JACKSON — Lawmakers are considering bills to allow and regulate long-term underground carbon dioxide storage, a practice proponents say will help increase the state’s oil production while reducing greenhouse gas emissions.
The Senate passed a bill to set up a regulatory structure giving the Mississippi Department of Environmental Quality the authority to oversee the process. The House version awaits a vote by the full chamber.
Two oil producers — Denbury Resources, Inc., of Plano, Texas, and Tellus Operating Group, LLC, based in Ridgeland — are supporting the bills.
For more than a decade, Denbury has pumped a naturally occurring supply of carbon dioxide back underground to revive oil wells in Yazoo County and south Mississippi. Shell Oil had used the method in the late 1970s and early 1980s, officials said.
Tellus has been involved in enhanced oil recovery since September 2010, said Mike Pumphrey, the company’s general counsel.
Currently, the state Oil and Gas Board oversees the use of carbon dioxide in oil wells. Capturing manmade carbon and storing it underground could attract a long-term supply oil companies could use, industry officials say.
“This is really about economic development and jobs. Mississippi oil fields have seen a resurgence in the last few years, primarily due to the use of carbon dioxide to coax out additional oil reserves,” Pumphrey said. “This is a proven, safe technology. This could save a generation of oil field jobs and oil field service jobs.”
Rep. Brandon Jones, D-Pascagoula, who’s taken the lead on explaining the House bill, said the state is a long way from the point of companies setting up facilities for the sole purpose of storage.
“But this creates the framework of how that’s going to take place and who’s going to be in charge,” said Jones, adding a House vote is expected next week.
Supporters of the proposal also say it could help Mississippi be among the states at the forefront of the federal push for “clean coal” technology, an experimental technique to store underground the carbon emissions from coal-fired power plants and other sources.
The technique, which involves injecting carbon dioxide in stable geologic formations, is designed to reduce greenhouse gases that contribute to global warming. The Obama administration has imposed new rules to protect drinking water and to track the amount of carbon stored underground.
A sudden release of large amounts of carbon dioxide can kill by asphyxiation.
Louie Miller, Sierra Club state director, said the process hasn’t been studied enough.
“There are big question marks as to what the outcomes of this are,” said Miller. “They’re also going to need tens of thousands of property owners to find a cavity large enough to store this in. That’s a lot of gas that you’re pumping underground that you don’t know what’s going to happen to it.”
Under the bills, MDEQ would work out an agreement with the state Oil and Gas Board to store the gas in oil and gas fields, said James Sparks, MDEQ’s underground injection control coordinator.
“If a facility wants to inject their CO2 in a deep saline formation, but it’s not in an oil and gas field, then MDEQ will regulate,” said Sparks.
Sparks also said MDEQ would ensure that the new federal regulations for underground carbon storage would be followed in the state.
Companies could apply for permits from MDEQ and the Oil and Gas Board to build storage facilities in state, said Sen. Bob Dearing, D-Natchez.
“I think it could be a model for other states to follow,” said Dearing, who filed the Senate bill.
Another company monitoring the legislation is Mississippi Power Co., which is building a $2.4 billion coal-fired plant in Kemper County that is expected to capture 65 percent of its carbon emissions through an innovative design and store the gases underground.
“After reviewing, there doesn’t appear to be anything in the bill that would negatively impact the project,” said Cindy Duvall, a spokeswoman for Mississippi Power.