Long-term Carbon Storage Liability

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Carbon capture projects are ramping up, and many are coming online. The process often involves storing carbon deep in underground natural resources. The industry is working to answer the question of who’s responsible for that stored carbon dioxide? The producers? The states? The taxpayers? 

Operators, including ExxonMobil and BP, have sought protections from long-term liability. Several states have laws allowing companies to transfer responsibility to state governments after operations shut down. 

For example, a law passed in Wyoming may reduce the incentive for companies to responsibly store the carbon—if they know liability won’t come back to them. Poorly managed projects could increase the risk of carbon dioxide leaking and contaminating groundwater or escaping into the atmosphere.

Other states have established funds that would cover costs in the event of a leak. States passing laws that limit long-term operator liability say doing so incentivizes much-needed investment in carbon removal.

Scott Anderson, senior director of energy transition at the Environmental Defense Fund, said states need to maintain incentives for companies to store carbon with the most rigorous standards, which includes long-term liability for issues. 

Anderson points out that removing corporate liability is at odds with regulations governing other types of injection wells that already store wastewater from oil and gas production and other hazardous substances. Companies often retain responsibility if those wells start to leak, even if the project has been closed.

We’re amid a giant game of tag. Who’s it?