An oil and gas rig overlooking Wyoming’s Wind River Range. (H/t Larry Zuckerman/BLM Wyoming)
EPA has granted Wyoming new authority to regulate carbon dioxide injection wells as the state looks for ways to capture emissions from coal-fired power plants.
The authority handed down by EPA last week applies to Class VI wells, which are used to inject CO2 into underground formations for the purpose of long-term storage. This makes Wyoming only the second state after North Dakota with primary enforcement authority over these kinds of wells under the Safe Drinking Water Act.
The decision finalizes a rule EPA proposed in April designed to shift regulatory authority to the states (Energywire, April 6).
Speaking at a press conference in Cheyenne, Wyo., Gov. Mark Gordon (R) said that burning coal is not the issue, but it’s “the release of CO2 that we should focus on.”
Wyoming has long sought solutions to CO2 emissions because of its reliance on coal production and coal-fired power plants for jobs and local and state tax revenue. Although the state made up roughly 40% of coal mined in the United States in 2018, according to the U.S. Energy Information Administration, demand for the black rock has been sapped by a market transitioning to gas and renewable power.
In recent years the state has supported efforts to create new markets for storing and using carbon emissions captured from coal plants. One of those uses is as a stimulant for production in older oil fields, while another is for long-term underground storage.
“By gaining primacy for underground storage of CO2, the state of Wyoming is in the best position to ensure that this activity is overseen correctly,” said Gordon, later adding, “and the process will be efficient and our natural resources are developed and protected.”
The expense of carbon capture, use and storage (CCUS) on an already cost-pressured power sector, however, has remained a key issue.
Last month, the Department of Energy completed a study at the request of Wyoming’s governor that evaluated the effects of CCUS retrofits in keeping Wyoming coal-fired power plants operating. The state’s largest utility, owned by PacifiCorp, anticipates retiring many of its coal-fired generators in Wyoming and the West as other resources offer more cost-competitive options.
The utility released an analysis last year showing that coal unit retirements could save ratepayers nearly $600 million. State regulators are reviewing the utility’s plans, which have been criticized by state political leaders.
The recent DOE analysis, prepared by Leonardo Technologies Inc., said CCUS retrofits at nine coal-fired units in Wyoming would lower CO2 emissions by 37% more than a 2019 integrated resource plan from PacifiCorp. But it said outfitting the units with carbon capture technology would require extra funding.
“For all but the Dave Johnston Unit 3-4 system, the projects need some sort of additional funding to make the projects financially viable,” the study said.
More state autonomy
Acting EPA Deputy Administrator Doug Benevento said the agency’s approval of Wyoming’s request for primary enforcement responsibility for Class VI wells gives the coal-rich state “more autonomy to protect groundwater for its citizens.”
“With this important action, EPA is recognizing Wyoming as a proven partner in the safe and responsible management of drinking water,” Benevento said. “EPA is committed to working with you to ensure a smooth transition of this important program.”
Republican Wyoming Sens. John Barrasso and Mike Enzi both welcomed the final rule. Barrasso said it would give the state the ability to permit many additional carbon capture projects.
Greg Sopkin, EPA regional administrator for Region 8, said the Trump administration believes in federalism and said states “know better than a bureaucracy in Washington, D.C., how to protect their citizens in regards to Class VI wells and water issues.”
EPA has received eight Class VI permit applications since July 2011, but none of those were from North Dakota, according to Molly Block, an EPA spokesperson. Class VI primacy approval for North Dakota was granted in April 2018.
Todd Parfitt, director of the Wyoming Department of Environmental Quality, said primacy also helps to avoid the “inefficiencies of double permitting” that would not otherwise occur between EPA and the state regulatory agency.
“This action gives certainty to the regulated community on what is required for geologic carbon sequestration in a way that ensures protection of public health and the environment,” he said.
Pete Obermueller, president of the Petroleum Association of Wyoming, called the state DEQ “uniquely qualified” to regulate Class VI wells and said it only makes sense to capitalize on state knowledge of its natural resource development.
The University of Wyoming School of Energy Resources is also preparing a Class VI well permit application for the CarbonSAFE project.
“Broad support for CCUS in Wyoming, which has helped lead to the Class VI primacy, is widely recognized as one of the strengths of the Wyoming CarbonSAFE project,” said Scott Quillinan, director of research with the School of Energy Resources. “Simply put, we believe the ability to work directly under the guidance and regulatory oversight of the Wyoming Department of Environmental Quality makes the possibility of developing a commercial CCUS project more feasible in the state of Wyoming.”
Brad Crabtree, vice president for carbon management at the Great Plains Institute and director of the Carbon Capture Coalition, said primacy enables Wyoming “to become a national leader in harnessing the federal 45Q tax credit.”
Crabtree said more than 20 industrial and power generation facilities in Wyoming would qualify for the 45Q tax credit aimed at encouraging carbon capture projects.
The Greater Green River Basin in Wyoming, he said, is one of the “most promising geologic storage sites” in the Rocky Mountain region.
“For carbon capture to reach its full carbon reduction and economic potential, commercial options for storing CO2 in saline geologic formations through Class VI wells must be expanded,” Crabtree said in a statement, “as such formations are capable of safely and permanently storing vast volumes of CO2 captured from industrial facilities, power plants and ambient air.”
Reprinted from Energywire with the permission of E&E News. Copyright 2020. E&E News provides essential news for energy and environment professionals at www.eenews.net.