A Line In (And Under) The Sand

• Published date: 19 March 2024
• Subject Matter: Environment, Energy and Natural Resources, Energy Law, Environmental Law, Climate Change
• Law Firm: Bracewell
• Author: William A. Moss and James 'JJ' McAnelly

Carbon capture and sequestration, or CCS, is a prominent carbon removal technology that has the unique advantage of being favored by both government and industry. CCS has emerged as a favored tool to mitigate climate change due to its potential to capture and store anthropogenic carbon dioxide, or CO₂, into deep, subsurface reservoirs.¹ Unfortunately, it can also come with real property complexities.

As commercial-scale CCS projects are deployed, uncertainty in subsurface property rights and liabilities could stifle investment in, and the development of, this nascent industry.² For lawyers who advise those contemplating or currently engaged in CCS operations in Texas, liability related to operating CCS facilities is front of mind. One of these risks is the scope of liability associated with subsurface migration of the "plume" of injected CO₂ into lands that are not owned or controlled by the developer.

Due to the natural properties of the sequestered CO₂, once injected, the plume will migrate.³ Thus, the risk profile for any CCS project should properly account for migration, which could result in trespass and nuisance claims. Although some of these risks have been effectively managed in the context of oil and gas activities using CO₂ that are reliant on the mineral estate's dominance over the surface estate,⁴ none of these doctrines immunize sequestration operations from trespass liability associated with subsurface migration. As a result, the natural movement of sequestered CO₂ coupled with the fact that pore space is an interconnected matrix that is impossible to delineate with easily identifiable boundaries creates fertile ground for conflict.

In Texas, the right to inject and store substances in underground reservoirs generally belongs to surface owners. Specifically, "the surface estate owner, not the mineral estate owner, owns all non-mineral molecules of the land, i.e., the mass that undergirds the surface" estate,⁵ and "retains ownership and control of the subsurface materials...."⁶ While subsurface ownership is typically attributable to the surface estate, qualifications to this rule exist.⁷ In many instances, ownership rights to an underground reservoir are undivided and shared by numerous owners. When injected CO₂ migrates to where the pore space rights are not owned or controlled by the storage operator, this migration may constitute a trespass for which there may be liability. Once CO₂ is injected into a subsurface formation, the presence of the CO₂ can impede or preclude "competing" uses of the pore space, such as oil and gas extraction, natural gas storage, or waste disposal. Understanding the trespass risk associated with the subsurface migration of sequestered CO₂ and ways to mitigate that risk are essential to lawyers involved in the development of Texas' CCS industry.

Identifying the Risk

"At its core, a trespass to real property is an unauthorized entry upon the land of another, and may occur when one enters—or causes something to enter—another's property."⁸ Liability for a...