Although Texas is probably at the polar opposite from California in recognizing and passing state legislation to address climate change, the State is very much behind promoting carbon capture and storage (or sequestration) (CCS). Texas stands to gain as much as any state if carbon capture and storage becomes a real industry.
Carbon dioxide (CO2) can be used to enhance oil recovery from depleted oil fields and to extract methane from deep coal seems. Texas has plenty of both.
It is not surprise then that the Texas legislature is considering a number of bills addressing CCS. Last Wednesday, both the House Environmental Regulation Committee and the House Energy Regulation Committee heard testimony on four such bills (HB 469 and HB 2811 in Energy Resources; HB 1796 and HB 2669 in Enviro. Reg.).
The testimony regarding the CCS bills was very positive from both the regulated community and from environmental groups. The federal government is looking to Texas to lead the way in this area because of our highly-developed oil and gas laws and vast underground storage capacity. Entrepreneurs and local government leaders testified about the economic potential for CCS, while environmentalists and the EPA testified about the benefits to the environment that CCS would have. It is amazing in the State of Texas that industry and environmentalists can agree on anything. They usually do not.
Hearings on four CCS bills have been conducted so far. None of these bills have been voted out of committee. Descriptions of these bills are provided below:
HB 469 - This bill provides state tax incentives for coal-fired electric generating companies that sequester CO2, and for oil companies that use CO2 from coal-fired electric generating companies for enhanced oil recovery projects.
HB 1796 - This bill authorizes the TCEQ to adopt rules regarding the location, construction, maintenance, monitoring, and operation of offshore deep subsurface geologic repositories for the storage of carbon dioxide, and for a pilot study of state-owned offshore land to identify potential locations for a carbon dioxide repository.
HB 2669 - This bill divides jurisdiction for CCS between the Texas Commission on Environmental Quality (TCEQ) and the Railroad Commission (RRC). The TCEQ would have primary jurisdiction with the RRC having jurisdiction under some limited areas.
HB 2811 - This bill provides the authority for the allocation of matching state funds for projects involving certain electric generating plants that sequester CO2. The bill also authorizes a grant and loan program to accelerate the commercialization of technologies for the control of air contaminant emissions by electrical power generating facilities, including the capture, transport, and storage of carbon dioxide.
The Texas Railroad Commissioner, the agency that regulates the oil and gas industry in Texas, has been very outspoken about the opportunities for CCS in Texas and he is promoting the business. Stay tuned as Texas may be adding significant incentives for the CCS business in this legislative sessions.
