[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 699 Reported in Senate (RS)]

                                                        Calendar No. 99
112th CONGRESS
  1st Session
                                 S. 699

                          [Report No. 112-32]

    To authorize the Secretary of Energy to carry out a program to 
 demonstrate the commercial application of integrated systems for long-
   term geological storage of carbon dioxide, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 31, 2011

     Mr. Bingaman (for himself, Mr. Barrasso, Mr. Rockefeller, Ms. 
     Murkowski, Mr. Tester, Mr. Udall of Colorado, and Mr. Hoeven) 
introduced the following bill; which was read twice and referred to the 
               Committee on Energy and Natural Resources

                             July 11, 2011

               Reported by Mr. Bingaman, with amendments
  [Omit the part struck through and insert the part printed in italic]

_______________________________________________________________________

                                 A BILL


 
    To authorize the Secretary of Energy to carry out a program to 
 demonstrate the commercial application of integrated systems for long-
   term geological storage of carbon dioxide, and for other purposes.

    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 ``Department of Energy Carbon Capture 
and Sequestration Program Amendments Act of 2011''.

SEC. 2. LARGE-SCALE CARBON STORAGE PROGRAM.

    (a) In General.--Subtitle F of title IX of the Energy Policy Act of 
2005 (42 U.S.C. 16291 et seq.) is amended by inserting after section 
963 (42 U.S.C. 16293) the following:

``SEC. 963A. LARGE-SCALE CARBON STORAGE PROGRAM.

    ``(a) Definitions.--In this section:
            ``(1) Industrial source.--The term `industrial source' 
        means any source of carbon dioxide that is not naturally 
        occurring.
            ``(2) Large-scale.--The term `large-scale' means the 
        injection of over 1,000,000 tons of carbon dioxide each year 
        from industrial sources into a geological formation.
            ``(3) Secretary concerned.--The term `Secretary concerned' 
        means--
                    ``(A) the Secretary of Agriculture (acting through 
                the Chief of the Forest Service), with respect to 
                National Forest System land; and
                    ``(B) the Secretary of the Interior, with respect 
                to land managed by the Bureau of Land Management 
                (including land held for the benefit of an Indian 
                tribe).
    ``(b) Program.--In addition to the research, development, and 
demonstration program authorized by section 963, the Secretary shall 
carry out a program to demonstrate the commercial application of 
integrated systems for the capture, injection, monitoring, and long-
term geological storage of carbon dioxide from industrial sources.
    ``(c) Authorized Assistance.--In carrying out the program, the 
Secretary may enter into cooperative agreements to provide financial 
and technical assistance to up to 10 large-scale demonstration 
projects.
    ``(d) Project Selection.--The Secretary shall competitively select 
recipients of cooperative agreements under this section from among 
applicants that--
            ``(1) provide the Secretary with sufficient geological site 
        information (including hydrogeological and geophysical 
        information) to establish that the proposed geological storage 
        unit is capable of long-term storage of the injected carbon 
        dioxide, including--
                    ``(A) the location, extent, and storage capacity of 
                the geological storage unit at the site into which the 
                carbon dioxide will be injected;
                    ``(B) the principal potential modes of 
                geomechanical failure in the geological storage unit;
                    ``(C) the ability of the geological storage unit to 
                retain injected carbon dioxide; and
                    ``(D) the measurement, monitoring, and verification 
                requirements necessary to ensure adequate information 
                on the operation of the geological storage unit during 
                and after the injection of carbon dioxide;
            ``(2) possess the land or interests in land necessary for--
                    ``(A) the injection and storage of the carbon 
                dioxide at the proposed geological storage unit; and
                    ``(B) the closure, monitoring, and long-term 
                stewardship of the geological storage unit;
            ``(3) possess or have a reasonable expectation of obtaining 
        all necessary permits and authorizations under applicable 
        Federal and State laws (including regulations); and
            ``(4) agree to comply with each requirement of subsection 
        (e).
    ``(e) Terms and Conditions.--The Secretary shall condition receipt 
of financial assistance pursuant to a cooperative agreement under this 
section on the recipient agreeing to--
            ``(1) comply with all applicable Federal and State laws 
        (including regulations), including <DELETED>a certification by 
        the appropriate regulatory authority that the project will 
        comply with</DELETED> Federal and State requirements to protect 
        drinking water supplies;
            ``(2) in the case of industrial sources subject to the 
        Clean Air Act (42 U.S.C. 7401 et seq.), inject only carbon 
        dioxide captured from industrial sources in compliance with 
        that Act;
            ``(3) comply with all applicable construction and operating 
        requirements for deep injection wells;
            ``(4) measure, monitor, and test to verify that carbon 
        dioxide injected into the injection zone is not--
                    ``(A) escaping from or migrating beyond the 
                confinement zone; or
                    ``(B) endangering an underground source of drinking 
                water;
            ``(5) comply with applicable well-plugging, post-injection 
        site care, and site closure requirements, including--
                    ``(A)(i) maintaining financial assurances during 
                the post-injection closure and monitoring phase until a 
                certificate of closure is issued by the Secretary; and
                    ``(ii) promptly undertaking remediation activities 
                for any leak from the geological storage unit that 
                would endanger public health or safety or natural 
                resources; and
                    ``(B) complying with the requirements of subsection 
                (f);
            ``(6) comply with applicable long-term care requirements;
            ``(7) maintain financial protection in a form and in an 
        amount acceptable to--
                    ``(A) the Secretary;
                    ``(B) the Secretary with jurisdiction over the 
                land; and
                    ``(C) the Administrator of the Environmental 
                Protection Agency; and
            ``(8) provide the assurances described in section 
        963(c)(4)(B).
    ``(f) Post Injection Closure and Monitoring Elements.--In assessing 
whether a project complies with site closure requirements under 
subsection (e)(5), the Secretary, in consultation with the 
Administrator of the Environmental Protection Agency, shall determine 
whether the recipient of financial assistance has demonstrated 
continuous compliance with each of the following requirements over a 
period of not less than 10 consecutive years after the plume of carbon 
dioxide has stabilized within the geologic formation that comprises the 
geologic storage unit following the cessation of injection activities:
            ``(1) The estimated location and extent of the project 
        footprint (including the detectable plume of carbon dioxide and 
        the area of elevated pressure resulting from the project) has 
        not substantially changed and is contained within the geologic 
        storage unit.
            ``(2) The injection zone formation pressure has ceased to 
        increase following cessation of carbon dioxide injection into 
        the geologic storage unit.
            ``(3) There is no leakage of either carbon dioxide or 
        displaced formation fluid from the geologic storage unit that 
        is endangering public health and safety, including underground 
        sources of drinking water and natural resources.
            ``(4) The injected or displaced formation fluids are not 
        expected to migrate in the future in a manner that encounters a 
        potential leakage pathway.
            ``(5) The injection wells at the site completed into or 
        through the injection zone or confining zone are plugged and 
        abandoned in accordance with the applicable requirements of 
        Federal or State law governing the wells.
    ``(g) Indemnification Agreements.--
            ``(1) Definition of liability.--In this subsection, the 
        term `liability' means any legal liability for--
                    ``(A) bodily injury, sickness, disease, or death;
                    ``(B) loss of or damage to property, or loss of use 
                of property; or
                    ``(C) injury to or destruction or loss of natural 
                resources, including fish, wildlife, and drinking water 
                supplies.
            ``(2) Agreements.--Not later than 1 year after the date of 
        the receipt by the Secretary of a completed application for a 
        demonstration project, the Secretary may agree to indemnify and 
        hold harmless the recipient of a cooperative agreement under 
        this section from liability arising out of or resulting from a 
        demonstration project in excess of the amount of liability 
        covered by financial protection maintained by the recipient 
        under subsection (e)(7).
            ``(3) Exception for gross negligence and intentional 
        misconduct.--Notwithstanding paragraph (1), the Secretary may 
        not indemnify the recipient of a cooperative agreement under 
        this section from liability arising out of conduct of a 
        recipient that is grossly negligent or that constitutes 
        intentional misconduct.
            ``(4) Collection of fees.--
                    ``(A) In general.--The Secretary shall collect a 
                fee from any person with whom an agreement for 
                indemnification is executed under this subsection in an 
                amount that is equal to the net present value of 
                payments made by the United States to cover liability 
                under the indemnification agreement.
                    ``(B) Amount.--The Secretary shall establish, by 
                regulation, criteria for determining the amount of the 
                fee, taking into account--
                            ``(i) the likelihood of an incident 
                        resulting in liability to the United States 
                        under the indemnification agreement; and
                            ``(ii) other factors pertaining to the 
                        hazard of the indemnified project.
                    ``(C) Use of fees.--Fees collected under this 
                paragraph shall be deposited in the Treasury and 
                credited to miscellaneous receipts.
            ``(5) Contracts in advance of appropriations.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Secretary may enter into agreements of indemnification 
                under this subsection in advance of appropriations and 
                incur obligations without regard to section 1341 of 
                title 31, United States Code (commonly known as the 
                `Anti-Deficiency Act'), or section 11 of title 41, 
                United States Code (commonly known as the `Adequacy of 
                Appropriations Act').
                    ``(B) Limitation.--The amount of indemnification 
                under this subsection shall not exceed $10,000,000,000 
                (adjusted not less than once during each 5-year period 
                following the date of enactment of this section, in 
                accordance with the aggregate percentage change in the 
                Consumer Price Index since the previous adjustment 
                under this subparagraph), in the aggregate, for all 
                persons indemnified in connection with an agreement and 
                for each project, including such legal costs as are 
                approved by the Secretary.
            ``(6) Conditions of agreements of indemnification.--
                    ``(A) In general.--An agreement of indemnification 
                under this subsection may contain such terms as the 
                Secretary considers appropriate to carry out the 
                purposes of this section.
                    ``(B) Administration.--The agreement shall provide 
                that, if the Secretary makes a determination the United 
                States will probably be required to make indemnity 
                payments under the agreement, the Attorney General--
                            ``(i) shall collaborate with the recipient 
                        of an award under this subsection; and
                            ``(ii) may--
                                    ``(I) approve the payment of any 
                                claim under the agreement of 
                                indemnification;
                                    ``(II) appear on behalf of the 
                                recipient;
                                    ``(III) take charge of an action; 
                                and
                                    ``(IV) settle or defend an action.
                    ``(C) Settlement of claims.--
                            ``(i) In general.--The Attorney General 
                        shall have final authority on behalf of the 
                        United States to settle or approve the 
                        settlement of any claim under this subsection 
                        on a fair and reasonable basis with due regard 
                        for the purposes of this subsection.
                            ``(ii) Expenses.--The settlement shall not 
                        include expenses in connection with the claim 
                        incurred by the recipient.
    ``(h) Federal Land.--
            ``(1) In general.--The Secretary concerned may authorize 
        the siting of a project on Federal land under the jurisdiction 
        of the Secretary concerned in a manner consistent with 
        applicable laws and land management plans and subject to such 
        terms and conditions as the Secretary concerned determines to 
        be necessary.
            ``(2) Framework for geological carbon sequestration on 
        public land.--In determining whether to authorize a project on 
        Federal land, the Secretary concerned shall take into account 
        the framework for geological carbon sequestration on public 
        land prepared in accordance with section 714 of the Energy 
        Independence and Security Act of 2007 (Public Law 110-140; 121 
        Stat. 1715).
    ``(i) Acceptance of Title and Long-Term Monitoring.--
            ``(1) In general.--As a condition of a cooperative 
        agreement under this section, the Secretary may accept title 
        to, or transfer of administrative jurisdiction from another 
        Federal agency over, any land or interest in land necessary for 
        the monitoring, remediation, or long-term stewardship of a 
        project site.
            ``(2) Long-term monitoring activities.--After accepting 
        title to, or transfer of, a site closed in accordance with this 
        section, the Secretary shall monitor the site and conduct any 
        remediation activities to ensure the geological integrity of 
        the site and prevent any endangerment of public health or 
        safety.
            ``(3) Funding.--There is appropriated to the Secretary, out 
        of funds of the Treasury not otherwise appropriated, such sums 
        as are necessary to carry out paragraph (2).''.
    (b) Conforming Amendments.--
            (1) Section 963 of the Energy Policy Act of 2005 (42 U.S.C. 
        16293) is amended--
                    (A) by redesignating subsections (a) through (d) as 
                subsections (b) through (e), respectively;
                    (B) by inserting before subsection (b) (as so 
                redesignated) the following:
    ``(a) Definitions.--In this section:
            ``(1) Industrial source.--The term `industrial source' 
        means any source of carbon dioxide that is not naturally 
        occurring.
            ``(2) Large-scale.--The term `large-scale' means the 
        injection of over 1,000,000 tons of carbon dioxide from 
        industrial sources over the lifetime of the project.'';
                    (C) in subsection (b) (as so redesignated), by 
                striking ``In General'' and inserting ``Program'';
                    (D) in subsection (c) (as so redesignated), by 
                striking ``subsection (a)'' and inserting ``subsection 
                (b)''; and
                    (E) in subsection (d)(3) (as so redesignated), by 
                striking subparagraph (D).
            (2) Sections 703(a)(3) and 704 of the Energy Independence 
        and Security Act of 2007 (42 U.S.C. 17251(a)(3), 17252) are 
        amended by striking ``section 963(c)(3) of the Energy Policy 
        Act of 2005 (42 U.S.C. 16293(c)(3))'' each place it appears and 
        inserting ``section 963(d)(3) of the Energy Policy Act of 2005 
        (42 U.S.C. 16293(d)(3))''.

SEC. 3. TRAINING PROGRAM FOR STATE AND TRIBAL AGENCIES.

    (a) Establishment.--The Secretary of Energy, in consultation with 
the Administrator of the Environmental Protection Agency and the 
Secretary of Transportation, shall establish a program to provide 
grants for employee training purposes to State and tribal agencies 
involved in permitting, management, inspection, and oversight of carbon 
capture, transportation, and storage projects.
    (b) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary of Energy to carry out this section 
$10,000,000 <DELETED>for each of fiscal years 2010 through 
2020</DELETED>.
    (c) Offset.--Section 708 of the Energy Independence and Security 
Act of 2007 (42 U.S.C. 17256) is repealed.

SEC. 4. ANNUAL DEPARTMENT OF ENERGY ASSESSMENT.

    (a) In General.--
            (1) Department of energy report.--Not later than 1 year 
        after the date of enactment of this Act and annually thereafter 
        until the Secretary of Energy (referred to in this section as 
        the ``Secretary'') determines that technology preventing the 
        emission of, capturing, transporting, permanently storing or 
        sequestering, or putting to beneficial use carbon dioxide is 
        available to the commercial marketplace, the Secretary shall 
        conduct an assessment in accordance with subsection (b) of the 
        existing Federal programs supporting such technology and submit 
        to the appropriate authorizing and appropriating committees of 
        Congress a report on the results of the assessment.
            (2) Government accountability office review.--Not later 
        than 1 year after the first report is provided to the 
        appropriate authorizing and appropriating committees of 
        Congress under paragraph (1) and subsequently as needed until 
        technology preventing the emission of, capturing, transporting, 
        permanently storing or sequestering, and putting to beneficial 
        use carbon dioxide is available to the commercial marketplace, 
        the Comptroller General of the United States shall conduct a 
        review of the report described in paragraph (1) in accordance 
        with subsection (c).
    (b) Department of Energy Report Requirements.--The Secretary shall 
include in the report required under subsection (a)(1)--
            (1) a detailed description of the existing programs, 
        including each major program area, that conduct or support 
        research, development, demonstration, and deployment of 
        technology--
                    (A) to prevent the emission of carbon dioxide or 
                capture of carbon dioxide from sources, including 
                fossil fuel-based power plants;
                    (B) to transport carbon dioxide;
                    (C) to store or sequester captured carbon dioxide 
                permanently; or
                    (D) to put captured carbon dioxide to beneficial 
                use;
            (2) an assessment, based on Federal Government laboratory 
        research experience, available industry research experience, 
        and such other data and information as the Secretary considers 
        useful and appropriate, to determine whether each major program 
        area and principal projects within the areas described in 
        paragraph (1) are designed to, and will, advance fundamental 
        knowledge or achieve significant technical advancement and 
        materially improve the technology base to effectively address 
        the prevention of carbon dioxide emissions or capture of carbon 
        dioxide or the transport, permanent storage, or beneficial use 
        of captured carbon dioxide;
            (3) an assessment of the estimated time frame and costs of 
        the Secretary necessary to reasonably conclude that technology 
        will be available to the commercial marketplace; and
            (4) an assessment of the barriers and solutions, including 
        policy recommendations, to financing large carbon capture and 
        storage demonstration projects with a focus on overcoming the 
        impacts of oil price volatility on enhanced oil recovery 
        contracts for carbon dioxide.
    (c) Government Accountability Office Review Requirements.--The 
Comptroller General of the United States shall include in the review 
required under subsection (a)(2)--
            (1) an analysis of the estimated time frames and costs of 
        the Secretary, as reported pursuant to subsection (b)(3);
            (2) any recommendations that the Comptroller General 
        considers appropriate and useful to improve the likelihood of 
        achieving technological advancements to mitigate carbon dioxide 
        emissions or to expedite the availability of carbon capture and 
        sequestration technology for the commercial marketplace;
            (3) an assessment of any legal or regulatory impediment by 
        any Federal agency or department that has arisen in relation to 
        the deployment of carbon capture and storage technology, 
        including any delays in the permitting of the technology or the 
        construction or operation of any the facility; and
            (4) any other analyses the Comptroller General considers 
        necessary or appropriate.
    (d) Budget Request Report.--In the case of the budget request for 
fiscal year 2013, the President shall include in the budget request of 
the Secretary for the Fossil Energy Program a report that--
            (1) assesses the progress of the Secretary in implementing 
        the recommendations of the Comptroller General of the United 
        States and compares the estimated costs of completing 
        implementation of those recommendations to the requested budget 
        levels; and
            (2) an assessment of the progress made for the preceding 
        fiscal year toward achieving the goals of the program for which 
        funding is requested.
                                                        Calendar No. 99

112th CONGRESS

  1st Session

                                 S. 699

                          [Report No. 112-32]

_______________________________________________________________________

                                 A BILL

    To authorize the Secretary of Energy to carry out a program to 
 demonstrate the commercial application of integrated systems for long-
   term geological storage of carbon dioxide, and for other purposes.

_______________________________________________________________________

                             July 11, 2011

                        Reported with amendments