HB1214_S_Cmte_Amend

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; to provide procedures, in a manner fair to all interests, for the cooperative management of surface and subsurface property interests to ensure the maximum use of natural resources; 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.

(k) It is for the public benefit and in the public interest to promote projects for the secure geologic storage of carbon dioxide.

(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, or any other geologic formation 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 53-11-9, Mississippi Code of 1972, is amended as follows:

53-11-9. (1) The board may enter an order, after notice and hearing pursuant to the provisions of Sections 53-1-19 through 53-1-37, approving any proposed geologic sequestration of carbon dioxide. The board shall be authorized to issue an order upon finding the following:

(a) That the reservoir sought to be used as a reservoir for the injection, storage and withdrawal of carbon dioxide is suitable and feasible for such use and in the public interest;

(b) That a majority interest, as provided in this chapter, have consented to such use in writing, or in the event that a majority has not consented, for the purpose of a preliminary technical order under this subsection (1) that must subsequently meet the requirements of Section 53-11-11(3), upon a showing by the storage operator that it has made a good-faith effort to obtain such majority consent, and that all nonconsenting owners are or will be equitably compensated;

(c) That there is no reasonable risk that the use of the reservoir for the storage of carbon dioxide will injure or endanger other formations containing fresh water, oil, gas or other commercial mineral deposits;

(d) That there is no reasonable risk that the proposed storage will endanger human lives or cause a hazardous condition to property; and

(e) In the case of a reservoir that may contain oil, gas or other commercial minerals, that either:

(i) The reservoir has been substantially depleted of all volumes of reservoir oil, gas or other commercial minerals and the requirements of Sections 53-11-11 and 53-11-13 have been satisfied; or

(ii) The reservoir has a greater value or utility as a reservoir for carbon dioxide storage than for the production of the remaining volumes of reservoir oil, gas, condensate or other commercial mineral, if any, and the requirements of Sections 53-11-11 and 53-11-13 have been satisfied.

(2) Approval of a geologic sequestration facility by the board shall provide full and complete authority for the construction, equipping and operation of the geologic sequestration facility without need of further action or grant by any person.

( * * *23) Neither injection nor an order of the board shall affect ownership of the carbon dioxide or inhibit the voluntary conveyance of title to the carbon dioxide by the owner. The board may issue any necessary order to protect the title of an owner to carbon dioxide injected into a geologic sequestration facility. The carbon dioxide shall not be subject to the right of any person other than the owner of the carbon dioxide to produce, take, reduce to possession, or otherwise interfere with or exercise any control thereover. The owner of the carbon dioxide shall have no right to gas, liquid hydrocarbons, salt or other commercial minerals in any stratum or portion thereof not determined by the board to constitute an approved sequestration reservoir which are not otherwise owned or leased by the owner.

SECTION 4. Section 53-11-11, Mississippi Code of 1972, is amended as follows:

53-11-11. (1) Upon application by an operator to unitize for a geologic sequestration facility in an oil or gas reservoir that is not unitized either under this chapter or by board order under the provisions of * * * ~~Sections~~ Section 53-3-103 or 53-3-155, after notice as provided in Section 53-3-115, the board shall hold a hearing to consider the operation of the reservoir for the storage of carbon dioxide to determine whether the predominant result of the injection operations will be the storage of carbon dioxide or will result in an increase in the ultimate recovery of oil or gas, or both, from the proposed geologic sequestration facility. After the hearing the board may:

(a) Determine from the evidence that the reservoir has more value as a geologic sequestration facility than as an enhanced oil or gas recovery project, and as a result, the board shall enter an order for the operation of the unit as a geologic sequestration facility upon making the additional findings set forth in Section 53-11-13.

(b) Determine from the evidence that the predominant result of the injection operations will be an increase in the ultimate recovery of oil or gas or both, and as a result, the board shall not approve the application for a geologic sequestration facility. However, this shall not prevent the board, upon application of the operator, from approving operation of an existing enhanced oil or gas recovery project simultaneously as a geologic sequestration project, recognizing the incidental storage of carbon dioxide under the provisions set forth in Section 53-11-15(1)(d).

(2) Upon application by an operator to unitize for a geologic sequestration facility in any other nonoil, nongas or noncommercial mineral-bearing reservoir that needs to be unitized, after notice as provided, the board shall hold a hearing to consider the evidence, and shall enter an order for the operation of the reservoir as a geologic sequestration facility upon making the findings set forth in Sections 53-11-9(1) and 53-11-13.

(3) An order requiring unit operations of a geologic sequestration facility shall be effective only when the unit for the geologic sequestration facility and the agreements incorporating the pertinent provisions of Section 53-11-15 have been signed, ratified, adopted or approved in writing by a majority interest of the surface interest, on the basis of, and in proportion to, the surface acreage content of the unit area, and, if separately owned, a majority interest of all rights of the subsurface reservoir, on the basis of and in proportion to the surface acreage content of the unit area, and the board has made a finding to that effect, either in the order or in a supplemental order.

(4) If the board finds under Section 53-11-9(1)(e) that a reservoir has been substantially depleted of commercially recoverable quantities of oil or gas or other commercial minerals or that the reservoir has greater utility as a reservoir for carbon dioxide storage and that the remaining conditions of Section 53-11-9(1) have been satisfied; or if the board finds that a nonoil, nongas or noncommercial mineral-bearing reservoir satisfies the conditions of Section 53-11-9(1)(a) through (d) and all other conditions the board shall require have been satisfied, the board shall issue an order approving the reservoir for the injection and storage of carbon dioxide in connection with operation of a geologic sequestration facility. An order approving any geologic sequestration facility shall be effective only when the storage rights agreement has been signed, ratified, adopted or approved in writing by a majority interest of the surface interest, on the basis of, and in proportion to, the surface acreage content of the unit area under the terms of the order; and, if separately owned, a majority interest of all rights in the underground reservoir, on the basis of, and in proportion to, the surface acreage content of the unit area. If oil, gas or commercial minerals are expected to be produced and sold or used in connection with the geologic sequestration facility in a depleted oil, gas or commercial mineral-bearing reservoir, or such a reservoir that has greater utility as a geologic sequestration facility, then a majority interest of all working owners of such oil, gas or commercial minerals, on the basis of, and in proportion to, the surface acreage content of the unit area under the terms of the order, must also consent to the allocation of the production in writing before an order approving the geologic sequestration facility shall be effective.

(5) In the event the required percentages set forth in this section have not signed, ratified or approved the respective agreements within * * * ~~twelve (12)~~ twenty-four (24) months from and after the date of the order, the order requiring unit operation shall be automatically revoked.

SECTION 5. Section 53-11-31, Mississippi Code of 1972, is amended as follows:

53-11-31. Any interested person, as defined in this section, adversely affected by any provision or section of this chapter within the jurisdiction of the board or by any rule, regulation or order made by the board thereunder, or by any act done or threatened thereunder, may obtain court review and seek relief by appeal to the Chancery Court of the First Judicial District of Hinds County, Mississippi, or the chancery court of the county in which the land involved, or any part thereof, is situated. The term "interested person" * * * means all mineral and royalty owners, mineral lessees, if any, and the owners of surface on which injection or reinjection wells and other surface equipment connected with a geologic sequestration facility is or will be situated. Any interested party may appeal to the chancery court of the county in which the land involved or any part thereof is situated, if appeal is demanded within thirty (30) days from the date that the rule, regulation or order of the board is filed for record in the office of the board.

The appeal may be taken by filing notice of the appeal with the board, whereupon the board shall, under its certificate, transmit to the court appealed to all documents and papers on file in the matter, together with a transcript of the record, which documents and papers together with said transcript of the record shall be transmitted to the clerk of the chancery court of the county to which the appeal is taken.

Except as otherwise provided in this section, the appeal otherwise shall be made in accordance with the provisions of Sections 53-1-39 and 53-1-41.

SECTION 6. This act shall take effect and be in force from and after July 1, 2022.