EPA Drilling Regulations Remain Underrated Obstacle to Solving Global Warming
For heavy industries like steel and iron foundries, chemical and ethanol plants, oil refineries, and cement kilns, CCS — which involves capturing carbon emissions and storing them below the earth’s surface — is likely the only way to curtail emissions without off-shoring jobs or going out of business. Therefore, a sense of urgency is critical. Recent advances in air capture and soil capture are exciting, but these new technologies are immature and may not reach wide-scale use for decades.
What remains is CCS technology, which the oil and gas industry has used to enhance the recovery of oil for the past nearly 50 years. Each year, this technology already traps more than 60 million tons of carbon dioxide permanently underground, preventing it from entering the atmosphere and contributing to global temperature increases. Congress has incentivized industrial companies to invest in this kind of CCS technology through tax breaks, but companies still are running into problems. Of paramount concern is the Environmental Protection Agency’s oversight of the well-drilling that is the necessary prerequisite for storing CO2 underground.
The Environmental Protection Agency (EPA) has oversight authority over the Safe Drinking Water Act’s rules that protect the country’s 151,000 public water systems. In general, this oversight works pretty well, permitting thousands of industrial wells to be drilled every year with virtually no damage to underground sources of drinking water.
In 2010, the EPA created a new class of drilling category especially for geologic storage of CO2 on the presumption that there would be demand for the technology. Instead of streamlining the practice, however, the EPA created overly prescriptive rules, onerous reporting requirements, and unintended liability issues — all of which have led to costly lag times in project development. In nearly a decade since the EPA initiated these Class VI permits, fewer than 10 have been licensed, even though tax breaks were supposed to lower the investment risk for companies.
In 2011, Illinois-based Archer Daniels Midland applied for an EPA well permit to place 1 million tons of carbon dioxide into an underground saline aquifer. But the newness of the permit-type, combined with disagreements over long-term liability issues, meant the project took roughly six years to finalize. The Illinois project remains the only major attempt to sequester carbon deep underground; two other efforts in Montana and Kansas were derailed due to permit issues.
The ramifications of this status quo are disastrous. Currently, there are few more than 20 large-scale CCS facilities in operation or under construction around the world. In order to meet the requirements of the Paris Agreement — which require worldwide temperatures to keep from increasing more than 2 degree Celsius — oil company Royal Dutch Shell estimates that 10,000 large-scale carbon capture plants will be need by 2070. At the current pace, there is simply no way to catch up in time.
But there is a way forward, and Congress can make it happen. In the summer of 2005, Congress passed major legislation that included language devolving regulation of hydraulic fracturing from the EPA to the states. This, in turn, dramatically eased red tape and litigation risk to firms interested in fracking.
In the decade-plus since passage of the fracking exemption, U.S. oil and gas production has exploded well beyond what was originally thought possible — from 5 million barrels a day to almost 13 million barrels a day — while the country could become a net exporter of crude oil and oil products by 2020. Meanwhile, the boost in natural gas production has displaced coal use for electricity, causing U.S. emissions to fall more than 10 percent from their peak in 2005.
Under the right circumstances, a similar change can occur in carbon capture and storage. But regulators, in particular, must stop inhibiting industries most interested in capturing carbon for storage underground. After all, CCS is currently the only clean technology that can decarbonize major industry. The fracking analogy shows just how powerful targeted regulatory exemptions can be when solving major technological/environmental problems like climate change.
The maturation of CCS technology in the next several years is the most important missing piece to the puzzle of how to keep the planet form overheating without drastically undermining economic growth. Lowering the barriers for innovation and exempting geological storage wells from federal oversight is likely the fastest, best way to get there.
