Enchant Energy pushes for legislation clarifying the ownership of interstitial space
Enchant Energy is calling on New Mexico lawmakers to introduce legislation that would clarify who owns the rights to small cavities in geologic formations into which carbon dioxide can be injected. These cavities are called the interstitial space.
Enchant Energy hopes to take ownership of the San Juan plant next year and modernize it with carbon capture technology.
At an interim legislative meeting of the Water and Natural Resources Committee on Tuesday in Gallup, the company’s CEO Cindy Crane said carbon dioxide will mostly be sequestered underground, which is a change from Enchant Energy’s original proposal to sell most of the carbon dioxide for enhanced oil recovery. . However, Crane said some of the carbon dioxide would still be sold for enhanced oil recovery.
But one of the hurdles the carbon industry faces are the property rights associated with interstitial space, especially in areas where there is a divided domain, according to Peter Mandelstam, Chief Operating Officer of Enchant. Energy.
The estate is split when the person who holds the surface rights is different from the person who holds the underground rights.
Mandelstam told the Water and Natural Resources Committee that rights to interstitial space are separate from surface and subsoil rights and that there is currently no clear legislation defining who owns them. Mandelstam suggested legislation that would give rights to interstitial space to the landowner.
These interstitial spaces, he explained, can exist naturally or can be created during the extraction of oil or natural gas.
Enchant Energy is not the first to push for this type of legislation in New Mexico.
Representative Jack Chatfield, R-Mosquero, said the New Mexico Cattle Growers Association has championed such measures in the past.
Prior to the committee meeting, Mandelstam said NM Policy Report that the injection of carbon dioxide into the interstitial spaces of formations is currently facing regulatory ambiguity that makes developers reluctant to invest for fear of legal action.
Mandelstam said creating laws to define ownership of interstitial space will help New Mexico by creating jobs and allowing carbon sequestration.
He went further at the committee meeting. Enchant Energy, in conjunction with the New Mexico Institute of Mining and Technology and other partners, received a federal grant to study the drilling of a Class VI well in the San Juan Basin that would allow injection of carbon dioxide into deep geological aquifers. These Class VI wells require a permit from the United States Environmental Protection Agency under the Safe Drinking Water Act.
Mandelstam said he initially considered a location on state land for this well, but moved to federal land due to the lack of clear state regulations regarding pore space. However, issues surrounding the authorization of the surrounding federal lands led Enchant Energy to ultimately choose to explore private land options.
Ownership of interstitial space was one of the three obstacles identified by Mandelstam. The other two barriers are custody and long-term responsibility for carbon dioxide and regulatory jurisdiction.
Mandelstam suggested New Mexico could charge a “reasonable injection fee” and recommended 10 cents per metric tonne of carbon dioxide. This money would go into the general state fund, he said.
In addition, he said the rules should allow for the transfer of long-term responsibilities to the state after a project no longer injects carbon dioxide. He gave the example of Enchant Energy being responsible for monitoring, reporting and verification while the project is operational as well as for several years thereafter before New Mexico assumes responsibility for it. long term.
Mandelstam’s proposed legislation also allows the state to charge annual regulatory and enforcement fees, which would be determined by the Oil Conservation Division.
OCD can currently regulate carbon dioxide used for enhanced oil recovery, which is different from permanent sequestration.
Mandelstam suggested the legislation should allow for a rule-making process for carbon dioxide sequestration.
This legislation that Enchant Energy is pushing for would impact state lands. Mandelstam said Enchant Energy is also in talks with federal lawmakers about developing regulations for pore space on federal lands.