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:

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 a certification by the appropriate regulatory authority that the project will comply with 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)).

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.