S. 1502 Carbon Storage Stewardship Trust Fund Act of 2009

1. S. 1502Carbon Storage Stewardship Trust Fund Act of 2009 Presented to Washington Coal Club September 9, 2009 Tom Feeley Chris Tomassi

2. S. 1502 • Introduced by U.S. Senators Bob Casey (D-PA) and Mike Enzi (R-WY) on July 22, 2009 • “New technology holds great promise for job creation and a cleaner environment,” said Senator Casey.  “This bill will encourage the commercial deployment of technology that will allow for the continued use of our Nation’s vast coal resources to produce economical and reliable power while at the same time mitigating the impact of climate change.” • “Coal will continue to fuel the nation and this bill will help coal move into a new era of production. Carbon sequestration could provide endless possibilities for Wyoming coal and decrease our dependence on foreign oil,” said Senator Enzi. 

3. S. 1502 - Background • Carbon capture and storage (CCS) is key component of both U.S. and international policy to reduce global emissions of carbon dioxide while allowing for the continued use of coal.   • The commercial viability of CCS will require further advancement of technology as well as thoughtful approach to addressing non-technical issues such as long-term liability of carbon storage.   • A program for managing the financial risk, or liability, of the long-term storage of CO2 is needed that offers private sector framework for managing legal and financial responsibilities for commercial carbon storage operations and that provides strong incentive to industry to reduce risk by deploying carbon sequestration in the safest possible manner.

4. S. 1502 -- Purpose • Removes major barrier to private investment in carbon capture and storage by providing liability framework that will encourage firms to invest in CCS but that will not relieve private sector of the responsibility for ensuring that best practices are followed.

5. S. 1502 -- Summary • Specifically, the Act would: • Require private liability assurance for geological storage facility CO2 injection, well plugging, site abandonment and post-closure monitoring; • Establish a Federal trust fund from fees paid by commercial CO2 storage facility operators that will be used to pay for claims for damages made after storage facility stewardship is transferred to Federal government; • Requires private CO2 storage facility operator to receive closure certificate prior to transferring site stewardship and liability to the Federal government; • Convey post-closure, long-term stewardship of stored CO2 to the Federal government or State upon receipt of certificate of closure; and • Provide for prompt and orderly compensation for damages or harm from the transport, injection and storage of CO2 in geological storage units.

6. Covered by H.R. 1502 Long-term Stewardship Active Phase – Private financial assurance Payment of trust fund fees Government Managed Trust Fund Facility permitting/ construction CO2 injection/storage Well capping Monitoring/remediation Monitoring/remediation Time Receipt of certificate of closure

7. S. 1502 – EHR Provision • Secretary of Energy shall determine most appropriate approach for fee for enhanced hydrocarbon recovery (EHR) operations: • Whether or not EHR is operated as carbon storage facility; • Amount of CO2 that is permanently stored; and • Other factors that Secretary deems appropriate

8. S. 1502 – Key Features • No Federal subsidy for program • Requires private-sector assurance vehicle during active phase of storage • “Risk-based” fee structure • Encourages best practices in siting and operation of CO2 storage facilities • Focus on environmental protection and public welfare