MISSISSIPPI LEGISLATURE
2021 Regular Session
To: Energy; Accountability, Efficiency, Transparency
By: Senator(s) Carter
AN ACT TO AMEND SECTION 53-11-3, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE STATE OIL AND GAS BOARD, INSTEAD OF THE MISSISSIPPI COMMISSION ON ENVIRONMENTAL QUALITY, SHALL HAVE JURISDICTION AND AUTHORITY TO ENFORCE THE PROVISIONS OF THE MISSISSIPPI GEOLOGIC SEQUESTRATION OF CARBON DIOXIDE ACT; TO PROVIDE THAT THE BOARD SHALL SERVE AS THE PERMITTING AGENCY FOR CLASS VI UNDERGROUND INJECTION CONTROL WELLS AND IS AUTHORIZED TO PROMULGATE SUCH RULES AND REGULATIONS AS ARE NECESSARY FOR THE DEVELOPMENT AND ADMINISTRATION OF THE CLASS VI UNDERGROUND INJECTION CONTROL WELL PROGRAM; TO AMEND SECTIONS 53-11-5, 53-11-7 AND 53-11-23, MISSISSIPPI CODE OF 1972, IN CONFORMITY THERETO; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. Section 53-11-3, Mississippi Code of 1972, is amended as follows:
53-11-3. (1) It is declared to be in the public interest for a public purpose and the policy of Mississippi that:
(a) The geologic sequestration of carbon dioxide will benefit the citizens of the state and the state's environment.
(b) Carbon dioxide is a valuable commodity to the citizens of the state.
(c) Geologic sequestration of carbon dioxide may allow for orderly withdrawal as appropriate or necessary, thereby allowing carbon dioxide to be available for commercial, industrial, or other uses, including the use of carbon dioxide for enhanced recovery of oil and gas.
(d) The state has substantial and valuable oil and gas reserves not producible by traditional recovery techniques, but which may be producible by enhanced recovery methods.
(e) The enhanced recovery of oil and gas by the injection of carbon dioxide into oil and gas reservoirs is a proven enhanced recovery method which results in additional production of oil and gas in the State of Mississippi and the sequestration of carbon dioxide.
(f) It is for the public benefit and in the public interest that the maximum amount of the state's oil and gas reserves be produced to the extent that it is economically and technologically feasible.
(g) It is for the public benefit and in the public interest that, to the extent that it is economically and technologically feasible, carbon dioxide be injected into and stored in oil and gas reservoirs and other geologic formations in a manner protective of waters of the state as defined in Section 49-17-5(f).
(h) Providing at the election of the operator for a current or former enhanced oil or gas recovery project to qualify as a geologic sequestration project for the incidental storage of carbon dioxide will encourage enhanced oil or gas recovery projects and geologic sequestration projects and will be beneficial to the citizens of this state and will serve the public interest.
(i) Geologic sequestration of carbon dioxide is an emerging industry that has the potential to provide jobs, investment, and other economic opportunities for the people of Mississippi, and is a valuable incentive for Mississippi to attract new industry.
(j) It is the public policy of Mississippi and the purpose of this chapter to provide for a coordinated statewide program related to the geologic sequestration of carbon dioxide in reservoirs defined in this chapter and to also fulfill the state's primary responsibility for assuring compliance with the federal Safe Drinking Water Act, including any amendments thereto related to the underground injection of carbon dioxide for geologic sequestration.
(2) The * * * board shall have
jurisdiction and authority over all persons and property necessary to enforce
effectively the provisions of this chapter relating to the geologic
sequestration of carbon dioxide streams and subsequent withdrawal of stored
carbon dioxide streams. The * * *
board, * * * on behalf of the State of Mississippi,
shall seek primacy from the U.S. Environmental Protection Agency for Class VI
underground injection control wells. The * * * board shall enforce the law
pursuant to Section 49-17-1 et seq. * * *
and shall serve as the permitting agency for Class VI underground
injection control wells * * *;
and * * * is
authorized to promulgate such rules and regulations as are necessary for the
development and administration of the Class VI underground injection control
well program consistent with federal statutes, rules and regulations pertaining
to geologic sequestration of carbon dioxide streams and assessment of fees for
the development and administration of the Class VI underground injection
control well program. Underground formations or strata used for the geologic
sequestration of carbon dioxide that are not included in the term "reservoir"
as defined in this chapter shall also be subject to the jurisdiction of
the * * * board. * * * The board has primacy for Class II
underground injection control wells and * * * will have jurisdiction and authority over
Class II underground injection control wells converted to Class VI underground
injection control wells and Class VI underground injection control wells within
reservoirs as defined in this chapter. All rules, regulations and standards
promulgated by * * * the board shall be consistent with the
requirements of federal statutes, rules and regulations related to Class VI
underground injection control wells.
SECTION 2. Section 53-11-5, Mississippi Code of 1972, is amended as follows:
53-11-5. As used in this chapter, the following terms shall have the meanings ascribed unless the context clearly indicates otherwise:
(a) "Board" means the State Oil and Gas Board created by Section 53-1-5.
(b) "Carbon dioxide" means: (i) naturally occurring carbon dioxide; (ii) geologically sourced carbon dioxide; (iii) anthropogenic carbon dioxide; or (iv) carbon dioxide stream. The term includes phases of carbon dioxide, whether fluid, liquid or gaseous, stripped, segregated, or divided from any other fluid stream thereof.
(c) "Carbon dioxide stream" means carbon dioxide that has been captured from an emission source (e.g., a power plant), plus incidental associated substances derived from the source materials and the capture process, and any substances added to the stream to enable or improve the injection process. This paragraph (c) does not apply to any carbon dioxide stream that meets the definition of hazardous waste under federal environmental laws and regulations.
(d) "Class VI underground injection control wells" means wells that are not experimental in nature, that are used for geologic sequestration of a carbon dioxide stream, either alone or in combination with injection of carbon dioxide in other forms, and which inject beneath the lowermost formation containing an underground source of drinking water.
* * *
( * * *e) "Department" means the
Mississippi Department of Environmental Quality created by Section 49-2-4.
( * * *f) "Enhanced oil or gas recovery
project" means secondary recovery, pressure maintenance, repressuring
operations, cycling operations, water-flooding operations, injection of carbon
dioxide or other gaseous substances or any combination thereof, or any other
form of effort calculated to increase the ultimate recovery of oil or gas or
both from a reservoir.
( * * *g) "Gas" has the same
meaning as provided in Section 53-1-3(d).
( * * *h) "Geologic sequestration"
means the long-term containment of a gaseous, liquid, or supercritical carbon
dioxide stream in subsurface geologic formations. For purposes of this
chapter, "storage" and "sequestration" have the same
meaning. This term does not apply to carbon dioxide capture or transport.
( * * *i) "Geologic sequestration
facility" means a facility that receives and contains or sequesters carbon
dioxide, or has done so, including:
(i) The reservoir into which carbon dioxide is injected;
(ii) Sequestration wells, monitoring wells, underground equipment, and surface buildings and equipment utilized in geologic sequestration, owned by or under the control of the storage operator; and
(iii) Other
property identified by the board * * * as part of
the facility.
The reservoir component of the geologic sequestration facility includes any necessary and reasonable buffer and subsurface monitoring zones designated by the board for the purpose of ensuring the safe and efficient operation of the geologic sequestration facility for the containment or sequestration of carbon dioxide and shall be chosen to protect against escape or migration of carbon dioxide. Nothing in this definition shall prevent orderly withdrawal of the contained carbon dioxide as appropriate or necessary to allow carbon dioxide to be available for enhanced oil or gas recovery projects or other authorized commercial, and industrial uses.
( * * *j) "Oil" has the same
meaning as provided in Section 53-1-3(c).
( * * *k) "Oil and gas reservoir"
shall mean a pool or field as defined in Section 53-1-3(e) and (f).
( * * *l) "Owner," except when used
in the phrases "working owner" or "royalty owner," shall
have its ordinary, accepted meaning.
* * *
( * * *m) "Person" means any
natural person, corporation, association, partnership, limited liability
company, or other entity, receiver, executor, administrator, fiduciary or
representative of any kind.
( * * *n) "Reservoir" means oil and
gas reservoirs and formations above and below oil and gas reservoirs suitable
for or capable of being made suitable for the injection and storage of carbon
dioxide therein, but only those formations for which the boundaries have been
or can be delineated as provided in this chapter.
( * * *o) "Royalty owner" means any
person who possesses an interest in production of oil, gas or other commercial
minerals, but who is not a "working owner" as defined in this
section.
( * * *p) "Safe Drinking Water Act"
means the Safe Drinking Water Act, as amended, Title 42, Chapter 6A, Subchapter
XII (42 USCS Section 300(f) et seq.).
( * * *q) "Sequestration" means
geologic sequestration as used in this chapter and may include the incidental
storage of carbon dioxide associated with enhanced oil recovery or gas recovery
project operations.
( * * *r) "State" means the State
of Mississippi.
( * * *s) "Storage operator" means
the person authorized by the board to operate a geologic sequestration
facility.
( * * *t) "Underground source of
drinking water" means an aquifer or portion of an aquifer that supplies
any public water system or that contains a sufficient quantity of ground water
to supply a public water system, and currently supplies drinking water for
human consumption, or that contains fewer than ten thousand (10,000) milligrams
per liter total dissolved solids and is not an exempted aquifer.
( * * *u) "Working owner" means the
person who has the right to drill into and produce from any pool of oil, gas or
other commercial minerals, and to appropriate the production either for himself
or for himself and another or others.
SECTION 3. Section 53-11-7, Mississippi Code of 1972, is amended as follows:
53-11-7. (1) The
board shall have authority to regulate and promulgate rules and regulations
governing geologic sequestration of carbon dioxide and underground injection
wells under this chapter within reservoirs. Rules and regulations governing
injection wells for geologic sequestration not regulated under the board's
authority for Class II wells shall be * * * developed
in consultation with the department.
(2) The board shall have authority to:
(a) Approve geologic sequestration of carbon dioxide and the operation of a geologic sequestration facility within a reservoir as defined in this chapter.
(b) Regulate the development and operation of geologic sequestration facilities and pipelines within geologic sequestration facilities, provided those pipelines serving such facilities approved hereunder are not otherwise covered under applicable law.
(c) Perform any and all acts necessary to carry out the purposes and requirements of the federal Safe Drinking Water Act, as amended, with respect to the sequestration of carbon dioxide within reservoirs.
(d) Approve conversion of an existing enhanced oil or gas recovery operation into a geologic sequestration facility and continuing of the authority and prior approvals of the board regarding unit operations.
(e) Approve use of carbon dioxide for enhanced oil or gas recovery and for simultaneous geologic sequestration within a reservoir.
(f) Establish requirements for reasonable performance bonds, deposits, or other assurances of performance consistent with federal statutes, rules and regulations connected with Class VI underground injection control wells to be posted as a condition to or requirement for approving an application by the storage operator, and requirements for the sufficiency and character of the surety and guarantors of performance bonds, deposits, or other assurances of performance and reasonable conditions under which the bonds or deposits shall be released.
(g) Make, after notice and hearings as provided in Sections 53-1-19 through 53-1-37, any reasonable rules, regulations and orders that are necessary from time to time in the proper administration and enforcement of this chapter. To that end, the board is authorized and empowered to adopt, modify, repeal and enforce procedural, interpretive and administrative rules in accordance with the provisions of this chapter.
(3) Only a storage operator shall be held or deemed responsible for the performance of any actions required by the board under this chapter.
(4) The board shall issue such orders, rules and regulations as may be necessary for the purpose of protecting any reservoir, strata, or formation against the escape of carbon dioxide therefrom, including any necessary rules and regulations as may pertain to the drilling into or through a geologic sequestration reservoir within the board's jurisdiction.
SECTION 4. Section 53-11-23, Mississippi Code of 1972, is amended as follows:
53-11-23. (1) (a) The board is authorized to adopt regulations within its jurisdiction to assess sequestration fees that shall be subject to the approval of the Legislature.
(b) Any monies collected shall be used exclusively: (i) to pay the expenses and other costs connected with administration and enforcement of this chapter and the rules, regulations and orders of the board pursuant to this chapter; and (ii) to fund the Carbon Dioxide Storage Fund established in this chapter.
(c) Any per-ton fee shall first be applied to the administration and enforcement costs of the board's activities required or authorized by this chapter, and any amount exceeding those costs shall be transferred to a separate special fund of the State Oil and Gas Board which is hereby created and is to be known as the Carbon Dioxide Storage Fund.
(d) Transfers to the Carbon Dioxide Storage Fund from the per-ton fees shall be made monthly. Transfers from excess funds collected under subsection (1)(c) of this section may be made at any time in the fiscal year that the board shall determine appropriate. At the beginning of the following fiscal year after the transfer of the excess funds, the rate or rates to be collected under subsection (1)(c) of this section shall be reduced to reflect the excess from the prior year.
(e) When the balance in the Carbon Dioxide Storage Fund reaches or exceeds Two Million Five Hundred Thousand Dollars ($2,500,000.00) per geologic sequestration facility, the board shall abate the per-ton fee, and may adjust the annual regulatory fee as prescribed herein. The abatement shall be effective at the beginning of the ensuing fiscal year. When the Carbon Dioxide Storage Fund is reduced below Two Million Five Hundred Thousand Dollars ($2,500,000.00) per geologic sequestration facility, the per-ton fee shall again be imposed on all geologic storage operators until such time as the fund shall reach or exceed Two Million Five Hundred Thousand Dollars ($2,500,000.00) per geologic sequestration facility. The imposition of the per-ton fee shall be effective at the beginning of the ensuing fiscal year.
(f) Monies in the Carbon Dioxide Storage Fund created in this chapter may be used in the board's discretion but only if inadequate funds are available from responsible parties including the financial assurance funds provided in Section 53-11-27(2). Monies in the Carbon Dioxide Storage Fund shall only be used for oversight of geologic storage facilities after cessation of injection at the facility and release of the facility's performance bond or other assurance of performance and as shall be necessary or appropriate to satisfy the requirements of the federal Safe Drinking Water Act, including, without limitation, matters with respect to closed facilities such as: (i) inspecting, testing and monitoring of the facility, including remaining surface facilities and wells; (ii) repairing mechanical problems associated with remaining wells and surface infrastructure; and (iii) repairing mechanical leaks at the facility.
(g) The Carbon Dioxide Storage Fund shall be used for the purposes set forth in this chapter and for no other governmental purposes, nor shall any portion of the fund ever be available to borrow from by any branch of government, it being the intent of the Legislature that this fund and its increments shall remain intact and inviolate. Any interest earned on monies in this fund shall remain in this fund and shall not lapse into the General Fund.
(2) To facilitate the
proper administration of the Class VI underground injection control program
within its jurisdiction, the * * * board
is authorized to assess and collect fees from Class VI permit applicants for
Class VI underground injection control wells * * *. The * * * board is further authorized
to promulgate rules and regulations for the assessment and collection of permit
fees for Class VI underground injection control wells within its jurisdiction.
SECTION 5. This act shall take effect and be in force from and after July 1, 2021.