The EPA Needs To Start Permitting Wells For Carbon Dioxide Sequestration

Everyone loves the idea of capturing carbon dioxide and injecting it in the ground. But the nascent industry known as CCS (carbon capture and sequestration) won’t go anywhere without government permits to drill the wells needed to do so.

The Environmental Protection Agency, EPA, has approved zero permits for carbon dioxide sequestration wells over the past several years even though the Energy Act of 2020, Bipartisan Infrastructure Law and the Inflation Reduction Act give great incentives for CCS. Industry, landowners, and Congress are questioning EPA’s leadership.

Long-delayed permits are currently pending for 41 CCS wells, Class VI wells as codified by EPA. The delay in approvals is puzzling to oil and gas companies that are sponsoring some of these wells. The overseer of oil and gas development on federal lands, the Bureau of Land Management, BLM, approved thousands of oil and gas wells last year. It begs the question of why doesn’t someone at the EPA call up the BLM to borrow a couple of geologists and subsurface specialists to get the job done.

Congress and the Biden administration have finally begun the fight to reduce greenhouse gas emissions in the U.S. Rather than change consumer behavior with a carbon price or carbon tax, the elected leaders decided to reward those who attempt to clean up the environment. For example, there are incentives for electric vehicles rather than penalties for the fuel-guzzling pickup trucks that are the most popular vehicles on American roads. There are incentives for carbon capture rather than penalties for emitting carbon by industrial users and power plants—both sectors emit approximately 50% more CO₂ than the transportation sector These incentives are funded by federal tax breaks and so the costs to the voters and consumers are obscured. The elected officials rely upon voters, taxpayers, and consumers not realizing that they are one in the same.

In a study led by former Secretary of Energy Ernest Moniz, the Energy Futures Initiative found that average costs of capturing CO₂ at the point source of emission at somewhat more than $90 per metric ton.

The incentives for CCS are strong. The Inflation Reduction Act upped the tax credit of $45 per metric ton for CCS from industrial polluters and power plants to $85 per metric ton with benefits depending on domestic content and employment. For CO₂ captured from the atmosphere, also called direct air capture, the credit soars to $180 per metric ton for carbon that is permanently stored. That is where disposal wells come into the picture. For CO₂ used for enhanced oil recovery, the credit is $60 per metric ton.

A broader question facing the EPA is over the regulatory control of the Class VI wells. For Wyoming and North Dakota, the EPA granted primacy or regulatory control of Class VI wells years ago. In most states where CO₂ injection is used for enhanced oil recovery the state regulatory authorities manage the approvals of these Class II injection wells. The EPA can easily delegate Class VI approvals to the better staffed state regulators. At the very least, the EPA could call the Railroad Commission of Texas, the state’s oil and gas regulatory authority, or the Colorado Oil and Gas Conservation Commission for help to evaluate Class VI permits in states other than Texas or Colorado so that no conflicts of interest exist. Why not?

The Executive branch needs to resolve the conflict between EPA and national policy. Congress has mandated the path forward on CCS, and the federal bureaucracy already has the tools needed to implement the policy. Let’s get it done.