Carbon storage regs out for comment

Kristen Nelson

Petroleum News

The Alaska Department of Natural Resources has proposed regulations on carbon storage, exploration licensing and leasing out for public comment, with comments due no later than 5 p.m., Dec. 2, DNR's Division of Oil and Gas said Oct. 23.

The regulations are a result of the passage of House Bill 50 earlier in the year.

In a statement after the bill was signed into law July 31, the governor's office said establishment of new regulations for carbon capture utilization under HB50 would enable Alaska to benefit from global carbon markets by leasing state subsurface lands for carbon storage, and that the leasing of land for carbon storage can provide new sources of state royalties and net profit shares.

"Underground storage of CO2 complements Alaska's existing oil and gas industry through enhanced oil recovery and enabling another voluntary pathway for companies within Alaska to meet their own carbon management goals, while DNR has the opportunity to maximize the value of previously undeveloped state resources for the benefit of all Alaskans," said DNR Commissioner John Boyle.

Leasing for carbon storage will be based on the pattern the state uses for exploration licensing, with 5-year terms and work commitments, and completion of commitments allowing the licensee the ability to convert the license to leases.

The Alaska Oil and Gas Conservation Commission will pursue primacy over Class VI wells for CCUS injection from the U.S. Environmental Protection Agency and will create a regulatory structure for CCUS in Alaska, AOGCC said in its fiscal note on the bill, with fiscal year 2025 work expected to focus on obtaining primacy.

The commission held a hearing on proposed revisions to its regulations related to HB50 Nov. 7.

--KRISTEN NELSON