CCS, liability and property rightsCCS, liability and property rights
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CCS, liability and property rightsCCS, liability and property rightsSouth Africa Carbon Capture & Storage WeekSouth Africa Carbon Capture & Storage Week
Legal & regulatory framework workshopLegal & regulatory framework workshop
27 October 2011, Johannesburg 27 October 2011, Johannesburg
Justine GarrettJustine Garrett
ETP BLUE Map Scenario: a portfolio of technologies
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Source: IEA ETP, 2010
BLUE Map Scenario
IEA CCS Roadmap: an ambitious growth path
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Source: IEA CCS Roadmap, 2009
CCS Roadmap regulatory actions and milestones
� 2009 IEA CCS Roadmap recommends
� Existing legal and regulatory frameworks should be reviewed
and adapted for CCS demonstration by 2011 in OECD countries
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and adapted for CCS demonstration by 2011 in OECD countries
and by 2015 in all non-OECD countries with CCS potential
� All countries should have a legal and regulatory framework
suitable for large-scale CCS deployment by 2020
� International legal issues need to be resolved by 2012
IEA support for CCS framework development
� IEA International CCS Regulatory Network
� Bi-annual Carbon Capture and Storage Legal and
Regulatory Review
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Regulatory Review
� 2010 Carbon Capture and Storage Model Regulatory
Framework
� Targeted engagement in 2011
� IEA-Indonesia Ministry of Energy and Mineral Resources legal and
regulatory working meeting 28 July
� IEA- South African DoE-SACCS legal and regulatory workshop 7 April
� IEA- Malaysian Ministry of Energy, Green Technology and Water CCS
roundtable 21 March
What do we mean by long-term liability?
� “Liability” generic term for
� General law liabilities (e.g. under civil law, for damage to the
environment, human health or third party property)
� Corrective or remediation measures
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� Corrective or remediation measures
� “Global” (climate) liability
� “Long-term liability”: liabilities arising after
� Permanent cessation of injection
� Active monitoring
� CCS aims to be permanent: implications for liabilities
associated with a storage site
Traditional focus on question of transfer
� Liability transfer or indefinite operator responsibility?
� Trend towards liability transfer
� European Union follows this approach, along with Australia and
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� European Union follows this approach, along with Australia and
some Australian, Canadian and US states and provinces
� No outright consensus in existing CCS frameworks
� Other options exist
Beyond transfer: the devil is in the detail
� Much to consider beyond preliminary question of
transfer
� Generally three requirements imposed
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� Generally three requirements imposed
� No significant risk of physical leakage or seepage of stored CO2
� Minimum time period elapsed
� Financial contribution to long-term stewardship
� Marked differences in approach between jurisdictions
Measuring stability
� Long-term security of storage sites critical
� Monitoring and verification to continue post cessation of
injection
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injection
� Government must be confident site behaviour is
acceptable
� Operator to demonstrate:
� Stored CO2 behaving in predicable manner
� No significant risk to human health or the environment
� Further quantitative details site-specific
Time to hand over
� Minimum period must elapse after cessation of injection
� 20-50 year periods, but can be modified at authority’s
discretion
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discretion
� Is minimum period arbitrary given lack of experience with
closed storage sites?
� Behaviour of storage site arguably more important
criterion
Covering costs
� Financial contribution to limit government’s financial
exposure
� Way contribution collected and managed differs
Royalties, fees, trust funds etc
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� Royalties, fees, trust funds etc
� How to calculate financial security amount unclear
� Area of ongoing research and discussion
� Factors vary between projects
� Germany – 3% of avoided emissions trading allowances/
year; Alberta currently grappling with this issue
� Further work needed on economic aspects of CCS liability
For discussion…
� Does financial assurance for long-term stewardship make
transfer of long-term liability non-controversial?
� What happens if long-term liability is not managed by a
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� What happens if long-term liability is not managed by a
CCS regulatory framework?
� Can appropriate mechanisms for long-term liability be
developed while there is significant uncertainty over
relevant risk?
� See second edition IEA CCS Legal and Regulatory
Review: www.iea.org/ccs/legal/review.asp
What do we mean by property rights?
� 1. Ownership of captured and stored CO2
� 2. Rights associated with access to surface infrastructure
� 3. Rights associated with sub-surface access and
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� 3. Rights associated with sub-surface access and
competing users/ uses of the sub-surface
� 4. Intellectual property rights
� Issue: how are property rights to be allocated and
managed in view of existing rights?
� Approach likely to depend on existing, jurisdictional-
specific approaches
Ownership of captured and stored CO2
� During operation, ownership will generally reside with
operator(s)
� Authorisation processes establish chain of custody across
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� Authorisation processes establish chain of custody across
capture, transport, injection and storage phases
� Ownership may revert to state in post-closure phase
(following any liability transfer)
� Government will then bear responsibility for stored CO2
over long-term
Access to surface infrastructure
� Generally allocated through existing property law/
industrial permitting laws
� Specific to individual jurisdictions
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� Specific to individual jurisdictions
� E.g. Canadian province of Alberta Regulatory Framework
Assessment
� Relevant to MMV, site operations and post-closure activities
� CCS Statutes Amendment Act amended Surface Rights Act to
enable Right of Entry Orders for MMV
� Existing oil and gas legislation relevant to many activities
requiring access
Ownership of sub-surface
� Sub-surface geology generally owned by state
� Government determines property access and allocation
(i.e. through exploration, storage permitting)
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(i.e. through exploration, storage permitting)
� Regulatory competence: which agency should allocate
rights?
� Protecting other users through allocation of responsibility
for leakage/ unintended migration events
Ownership of sub-surface cont.
� Victorian GHG Geological Sequestration Act 2008
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Intellectual property rights
� Issue: should CCS regulatory frameworks manage IP
rights?
� CCS generally still in a research and demonstration phase
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� Provision of government funding
� Need to rapidly scale-up deployment
� Essentially, requirements on knowledge sharing
� Management of IP rights can discourage investment
� NER 300 knowledge sharing requirements
� See IEA Carbon Capture and Storage Model Framework:
www.iea.org/ccs/legal/review.asp
[email protected]@iea.org
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[email protected]@iea.org
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