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VANCOUVER, B.C.--The Alberta government announced regulations detailing how permitting for large-scale carbon capture and storage (CCS) projects will proceed in the energy-rich western Canadian province and who owns rights to use subsurface porous space, a spokesman for Alberta Energy told BNA.
Spokesman Bob McManus said the Carbon Sequestration Tenure Regulation, announced April 28, is similar to other regulations under the Mines and Minerals Act, which grants tenure--leasing and administration rights--for oil, natural gas, oil sands, mines, and minerals in the province.
Thus, companies may apply for pore-space tenure under the regulation using the same model in place for petroleum and natural gas rights, according to the ministry.
“It's important to do this because for Alberta, carbon capture and sequestration is an important part of climate change plans,” McManus said. The law fills the vacuum of who owns or has rights to subsurface porous space, he said.
The regulation establishes a five-year evaluation permit to determine a site's suitability for storing carbon dioxide. It also creates a 15-year sequestration lease for longer term commercial needs and requires permit and lease holders to submit monitoring, measurement, and verification plans that must be approved by the energy minister and updated every three years.
In addition, the regulation sets annual rental rates of one Canadian dollar per hectare (2.5 acres) and application fees of C$625 ($657) for both permits and leases. It also sets the minimum carbon dioxide injection depth at one kilometer (0.6 mile) and sets a maximum area for permits and leases at 73,728 hectares.
According to the government's CCS Major Initiatives website, four project proponents have signed letters of intent to receive CCS funding from the province and are working with the province on grant agreements. The province said it plans to spend more than C$400 million ($421 million) for environmental programs in fiscal year 2011, including money for carbon capture and storage projects (34 INER 286, 3/16/11).
A Feb. 25 budget document on responsible resource development said that in the first of the four projects, Enhance Energy Inc. plans to build a carbon trunk pipeline northeast of Edmonton to deliver carbon dioxide captured from a bitumen refinery to be used to enhance oil recovery.
However, McManus said the regulation is not specific to enhanced oil recovery. “This regulation is specific to deep, long-term injection,” he said.
Greg Stringham, vice president of the Canadian Association of Petroleum Producers, told BNA that the regulation puts in place rules about who owns the space and how it can be used.
“It provides certainty that isn't there in other jurisdictions,” he said.
Companies will need to continue to work with landowners to obtain surface access and the provincial Energy Resources Conservation Board to obtain necessary approvals required by law, the government said.
In addition, projects will need a well license before they can drill an injection well and an additional approval before they can begin commercial scale sequestration.
Existing provisions available to landowners to intervene in the application process and to seek compensation remain in place.
More information on major CCS initiatives in Alberta is available at http://www.energy.alberta.ca/Initiatives/1897.asp.
More information about tenure rights in Alberta is available at http://www.energy.alberta.ca/OurBusiness/tenure.asp.
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