Powering tomorrow Navigating the energy transition landscape 2024 - Flipbook - Page 18
Carbon capture
and storage gains
momentum— but
challenges remain
Global oil and gas consumption is
expected to rise over the next decade
despite ambitious emission targets
and tight regulations—and carbon
capture, utilization and storage (CCUS)
will be instrumental in meeting that
demand while also accelerating the
clean energy transition.
The biggest obstacle to rollout of CCUS projects
around the globe is time itself. Between slow
regulatory approvals, complex cross-border
negotiations, and drawn-out construction
timelines, CCUS infrastructure has been a
start-stop development. But the landscape
could change rapidly over the next decade,
as over 500 CCUS projects in the development
pipeline begin to break ground.
Challenges facing United States (U.S.)
stakeholders
• Legal uncertainty surrounding pore
space: The property rights of pore space, the
empty space between geologic formations
where carbon is often captured, remains
unclear in many states. U.S. courts have
generally granted pore rights to those who
own the surface estate, but not always. In
situations where the mineral rights owner
has been granted an easement, for example,
the court has ruled in their favor, against
established precedent.
Band 2
Energy & Natural Resources
Chambers U.S., 2023
18
Today, however, leases are increasingly being
used to grant pore space access in place of
easements. This has generated additional
uncertainty concerning the length of such
leases, who maintains responsibility for
stored carbon after those leases end, and
whether a lease must consider state and
local regulations with respect to length
of time for sequestration. Because of this
uncertainty, those aiming to invest in carbon
storage facilities will have to rely on local due
diligence and expert counsel to draft leases
and secure pore space rights.
Federally, surface and minerals are owned
by the same person and (presumably) will
not be split—so these considerations may
di昀昀er. But federal courts have yet to settle
on a single approach.
Hogan Lovells | Powering tomorrow: Navigating the energy transition landscape
