Friday, February 29, 2008

Legislature passes carbon storage bill

House Bill 89 passed the full Senate on third reading and now goes to Gov. Freudental for his signature.

The bill makes surface landowners the owners of the geological structures underground where greenhouse gases may be sequestered. In Wyoming, this would be the carbon dioxide produced when our coal is burned in a power plant. The plan is to inject the CO2 into so-called underground pore spaces until we can figure out what to do with it.

I am glad to be the legal owner of my pore spaces. I doubt if they'll be needed in the battle against global warming, as they're located beneath my residential lot in Cheyenne. The nearest power plant is about 30 miles away in Colorado. The nearest Wyoming power plant is about 80 miles away, north of Wheatland. These plants will be looking for closer pore spaces than mine. But first, they have to be retrofitted with carbon capture technology which still is in the development stage.

Kudos to the Wyoming Legislature for planning for the future. It's fitting that yesterday legislators heard from EU Ambassador to the U.S. John Bruton. The main topic was coal, and how the EU will need it for its future energy needs. The EU has committed to reducing greenhouse gases drastically by 2020. Carbon sequestration is the way to do it. Bruton noted that money is a major issue, as adding carbon sequestration equipment to power plants increases costs 30-40 percent. He asked the Legislature: "How are you going to bridge that financial gap?"

A good question for us all.


jhwygirl said...

How does this work if you don't hold the mineral rights to your property?

Are you able to charge the mineral rights holder, should they choose to exercise their rights, for the value lost in the CO2 sequestration potential?

What if you don't want to?

This couldn't have been a move to slow down mineral extraction...

Or do I have this all whack?

Michael Shay said...

I'm not the one to know if you have this whack or not. I've been corresponding with a law student at the University of Wyoming who contends there are some big legal ramifications in all this which I don't pretend to understand. Maybe he'd care to comment?

Jason said...

Hey Mike,
In your post today you said your glad you own the pore space under your land. I assume you own all legal interests in your property. The problem of pore space ownership arises when there is a severance of property rights. Let's say you have coal or oil under your property. Being that you are neither in the coal or oil drilling business, you allow a company to purchase the mineral rights to your property. You have severed your property into two separate interests, the surface interest (where your home is) and the mineral interest (where the companies coal is now). The Wyoming Legis. adopted the American rule. The bill essentially codified the commonlaw rule, that surface owners retain the right to the geologic formation once all minerals are extracted. So once the coal company finishes their excavation, the pore space below is now yours. In my Law Review note, I plan to disagree with following the American Rule. There is an English Rule, followed in Canada and England, which states that the mineral interest holder maintains the rights to the underground storage space, even once all minerals are gone. One of my principal arguments is that the English Rule is better for public policy reasons. Under the American Rule, all economically viable minerals must be extracted prior to the interest being retained in surface owner. I could foresee companies stalling in extracting all the minerals because while perhaps at this time they can not reach all the viable coal, tomorrow when a new technology is discovered, they will be able to extract more. Additionally, when the company is required to extract all minerals before reversion, I could also foresee the company disregarding the integrity of the geologic formation. The company would do anything and everything to extract the minerals without care that the future use of the formation will be used for geologic carbon sequestration. Aggressive mining activities could leave a potentially great geologic formation completely unusable if the formation integrity is destroyed.
I apologize for my rantings, I have been working on this large paper for several months now. Your blog has informed me of the actions of the Wyoming legislature, and I plan on adding a discussion of the legislatures decision in my paper.
Michael, I am actually a law student at Vermont Law School. Sorry for the confusion, I should have been more specific.

kelly said...

Hey fellow law student I am looking for authority on which states follow which rule. Specifically, I want to know whether Texas and California follow the American Rule. Can you help me out?