Experts Back Giving States the Authority to Permit Wells for Carbon Capture

American Electric Power’s Mountaineer plant in New Haven, W.V., on Oct. 30, 2009. The plant was the world’s first to be fitted with carbon capture and sequestration technology. Saul Loeb/AFP/Getty Images

Federal agencies should cede primary permitting authority to states in classifying what wells are suitable for carbon sequestration and in regulating large-scale carbon capture projects, three experts told the Senate Environment and Public Works Committee on Feb. 12.

Since President Donald Trump signed the Utilizing Significant Emissions with Innovative Technologies (USE IT) Act into law in December 2020 authorizing the use of Class VI wells for geologic carbon sequestration, only eight have been permitted by the Environmental Protection Agency (EPA) while 161 are languishing in regulatory limbo.

“States are best positioned and suited to regulate this activity, and to be able to do so in a manner that’s more efficient,” said Kevin Connors, the University of North Dakota Energy and Environmental Research Center’s (EERC) assistant director for regulatory compliance and energy policy, noting the EPA acknowledged this when it created its Class VI well classification in 2010.

“One of the reasons is just a simple numbers game,” agreed Ground Water Protection Council (GWPC) Executive Director Dan Yates.

“Rather than one agency trying to manage wells for multiple states, having staff in your state, having management authority over the wells in your state,” he testified, would be more efficient in using “the overwhelming amount of knowledge that state staff have about the operations in their state.”

While Connors, Yates, and Breakthrough Energy Carbon Management U.S. Policy and Advocacy Manager Jack Andreasen Cavanaugh said federal agencies should step back in regulating wells for carbon capture, the three called on Congress to step up in ensuring allocations authorized for such projects through the Bipartisan Infrastructure Law are not ensnared in Department of Government Efficiency (DOGE) budget clear-cutting.

Cavanaugh testified that the Department of Energy’s Loan Programs Office has issued $69 billion in loan guarantees and $41 billion in conditional commitments that are incentivizing private investment in “the carbon management economy.”

He specifically cited Monolith’s $1 billion “conditional commitment” for a Nebraska carbon utilization project that could fall by the wayside without the federal government meeting its commitments.

“To put it succinctly, with a freeze, with a delay in these funds, the likelihood that these projects reach full operation is incredibly dubious,” Cavanaugh said.

Carbon capture, utilization, and storage (CCUS), is the process of capturing carbon dioxide from a large point source, such as a power plant or an industrial facility, and repurposing it as a secondary energy source or “sequestering” it deep underground to prevent it from filtering into the atmosphere, where it is the primary propellent for global warming.

The still-evolving process has not proven commercially viable yet, and critics argue it is a dodge by the fossil fuels industry to avoid emission controls and retain its market share against advancing renewable energy technologies.

Nevertheless, carbon capture has staunch bipartisan support at the state and federal levels. Twenty-five states adopted 88 bills earmarking $4.5 billion for CCUS development in  2024, according to the National Conference of State Legislatures’ CCUS page.

Senate Environment and Public Works Committee Chair Sen. Shelley Moore Capito (R-W.V.) said among her priorities is to retain authorized allocations and galvanize implementation of the USE IT Act, citing “significant problems with its implementation that have held back the deployment and the development of CCUS.”

The USE IT Act, originally co-sponsored in 2018 by Sens. John Barrasso (R-Wyo.) and Sheldon Whitehouse (D-R.I.), directs the EPA to support carbon utilization and direct air capture research by classifying CCUS projects and CO2 pipelines as eligible for permitting review under 2015’s Fixing America’s Surface Transportation Act.

The Midwest Carbon Express is a 2,000-mile web of carbon-capture pipelines proposed by Summit Carbon Solutions. Courtesy Summit Carbon Solutions

Take The Money, Leave The Regs

The bill requires the Council on Environmental Quality (CEQ) to establish guidance for CCUS projects and CO2 pipeline developers and operators, assemble task forces to garner input from different expertise groups, and expand the 45Q tax credit to provide certainty to utilities.

Capito said EPA under the Biden administration failed to achieve these benchmarks, noting that there’s no “clear pathway to expedite permitting for these projects,” the first CCUS task forces weren’t authorized until April 2024, and the agency approved only two Class VI well projects in the last four years.

Connor cited three reasons why the 45Q tax credit and USE IT Act have not accelerated CCUS development, including the cost of retrofitting utility-size electricity generation plants, costs associated with CO2 pipeline permitting—which almost always draw public opposition—and long lead times and delays in permitting Class VI storage projects at the federal level.

He said it can take four to seven years for EPA to issue a permit under the Class VI Underground Injection Control (UIC) program, the federal regulations that govern the injection of CO2 into deep underground formations, that North Dakota can process within eight months and Wyoming within a year.

“I hope you all can agree that this process is inefficient and must be improved. States are best positioned to regulate these activities” Connor said. “States have a broader framework to consider, in addition to the environmental protections offered by the Class VI rules, such as promoting the development of geologic CO2 storage.”

Sen. Pete Ricketts (R-Neb.), who served two terms as Nebraska governor before being elected to the Senate in 2022, said he knew of a Nebraska biofuels company that has been waiting 33 months for a permit EPA said it would deliver in less that 24 months.

“Maybe this is one of the reasons why other companies don’t jump in. If you’ve only got eight Class VI wells permitted and there’s 161 waiting, why would I jump in on this? Right?” he said. “EPA has got to get it going. This is just unacceptable.”

When it comes to CCUS—and to an array of emerging energy technologies—time is not just money, it is destiny, Connor said.

“To rise to this challenge, we need clear permitting regimes, funding, and public-private partnerships to deploy these necessary carbon management technologies,” he said. “If we do not deploy this technology, China will. China will enjoy the economic development, hundreds of thousands of jobs, and a healthier environment.

“The future, as always,” he added, “is a policy choice.”