The Nickel Report

On April 27, 2023, the Environmental Protection Agency (EPA) published a Proposed Rule to grant Louisiana primacy to administer and enforce the Class VI Underground Injection Control (UIC) program within its borders. EPA approval of Louisiana’s primacy application would authorize the Louisiana Department of Natural Resources (LDNR) to issue UIC permits for Class VI geologic carbon sequestration facilities and undertake compliance enforcement for such facilities located within the state. EPA has determined that Louisiana’s application meets the necessary requirements for approval and is soliciting public comments on the proposal. One of the major sticking points in EPA’s approval of Louisiana’s program has been the approach to incorporating environmental justice (EJ) into the Class VI permit process. LDNR has agreed to implement a number of EJ-focused elements into the permitting process, including robust EJ analysis and public participation.

Adopted in 2010, the Class VI UIC program regulates the construction, operation, testing, and monitoring of geologic sequestration facilities. States and federally recognized tribes may be granted primacy to administer and enforce the Class VI UIC program in lieu of EPA after demonstrating that they have the requisite law, resources, and capability to do so.

Recognized as a critical emission reduction tool by regulators and the Biden Administration, carbon sequestration involves the injection of CO₂ into deep geologic formations for long-term storage. Currently, only Wyoming and North Dakota have obtained primacy to administer the Class VI program. EPA lists Arizona, Texas, and West Virginia as being in the pre-application (consultation and drafting) phase of the process. Louisiana submitted its primacy application to EPA in September 2021.

Concern over the length of time it has taken EPA to review Louisiana’s application led the US House of Representatives last month to adopt an amendment offered by Reps. Dan Crenshaw (R-TX) and August Pfluger (R-TX) to set firm deadlines for EPA approval of state primacy applications. Proposed Senate permitting reform legislation also includes language to require quicker EPA reviews.

As a condition for approving Louisiana’s Class VI primacy, EPA collaborated with state regulators to develop procedures for public participation, permit review, and assessment for alternatives that incorporate EJ considerations as an integral part of administering the UIC program. The collaboration between EPA and LDNR follows a December 2022 letter from the EPA Administrator to state governors calling for states seeking primacy to incorporate EJ into proposed Class VI programs and outlining a variety of approaches for doing so. In the Memorandum of Agreement (MOA) between EPA and Louisiana, which is the central agreement concerning the administration, implementation, and enforcement of the state UIC program, Louisiana committed to adopt all EJ elements outlined in EPA’s December 2022 letter.  Under the MOA, Louisiana will implement the following EJ-focused actions as part of the Class VI program:

• Analysis of EJ Communities – Applicants will be required to conduct a review of potential EJ impacts resulting from the proposed project. LDNR will evaluate project sites using EPA’s EJSCREEN and, in some cases, may rely on qualified third-party reviewers to conduct additional evaluations when communities with EJ concerns are identified.
• Enhanced Public Participation – Based on the EJ analysis, LDNR will evaluate whether an enhanced public comment period will be required.
• Evaluation of Alternatives – LDNR will require applicants to assess alternatives to the site location as appropriate.
• Evaluation of Mitigation – LDNR will require applicants to propose mitigating measures to ensure adverse environmental effects are minimized.
• EPA Oversight – The MOA provides that EPA may request specific information regarding permits, including the accompanying EJ reviews.

These EJ requirements are more stringent than those in EPA’s approval for primacy for Wyoming and North Dakota and could result in a longer permit process in Louisiana. EPA is likely to require a similarly robust EJ framework in other future state primacy applications.

Comments on the proposal must be submitted on or before July 3, 2023 and identified using the Docket ID No. EPA-HQ-OW-2023-0073. In addition to soliciting public comment, EPA will hold a public hearing on June 15, 2023 at the LDNR offices. Those wishing to reserve a slot to speak at the hearing must pre-register by June 8, 2023, and a general agenda will be posted on June 14, 2023. For a list of Class VI primacy states and states that have applied for primacy, along with a list of the permit applications, check out Hunton’s Class VI Permit Tracker.