Draft Summary of conference call Liability Working Group WRI ...

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Attachment I: Template of issues for state liability considerationRegulatory authority (who regulates what)Experience with CO2 injection - existingprojects, institutional capacity/resources toregulateSurface liability (damage to agriculturallands, residential, public safety)Subsurface liability (geophysical trespass,hydrocarbon damage, groundwatercontamination)Existing well abandonment regulationsExistence of insurance/indemnity bonds/feesfor plugging and abandonmentAccounting linkages (existing CO2regulations that may address liability directlyor indirectly)CO2 liability (state or private treatment)Existing monitoring regulationsCO2-EOR Saline EGRTexas California Wyoming Illinois Indiana Kentucky California Michigan Louisiana
Attachment II:Summary of CO2 Injection Liability Findings for WRIJune 29, 2006Follow is a bullet-point summary of our findings regarding potential liabilitiesrelated to the injection of CO2 for enhanced oil recovery (primarily using theanalog of water injection). We also looked at the broader question of potentialliabilities for any type of geologic sequestration of CO2.There are virtually no cases involving CO2 injection for oil recovery -- those thatexisted almost exclusively dealt with royalty disputes for oil/gas generated duringrecovery.We used Texas as a model. Comparable case law/regulations exist in otherStates.• Damage to subsurface freshwater resources (source: TX RailroadCommission regulations on gas/water injection)• Endangerment to oil, gas, or geothermal resources (source: TX RailroadCommission regulations on gas/water injection)• Waste of oil/gas due to injection -- due to migration into lands not used foroil/gas production (source: TX Railroad Commission regulations ongas/water injection)• Escape of injection material to areas outside the injection zone -- in Texas,this is sufficient grounds for denial of an injection permit (source: various)• Threat of wells as a pathway for other forms of contamination (improperabandonment, improper maintenance, etc.) (source: TX RailroadCommission regulations on gas/water injection)• Increased risk of seismic activity (source: hypothetical; several scholarlyarticles where carbon increases pressure on subsurface formations; case lawor regulations)• If CO2 is classified as a waste or hazardous substance, then injection as"storage," "dumping" or "release" would create numerous statutoryobligations and liabilities under laws such RCRA, CERLA and their Statecounterparts (source: statutory analysis of non CO2-laws)• Releases endangering human health (source: hypothetical -- naturallyoccurringCO2 release from African lake caused mass asphyxiation in 1995,often raised as source of concern)5
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