Governor Supports GOP Carbon Storage Bill

By Beacon Staff

HELENA – The last surviving bill to set rules governing carbon dioxide storage is being considered by a House committee, along with 54 possible amendments — one of which deals with the controversial issue of who owns the underground storage areas.

Sen. Keith Bales, R-Otter, presented his bill Monday with an amendment giving ownership of the underground domes used for storage to surface landowners.

Democratic Gov. Brian Schweitzer had threatened a veto if Senate Bill 498 did not define who owns what is known as pore space. His office is now supporting the measure.

“Montana has more coal than any other state in the nation and if we are ever to be able to utilize any of that I think we must move forward now in a proactive way,” Bales told members of the House Federal Relations, Energy and Telecommunications Committee.

The bill seeks to establish a preliminary regulatory framework for the process of storing carbon dioxide thousands of feet underground in deep sandstone or basalt formations that have been identified in northeastern Montana.

The House Committee will vote on the measure Wednesday, after which it may move to the House.

Many scientists have linked carbon dioxide, a major greenhouse gas, to climate change. The burning of fossil fuels, such as coal and oil, has led to increasing levels of the gas in the earth’s atmosphere, stoking concern about rising temperatures, droughts and sea level rise among world leaders.

Carbon sequestration is considered a potential method for stemming these increases, although it would have to be paired with a technology for capturing the gas at large emissions sources, such as a coal-fired power plant.

Bales has worked to fine-tune his bill with Sen. Ron Erickson, D-Missoula, and Rep. Mike Phillips, D-Bozeman, both of who sponsored carbon-storage legislation this session that has failed.

Erickson appeared during Monday’s committee hearing to offer his support for the bill. However, he would like to see it amended to give elected leaders final approval over whether the state assumes liability for a storage site.

The bill currently places that decision with the state’s Board of Oil and Gas, which would have general regulatory authority over the storage of carbon dioxide in Montana if the bill becomes law.

Under the measure, storage operators could turn over liability to the state after 20 years of closure, as long as the site has no problems, such as gas leakage or migration. Carbon-storage permit holders would pay a fee per ton of carbon dioxide buried to cover any future costs to the state associated with managing the storage site.

The state’s natural resource industries have lined up to support Bale’s bill, with representatives from PPL Montana, Rio Tinto Energy America and the Montana Petroleum Association all testifying in its favor.

Environmentalists, though, say the fees and liability period provide Montanans with inadequate protection from the potential tax burdens and environmental hazards that could accompany carbon dioxide storage. They also criticize giving the Board of Oil and Gas authority over the new industry.

“Putting the board in charge of carbon sequestration is a classic case of the fox guarding the hen house,” said Matt Leow, spokesman for the Northern Plains Resource Council.

Others argue that the energy industry — and energy regulators — are likely to spearhead carbon sequestration in the U.S. as the gas is increasingly used for enhanced oil and gas recovery operations in deep wells.

Burying carbon dioxide deep below the earth’s surface has not yet been tested on a large scale in the United States. But many expect it could be a profitable enterprise if Congress were to launch a cap-and-trade system for emissions.

Wyoming, North Dakota and other states have also been working on their own legislation to outline how carbon storage should be regulated. In the end, though, final approval will have to come from the U.S. Environmental Protection Agency, which does not expect to finish defining its rules until 2011.

Confronted by 54 amendments and a complex topic, Committee Chairman Art Noonan, D-Butte, said he does not know what will happen when members vote on the bill Wednesday.

“When you have a decision of this consequence show up with this many amendments, it makes me a little skeptical that we have not in fact cooked this piece of legislation longer,” Noonan said.

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