D.C. court rejects carbon capture and storage litigation

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The U.S. Court of Appeals threw out litigation challenging EPA treatment of certain carbon dioxide meant for injecting underground in carbon capture and sequestration applications due to lack of legal standing by those challenging the policy.

The D.C. Circuit ruled June 2 that the Carbon Sequestration Council, Southern Co. Services, and the American Petroleum Institute (API) lack standing to challenge EPA’s conclusion that supercritical CO2 streams injected into “Class VI” wells for the purpose of geologic sequestration constitute “solid waste” subject to the Resource Conservation and Recovery Act (RCRA).

“Because we find that Petitioners have no standing to pursue this challenge, we dismiss for want of jurisdiction,” the three-judge panel for the D.C. Circuit said in its decision.

The Southern Co. affiliate specifically “has failed to allege that it uses or intends to use any Class VI wells,” the court said. “Rather, it captures and compresses carbon dioxide either for use in enhanced oil recovery or in Class V experimental wells,” the court held.

The Kemper coal gasification power plant that a Southern utility is building in Mississippi would capture CO2 for use in enhanced oil recovery.

Southern Co. Services provides regulatory and engineering services for its corporate family, which delivers energy-related services, including electric power, in the states of Alabama, Georgia, Florida, and Mississippi.

Southern’s corporate family provides supercritical CO2 from several of its plants for geologic sequestration demonstration projects being conducted by the Department of Energy (DOE).

Much of the captured carbon dioxide from the plants is injected into Class V wells, which are authorized for testing experimental technologies such as those involved in geologic sequestration.

Southern’s corporate family also plans to capture carbon dioxide for use by other companies in enhanced oil recovery (EOR) and for “other commercial uses.”

“The disputed rule addresses only streams injected into Class VI wells for the purpose of geologic sequestration, which are not mentioned in Southern’s affidavit supporting standing,” the appeals court said.

“There is no evidence that Southern operates or plans to operate Class VI wells, or that any of Southern’s business activities are covered by this rule,” the court said in the decision.

“Southern Co. is evaluating today’s decision by the U.S. Court of Appeals to determine its impact on our utilities ability to provide clean, safe, reliable and affordable power to the customers we serve using emerging technology,” said a Southern spokesperson.

“EPA has stated that it “considers [supercritical carbon dioxide streams] to be a solid waste” only “[o]nce the decision is made that the supercritical [carbon dioxide] stream will be sent to a . . . Class VI well for discard,” the court held.

An affidavit from a Southern geologist contended that EPA’s solid waste determination injures Southern by requiring it to incur costs to determine whether its CO2 streams are hazardous.

EPA is authorized to regulate “solid waste,” which is defined, in part, as “discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations.

To prevent any danger from underground injection of fluids, EPA has promulgated regulations creating “classes” of underground injection control wells.

While the Class VI well is meant to receive carbon dioxide streams for geologic sequestration, EPA clarified in the rule that the wells could not receive “any carbon dioxide stream that meets the definition of a hazardous waste under” RCRA.

“The agency thus made clear that the Class VI rule did not provide an answer to the question whether geologically sequestered carbon dioxide streams are either solid or hazardous waste,” the court said.

Petitioners do not contest the portion of EPA’s rule that creates a conditional exclusion from the hazardous waste definition. Instead, Petitioners challenge only EPA’s determination that supercritical carbon dioxide streams injected into Class VI wells are “solid waste,” the court said.

When fluid “solid waste” is injected into underground wells, that waste may be subject to regulation under both the Safe Drinking Water Act and RCRA, the appeals court noted.

In 2010, acting pursuant to its authority under the Safe Drinking Water Act, EPA promulgated a rule creating the new “Class VI” well, and prohibiting the injection of hazardous RCRA “solid waste” into such wells.

Class VI wells are designated to receive carbon dioxide streams generated as part of a climate change mitigation program known as carbon capture and storage (CCS). Because the compressed CO2 fluid is injected underground it is subject to Safe Drinking Water Act regulation, the court said.

On Jan. 3, 2014, EPA issued a final rule in which it determined that supercritical carbon dioxide injected into Class VI underground wells for purposes of geologic sequestration is “solid waste” within the meaning of RCRA.

EPA also determined that the geologically sequestered streams constitute “discarded material” within the meaning of the statute because they are injected underground with the express intention of isolating them from reentry into the atmosphere, even though they could, theoretically, be extracted and reused in the future.

The case, Carbon Sequestration Council, Southern Co. Services and others versus EPA, No. 14-1046, was argued March 26. Senior Circuit Judge Harry Edwards drafted the opinion for the court.

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