CCS LEGAL ISSUES

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CCS LEGAL ISSUES

• Karen J. Greenwell
• Wyatt, Tarrant Combs, LLP

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CCS PHASES AND ACTIVITIES

• CAPTURE
• Power Plant /Other
• Fossil Fuel Facility
• Oxy-Fuel
• Pre-Combustion
• Post-Combustion

• TRANSPORTATION
• Truck
• Pipeline

• INJECTION
• Deep Saline Aquifer/
• Rock Formation
• Depleted O G
• Resevoirs
• Enhanced Oil
• Recovery (EOR)
• Deep Coal Seams

• POST-INJECTION
• (MMV)
• Measuring
• Monitoring
• Verification

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CCS Phases and Risks

• Transportation
• Catastrophic Release
• Injection
• Induced Seismology
• Groundwater Contamination
• Harm to Health Environment
• Post-Injection
• Migration/Trespass
• Contract Liability
• Ground Water Contamination
• Harm to Health Environment

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CCS Phases Legal Issues

• Pipeline Transportation
• Siting
• Voluntary Rights of Way
• Condemnation
• Common Carrier Regulation
• FERC
• DOT
• Tort Liability for Catastrophic Release

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CCS- Phases Legal Issues

• Injection
• Property Issues Site Acquisition
• Ownership Issues
• Surface Underground Trespass
• Tort Liability
• Health Environment
• Groundwater Contamination
• Strict liability
• CERCLA, RCRA

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CCS- Phases Legal Issues

• Post-Injection
• Tort Liability
• Trespass
• Groundwater Contamination
• Human Health Environment
• Strict Liability
• Contract Liability
• Breach of Contract
• Loss of Storage Credits
• Regulatory Liability

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CCS Property IssuesOwnership of Storage Space

• Depends on the nature of the target formation and
  the jurisdiction
• Storage in mineral strata implicates solid
  mineral ownership law
• Storage in oil or gas fields implicates oil and
  gas ownership law
• Storage in saline aquifer implicates water law

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CCS Property IssuesSolid Minerals Ownership
Options

• Fee Simple Absolute
• Analogous to separate surface tract
• Absolute, perpetual ownership

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CCS Property IssuesSolid Mineral Ownership
Options

• Fee Simple Determinable
• Ownership in place
• Only until minerals are exhausted
• Applied to leaseholds to exhaustion

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CCS Property IssuesSolid Mineral Ownership
Options

• Profit À Prendre/Servitude
• Not ownership
• Right to take benefit from property
• May be perpetual
• May be exclusive
• No use beyond what is necessary

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CCS Property Issues Oil Gas Ownership Options

• Fee Ownership
• Made a defeasible fee by the rule of capture
• Servitude Theory
• Exclusive right to explore and reduce to
  possession from the relevant property

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CCS Property Issues Water Ownership/Use
Concepts

• Theories Governing Use and Removal of Water
• Absolute Dominion
• Reasonable Use
• Prior Appropriation
• Correlative Rights

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CCS Property IssuesProblems of Multiple Owners

• Co-Tenancy
• Multiple Owners of the Same Formation
• Must the Interest of every Owner be Acquired?
• Severed Estates
• Different Seams/Minerals/Formations May Have
  Different Owners

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CCS Property Issues
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CCS Liability IssuesTrespass

• Unlawful interference with another's person,
  property or rights
• Common law tort had several different forms
• Trespass de bonis asportatis (Conversion)
• Trespass quare clausum fregit (Trespass to Land)
• Trespass vi et armis (Physical Injury to Person
  or Property)
• Actual harm may or may not be necessary to
  support a trespass claim

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CCS Liability Issues Nuisance

• Public Nuisance
• Private Nuisance
• Property Use Must Be Reasonable
• Property Use Must Not Disturb The Free Use Of
  Other Property Or Its Physical Occupation

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CCS Property Issues-Access

• Theories of Access Through Overlying Minerals
• Purely Legal Analysis
• What Do The Documents Say?
• Does one estate have a grant of dominant rights?
• Essentially a bargain between the parties
• Which estate was severed first?
• No subsequent severance can affect the rights of
  the first severed estate

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CCS Property Issues-Access

• Chartiers Block Coal Co. v. Mellon, 152 Pa. 256,
  25A 597 (Pa. 1893)
• Chartiers Owned The Coal And Extensive Surface
  Rights
• Chartiers Grantor Reserved No Access Rights
  Through The Coal To Reach The Underlying Oil And
  Gas
• Mellon Drilled For Oil
• Chartiers Sued To Stop The Drilling

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CCS Property Issues- Access

• Easement By Necessity
• Inherent Rights Governed And Adjusted By
  Legislation
• Reciprocal Servitudes

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CCS Property Issues-Access

• Easement By Necessity
• Unity of Title
• Necessity At Time Of Severance
• No Reasonable Alternate Access
• Typically No Liability If Use is Within Scope Of
  Easement

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CCS Property Issues- Access

• Reciprocal Servitudes/Due Regard
• The owner of each estate must exercise its rights
  and develop its interest with due regard for
  the other estates
• Each party has to minimize interference with
  other uses
• Frequently gives the first on the ground the
  first right
• May have a different result than the purely legal
  analysis

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CCS Liability Issues -Trespass

• Tort Liability/Strict Liability
• Groundwater Contamination
• Acidity/Salinity
• Metals
• Seismic Induction
• Destruction of Plant Life
• Damage to Overlying Strata

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CCS LEGAL ISSUES

• Karen J. Greenwell
• Wyatt, Tarrant Combs, LLP
• 250 West Main Street, Suite 1600
• Lexington, Kentucky 40507
• 859-288-7636
• kgreenwell_at_wyattfirm.com