The signatory states of the CO2 Transport Infrastructure Memorandum of Understanding (MOU) have released a Regional Carbon Dioxide (CO2) Transport Infrastructure Action Plan which includes potential policies for states to consider to facilitate carbon dioxide (CO2) transport and storage project deployment. The MOU and Action Plan were developed as part of state engagement in the Regional Carbon Capture Deployment Initiative.

The Regional Carbon Capture Deployment Initiative is staffed by the Great Plains Institute and contains a network of 25 states, and growing, that work together to help ensure near-term deployment of carbon capture projects that will benefit domestic energy production, reduce carbon emissions, and protect and create high-wage jobs. The Initiative provides unique and valuable opportunities for governors, state officials, legislators, and stakeholders to engage at the state, regional, and national levels.

State collaboration and plan development

Eight states—Kansas, Louisiana, Maryland, Montana, North Dakota, Pennsylvania, Oklahoma, and Wyoming—entered into an MOU in October 2020 and committed to establishing and implementing a regional CO2 transport infrastructure action plan.[1] Over the past year, states hosted a series of educational webinars engaging stakeholders and industry experts on CO2 transport infrastructure and geologic storage. The webinars are outlined in the plan and covered the following topics:

• Webinar #1
  • Overview of Regional Deployment Initiative Modeling Results
  • Stage-Setting for Future Analysis
  • Overview of Federal Policy Landscape
  • SCALE Act & Infrastructure Opportunities
• Webinar #2
  • Alberta Trunk Line Project Overview
  • Wyoming Pipeline Corridor Initiative Overview
• Webinar #3
  • Class VI Update
  • Carbon Capture Announced Projects
• Webinar #4
  • Legal Liability and Pore Space
• Webinar #5
  • Class VI Program, Permitting & Primacy

Following the webinar series, the MOU signatory states began the collaborative process of drafting the Action Plan. Kris Carter, assistant state geologist for the State of Pennsylvania, emphasized the need for the infrastructure plan, stating, “We know that adoption of low-carbon and renewable energy resources cannot alone decarbonize our economy by midcentury; integrated infrastructure that connects carbon sources with sinks is necessary to decarbonize the country’s industrial and power sectors.”

Regional CO2 transport infrastructure MOU Action Plan

The Regional Carbon Dioxide (CO2) Transport Infrastructure Action Plan provides various state and regional policy recommendations to facilitate carbon management project deployment. Broadly, signatory states stress policy efforts needed to incorporate CO2 transport infrastructure and geologic storage into federal infrastructure legislation and measures for federal financing. They further suggest supportive state policies for CO2 transport infrastructure buildout and provide options for future collaborative carbon management work between states.

Federal recommendations and support

The signatory states urge lawmakers to consider key pieces of bipartisan legislation to help finance the buildout of regional CO2 transport and storage networks and provide a suite of federal recommendations, including

• a direct pay option,
• enhancing 45Q credit values,
• eliminating annual carbon capture thresholds, and
• robust funding for commercial-scale pilot and demonstration projects.

Discussing this need for federal action, Mark Gordon, governor of Wyoming, described how federal action on carbon capture is critical to address CO2 emissions and to meet the current administration’s climate goals: “Carbon capture is vital to Wyoming as we strive to reduce CO2 emissions and maintain the use of fossil fuels, particularly coal. As I have often said, burning coal is not the issue, the release of CO2 is the issue. Carbon capture will address the release of CO2. This updated MOU identifies a suite of measures for federal and state consideration to keep carbon capture projects moving forward. The Biden Administration cannot meet its climate goals just by implementing bans on federal oil and gas and wide scale wind, solar and battery proposed projects. Carbon capture has to be a widely available option.”

Signatory states also recommend federal support for the Underground Injection Control (UIC) Class VI program at the federal and state levels, regulations and a path forward for using Federal Lands and Offshore Resources, and disclosure and possible enhancement of safety programs for carbon management projects.

State recommendations

The Regional Carbon Dioxide (CO2) Transport Infrastructure Action Plan “provides regulatory policy, financial incentives, and market development recommendations based on the experiences of the eight signatory states,” explained Carter.

Regulatory policies and planning play a pivotal role in supporting carbon management projects and related infrastructure. “States play a critical role in carbon management efforts in research and development of statutory and regulatory policies,” emphasized Ken Wagner, secretary of energy and environment for the State of Oklahoma.

Signatory states stress that regulatory certainty helps the private sector proceed with project deployment decisions and provides options for greater assurances. Underscoring the importance of this certainty, Wagner stressed that State collaboration “enables partners to better understand how to establish and secure proper management of carbon,” making cooperation necessary for viable carbon reduction.

The Action Plan also outlines financial incentives that states can offer. Financial incentives, particularly those that complement 45Q tax credits, can increase investments and the feasibility of carbon management projects. Remarking on these incentives, Jason Lanclos, director of the energy office for the State of Louisiana, noted, “It is critical that we do all we can to incentivize the private sector to take advantage of CCS [carbon capture and storage] opportunities.”

Signatories also describe the importance of market development for low– and zero-carbon industrial products, providing examples of market initiatives to increase developer and investor confidence. Lanclos stressed that states need to “coordinate their efforts in getting the legal, financial and physical infrastructures in a posture that invites investment and participation by the private sector.”

Future work

Signatory states plan to continue working on carbon management policies and initiatives that support the deployment of CO2 infrastructure and geologic storage. The Action Plan describes potential future work that states believe will further incentivize regional and national buildout of carbon management projects. “This effort is not only a crucial investment in our economy in the near term, but in the environment we all share in the long term,” Lanclos emphasized.

Further discussing state collaboration following the release of the Action Plan, Doug Burgum, governor of North Dakota stated, “North Dakota hit the geologic jackpot, not only with abundant natural resources, but also with over 252 billion tons of underground storage capacity for carbon dioxide. Our opportunities are not limited to storage, however. Thanks to the investments in R&D from our industry and the Energy and Environmental Research Center at UND [University of North Dakota], we now know that we will need to import 10 times the amount of carbon dioxide we produce annually in order to fully leverage our opportunities for carbon-negative enhanced oil recovery. This will completely change our approach toward carbon, turning it into a valuable commodity. We have been happy to share our energy with our neighbors for years, and now thanks to this MOU, the groundwork is laid for North Dakota to also share in the opportunity for developing new markets for our nation’s carbon.”

This blog was originally published by Great Plains Institute.