This week marks the end of the Colorado Oil and Gas Conservation Commission and the beginning of the Colorado Energy and Carbon Management Commission (ECMC). Senate Bill 2023-285, which was signed into law May 22, 2023, expands the Commission’s regulatory authority beyond oil and gas development to include deep geothermal energy production (geothermal resources more than 2,500 feet below surface), underground natural gas storage, and carbon capture and storage.
SB23-285, effective July 1, 2023, still vests the ECMC with authority over oil and gas regulation. In the weeks and months to come, the ECMC will work with the state engineer to transfer deep geothermal permit and regulatory oversight to ECMC Staff.
Along with SB23-285, Senate Bill 2023-016, signed May 11, 2023, gives the ECMC authority over Class VI injection wells for sequestration of greenhouse gases if the Governor and Commission determine the state has sufficient resources to ensure safe and effective regulation of the sequestration process. Class VI injection wells (carbon capture utilization and storage wells) are currently regulated by the Environmental Protection Agency under the federal Safe Drinking Water Act.
The process for obtaining primacy over Class VI injection wells from EPA is extensive; however, Colorado is uniquely poised to effectively regulate CCUS in light of the significant regulatory changes made following enactment of Senate Bill 2019-181 (modifying the mission of the Commission under the Oil and Gas Conservation Act, C.R.S. §34-60-101 et seq.). Many key issues facing other states seeking primacy over Class VI injection wells are firmly part of the existing regulatory framework in Colorado, including but not limited to evaluation of cumulative impacts, residential setbacks, evaluation and consideration of Disproportionately Impacted Communities, and measures to avoid, minimize, and mitigate impacts to the public, environment, and wildlife. While an official decision has yet to be made regarding seeking primacy to regulate CCUS in Colorado, SB23-285 and SB23-016 serve as significant indicators that Colorado is likely to seek primacy over regulation of Class VI CCUS wells in the months to come.
Beatty & Wozniak, P.C. has and continues to work with clients on developing CCUS projects in Colorado and other states and will continue to collaborate with industry and regulators as ECMC oversight unfolds and expands into this and other areas.