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Applying Federal Environmental Laws to CO2 Enhanced Oil Recovery

Marie Bradshaw Durrant, Amy M. Mowry, Enhanced Oil Recovery: Legal Framework for Sustainable Management of Mature Oil Fields

Three recent EPA actions are meant to support the current Administration's climate change policies by encouraging the sequestration of carbon dioxide (CO2) from coal-fired power plants in depleted oil and gas reservoirs. Oil and gas operations employing CO2 for enhanced recovery (ER) play a key role in EPA's plan. As envisioned by EPA, power plants will capture and sell their CO2 to oil and gas companies with depleted reservoirs.1 Oil and gas companies engaged in ER operations will pay power plants for the captured CO2, then use the CO2 to recover more oil and gas. These payments will help offset the large capital costs incurred by power plants to capture emitted CO2. As the only commercially successful, high-volume CO2 injectors, ER operators represent both the experience and the financial model needed to make carbon capture and sequestration/storage (CCS) work as a carbon-reducing strategy. If the oil and gas companies respond positively, the CO2 “sumps” in depleted reservoirs will provide the ideal receptacle for captured CO2 from power plants.

EPA's plan involves three separate yet integrated environmental regulations. First, EPA's New Source Performance Standards (NSPS) under the Clean Air Act for electric generating units/power plants (EGU-NSPS) essentially mandates CCS for all future coal-fired power plants.2 Second, EPA's Underground Injection Control (UIC) reg