[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1502 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1502

  To establish a program to be managed by the Department of Energy to 
 ensure prompt and orderly compensation for potential damages relating 
     to the storage of carbon dioxide in geological storage units.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 22, 2009

  Mr. Casey (for himself and Mr. Enzi) introduced the following bill; 
   which was read twice and referred to the Committee on Energy and 
                           Natural Resources

_______________________________________________________________________

                                 A BILL


 
  To establish a program to be managed by the Department of Energy to 
 ensure prompt and orderly compensation for potential damages relating 
     to the storage of carbon dioxide in geological storage units.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Carbon Storage Stewardship Trust 
Fund Act of 2009''.

SEC. 2. PURPOSES.

    The purposes of this Act are--
            (1) to promote the commercial deployment of carbon capture 
        and storage as an essential component of a national climate 
        mitigation strategy;
            (2) to require private liability assurance during the 
        active project period of a carbon dioxide storage facility;
            (3) to establish a Federal trust fund consisting of amounts 
        received as fees from operators of carbon dioxide storage 
        facilities;
            (4) to establish a limit on liability for damages caused by 
        injection of carbon dioxide by carbon dioxide storage 
        facilities subject to certificates of closure;
            (5) to establish a program--
                    (A) to certify the closure of commercial carbon 
                dioxide storage facilities; and
                    (B) to provide for the transfer of long-term 
                stewardship to the Federal Government for carbon 
                dioxide storage facilities on the issuance of 
                certificates of closure for the facilities;
            (6) to provide for the prompt and orderly compensation for 
        damages relating to the storage of carbon dioxide; and
            (7) to protect the environment and public by providing 
        long-term stewardship of geological storage units.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Active project period.--The term ``active project 
        period'' means the phases of the carbon dioxide storage 
        facility through receipt of a certificate of closure, 
        including--
                    (A) the siting and construction of the facility;
                    (B) carbon dioxide injection;
                    (C) well capping;
                    (D) facility decommissioning; and
                    (E) geological storage unit monitoring, 
                measurement, verification, and remediation.
            (2) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (3) Carbon dioxide storage facility.--The term ``carbon 
        dioxide storage facility'' means a facility that receives and 
        permanently stores or sequesters carbon dioxide within a 
        geological storage unit, including carbon dioxide permanently 
        stored as a result of enhanced hydrocarbon recovery.
            (4) Certificate of closure.--The term ``certificate of 
        closure'' means a determination issued by the Administrator or 
        other Federal or State regulatory authority with respect to a 
        carbon dioxide storage facility that certifies that the 
        operator of the carbon dioxide storage facility has completed 
        injection operations, well closure, and any required monitoring 
        and remediation to ensure that any carbon dioxide injected into 
        a geological storage unit would not harm or present a risk to 
        human health, safety, and the environment, including drinking 
        water supplies.
            (5) Civil claim.--The term ``civil claim'' means a claim, 
        cause of action, lawsuit, judgment, court order, administrative 
        order, government or agency order, fine, penalty, or notice of 
        violation, for civil relief with respect to damages or harm to 
        persons, property, or natural resources from the injection of 
        carbon dioxide by a carbon dioxide storage facility.
            (6) Damage.--
                    (A) In general.--The term ``damage'' means any 
                direct or indirect damage or harm to persons, property, 
                or natural resources from the injection of carbon 
                dioxide into geological storage units.
                    (B) Inclusions.--The term ``damage'' includes 
                personal injury, sickness, real or personal property 
                damage, natural resource damage, trespass, subsidence 
                losses, revenue losses, and loss of profits.
            (7) Enhanced hydrocarbon recovery.--The term ``enhanced 
        hydrocarbon recovery'' means the use of carbon dioxide to 
        improve or enhance the recovery of oil or natural gas from oil 
        or natural gas fields.
            (8) Fund.--The term ``Fund'' means the Carbon Storage Trust 
        Fund established by section 5(d)(1).
            (9) Geological storage unit.--The term ``geological storage 
        unit'' includes saline formations, hydrocarbon formations, 
        basalt formations, salt caverns, unmineable coal seams, or any 
        other geological formation capable of permanently storing 
        carbon dioxide.
            (10) Liability assurance.--The term ``liability assurance'' 
        means privately funded financial mechanisms, including third-
        party insurance, self-insurance, performance bonds, trust 
        funds, letters of credit, and surety bonds.
            (11) Long-term stewardship.--The term ``long-term 
        stewardship'' means the monitoring, measurement, verification, 
        and remediation and related activities associated with a carbon 
        dioxide storage facility after issuance of a certificate of 
        closure.
            (12) Program.--The term ``Program'' means the Carbon 
        Storage Stewardship and Trust Fund Program established by 
        section 5(a).
            (13) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.

SEC. 4. LONG-TERM STEWARDSHIP RESPONSIBILITY.

    (a) In General.--Subject to subsection (b), the Secretary shall be 
responsible for the long-term stewardship of a carbon dioxide storage 
facility on the issuance of a certificate of closure for the carbon 
dioxide storage facility.
    (b) Transfer to State.--
            (1) In general.--A State may request that the management 
        responsibilities associated with long-term stewardship of a 
        carbon dioxide storage facility located in the State be 
        transferred to the State in accordance with regulations 
        established by the Secretary.
            (2) Approval of request.--If the Secretary approves a 
        request under paragraph (1), the State shall be responsible for 
        the long-term stewardship of the applicable carbon dioxide 
        storage facility beginning on the date of the approval in 
        accordance with applicable Federal and State laws (including 
        regulations).
            (3) Failure to act by state.--In accordance with any 
        regulations established under paragraph (1), if the Secretary 
        determines that a State that has accepted management 
        responsibilities under paragraph (1) has failed to carry out 
        the responsibilities of the State with respect to the carbon 
        dioxide storage facility, the Secretary shall assume long-term 
        stewardship of the carbon dioxide storage facility as soon as 
        practicable after the date of the determination.
    (c) Standards.--The Secretary, in coordination with the 
Administrator, shall establish standards for any monitoring, 
measurement, verification, and site remediation activities necessary to 
protect health, safety, and the environment during long-term 
stewardship performed by a State or the Federal Government.
    (d) Coordination With Administrator.--If long-term stewardship is 
vested with the Secretary, the Secretary may coordinate responsibility 
for site monitoring, measurement, verification, and remediation and 
related activities with the Administrator.

SEC. 5. CARBON STORAGE STEWARDSHIP AND TRUST FUND PROGRAM.

    (a) In General.--There is established in the Department of Energy 
the Carbon Storage Stewardship and Trust Fund Program.
    (b) Liability Assurance Required for Operators of Commercial Carbon 
Dioxide Storage Facilities.--Notwithstanding any other provision of 
Federal or State law, in carrying out the Program, the Secretary shall 
require operators of carbon dioxide storage facilities to maintain 
adequate liability assurance during the active project period.
    (c) Fees.--
            (1) In general.--In carrying out the Program, the Secretary 
        shall require operators of carbon dioxide storage facilities to 
        pay a risk-based fee, in an amount to be established in 
        accordance with paragraph (2), for each ton of carbon dioxide 
        injected by the carbon dioxide storage facility into geological 
        storage units during the operation phase of the facility.
            (2) Amount.--
                    (A) In general.--As soon as practicable after the 
                date of enactment of this Act and after taking into 
                account the criteria described in subparagraph (B), the 
                Secretary shall establish--
                            (i) the minimum and maximum balance for the 
                        Fund; and
                            (ii) the amount of the fee required under 
                        paragraph (1).
                    (B) Criteria.--The criteria referred to in 
                subparagraph (A) are--
                            (i) the estimated quantity of carbon 
                        dioxide to be injected annually into geological 
                        storage units by all operating commercial 
                        carbon dioxide storage facilities;
                            (ii) the likelihood or risk of an incident 
                        resulting in liability;
                            (iii) the likely dollar value of any 
                        damages relating to an incident;
                            (iv) other factors relating to the risk of 
                        the carbon dioxide storage facility and 
                        associated geological storage unit; and
                            (v) impact on commercial and economic 
                        viability of carbon dioxide storage facilities.
                    (C) Considerations.--In establishing the amount of 
                the fee under subparagraph (A)(ii), the Secretary may 
                consider using a fee system that is based on the level 
                of risk associated with a specific geological storage 
                unit to provide an incentive for the selection and 
                operation of the best carbon dioxide storage 
                facilities.
                    (D) Enhanced hydrocarbon recovery.--The Secretary 
                shall determine the most appropriate approach for 
                charging a fee on the quantity of carbon dioxide 
                injected into oil and gas fields, after taking into 
                consideration--
                            (i) the quantity of carbon dioxide that is 
                        permanently stored;
                            (ii) whether or not the enhanced 
                        hydrocarbon recovery operation is also being 
                        operated as a carbon dioxide storage facility; 
                        and
                            (iii) any other factors that the Secretary 
                        determines to be appropriate.
                    (E) Review and adjustment.--The Secretary shall, on 
                at least an annual basis, review the Fund balance--
                            (i) to ensure that there are sufficient 
                        amounts in the Fund to make the payments 
                        required under subsection (d)(3)(A); and
                            (ii) to determine whether or not to 
                        increase or decrease the amount, or discontinue 
                        collection, of the fee, after taking into 
                        consideration--
                                    (I) the annual quantity of carbon 
                                dioxide injected by carbon dioxide 
                                storage facilities;
                                    (II) the number and estimated value 
                                of claims against the Fund; and
                                    (III) any other relevant factors, 
                                as determined by the Secretary.
            (3) Deposit.--Notwithstanding section 3302 of section 31, 
        United States Code, the fees collected under paragraph (1) 
        shall be deposited in the Fund.
    (d) Carbon Storage Trust Fund.--
            (1) Establishment.--There is established in the Treasury of 
        the United States a revolving fund, to be known as the ``Carbon 
        Storage Trust Fund'', consisting of such amounts as are 
        deposited under subsection (c)(3).
            (2) Use of fund.--
                    (A) In general.--Amounts in the Fund shall be made 
                available, without further appropriation or fiscal year 
                limitation--
                            (i) to the Secretary for the payment of 
                        civil claims from a carbon dioxide storage 
                        facility that are brought after a certificate 
                        of closure for the carbon dioxide storage 
                        facility has been issued;
                            (ii) to the Secretary for long-term 
                        stewardship after the date of issuance of a 
                        certificate for closure; and
                            (iii) to the Secretary or other appropriate 
                        regulatory authority to pay any reasonable and 
                        verified administrative costs incurred by the 
                        Secretary or regulatory authority in carrying 
                        out the Program.
                    (B) Limitation.--Amounts in the Fund shall only be 
                used for the purposes described in clause (i), (ii), or 
                (iii) of subparagraph (A).
                    (C) Limitation on payments.--
                            (i) In general.--Subject to clause (ii), an 
                        aggregate claim for damages brought under 
                        subparagraph (A)(i) shall be limited to an 
                        amount to be established by the Secretary as 
                        soon as practicable after the date of enactment 
                        of this Act, based on mechanisms such as--
                                    (I) actuarial modeling of probable 
                                damage; and
                                    (II) net present value analysis.
                            (ii) Congressional action.--If estimated or 
                        actual aggregate damages exceed the amount 
                        established under clause (i)--
                                    (I) the Secretary shall notify 
                                Congress; and
                                    (II) on receipt of notice under 
                                subclause (I), Congress may provide for 
                                payments in excess of that amount, in 
                                accordance with guidelines established 
                                by Congress by law.
                    (D) Exception for gross negligence and intentional 
                misconduct.--Notwithstanding subparagraph (A), no 
                amounts in the Fund shall be used to pay a claim for 
                liability arising out of conduct of an operator of a 
                carbon dioxide storage facility that is grossly 
                negligent or that constitutes intentional misconduct, 
                as determined by the Secretary.
                    (E) Procedures for adjudication of claims.--Claims 
                of damage brought under subparagraph (A)(i) relating to 
                carbon dioxide in a carbon dioxide storage facility 
                subject to a certificate of closure shall be--
                            (i) filed in the United States Court of 
                        Federal Claims; and
                            (ii) adjudicated in accordance with 
                        procedures established by the United States 
                        Court of Federal Claims.
            (3) Initial funding.--
                    (A) In general.--If sufficient amounts are not 
                available in the Fund to cover potential claims during 
                the first years of the Program, the Secretary may 
                request from the Secretary of the Treasury an interest-
                bearing advance in funding from the Treasury to carry 
                out the Program, subject to subparagraph (B).
                    (B) Terms and conditions.--The terms and conditions 
                for the repayment of an advance under subparagraph (A) 
                shall be specified by the Secretary of the Treasury.

SEC. 6. LIMITATION ON CIVIL CLAIMS.

    (a) In General.--Except as provided in subsection (b), on issuance 
of a certificate of closure, a civil claim or claim for the performance 
of long-term stewardship responsibilities under applicable Federal and 
State law, may not be brought against--
            (1) the operator or owner of the carbon dioxide storage 
        facility subject to the certificate of closure;
            (2) the generator of the carbon dioxide stored in the 
        applicable geological storage unit; or
            (3) the owner or operator of the pipeline used to transport 
        the carbon dioxide to the carbon dioxide storage facility 
        subject to the certificate of closure.
    (b) Exception.--Subsection (a) shall not apply in the case of a 
civil claim involving the gross negligence or intentional misconduct of 
an owner, operator, or generator.
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