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Texas poised to speed up carbon storage permits as EPA plans to OK state's oversight

Story Highlights:

  • • EPA plans to allow Texas to have regulatory authority over its own carbon capture and storage projects.
  • • Having primacy over Class VI well permits can greatly decrease the amount of time it can take a Texas project to get permitted.
  • • Texas has 18 carbon capture projects under review, including 10 in the Houston-Beaumont region.

The Environmental Protection Agency plans to allow Texas to have regulatory authority over its own carbon capture and storage projects.

The EPA said it has proposed the approval of Texas application for Class VI primacy, which allows the state to permit wells for carbon dioxide injection rather than having companies rely on a slow EPA permitting timeline.

Having primacy over Class VI well permits can greatly decrease the amount of time it can take a Texas project to get permitted. The EPA estimates the application review process should take about two years: 30 days for a completeness review, 18 months for a technical review, 60 days to prepare a draft permit, 30 to 45 days for public comment and 90 days to prepare a final permit decision. However, Austin-based Enverus Intelligence Research has said the processing time realistically takes longer.

I think [states getting primacy will] just kind of speed up the timeline and take a lot off the plate from the EPA, so that should help that momentum continue and hopefully decrease those timelines, Brad Johnston, an analyst at Enverus, previously told the Houston Business Journal.

We're seeing in states like Wyoming and North Dakota they've had Class VI primacy for years now their average approval time is on the order of one year, compared to, say, three years with the EPA.

However, Johnston added that permitting for Texas projects initially could be slowed as the Railroad Commission of Texas establishes its plans and protocols for Class VI review. Meanwhile, the 18 Texas projects that would transfer over to the Railroad Commission would reduce the EPAs projects under review by 30%, potentially speeding up federal permitting timelines.

Right now, the only states with Class VI primacy are Wyoming, North Dakota, Louisiana and West Virginia. However, state primacy over other injection wells is very common, and Texas already has regulatory control over the first five classes of injection wells.

Growth of CCS in Texas
Many CCS projects are being planned in the Houston-Beaumont region, though applications for Class VI permits are lagging behind Louisiana recently. Johnston said Louisiana currently is reviewing about 104 Class VI well applications, while Texas has about 62 wells under review with the EPA. A single CCS project could have multiple wells.

Despite this, Texas is seen as a prime location for CCS, with many projects planned along the Gulf Coast. Major Houston-area companies like Exxon Mobil Corp. (NYSE: XOM), Occidental Petroleum Corp. (NYSE: OXY), ConocoPhillips (NYSE: COP) and Chevron Corp (NYSE: CVX) all have applications submitted for projects in the state.

“Texas is a leader in energy production, and part of that is pioneering carbon capture and storage practices,” Sen. John Cornyn, R-TX, said in an EPA press release. “The proposed approval of Texas’ application for primacy over underground water injection wells is a step in the right direction. If approved, Texas will be … able to efficiently and responsibly take control of its own permitting process, and I urge the EPA to swiftly issue a final rule approving Texas’ application.”

Of Texas’s 18 projects under review, about 10 applications are for projects in the Houston-Beamont region, where the bulk of Texas’s industrial facilities are located.

Some of these projects include:

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