international conference on ccs: session 3.1 - ms. alexandra malone

8/6/2019 International Conference on CCS: Session 3.1 - Ms. Alexandra Malone

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Addressing Legal and Regulatory Barriers:Examples from the United Kingdom and Canada

Alexandra Malone

Carbon Capture Legal Programme

University College London

International Carbon Capture and Storage Conference28 - 29 July 2011


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Overview

Key challenges remain for regulating CCS projects

Jurisdictions are taking action to develop legal

frameworks to address barriers to deployment Two leading examples:

Alberta, Canada

United Kingdom Outstanding issues


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Key Challenges for Regulating CCS

Long-term liability

Pore space ownership and use

Financial security for post-closure stewardship

Carbon capture readiness


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CCS in Canada

Federal and provincialgovernments both have a rolein CCS regulation

CCS projects most advanced in WesternCanada - various capture sources (power and

industrial) Onshore storage in saline formations and depleted

hydrocarbon reservoirs (with enhanced recovery)


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Alberta: CCS Policy Context

CCS is a key part of Albertas climate change andenergy strategies

Mandatory intensity-based GHG reduction targetsintroduced in 2007

CAD 2 billion in provincial funding allocated tofour projects to be operating by 2015


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Alberta: CCS Regulatory Framework

Existing regulatory frameworks from the oil andgas sector provide a basis for regulating CCS

Mines and Minerals Act Oil and Gas Conservation Act

CCS Statutes Amendment Actintroduced in 2010

Provides a legal framework for permitting CO2 storage

Addresses key areas of legal uncertainty


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Pore space ownership

Legislation clearly vests ownership of all pore space in

the provincial government Prior to 2010, ownership of pore space was unclear

potential holdout issues from private mineral owners

Carbon Sequestration Tenure Regulation (2011)

Details elements of evaluation permits, sequestrationleases, and MMV plans

CO2 injection must not interfere with oil and gasproduction or existing use of underground formationfor oil or gas storage


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Long-term liability

Provincial government will accept liability for CO2

storage projects once closure requirements have beenmet

Province assumes statutory liability

Province indemnifies operator from third party actionsin tort



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Financial security for post-closure stewardship

Post-closure stewardship fund established for CCS

projects Funds may be used for post-closure monitoring,

statutory liabilities, orphaned facilities

Cannot be used to cover governments indemnityobligations

Contribution amount to be determined


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RegulatoryFramework Assessment

Process to examine existing environmental, safety and

assurance processes for CCS Identify gaps and implement new processes to support

commercial deployment

Led by an expert panel and steering committee

F

our working groups:R

egulatory,E

nvironmental,MMV, Geological/Technical

Report back to government in Fall 2012


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CCS in the United Kingdom

UKand Scottish governmentsresponsible for CCS regulation

Capture from coal- and gas-firedpower plants

Offshore storage in salineformations or depleted hydrocarbon

reservoirs (potential for enhancedrecovery)


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UK: CCS Policy Context

GHG reduction objective: 80% by 2050 withinterim targets

Decarbonization of electricity by 2050 CCS recognized as a key mitigation option for

fossil fuels

UKto provide GBP 1 billion to first demonstration

project; committed to fund 3 additional projects

Numerous consultations on CCS policy since 2007


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European Union: CCS Legal Framework

EU Directive on the geological storage of CO2adopted April 2009

Applies to CO2 storage within a Member Statesterritory, exclusive economic zone, andcontinental shelf

Risk management framework for ensuring

environmentally safe storage of CO2 Member States must transpose into national laws

by 25 June 2011


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European Union: CCS Legal Framework

CCS Directive addresses many key issues

Carbon capture readiness requirements

Long term liability (environmental and climate) Financial security for post-closure stewardship

Third party access to transport and storage

Environmental impact assessment

MMV


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UK: CCS Regulatory Framework

Key legal instruments:

Energy Act 2008

Storage of CO2 (Licencing etc.) Regulations 2010Storage of CO2 (Termination of Licences) Regulations

2011

Third party access regulations pending

Establish licencing regime for exploration andstorage and create enforcement measures


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Capture ready:

All combustion plants >300 MW must meet captureready requirements

Pore space ownership and use:

Offshore property vested in the Crown for the purpose

of gas storage Priority to oil and gas production and gas storage


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Long-term liability:

Termination of licence after 20 years (can be less) ifclosure conditions are met

Transfer to UKgovernment of obligations formonitoring, corrective measures, preventative andremedial actions, surrender of allowances

Transfer to UKgovernment of any liabilities, future or

present, arising from leakage from the storage site

Costs recovered from operator if there is fault on its part


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Financial security for post-closure stewardship:

Operator must provide a financial contribution to theUKgovernment prior to transfer of responsibility

Amount must cover at least the monitoring costs for 30years after transfer

Non-binding guidance for determining amount ofcontribution provided byEuropean Commission


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Outstanding Issues

Alberta

Liability regime no link to climate liability

No third party access provisions No preferential rights when granting storage leases

UK

Difficulty estimating financial security for post-closure

costs Compliance with requirements to prove CO2

containment before transfer of liabilities


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[email protected]

For more information:

www.ucl.ac.uk/cclp

Thank you for your attention!


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Useful Resources

Alberta

http://www.energy.alberta.ca/Initiatives/1438.asp

European Union

http://www.ucl.ac.uk/cclp/ccsdedlegstorage.php

http://ec.europa.eu/clima/policies/lowcarbon/ccs_en.htm

United Kingdom

http://www.ucl.ac.uk/cclp/ccsdedlegnat-UK.php

http://www.decc.gov.uk/en/content/cms/emissions/ccs/ccs.aspx

international conference on ccs: session 3.1 - ms. alexandra malone

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