Colorado can now approve underground injection of carbon dioxide, a move that could kickstart investment in carbon capture and storage, a growing sequestration industry.
The Environmental Protection Agency granted Colorado the authority to oversee underground injection wells, known as Class VI wells, last week. That means the state can now approve and regulate the industry, where companies capture emissions from a polluting source or directly from the air, then inject it thousands of feet underground and store it indefinitely. It’s marketed as a way to mitigate climate change by capturing carbon dioxide emissions.
“With the growing interest in this technology, we wanted to hopefully provide a faster regulatory and permitting framework than waiting for the federal EPA program,” said John Brown, the public information officer for the Colorado Energy and Carbon Management.
Colorado joins six other states — Arizona, Texas, Louisiana, West Virginia, Wyoming and North Dakota — that have the authority to permit Class VI carbon capture and sequestration (CCS) facilities, rather than relying on the EPA’s federal permitting program.
Companies like Microsoft invest in CCS to offset their climate footprint, and increasingly, oil and gas companies are investing in the technology, such as Shell.
Currently, there are two CCS projects that have or are seeking approval in Colorado.
Carbon Storage Solutions’ project sits outside of Windsor at an ethanol plant. Front Range Energy received approval to start injecting CO2 underground a few weeks ago. Two other ethanol producers — Sterling Ethanol and Yuma Ethanol — plan to store their emissions with Carbon America’s Denova project, which ECMC is reviewing.
If effective, the two projects could capture up to about 480,000 metric tons of CO2 per year — equivalent to emissions from almost 100,000 homes’ electricity use — according to ECMC’s presentation during its October hearing on Wednesday.
Carbon storage is part of Colorado’s climate strategy to achieve net-zero emissions by 2050, and is a “safe and well-established process,” according to the state energy office. However, critics have raised concerns about possible leaks or ruptures, and projects have faced fierce community pushback in other states.
“It’s still developing technology,” said Anika Juhn, an energy data analyst with the Institute for Energy Economics and Financial Analysis, an energy think tank.
Juhn said residents don’t always know about the risk of living near a CCS facility. For instance, in 2020 in Mississippi, a carbon dioxide pipeline ruptured that sent at least 45 people to the hospital. A federal investigation found that the pipeline operator did not alert emergency responders.
However, Colorado has more stringent regulations than at the federal level, according to Mark Seeley, ECMC’s geothermal and CCS supervisor.
The state requires the wells to be at least 2,000 feet away from homes and businesses. Operators also need to submit cumulative impact analyses prior to construction, which detail the potential health and environmental impacts of the projects.
The facilities also use pipelines to transport CO2, which are regulated separately. While ECMC does not approve or regulate CO2 pipelines, local governments are required to meet federal pipeline standards, said Brown.
Environmental advocates have also raised questions around the effectiveness of the technology as a climate solution.
“We have a lot of concerns that it’s a false solution that could lead to the extending of polluting facilities in communities,” said Ean Tafoya, the Colorado director of GreenLatinos. “You’re just putting a filter on a cigarette.”
Juhn said that water and energy use over the life of a project may outweigh the benefits. “Sometimes it’s better to just burn the natural gas or just make the ammonia without any carbon capture at all, which is pretty mind-boggling,” Juhn said.
A 2020 study led by University of California-Berkeley researchers found that CCS adoption to meet global climate targets would almost double the world’s water use.
Biden-era tax credits for carbon capture and storage — which were expanded under the Trump administration — offer companies tax subsidies of $85 to $180 per ton of carbon dioxide stored. There have also been questions surrounding whether the Internal Revenue Service can accurately verify carbon captured by the companies.
Brown estimated that fewer than a dozen companies are looking to pursue new CCS projects in the state over the next year or two.
ECMC is currently studying where the largest storage opportunities lie. According to a study cited by the Colorado Energy Office’s carbon management roadmap, the largest storage potential lies along the Front Range and northwestern Colorado, as well as parts of the Western Slope.
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