Texas just took a major step towards an energy expansion. Earlier this week the Railroad Commission of Texas (RRC) voted to approve rules for the state’s permitting and regulation of carbon capture and underground storage, also known as CCUS. These rules are needed for the Commission’s implementation of House Bill 1284 passed in 2021, which assigned CCUS regulation to the RRC.
Carbon capture represents an integral component of Texas’ energy expansion. Just as oil and gas will continue to play an integral role in our state’s economy and nation’s security, our state policy should encourage the expansion of our energy portfolio to include technologies and industry segments that both generate more power and reduce emissions. These include hydrogen energy as well as an expanded renewable portfolio of geothermal generation, nuclear power and CCUS. Thanks to the Railroad Commission’s leadership, Texas now has a regulatory framework for CCUS project permitting.
In addition to the benefit of regulatory certainty, the CCUS rules adopted by RRC include several recommendations submitted by Texas 2036 earlier this summer aimed to improve clarity and program transparency. These adopted recommendations include:
- Defining key terms to ensure clarity throughout the rule and consistency with federal law authorizing tax credits for CCUS.
- Requiring that permit documents for CCUS projects identify the source(s) of CO2 that will be captured by the project. This requirement will ensure the collection of data on where carbon emissions for sequestration projects are coming from, enabling state regulators, policymakers, industry and the public to measure advancements in carbon sequestration strategies.
- Posting permit data and draft permits for carbon capture facilities on RRC’s website. This change will allow the public and policymakers to understand both where and how CCUS projects will work to remove carbon emissions in Texas.
Now that the Commission has adopted these rules, the agency will soon apply to the U.S. Environmental Protection Agency for jurisdictional primacy for permitting CCUS projects under the U.S. Safe Drinking Water Act. While federal review of RRC’s application is expected to take a significant amount of time, the EPA has already approved underground carbon capture permitting programs in North Dakota and Wyoming. And earlier this year the first underground carbon sequestration project permitted by North Dakota began operations.
Hopefully, with the incentives for carbon capture and sequestration included within the recently-passed U.S. Infrastructure Investment and Jobs Act and the U.S. Inflation Reduction Act, the EPA will move on RRC’s application for regulatory primacy sooner rather than later.
If the EPA approves RRC’s application, we can expect Texas to become a national leader in carbon capture and sequestration. A recent report released by Texas 2036 and the Center for Public Finance at Rice University’s Baker Institute for Public Policy found that Texas’ industry concentration, geology, pipeline infrastructure and energy workforce makes it the ideal state for CCUS to grow and flourish. Just as Texas is the nation’s energy production leader, we’re well positioned to exhibit that role in the area of CCUS.