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Primacy for Louisiana
Bury the carbon dioxide not the lede
Huge news last week in the carbon management world as Louisiana was granted primacy over their Class VI wells, joining North Dakota and Wyoming in that distinction. This comes after two years since the formal submission of the application in 2021. As a reminder, most states have primacy over some of their injection wells, with many having primacy over classes I-V.
The Class VI well program was created as part of the Safe Drinking Water Act (SDWA) to regulate the injection and storage of carbon dioxide (CO2) in underground formations. This program is designed to protect underground sources of drinking water (USDWs) from contamination caused by CO2 injection and storage. Class VI wells are intended for the injection of CO2 into deep geological formations for long-term storage. This contrasts the Class II wells, which are used for oil and gas exploration and production. These wells are designed to inject fluids associated with oil and gas production, like CO2, in a process known as enhanced oil recovery. Some of the CO2inject in that process remains underground.
In 2010, the Environmental Protection Agency (EPA) established the Class VI well program to provide specific CO2 injection and storage regulations in deep geological formations. The Class VI well program requires a comprehensive permitting process, including site characterization, well design, and long-term monitoring to ensure that the storage of CO2 is safe and environmentally sound.
Until 2010, only two federal Class VI permits were issued, both for the same bioethanol project in Illinois. North Dakota has issued four state Class VI permits, and although Wyoming has yet to issue one, they have been clear that the permitting process will not materially slow down the deployment of CCUS or DAC. Several other states (Arizona, Texas, and West Virginia) want to receive Class VI primacy, and Pennsylvania has announced its intention to apply.
Louisiana application and process
Louisiana's recent designation as a Class VI primacy state means it is now responsible for implementing and enforcing the Class VI well program within its borders. This designation is significant because it allows Louisiana to tailor the Class VI well program to its unique geological characteristics and regulatory framework. This will enable Louisiana to facilitate CCUS and DAC projects within the state more efficiently and effectively.
Primacy is vital for a number of reasons, and emissions reduction potential is the highest on that list. The state has a robust and critical industrial sector which accounts for two-thirds of the state’s emissions. CCUS provides a pathway to many industrial sectors which use fossil fuels as feedstocks and/or thermal energy for decarbonization. It’s also beneficial for the proposed DAC hub application, which gives the state another tool in the net-zero tool kit.
But getting primacy isn’t some sort of carte blanche for the state to do whatever they want with injection. The process for gaining Class VI primacy involves a rigorous review process by the EPA. The state must demonstrate that it has the necessary regulatory framework and technical expertise to administer the Class VI program. The state must also demonstrate that it has the resources and sufficient funding to implement and enforce the program effectively. The program will also continue communicating with the federal EPA about the injection program, its funding, resources, permitting practices, etc.
The entire process from the EPA:
Phase I: pre-application activities
This phase begins when EPA engages with a state interested in applying for UIC program primacy or implementing a program revision. During this phase, EPA may support a state in identifying available resources and the critical elements (i.e., the governor’s letter, attorney general’s letter, program description, memorandum of agreement, and public participation documentation) of a primacy application or program revision. EPA may also meet with the state to outline the process, address preliminary questions a state, territory, or tribe might have, and determine the scope of a state’s actions (e.g., all well classes, Class II only, or Class I – V, or Class VI only).
Additionally, EPA may work with the state to review the state’s draft UIC statutes and regulations and encourage a state to complete a comparison crosswalk. The crosswalk provides a method to efficiently compare the federal regulations with the state's draft statutes and regulations.
Phase II: completeness review and determination
During the Completeness Review and Determination Phase, EPA receives and reviews complete drafts of applicable critical elements of a state submission including the governor’s letter, attorney general’s letter, program description, memorandum of agreement, and public participation documentation. The EPA and a state may engage in a continued dialogue to ensure that questions are clarified prior to the end of this phase. It is also possible that a state, territory or tribe may identify regulatory or statutory changes that must be implemented prior to completion of this phase.
Phase III: application evaluation
The Application Evaluation Phase encompasses a comprehensive evaluation of the regulations and other elements of the primacy application or program revision package. During this phase, EPA will evaluate, in detail, every aspect of each element and coordinate with an applicant to gain clarity and confirm stringency or effectiveness.
During this phase, EPA publishes a proposed rule signed by the EPA Administrator which indicates EPA’s intent to approve or disapprove of a primacy application or program revision. The public is given at least 30 days to comment on the state’s UIC primacy application during which time the public may request a hearing. When a public hearing is requested, EPA arranges the date, time and location of the hearing, and notifies the public.
At the close of the public comment period, EPA reviews public comments received during the public hearing as well as written comments submitted to the EPA Docket. Depending on the comments, EPA may re-review the state’s primacy application and request changes.
Phase IV: rulemaking and codification
During Phase IV, EPA drafts the final rule approving, or disapproving, the state’s primacy application or program revision. The final rule package includes: a summary of the public comments and EPA’s responses; documentation of any changes from the state’s original application and EPA’s rationale for finalizing the rule with such changes; and the regulatory text that will be codified in 40 CFR part 147 after the program is approved.
The final rule is signed by the EPA Administrator and published in the Federal Register with the date of publication as the rule’s effective date.
A Road Forward
Louisiana's designation as a Class VI primacy state is an essential step forward for CCUS and DAC projects in the United States. The designation will provide more certainty and efficiency in the regulatory process for CCUS projects within Louisiana's borders, it signals to the market that Louisiana is a place where effective carbon management is encouraged and available, and it will also serve as a model for other states to follow in pursuing Class VI primacy. Administrator Regan noted that in his earlier response to the application moving forward, especially the environmental justice provisions.
Primacy is not a resignation of authority by the EPA; it is an acknowledgment that Louisiana has the expertise and resources to administer the storage of CO2 in a safe and just way.
We will need states who can prove a safe injection program to receive primacy. We will also need to see the federal EPA permit more Class VI wells. We cannot have a known, safe technology be bogged down by regulatory malaise. If we can capture or remove it, we can store it.