The Bureau of Land Management Issues New Policy Guidance for Onshore Development of Carbon Capture, Utilization, and Sequestration on Federal Public Lands

Shortly after assuming office, President Biden set out an ambitious, government-wide approach for addressing climate change.¹ Pursuant to the Utilizing Significant Emissions with Innovative Technologies (“USE IT”) Act,² the Council on Environmental Quality (“CEQ”) completed a report to Congress on Carbon Capture, Utilization, and Sequestration (“CCUS”) in June 2021. The CCUS Report recognized that in order to reach the President’s ambitious climate goals, the United States would likely have to capture, transport, and permanently sequester significant quantities of carbon dioxide (“CO₂”), and that CCUS would “likely play an important role in decarbonization efforts globally.”³ Then, consistent with the USE IT Act, CEQ subsequently solicited public comment on proposed guidance for CCUS activities in February of this year.⁴ In addition, the Infrastructure Investments and Jobs Act (“IIJA”) passed last November, included amendments to the Outer Continental Shelf Lands Act (“OCSLA”) that authorized the Department of the Interior (“DOI”) to issue leases, easements, and rights of way (“ROW”) for offshore CCUS activities.⁵ The OCSLA amendments also required the DOI to promulgate regulations in support of these activities, which are currently being drafted by the DOI. However, the question of how the DOI would address onshore CCUS development remained a topic of speculation.  

On June 10, 2022, the Bureau of Land Management (“BLM”) issued a new Instruction Memorandum (“IM 2022-014”), entitled National Policy for the Right-of-Way Authorizations Necessary for Site Characterization, Capture, Transportation, Injection, and Permanent Geologic Sequestration of Carbon Dioxide in Connection with Carbon Sequestration Project,⁶ directing the authorization of ROWs for the geologic sequestration and storage of CO₂ on public lands, under Title V of the Federal Land Policy and Management Act of 1976.⁷ The new policy makes clear that the Biden Administration views the injection and storage of CO₂ into federal pore space as one method for combatting the climate crisis, by reducing anthropogenic CO₂ emissions into the atmosphere, and consequently, the impacts on climate from those emissions.

Pursuant to IM 2022-014, which became effective immediately, BLM may authorize ROWs for a minimum 30-year renewable term for site characterization, transportation, injection, capture, and the permanent storage of CO₂ at classified injection well locations. Prior to authorization, however, BLM must satisfy a number of requirements.

BLM must complete exploration and characterization studies prior to authorization to ensure that no physical connections exist between different formations identified for CO₂ sequestrations, and establish adequate monitoring programs to ensure long-term stewardship of project sites. Although BLM might be required to conduct environmental review under the National Environmental Policy Act (“NEPA”) for CO₂ sequestration projects, the IM suggests steps BLM might take to facilitate expedited NEPA review.

BLM must also ensure that project applicants comply with all applicable laws, including obtaining necessary permits under the underground injection control program⁸ to comply with the Safe Drinking Water Act of 1974, and submit an approved plan of development with their application form. BLM will not consider applications complete until applicants execute a cost recovery agreement for cost reimbursement and pay all appropriate processing fees.

Other key provisions of IM 2022-014 are also worth mentioning. Notably, while all ROW grants for CO₂ sequestration must comport with land and realty allocations within applicable Resource Management Plans (“RMP”), IM 2022-014 provides that federal lands open for ROWs may not require an RMP amendment so any proposed use for CCUS must comport with the existing applicable RMP. IM 2022-014 also seeks to ensure that ROW grants do not interfere with operations authorized under the Mineral Leasing Act of 1920, in order to prevent damage to other potentially recoverable mineral resources and other surface and subsurface authorized uses.

The attorneys at Hunton Andrews Kurth LLP provide a deep bench of talent that cover all aspects of CCUS projects for clients interested in pursuing onshore CCUS projects on federal lands.

¹ Tackling the Climate Crisis at Home and Abroad, Executive Order 14008, 86 Fed Reg. 7619, 7623, § 201 (Feb 1, 2021).

² Public Law 116-260, div. S, 134 Stat. 1182 (2020).

³ CEQ CCUS Report, “Executive Summary” (June 2021).

⁴ https://www.federalregister.gov/documents/2022/02/16/2022-03205/carbon-capture-utilization-and-sequestration-guidance#footnote-2-p8809.

⁵ H.R. 3684 §§ 40307 (a)(4), (b); see also 43 U.S.C. § 1337(p)(1).

⁶ https://www.blm.gov/policy/im-2022-041.

⁷ 43 U.S.C. §§ 1761-71; see also 43 C.F.R. Part 2800.

⁸ https://www.epa.gov/uic/class-vi-wells-used-geologic-sequestration-carbon-dioxide.