The lack of a settled legal framework that balances private
property rights while maximizing the public good ultimately hinders the
large-scale commercial deployment of geologic carbon sequestration, according
to published research by a University
of Illinois expert in
renewable energy law.
In order to justify the extensive up-front capital
investment by firms, issues with the property rights of the subsurface pore
space that would permanently house the captured carbon dioxide must be resolved
first, says A. Bryan Endres, a professor of agricultural law at Illinois.
“You have a new technology that requires a lot of up-front
capital investment, but you don’t have a legal framework for how you’re going
to be able to implement this technology with regard to property rights,” says
Endres, who also is the director of the university’s European Union Center. “What’s unique about property rights is they’re usually pretty well settled,
and yet here we are dealing with a situation where ownership isn’t quite so
clear. That’s a key question, because a firm isn’t going to invest money in a
carbon sequestration plant before they are confident about who owns the area
underneath.”
According to the study, published in the University of Illinois Law
Review, ownership of the pore space at the
depths necessary for permanent geologic carbon sequestration is still an open
question in the vast majority of states.
“Right now, only Wyoming, Montana, and North
Dakota have assigned the property rights of the pore
space to the surface property owner,” Endres says. “While that might make good
political sense, I don’t think that makes good policy sense because it creates a
patchwork of small land-holdings. With carbon sequestration, the geology is
going to determine the limits, not some grid-based property system. This is why
we need to have legislative involvement to clarify the situation.”
Endres says sequestration operations implicate a unique set
of property rights issues, one that’s analogous to a plane flying over a house
at 30,000 ft.
“Do you own the airspace above your house?” he says. “Well,
no, and the reason we know the answer to that question is that there was a
court case that settled the issue. And that was one of the things that allowed
the airline industry to develop, so that planes didn’t have to weave around an
easement, like railroads do. Similarly, picture a really deep hole that may
start on your land but goes down 7,000 ft. Who owns that? One argument is that
a property owner does not have a reasonable expectation of ever using the pore
space at such extreme depths.”
Like air transport, carbon sequestration should be thought
of as a public good—one that has the added potential to reduce carbon dioxide
emissions and curb global climate change.
“It makes more sense to treat it as you would airspace for
an airplane, in that it belongs to the state and they can decide who’s going to
access it,” Endres says. “It would be a much more efficient system if the state
had ownership of it.”
Endres notes that there’s also the potential for states to
generate a significant amount of revenue from carbon sequestration, either
through an auction or a royalty system.
Because of its unique geology, the Mount
Simon formation, which makes up a
large swath of the Illinois Basin that extends to parts of Illinois,
Indiana, and Kentucky, is a potentially ideal site for
carbon sequestration.
“It would behoove a state like Illinois to be a leader at settling these
property rights issues, and not just for climate change purposes but also for
job growth and revenue generation,” Endres says. “It’s a resource the state
should take advantage of so that it can become a center of innovation for this
new industry.”
While this isn’t necessarily the silver bullet to reverse
carbon dioxide emissions, Endres says it’s one of many ready-made and already
available tools that could slow the growth rate of global climate change.
“This is a technology that will allow us to utilize natural
resources like coal while also shrinking its carbon footprint,” he says. “So
it’s important to get this framework in place so the industry can really take
off, because now you just have a lot of speculation, experimental labs, and
pilot projects. This is something that needs to get developed sooner rather
than later.”
