california

By Lee Vail

New projects require air permits and projects at major stationary sources that will emit (or increase) a significant amount of a regulated NSR pollutant, must conduct a control technology review.  In order to receive a permit, the applicant must determine the level of control considered Best Available Control Technology (“BACT”) and the permit issuing authority must agree.  This has been the rule for a long time and nothing is new.

As it relates to greenhouse gas (“GHG”) emissions, facilities that have a significant increase of a non-GHG and a significant increase in GHG must conduct a GHG BACT review.  Typically these reviews conclude that add-on controls, such as Carbon Capture and Sequestration (“CCS”), are infeasible. As a result, BACT may be a combination of good-engineering/good-combustion practices, low carbon fuels, or an emission limit.  The lack of feasible add-on controls is typically based on the high associated cost, the lack of controlling legal mechanisms, and the dearth of actual experience.  California has started a process that may start to address the last two issues.  As for the excessive cost of CCS, that will likely remain.  However experience usually results in some reduction of cost.

A little over a year ago, The California Air Resource Board (“CARB”) initiated a series of public workshops[1] with the goal of better understanding of “the ability of CCS to contribute to climate goals, the limitations or advantages of the technology, and the innovation and incentives necessary for adoption.”[2] Six additional “Technical Meetings” have occurred since that time and on May 8, 2017, CARB conducted a public workshop where CARB staff presented “an initial concept of a Quantification Methodology (QM) and Permanence Protocol for CCS.”[3] CARB is signaling the intent to establish QM and permanence requirements into California’s Low Carbon Fuel Standard (LCFS) in the near term with possible inclusion into the California Cap-and-Trade (“C&T”) regulation sometime in the future.

Following the May 8, 2017 workshop, CARB has received multiple substantive comment letters.  Many of these comments were from industry groups that provided significant positive technical comments.  That said general concerns with the current proposal were expressed:

  • Inability of moving carbon dioxide from one well to another (i.e., reuse carbon dioxide used for enhanced recovery).
  • Post-closure should not prohibit future activity in an oil reservoir if it can be shown that carbon dioxide is not released.
  • Well construction (cemented to the surface) will not allow use of existing wells and may be counterproductive with leak monitoring and mitigation.
  • Inclusion of QM for C&T should occur expeditiously.

California has unique laws concerning GHG control that create incentives to investigate CCS as an add-on technology.  CARB’s development of protocols (and eventually regulations) is clearly intended to spur activity along CCS activity.  Whereas, non-California projects are not constrained with C&T requirements, prolific expansion of CCS in California may make the infeasible argument more difficult. Close attention should be paid to this process.

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[1] CARB, Carbon Capture and Sequestration Meetings, found at https://www.arb.ca.gov/cc/ccs/meetings/meetings.htm.

[2] Workshop Notice and Draft Agenda, from Elizabeth Scheehle, Oil and Gas and Greenhouse Gas Mitigation Branch, CARB (January 21, 2016); found at https://www.arb.ca.gov/cc/ccs/meetings/Workshop_Notice_1-21-16.pdf.

[3] Workshop Notice and Draft Agenda, from Elizabeth Scheehle, Oil and Gas and Greenhouse Gas Mitigation Branch, CARB (April 18, 2017); found at https://www.arb.ca.gov/cc/ccs/meetings/Workshop_Notice_5-8-17.pdf