund |
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| 1 | | shall be refunded to the storage operator.
| 2 | | Section 60. Enhanced recovery projects.
| 3 | | (a) This Act does not apply to applications filed with the | 4 | | Department proposing to use carbon dioxide for an enhanced oil | 5 | | or gas recovery project. Such applications shall be processed | 6 | | pursuant the Illinois Oil and Gas Act.
| 7 | | (b) The Department may allow an enhanced oil or gas | 8 | | recovery project to be converted to a storage facility. In | 9 | | considering whether to approve a conversion, and upon | 10 | | conversion, the provisions of this Act and its implementing | 11 | | rules apply, but if during the conversion process unique | 12 | | circumstances arise, then the Department, may waive such | 13 | | provisions or impose additional ones to better ensure that the | 14 | | Act's objectives are fulfilled.
| 15 | | Section 65. Memorandum of Understanding. The Department | 16 | | and the Illinois Environmental Protection Agency shall enter | 17 | | into a Memorandum of Understanding with respect to their | 18 | | respective roles under this Act and the UIC program, if | 19 | | applicable. The Memorandum of Understanding shall provide for | 20 | | procedures to ensure a streamlined and concurrent permitting | 21 | | process for storage facilities. | 22 | | Section 70. Department; home rule. The Department may adopt | 23 | | rules and issue orders to enforce this Act. The Department may |
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| 1 | | authorize its employees, qualified by training and experience, | 2 | | to perform the powers and duties set forth in this Act. No | 3 | | agency of State government or political subdivision of the | 4 | | State may regulate a storage facility except as expressly | 5 | | authorized under this Act. | 6 | | Section 75. Restraint of trade. None of the rights and | 7 | | responsibilities pursuant to this Act shall be held or | 8 | | construed to violate any of the statutes of this State relating | 9 | | to trusts, monopolies, or contracts and combinations in the | 10 | | restraint of trade.
| 11 | | Section 97. Severability. The provisions of this Act are | 12 | | severable under Section 1.31 of the Statute on Statutes.".
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