Legislative Update: Carbon sequestration

HB 1214 makes changes to the Mississippi Geologic Sequestration of Carbon Dioxide Act, Miss. Code Ann. §§ 53-11-1 to -33 to promote carbon sequestration in Mississippi.  Among other changes, HB 1214 permits the entry by the Mississippi Oil and Gas Board of a preliminary technical order even if a majority of the ownership interests of an underground storage facility have not consented as long as the operator (aka developer) has made a good-faith effort to obtain the consent of a majority of the surface and mineral owners, and the operator obtains majority consent within twenty-four months from the date of the preliminary technical order. The operator would have to compensate non-consenting surface and mineral owners.

Note: The Mississippi Geological Sequestration of Carbon Dioxide Act was enacted by the Legislature in 2011 to allow the construction of a carbon dioxide pipeline. The pipeline was originally intended to use carbon dioxide for enhanced oil recovery, e.g., fracking. That pipeline currently connects underground storage in a geological formation known as the Jackson Dome to pipelines running southeast to the southeasterly and southwesterly corners of the state.  A tax credit for carbon sequestration, known as 45Q, was enhanced by Congress in 2018. 45Q provides an incentive for industries to store carbon dioxide rather than emit carbon dioxide into the atmosphere. According to an article by Alex Rozier in the June 13, 2022, online edition of Mississippi Today, the owner of the pipeline is considering using the pipeline and storage facility for carbon capture and storage rather than or in addition to enhanced oil recovery. The Legislature enacted HB 1214, according to the article, in the hope that this existing pipeline and storage facility, and the favorable geology in Mississippi for underground storage generally, might provide an incentive for industries that can use the 45Q tax credit to locate in Mississippi.