Geologic Sequestration of CO2 and Class VI Wells in Texas

Carbon dioxide or CO₂ is a colorless, odorless gas produced when substances containing carbon - such as food, wood, or fossil fuels- react with oxygen (usually through burning) to release energy. CO₂ is also released by almost all human and animal life during breathing exhalation and used by plants in the process of photosynthesis. Through this process, plants convert CO₂ into food and release pure oxygen (O₂) as a by-product. CO₂ molecules consist of a single carbon atom bonded to two oxygen atoms—both elements being among the most abundant on our planet. Currently, CO₂ makes up roughly 0.04% of the Earth's atmosphere.

CO₂ has several consumer, industrial and commercial uses. It is found in fertilizers, food, carbonated soft drinks, medicine, electronics, metals and fire extinguishers to name several examples.

A Class VI well is a well used for the injection of CO₂ into deep underground rock formations for permanent storage, a process known as geologic sequestration.

CO₂ is typically transported safely to Class VI injection sites through pipelines. It is usually captured from “point sources” such as industrial facilities like petrochemical plants, oil refineries, cement plants, energy production operations such as ethanol plants, hydrogen production facilities, natural gas processing facilities and power plants, or captured directly from the atmosphere.

Contrary to what many people believe, CO₂ is typically not stored in large underground caverns, caves, or tanks. Instead, CO₂ can be stored deep underground in sedimentary rock formations composed of smaller sediment grains, such as sand or gravel. Additionally, depleted oil and gas reservoirs provide another option for storage due to their well-understood geological properties.

Selecting a suitable Class VI well location to inject CO₂ involves extensive geological and engineering studies to identify suitable underground formations that have the necessary depth, porosity, permeability, and containment characteristics for safe and permanent CO₂ storage.

A key benefit of Class VI wells is the safe and permanent sequestration of CO₂ emissions in geologic formations, which helps reduce the amount of CO₂ released into the atmosphere.

Companies adopt carbon capture technologies for several reasons: to help reduce greenhouse gas emissions, to prepare for future regulations and market demands and to benefit from available financial incentives, such as tax credits.

Companies using carbon capture and storage can benefit from federal tax credits under Internal Revenue Code Section 45Q. The credit amount varies depending on factors such as how the captured carbon was used, the type of qualifying capture equipment employed, and how it was captured. The savings can range from $17 to $180 per metric ton of CO₂ captured and sequestered. The Department of the Treasury’s March 2022 estimates that tax credits given out for Section 45Q will be $2.4 billion for the 2022-2026 five-year period and $30.3 billion from 2022 to 2032.

Currently, the Environmental Protection Agency (EPA) is the permitting authority for Class VI wells in Texas, although a separate state permit is also required from the Railroad Commission of Texas (RRC).

Throughout the duration of a Class VI project, the permitting authority is responsible for ensuring that:

• Class VI wells are sited and constructed to ensure Underground Sources of Drinking Water (USDW) are protected by considering project-specific information collected in the pre-permitting, pre-construction and pre-operation phases;
• Class VI wells must be constructed, operated, tested and monitored as approved; and
• Post-injection monitoring of the Class VI wells is conducted until the injection well and all monitoring wells are plugged and the site is closed.

When permitting a Class VI well, applicants must submit the following to the permitting authority:

• technical information concerning site characterization,
• modeling information to determine the Area of Review (see question #11 below),
• a demonstration of financial assurance to ensure that the facility will be operated and closed in accordance with regulations,
• proposed injection well construction,
• pre-injection, injection and post-injection testing and monitoring plans,
• emergency response and remedial action plans,
• proposed operating conditions,
• plans for post-injection well plugging.

As the operator implements the testing and monitoring plans to track the behavior and containment of injected CO₂, the plans are periodically reviewed and updated as necessary.

Determining the Area of Review (AoR) is a crucial step in permitting Class VI wells for underground injection of CO₂. An AoR is a region around a CO₂ injection well where USDWs could be affected. The primary goal of regulating or permitting Class VI wells is to protect USDWs.

When the EPA prepares a draft permit for a new Class VI well project, it is published for public review and comment. A minimum of 30 days is provided for public comment, with communities being notified through newspapers, other media announcements, and mailing lists.

The public has multiple avenues for involvement in the permitting process.

• Submitting feedback on draft permits
• Requesting and participating in public hearings
• Appealing final permitting decisions to the appropriate regulatory body

Furthermore, prospective Class VI permit applicants are encouraged to evaluate how their projects might uniquely affect nearby communities and local stakeholders.

Applicants are required to engage the public and other stakeholders early in the permitting process to learn about each community’s specific concerns to foster a more inclusive and responsive project development process.

Public participation is outlined in the RRC’s rules for Class VI wells in 16 Texas Administrative Code, Chapter 5, relating to Carbon Dioxide. To view the rules, visit the Texas Secretary of state website at https://texreg.sos.state.tx.us/public/readtac$ext.ViewTAC?tac_view=4&ti=16&pt=1&ch=5.

The EPA is the primary enforcement authority (primacy) for Class VI wells in Texas until Texas receives primacy. Once EPA grants primacy for the Class VI UIC program to Texas, the state can implement the program. The RRC has submitted an application for primacy of the Class VI Underground Injection Control program in the state. The RRC is the state agency with regulatory jurisdiction over the oil and natural gas industry, pipeline transporters, the natural gas and hazardous liquid pipeline industry, natural gas utilities, the liquified petroleum gas industry, and coal and uranium surface mining operations.