On February 16, the White House Council on Environmental Quality (CEQ) published in the Federal Register new interim guidance that is intended to facilitate the review and deployment of carbon capture, sequestration, utilization, and storage (CCUS) technologies. For those hoping for specific guidance that would accelerate the deployment of CCUS, the interim guidance is likely to disappoint. Congress recently signaled strong interest in accelerating CCUS as a national decarbonization strategy by providing billions of dollars of new investment to support the industry, but the guidance is largely silent on how the executive branch will match the urgency in ensuring on-the-ground deployment in the foreseeable future. Comments on CEQ’s guidance are due to CEQ by March 18.

Supporters of CCUS will be pleased to see the Biden administration generally supports CCUS as part of its climate adaptation strategy, acknowledging its criticality in helping to achieve its carbon reduction goals. For example, CEQ’s chair acknowledges that “[t]o reach the President’s ambitious domestic climate goal of net-zero emissions economy-wide by 2050, the United States will likely have to capture, transport, and permanently sequester significant quantities of carbon dioxide.” The notice also acknowledges that the technical and economic viability of carbon capture in significant quantities is established by the scientific literature. White House support regarding the need for and viability of carbon capture are necessary signals to executive branch agencies that may not be in complete alignment on the deployment of CCUS as a national strategy in the years ahead, as certain agencies will face external pressure to slow-walk CCUS projects given the perception that the technology allows additional carbon emitting economic activities to continue.

Those same executive branch agencies may also perceive mixed signals in the interim guidance, particularly regarding the pace of deployment and the ability of existing regulatory programs to handle the increased workload associated with the acceleration in the number and complexity of CCUS projects going forward. For example, twice the Federal Register notice characterizes the existing CCUS regulatory framework as “robust,” but the guidance itself seems to recommend what would likely amount to years’ worth of environmental studies, agency rule-making, process and protocol development, and engagement procedures. This includes, for example, the development of new federal leasing regulations; enhancements to greenhouse gas reporting rules; new programs to monitor and verify sequestration rates and volumes; cross-agency coordination on research needed to monitor geologic formation stability, water chemistry, and potential impacts to marine life; and new training, risk assessment protocols, and rule-making for the federal transportation and material safety components of CCUS. For states, communities, and companies pursuing decarbonization, including hydrogen development and production, this messaging mismatch may be difficult to interpret.

The guidance also layers in additional policy considerations that have the potential to complicate agency decisions in this space. For example, CEQ’s chair states that CCUS projects “should” reduce other forms of pollution in addition to carbon emissions, protect environmental justice communities from the cumulative effects of pollution, and create “good, union-friendly jobs.” CEQ will also align the various entities responsible for permitting and funding new CO2 transport pipelines to ensure that those projects “align with climate, economic, and public health objectives.” Considering the potential need for many CCUS projects to comply with the National Environmental Policy Act and other federal regulatory frameworks, these additional policy considerations will likely complicate and elongate environmental permitting and assessment timeframes.

The guidance correctly notes that the Infrastructure Investment and Jobs Act (IIJA) provides significant new funding for one of the critical federal regulatory programs for CCUS: EPA’s Class VI Underground Injection Well (UIC) Program. The UIC program is authorized by the Safe Drinking Water Act and is administered by EPA’s Office of Water. The program authorizes deep-well injection of fluids for various purposes, including industrial and municipal waste disposal wells (Class I), oil and gas-related injection wells (Class II), solution mining wells (Class III), shallow hazardous and radioactive waste injection wells (Class IV), and wells that inject nonhazardous fluids into or above underground sources of drinking water (Class V). EPA finalized requirements for Class VI wells in 2010 and officially launched the Class VI program in 2011. The Class VI program regulates the geologic sequestration of carbon via deep well injection.

According to EPA’s website, the agency has authorized two applications for Class VI UIC wells and has nine currently pending. Although EPA can issue UIC permits, states and tribes are also authorized to apply for and receive primacy to administer and enforce the UIC program. To date, EPA has authorized two states’ primacy applications for the Class VI program — North Dakota in 2018 and Wyoming in 2020. According to CEQ’s guidance, “To facilitate effective permanent sequestration, … the IIJA provides additional funding for implementation of [EPA’s Class VI UIC] Program, including funds that could enable increased staff capacity and training at agencies with geological sequestration permitting authorities, and providing grants for States with UIC Class VI primary enforcement authority (primacy) or to States seeking primacy.”

With this significant investment in the Class VI program, permit applicants and states seeking primacy should expect to see process improvements, speedier agency action, and greater deployment of CCUS technologies across the country. EPA’s existing Class VI staffing levels are relatively small, and additional staffing should help that program scale up to meet the increased demand on agency resources that is already hitting the agency. For example, some commentators are expressing frustration with the time it has taken EPA to process Louisiana’s application for Class VI primacy. The state’s application is dated May 2021, and according to EPA’s website, the application is complete but has not yet been approved. Louisiana received primacy for the Class I-V programs in 1982. Louisiana Senator Cassidy recently placed a hold on EPA nominees, citing EPA’s delay in approving the state’s primacy application and noting that “[w]e have met the requirements and we have the workers, capacity and resources to begin this process. All that’s needed is the green light from the Biden administration.” This political pressure is a harbinger of things to come as CCUS grows into a major component of this administration’s climate adaptation strategy. How the administration manages that pressure against the countervailing arguments to slow CCUS deployment in order to shutter carbon-intensive industries will be worth monitoring in the months and years ahead.

Developers of CCUS technologies and projects, states and local communities contemplating CCUS as part of their climate adaption strategies, and carbon-intensive industries seeking to deploy CCUS to meet new regulatory requirements or corporate sustainability pledges should pay careful attention to CEQ’s new guidance and any future CEQ action in this regulatory arena. The Biden administration is already grappling with how to accelerate the development of renewable energy projects across the country to meet its climate goals, while implementing a regulatory agenda that will inherently slow the environmental permitting processes for infrastructure projects generally. That same tension is now surfacing in the carbon management space, and CEQ will be a central figure in navigating the carbon elimination desires of the White House with the growing realization that CCUS is necessary to meet the White House’s net-zero 2050 targets.