S. 6163 2
DISTANCE OF ONE THOUSAND FEET OR MORE TO BE USED TO TRANSPORT CAPTURED
CARBON AT PRESSURES OF ONE HUNDRED TWENTY-FIVE POUNDS PER SQUARE INCH OR
MORE, EXCLUDING APPURTENANT FACILITIES, BUT SHALL NOT INCLUDE ANY SUCH
TRANSMISSION LINE WHICH IS LOCATED WHOLLY UNDERGROUND IN A CITY OR WHOL-
LY WITHIN THE RIGHT OF WAY OF A STATE, COUNTY OR TOWN HIGHWAY OR VILLAGE
STREET AS THOSE TERMS ARE DEFINED IN ARTICLE ONE OF THE HIGHWAY LAW AND
ARTICLE SIX OF THE VILLAGE LAW. CAPTURED CARBON DISPERSAL LINES,
INJECTION WELLS AND UNDERGROUND WELL FIELDS ARE NOT INCLUDED IN THE
MEANING OF THE TERM "MAJOR UTILITY TRANSMISSION FACILITY".
4. "Appurtenant facilities" means installations (excluding gas
compressors) which are merely auxiliary or appurtenant to a fuel gas OR
CAPTURED CARBON transmission line such as: valves; drips; measuring and
regulating equipment; yard and station piping; cathodic protection
equipment; gas cleaning; cooling and dehydration equipment; residual
refining equipment; water pumping; treatment and cooling equipment;
electrical and communication equipment; and buildings.
5. "CAPTURED CARBON" MEANS CARBON DIOXIDE IN ANY STATE AND ASSOCIATED
CONSTITUENTS EXTRACTED FROM THE EMISSIONS OF AN ELECTRIC GENERATING
FACILITY OR AN INDUSTRIAL FACILITY FOR THE PURPOSES OF SEQUESTRATION.
S 2. Subdivision 1 of section 123 of the public service law, as
amended by chapter 538 of the laws of 1981, is amended to read as
follows:
1. Upon the receipt of an application with respect to an electric
transmission line that complies with section one hundred twenty-two OF
THIS ARTICLE, the commission shall promptly fix a date for the commence-
ment of a public hearing thereon not less than sixty nor more than nine-
ty days after such receipt. Except as otherwise provided in section one
hundred twenty-one-a of this article upon the receipt of an application
with respect to a fuel gas transmission line that complies with section
one hundred twenty-two OF THIS ARTICLE, the commission shall promptly
fix a date for the commencement of a public hearing thereon not less
than twenty nor more than sixty days after such receipt. UPON THE
RECEIPT OF AN APPLICATION WITH RESPECT TO A CAPTURED CARBON TRANSMISSION
LINE THAT COMPLIES WITH SECTION ONE HUNDRED TWENTY-TWO OF THIS ARTICLE,
THE COMMISSION SHALL PROMPTLY FIX A DATE FOR THE COMMENCEMENT OF A
PUBLIC HEARING THEREON NOT LESS THAN SIXTY NOR MORE THAN NINETY DAYS
AFTER SUCH RECEIPT. The testimony presented at such hearing may be
presented in writing or orally, provided that the commission may make
rules designed to exclude repetitive, redundant or irrelevant testimony.
The commission shall make a record of all testimony in all contested
hearings.
S 3. Paragraph (e) of subdivision 1 of section 126 of the public
service law, as added by chapter 272 of the laws of 1970, is amended to
read as follows:
(e) in the case of a gas OR CAPTURED CARBON transmission line, that
the location of the line will not pose an undue hazard to persons or
property along the area traversed by the line;
S 4. The carbon capture and sequestration act is hereby enacted to
read as follows:
Carbon Capture and Sequestration Act
Section: 1. Short title.
2. Legislative findings.
3. Definitions.
4. Administration.
5. Powers and duties of the commissioner and the department.
6. Procedure for obtaining carbon sequestration lease.
S. 6163 3
7. Procedure for obtaining carbon sequestration permit.
8. Authority to acquire property.
9. Procedure for closure of carbon sequestration reservoir.
10. Ownership of captured carbon and reservoir pore space.
11. Imposition of fee for application for permit to drill,
deepen, plug back or convert a well.
S 1. Short title. This act shall be known and may be cited as the
"carbon capture and sequestration act."
S 2. Legislative findings. The legislature finds that the earth's
climate is changing as a result of global warming, due in part to emis-
sions of carbon dioxide and other greenhouse gases. The legislature
further finds that it is in the public interest to encourage the
research and development of technology to facilitate the capture, trans-
port and underground storage of carbon dioxide emissions from anthropo-
genic sources, and that the public health and the environment of the
state would be served by a carbon capture and sequestration demon-
stration project and the authorization and regulation of the siting and
operation of such a project.
S 3. Definitions. Terms used in this act shall have the same meaning
as defined in title 1 of article 23 of the environmental conservation
law, except that for purposes of this act:
1. "Buffer zone" means all that area outside and surrounding the
carbon sequestration reservoir which the department approves as appro-
priate to protect the integrity of such reservoir, no part of which
shall be more than 3,500 linear feet from the boundary of such reser-
voir.
2. "Captured carbon" means carbon dioxide in any state and associated
constituents which have been extracted from the emissions of an electric
generating facility or an industrial facility for the purpose of seques-
tration pursuant to this act.
3. "Carbon sequestration permit" means a permit to utilize and operate
a reservoir for carbon sequestration or modify a carbon sequestration
reservoir, which may include the injection of captured carbon into a
reservoir, and the observation and monitoring of the carbon sequestra-
tion reservoir and its buffer zone boundaries, as authorized in the
permit.
4. "Department" means the department of environmental conservation and
"commissioner" means the state commissioner of environmental conserva-
tion.
5. "Owner" means the person who possesses any well subject to this act
or who has the right to drill into and inject captured carbon into a
reservoir.
6. "Operator" means any person engaged in the business of drilling or
operating wells for the purpose of injecting captured carbon for storage
or utilizing and operating a reservoir for carbon sequestration.
7. "Reservoir" means any underground reservoir, natural or artificial
cavern, or geologic feature, formation or unit, whether or not previous-
ly occupied by or containing oil, gas or brine.
8. "Sequestration" or "carbon sequestration" means the long-term stor-
age of captured carbon in a reservoir.
9. "Waste" means:
(a) the inefficient, excessive or improper use of reservoir space; and
(b) the escape, release, seepage or migration of captured carbon from
a carbon sequestration reservoir.
S 4. Administration. 1. Except to the extent that the administration
of this act is specifically entrusted to other agencies or officers of
S. 6163 4
the state by its provisions, the administration of this act shall be by
the department.
2. The provisions of this act shall supersede all local laws or ordi-
nances relating to the regulation of carbon sequestration including any
pertaining to wells and storage reservoirs but shall not supersede local
government jurisdiction over local roads or the rights of local govern-
ments under the real property tax law.
S 5. Powers and duties of the commissioner and the department. In
addition to the powers specified in subdivisions 1 through 7 of section
23-0305 of the environmental conservation law, with respect to carbon
sequestration reservoirs the department shall have the power to:
1. Make such investigations or require an owner or operator to make
investigations as the department deems proper to determine whether waste
exists or is imminent.
2. Require identification of ownership of carbon sequestration leases,
wells and well sites, and any equipment such as structures, tanks, gath-
ering systems and facilities for the capture, collection, transporta-
tion, injection and sequestration of captured carbon.
3. Classify geologic reservoirs as carbon sequestration reservoirs and
buffer zones, including the delineation of boundaries of such reservoirs
and buffer zones, for purposes material to the interpretation or admin-
istration of this act.
4. Classify wells as injection, observation or monitoring wells.
5. Require the drilling, casing, operation and plugging of wells in
accordance with rules and regulations of the department in such a manner
as to prevent the loss or escape of captured carbon to the surface or to
other strata, the intrusion of water into the strata sequestering the
captured carbon, the pollution of fresh water supplies and other envi-
ronmental impacts.
6. Give notice or require an owner or operator to give notice to
persons engaging in mining operations of the commencement of any phase
of carbon sequestration which may affect the safety of such underground
mining operations or of the mining properties involved. Rules and regu-
lations of the department may specify the distance from such underground
mining operations within which such notice shall be given and shall
contain such other provisions as in the judgment of the department shall
be necessary in the interest of safety. The department shall not be
required to furnish any notice unless the person or persons engaged in
underground mining operations or having rights in mining properties have
notified the department of the existence and location of the underground
mining operations or properties.
7. Enter, take temporary possession of, plug or replug any abandoned
well as provided in the rules and regulations of the department, whenev-
er any owner or operator neglects or refuses to comply with the rules
and regulations. Any plugging or replugging by the department shall be
at the expense of the owner or operator whose duty it may be to plug the
well and the state of New York shall be held harmless for all accounts,
damages, costs and judgments arising from the plugging or replugging of
the well and the surface restoration of the affected land. Primary
liability for the expense of plugging or replugging and first recourse
for the recovery of expenses shall be to the operator unless a contract
for the working of the well shall place liability on the owner or on the
owner of another interest in the land on which the well is situated.
When an operator violates any provision of this act or any order issued
pursuant to this act in reference to plugging or replugging an abandoned
S. 6163 5
well, the operator may not transfer the operator's responsibility by
surrendering the lease.
8. Require the operator to furnish to the department, prior to the
commencement of drilling of any well, and to continuously maintain, a
bond acceptable to the department conditioned upon the performance of
the operator's plugging responsibilities with respect to the well. The
amount of financial security shall be determined by the department based
on a written plugging estimate provided by the operator and acceptable
to the department. Upon the approval of the department, in lieu of a
bond, the operator may deposit cash or negotiable bonds of the United
States government of like amount in an escrow account conditioned upon
the performance of the operator's plugging responsibilities with respect
to the well. Any interest accruing as a result of the escrow deposit
shall be the exclusive property of the operator. This bonding require-
ment shall remain the obligation of the original operator regardless of
changes in operators unless a subsequent operator has furnished the
appropriate bond or substitute acceptable to the department and approval
for the transfer of the well plugging responsibility to the subsequent
operator has been granted by the department. The failure of any operator
to maintain a bond or other acceptable financial security shall be
deemed a breach of plugging responsibilities and entitle the department
to claim the proceeds of the bond or other financial security. The cost
of plugging or replugging any well, where such action is necessary or
incident to the commencing or carrying on of storage operations pursuant
to this act shall be borne by the operator of the carbon sequestration
reservoir.
9. Require that every person who captures, transports, injects or
sequesters captured carbon in this state keep and maintain complete and
accurate records of the quantities of carbon captured, transported or
injected. True copies or duplicates shall be kept or made available for
examination within this state by the department or its agents at all
reasonable times and every person shall file with the department such
reports concerning collection, transportation, injection, storage or
sequestration on a form provided by the department or approved by the
department prior to submittal.
10. In addition to the powers provided for in titles 1, 3, 5 and 13 of
article 71 of the environmental conservation law, order an immediate
suspension of drilling, injection or sequestration operations whenever
such operations are being carried on in violation of this act or any
rule or regulation promulgated pursuant to article 23 of the environ-
mental conservation law or order issued pursuant thereto. Any order
issued pursuant to this subdivision may be reviewed upon application of
an aggrieved party by means of an order to show cause which order shall
be issued by any justice of the supreme court in the judicial district
in which any order applies and shall be returnable on the third succeed-
ing business day following the issuance of such order. Service of such
show cause order shall be made upon the regional office of the depart-
ment for the region in which such order applies, and upon the attorney
general by delivery of such order to an assistant attorney general at an
office of the attorney general in the county in which venue of the
proceeding is designated, or if there is no office of the attorney
general within such county, at the office of the attorney general near-
est such county. Except as specified in this subdivision, the proceeding
to review an order under this subdivision shall be governed by article
78 of the civil practice law and rules.
S. 6163 6
11. Require the immediate reporting of any non-routine incident
including but not limited to casing and drill pipe failures, casing
cement failures, fishing jobs, fires, seepages, blowouts and other inci-
dents during drilling, completion, injection, sequestration, plugging or
replugging operations, and monitoring or observation that may affect the
health, safety, welfare or property of any person. The department may
require the operator, or any agent thereof, to record any data which the
department believes may be of subsequent use for adequate evaluation of
a non-routine incident.
12. Require the taking and making of well logs, well samples, direc-
tional surveys and reports on well locations and elevations, drilling,
injection, sequestration, plugging or replugging operations and further
require their filing pursuant to the provisions of this act. Upon the
request of the state geologist, the department shall cause such dupli-
cate samples or copies of records and reports as may be required pursu-
ant to this act to be furnished to the state geologist.
13. Require the operator to furnish to the department, prior to the
commencement of any injection of captured carbon, and to continuously
maintain for a period specified by the department of at least ten years
following cessation of injection, a bond acceptable to the department
conditioned upon the performance of the operator's observation and moni-
toring responsibilities as specified in a carbon sequestration permit,
and to protect against pollution, invasion, or the escape, discharge,
seepage or migration of captured carbon. This bond shall be in addition
to any bond or financial security required in subdivision 8 of this
section for well plugging responsibilities.
S 6. Procedure for obtaining carbon sequestration lease. 1. The
department may make leases on behalf of the state for the exploration
and development of carbon sequestration reservoirs and the sequestration
of captured carbon in state-owned lands, upon such terms and conditions
including consideration as the department deems just and proper.
2. All carbon sequestration leases shall:
(a) Provide for payment to the agency having jurisdiction over the
leased lands of adequate and reasonable consideration;
(b) Be invalid unless they shall have the prior approval of such agen-
cy or the appropriate department, division or bureau thereof, having
jurisdiction over the land in question; and authority to give such
consent is hereby conferred upon the head of any such agency or the
appropriate department, or a division or bureau thereof, and with
respect to lands under water held by the state in its sovereign capaci-
ty, jurisdiction is deemed to be in the commissioner of general
services;
(c) Be inapplicable to any state park lands and to any lands the leas-
ing of which is prohibited by the state Constitution; and
(d) Contain such other terms and provisions as may be necessary or
appropriate to promote the purposes of this act and the public policy of
the state.
S 7. Procedure for obtaining carbon sequestration permit. 1. No
person shall utilize, operate or modify the capacity or boundaries of a
reservoir for the sequestration of captured carbon, or of a buffer zone,
unless such person has received from the department, after approval in
writing of the state geologist, a carbon sequestration permit. The
application for a carbon sequestration permit shall include the follow-
ing:
(a) A map showing the location, acreage and boundaries of the proposed
carbon sequestration reservoir and its buffer zone, the surface and
S. 6163 7
bottom hole locations of any well or wells proposed to be drilled into
the reservoir and buffer, the location of any existing wellbore or well-
bores in the proposed reservoir and buffer, and the location of any
abandoned or unplugged wells in the proposed reservoir and buffer,
regardless of well type or depth.
(b) A report containing sufficient engineering, geological, geophysi-
cal, observation, monitoring and operational data to show that the
reservoir and the buffer zone are adaptable and suitable for the seques-
tration of captured carbon.
(c) An affidavit signed by the prospective owner or operator to the
effect that the owner or operator has acquired by grant, lease or other
agreement at least 75 percent of the storage rights in the proposed
reservoir and in the buffer zone established to protect the reservoir as
approved by the department, calculated on the basis of surface acreage.
The affidavit shall also set forth that the applicant will agree as a
condition to the issuance of a permit that the applicant will, within a
reasonable time, either acquire by negotiation, or file and proceed with
condemnation proceedings to acquire, any outstanding storage and seques-
tration rights in the remaining portion of the reservoir and buffer zone
acreage.
(d) Any other information that the department may require.
2. No person shall commence operations to drill, deepen, plug back or
convert a well for use in the operation of a carbon sequestration reser-
voir unless such person has obtained a permit to drill from the depart-
ment. An application for a permit to drill shall be on forms prescribed
by the department.
3. The department shall grant an application for a carbon sequestra-
tion permit, and any application for a permit to drill, within 90 days
of application unless the department finds that the application and the
information submitted with it do not meet the requirements of this
section. The department may revoke or suspend any carbon sequestration
permit for failure to comply with any of its provisions or for failure
to comply with this section.
4. Every owner or operator shall file with the department on or before
March 31 of each year, a report for the prior period on the status of
each carbon sequestration reservoir and buffer zone, and the present
limits of any sequestered or injected captured carbon. The report shall
be on a form prescribed by the department and shall include at least the
following:
(a) The size in surface acreage or shape of the reservoir and the
buffer zone;
(b) An estimate of total capacity of the reservoir; and
(c) Any other engineering, geological, geophysical, observation, moni-
toring, or operational data that the department may request.
5. The applicant for a carbon sequestration permit shall submit with
the application the following fees:
(a) For a new carbon sequestration reservoir: $10,000.
(b) For a modification of the capacity or boundaries of an existing
carbon sequestration reservoir: $5,000.
6. No permit issued under this section and no provision of this act
shall be construed to diminish or impair the jurisdiction of the state
public service commission with respect to regulation of the manufacture,
collection, capture or transportation of captured carbon.
S 8. Authority to acquire property. 1. Any owner or operator
empowered to capture, transport, inject, store or sequester captured
carbon within this state for ultimate public use or benefit, which holds
S. 6163 8
a carbon sequestration permit from the department, and which after
reasonable effort is unable to obtain rights in real property and wells
thereon necessary for activation, including siting of any pipeline with-
in and outside the carbon sequestration reservoir and buffer zone, oper-
ation, or protection of the carbon sequestration reservoir and its buff-
er zone shall, subject to the applicable provisions of the eminent
domain procedure law, have the authority to acquire such rights as may
be required adequately to examine, prepare, maintain, operate and
protect, and for access to such reservoir and its buffer zone; provided
that no right of acquisition under this section shall extend to any
lands or interests therein which have been acquired, or, in the hands of
the present holder, could have been acquired by acquisition; and,
provided further, that any acquisition of cemetery lands or burial
grounds shall be in the sound discretion of the court and with due
provision for the relocation of human remains.
2. Owners or operators authorized by this section to maintain acquisi-
tion proceedings before filing a suit for such acquisition shall have
filed with the department a map showing the location, boundaries and
size of surface acreage of the carbon sequestration reservoir and its
buffer zone.
3. Any owner or operator of a carbon sequestration reservoir who at
any time controls less than 100 percent of the rights within that reser-
voir and its buffer zone and is authorized by this section to maintain a
proceeding shall acquire the rights remaining in the reservoir and its
buffer zone acreage and rights needed for pipeline siting by negotiation
or file and proceed with acquisition proceedings within a reasonable
time but not to exceed a 2 year period after the first injection of
captured carbon, or within any extension granted by the department.
4. Any owner or operator who seeks to acquire rights as authorized by
this section shall name as parties defendant all the owners of all the
parcels of property located within the boundaries of the reservoir and
its buffer zone from whom storage and sequestration rights have not
previously been legally acquired by grant, lease, or other voluntary
agreement; provided, however, that a failure to join the owners of any
parcel in the reservoir and its buffer zone due to inadvertence shall
not constitute a jurisdictional defect in any proceeding of acquisition.
5. Except for lands needed for any pipeline siting which are located
outside the boundaries of the reservoir and its buffer zone, the value
of any property acquired pursuant to this section shall include the
value of any commercially recoverable native oil and gas in place to the
extent that the holder of the property interest being acquired has a
right thereto. The same provision shall apply to the holder of salt
rights.
6. The cost of, or possible necessity for, plugging any well or wells,
when such plugging or replugging is or may be made necessary by reason
of the storage use made possible or facilitated by acquisition shall not
be considered in computing the value of property or any interest therein
taken under this section.
S 9. Procedure for closure of carbon sequestration reservoir. 1. In
connection with the closure of any carbon sequestration reservoir for
which a permit has been granted pursuant to this act or in connection
with the revocation of any such permit, the owner or operator is respon-
sible for placing the premises in a condition which, to the extent prac-
ticable, assures the continuance of the premises in a condition which
does not constitute a menace to the present or future health, safety or
welfare of persons, or safety or value of property. In case the owner or
S. 6163 9
operator shall fail to put the premises in a satisfactory condition
prior to any such closure or immediately upon revocation of a permit,
the department may do or cause to be done all things necessary to place
the premises in satisfactory condition and the owner and operator shall
be liable for the cost.
2. The owner or operator shall monitor the premises and the carbon
sequestration reservoir, through utilization of observation and monitor-
ing wells and by other appropriate means, for a period specified by the
department of at least ten years following the cessation of injection.
S 10. Ownership of captured carbon and reservoir pore space. 1. All
captured carbon which has previously been reduced to possession, and
which is lawfully injected into a carbon sequestration reservoir, shall
be deemed the property of the operator, the operator's heirs, successors
or assigns. The operator, the operator's heirs, successors or assigns
shall have no right to reserves of native gas or oil remaining in any
stratum or portion thereof which have not been condemned hereunder or
otherwise acquired by such operator, operator's heirs, successors or
assigns. Nothing contained in this subdivision shall be construed to
confer on any owner or operator any storage or sequestration rights not
otherwise acquired or held by the owner or operator.
2. No production lease shall be construed to include rights to seques-
ter captured carbon unless the lease includes a provision granting such
storage rights.
3. The ownership of all pore space in all strata below the surface
lands and waters of this state is declared to be vested in the several
owners of the surface lands above the strata.
S 11. Imposition of fee for application for permit to drill, deepen,
plug back or convert a well. When a person files an application for a
permit to drill a well or converts a well to one subject to this act,
the person shall pay to the department a fee of $3,000, provided that
for any application to plug back or deepen a well previously permitted
by the department pursuant to this act, the person shall pay to the
department a fee of $1,000.
S 5. This act shall take effect immediately and shall only apply to a
municipally-owned electric generating facility that has submitted a
complete application to the department of environmental conservation by
December 31, 2010.
