Carbon Capture Sequestration Utilization And Storage Projects And US Federal Environmental Laws

• Published date: 25 April 2022
• Subject Matter: Environment, Energy and Natural Resources, Environmental Law, Oil, Gas & Electricity, Clean Air / Pollution, Water
• Law Firm: Mayer Brown
• Author: Ms Lauren A. Bachtel, Emily M. Gleichert, Philip K. Lau, Eric Pogue and Dale D. Smith

Carbon capture, sequestration, utilization, and storage (CCUS) will be essential in meeting the Biden administration's net zero GHG emission goals, as the chair of the White House Council on Environmental Quality (CEQ) acknowledges that "[t]o reach the President's ambitious domestic climate goal of net-zero emissions economy-wide by 2050, the United States will likely have to capture, transport, and permanently sequester significant quantities of carbon dioxide." 87 Fed. Reg. 8808 (Feb. 16, 2022). Congress and the Biden administration have taken actions to support CCUS deployment. With the bipartisan Infrastructure Investment and Jobs Act (IIJA), Congress signaled strong interest in accelerating CCUS as a national decarbonization strategy by providing billions of dollars of new investments to support the industry. Building on this strategic commitment, CEQ recently issued new guidance on the responsible deployment of CCUS technologies, including direction on incorporation of environmental justice and equity considerations, meaningful public engagement and Tribal consultations, and support for union-job creating projects. Additionally, the Environmental Protection Agency (EPA) is developing proposed rule revisions to improve transparency on CCUS activities, the Department of Energy (DOE) is committing $5 million for university training and research related to carbon management, and the Federal Permitting Improvement Steering Council is facilitating a collaborative CCUS project review among its member agencies.

Nonetheless, CCUS projects still face several regulatory obstacles in the United States. There are no CCUS-specific federal environmental laws or regulations, but instead the precise mix of environmental permits and reviews needed for a particular project must be determined by the project-specific details. Below we highlight some of the major federal environmental laws that may apply to CCUS projects.

• National Environmental Policy Act (NEPA) - NEPA requires federal agencies undertaking a "major Federal action" to evaluate the environmental effects of the action The policy goals of NEPA are achieved through "'action-forcing' procedures that require that agencies take a 'hard look' at environmental consequences." Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989). CCUS projects with a federal nexus (e.g., federally funded or occurring on federal lands) may trigger NEPA. CCUS projects in the United States may receive federal funding, whether they are in development or fully operational. NEPA is triggered if federal funding involves significant federal...