carbon capture
September will bring a new law that allows for the underground storage of carbon dioxide in Ohio. H.B. 170 , the Carbon Capture and Storage bill, had a rocky voyage and multiple revisions in its long year-and-a-half run through the Ohio General Assembly. But in the end it had bipartisan support and only four legislators opposed the measure, now signed by Governor DeWine. The new law becomes effective on September 23, 2026. We’ve written several articles about Carbon Capture and Storage (CCS) and Ohio’s legislation, available here as a series.
CCS is a carbon sequestration technology that captures carbon dioxide (CO2) from airborne emissions and injects it into geologic formations known as “pore space” far beneath the land surface through Class VI injection wells. Proponents state that the technology will reduce the amount of CO2 in the atmosphere, permit industries with CO2 emissions to reduce their carbon “footprint” and raise their “carbon index” and allow for innovative future reuses of C02. Because CCS requires land and can reduce the carbon index of products like ethanol, the technology has implications for Ohio agriculture.
Legislation was necessary to authorize CCS in Ohio, establish a regulatory program to oversee it, and answer important legal issues related to CCS. H.B. 170 aims to address those needs. Not surprisingly, the new law hands regulatory responsibilities to the Ohio Department of Natural Resource Division of Oil and Gas Resources Management. Much more surprising was a late amendment in the Senate Energy Committee to create a Host Community Fund for use by communities hosting CCS projects, which proponents state is the first fee of its type in the country. CCS owner fees will fuel the fund. Another surprise came in the form of a higher standard for statutory consolidation or “forced pooling” of pore space interests. The original proposal allowed a CCS operator to apply for statutory consolidation with consent of at least 65% of the pore space interests, but that increased to 75% in the final bill, putting Ohio behind only Wyoming in the higher protection for property owners.
Here’s a summary of other provisions in the new law:
Authorization of CCS and clarification of property interests – ORC 5301.58 and 5301.59
- Authorizes carbon sequestration projects for the purposes of injecting CO2 into pore space through an Underground Injection Control Class VI permit.
- Declares the land surface owner to be the owner of all pore space beneath the land surface and allows the surface owner to sever and transfer the pore space to another party though typical property transfer instruments. A pore space instrument must contain a specific description of the location of the pore space.
- Clarifies that once severed, the pore space interest is dominant and has priority over a surface interest unless provided otherwise.
- Clarifies that a severed mineral or oil and gas interest is dominant over a pore space interest on the same property.
- States that all CO2 injected into a CCS storage facility is presumed to be owned by the storage operator rather than the surface or pore space owner.
- Clarifies that ownership of pore space or any other surface or subsurface property interest owner does not establish liability for the injection of CO2 and other CCS substances.
Regulatory framework for establishing CCS projects – ORC 1509.71 to 1509.75
- Grants exclusive authority to regulate CCS activities to the Division of Oil and Gas Resources Management in the Ohio Department of Natural Resources (ODNR), except for any activities regulated by federal laws for which the U.S. has not delegated regulatory authority to Ohio.
- Directs ODNR to establish rules to implement the new law. The rules must include provisions for:
- Applications for and terms and conditions of UIC Class VI permits;
- Entry rights for inspection and compliance;
- Maintenance of information through monitoring, recordkeeping and reporting;
- Field drainage system review, mitigation, and repairs if ground disturbance is necessary;
- Statutory consolidation or pooling procedures;
- Well drilling, operating safety, spacing, and setback requirements;
- Protection of public and private water supplies;
- Fencing, screening, and noise mitigation;
- Containment and disposal of drilling and other wastes;
- Construction of access roads;
- Liability insurance from the commencement of construction to closing, including at least $15 million for bodily injury and property damage from construction, drilling or operation of wells and including environmental coverage.
- Maintenance of a surety bond, letter of credit, insurance, escrow, or self-insurance by the well operator.
- Allows ODNR to require seismicity monitoring prior to carbon injection and periodically throughout operations.
- Allows ODNR to create a program to incentivize innovation for the use and reutilization of captured CO2.
- Requires CCS well operators to design projects to isolate impacts on oil and gas production.
Fees, funds, and host community payments – ORC 1509.78
- Requires CCS operators to pay five cents per metric ton of CO2 injected into the Carbon Dioxide Storage Facility Fund and allows ODNR to use the fund for specified expenses and purposes.
- Allows ODNR to set and charge application fees, annual fees, and other fees necessary to defray administrative costs, to be deposited into the Carbon Capture Administrative Fund (CCAF).
- Establishes a “Host Community Fee” to support the needs of communities in which a CCS project exists. A CCS owner must pay the fee of three cents per metric ton of injected CO2 to be used by the county, township, municipal corporation, school district, or other subdivision for infrastructure; parks, recreation, and trails; education; or public safety.
Statutory consolidation or “pooling” of CCS projects – ORC 1509.76
- Allows a CCS project applicant to submit a request for statutory consolidation of pore space interests to ODNR if, after good-faith negotiation, the applicant has obtained the consent of at least 70 per cent of the pore space needed for the project.
- Lays out provisions for the statutory consolidation process, including a $50,000 application fee; notice requirements to pore space owners; hearing timelines; and allocations of property interests and compensation.
- Requires ODNR to approve the application if “such operation is reasonably necessary to facilitate carbon sequestration.”
- Clarifies that a statutory consolidation order does not result in a transfer of any person’s title to pore space.
Project closure – ORC 1509.77
- Establishes a “certificate of project completion” process to close a well no less than 50 years after injections cease.
- Requires ODNR to issue a certificate of completion only after satisfaction of all conditions, public notice and comment, and if necessary, a public hearing.
- Conditions for completion include proof that: the operator is in compliance with all law; CO2 is not expected to extend or migrate outside the project area or vertically and not expected to endanger public health, safety, the environment or underground drinking water sources; all equipment is in good condition and will retain mechanical integrity; and the operator has plugged well and completed required reclamation.
- States that upon issuance of a project of completion the operator is released from regulatory requirements, the financial assurance instrument is to be released to the operator, and primary responsibility and liability for the stored CO2 shall be transferred to the State except for potential criminal and contractual liability, violations of duties, provision of deficient or erroneous information, or migration that threatens public health or safety or the environment or underground sources of drinking water or the CO2 storage facility fund is insufficient to cover costs.
Liability and claims – ORC 5301.60
- States that a claim for damages based on CO2 injection or migration is not valid unless there is proof of a direct physical injury to a person, animal, or property, but exempts claims by oil and gas interest or owners of class II disposal wells from this provision.
- Limits recovery under a CCS property injury claim to the reduction in property value and prohibits punitive damages if the CCS operator acted in compliance with permit requirements.
Appeals and fines – ORC 1509.79 and 1509.99
- Establishes an appeals process for any person adversely affected by an ODNR order regarding the CCS program.
- Aligns fines for violating the CCS program with fines for violating the Oil and Gas program administered by ODNR.
What’s next?
Rulemaking. Now the ODNR must develop regulations for the CCS program. After rules are proposed, reviewed, and finalized, we can also expect Ohio to submit its primacy application to the U.S. EPA. The EPA would determine whether Ohio’s program suffices for the agency to delegate authority over UIC Class VI well permitting in Ohio to the ODNR. That delegation of authority would purportedly result in faster review of the UIC permits at the state rather than federal level. With much yet to happen, we’re not quite to the end of the CCS process in Ohio, but we’re closer than we were two years ago when we first learned that CCS could come to the state. As always, we’ll continue to follow future developments on CCS.
Landowners should still be cautious
A landowner who signs a pore space lease for a CCS project today won’t be subject to or benefit from the provisions of H.B. 170, which puts the landowner at risk of legal uncertainty. Until the new law is effective on September 23, 2026, and the ODNR establishes final regulations, there are no laws in Ohio that clearly recognize pore space interests, provide for severing or transferring those interests or prioritizing pore space with other property interests, or place requirements on CCS project operators. Operators would be required only to obtain a UIC Class VI permit from the U.S. EPA and would not be subject to state oversight. For these reasons, landowners receiving offers to lease pore space for CCS may be wise to wait a few more months for the law to be effective and provide clarity and oversight for CCS development in Ohio.
Part 2 in our series on Carbon Capture and Storage
If you’re a landowner, you may hold a valuable property interest that is gaining attention across the country: pore space. Pore space is the empty space between the particles of soil, sand, rock, and sediment beneath the surface of your land. It’s a geological formation that, if large enough, can store gas, brine water, and similar substances. Why the recent interest in pore space? It’s a necessity for Carbon Capture and Storage (CCS)—a technology that removes carbon dioxide (CO2) from emission sources and stores it in pore space far beneath the land’s surface.
We began this series on CCS with an overview of the technology and why it’s gaining traction in Ohio. See our first post on the Ohio Ag Law Blog. This second post focuses on legal issues related to pore space. The capacity to store CO2 in the pore space beneath the surface is a property interest that may have value to landowners—one that could be sold or leased to another party for CCS or other storage purposes. But before pore space transactions occur in Ohio, the General Assembly must address a few legal issues: clarification of pore space ownership, whether and how pore space interests can be severed and conveyed, and the relationship between a severed pore space interest and surface and mineral interests. Here’s why these are important legal needs.
- Ownership of pore space. A golden rule of property law partly answers the issue of pore space ownership in Ohio: the “ad coleum” doctrine. The doctrine states that the owner of land owns the rights above and below the land, from the sky to the earth’s core. The assumption under this common law rule, then, is that a landowner owns all subsurface pore space. But what if the pore space is created as a result of a particular activity, like mining? While a few court cases in Ohio have followed the ad coleum doctrine and recognized pore space ownership as an attribute of surface ownership, there have been inconsistent court rulings on the question of ownership of pore space resulting from mining activities. The rulings drive a need for the Ohio legislature to clarify pore space ownership issues, first by codifying the ad coleum doctrine and stating that a surface owner also owns the pore space beneath the surface. Second, statutory law could state whether the surface or mineral owner holds the right to pore space resulting from mineral extraction. If Ohio follows the general rule on mineral extraction adopted among other states, Ohio law would state that the surface owner retains the right to pore space after minerals are fully extracted.
- Severance, conveyance, and recording of pore space interests. Can a surface owner sever the rights to pore space and convey the interest to another party, as Ohio law allows with mineral interests? That’s another legal question in need of clarification in Ohio. The legislature could establish the right to sever pore space and adopt the same conveyancing and recording standards we utilize for tracking other property interests in Ohio.
- Conflicts with other property interests. Can pore space owners interfere with mineral and surface ownership interests by taking actions such as establishing a CCS well on the surface to store CO2 in the pore space? Which property interest has priority over the others if there is a conflict? Our courts can address legal questions as they arise but the Ohio legislature has the power to clear up the relationship between these property interests through statutory law. In particular, Ohio law should establish the priority of rights between the surface, pore space, and mineral interests and answer which is dominant over another when there is a conflict.
Will the legislature tackle these pore space issues that arise with the potential of CCS in Ohio? Possibly, but probably not until the next legislative session begins in January. There are currently proposals in both chambers of the legislature that simply declare an “intent to regulate carbon capture and storage technologies and the geologic sequestration of carbon dioxide for long-term storage,” House Bill 358 and Senate Bill 200, but those bills do not yet contain any detailed language and they will die if not passed by year’s end. With few days remaining in the legislative session this year, the bills are not likely to see any action. There will likely be new versions of the bills introduced next year, however, if the interest in CCS in Ohio continues. Hopefully, the proposals will answer our legal questions about pore space as a property interest of Ohio landowners.
Read the next blog post in this series, which reviews the CCS legislation under consideration in Ohio, at this link.
Tags: pore space, CCS, carbon, carbon capture, carbon injection, carbon lease, carbon sequestration
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Co-authored by Tyler Zimpfer, Law Fellow, National Agricultural Law Center
This is the first in a four-part series on Carbon Capture and Storage in Ohio. See Part 2 in this blog post, Part 3 in this blog post, and Part 4 in this blog post.
Many in Ohio agriculture are familiar with the terms “carbon sequestration” and “carbon credits.” The terms relate to efforts to reduce carbon in the atmosphere by capturing or “sequestering” the carbon. Ohio farmers have taken advantage of their ability to sequester carbon through practices like conservation tillage and cover crops, thus exchanging carbon sequestration practices or the generation of carbon credits for cash payments.
Now an additional form of carbon sequestration is emerging: Carbon Capture and Storage (“CCS”). CCS is a carbon sequestration technology that industries with large carbon dioxide (CO2) emissions are using to reduce their carbon “footprint.” CCS technology captures CO2 from airborne emissions and injects it into geologic formations beneath the land surface. Because CCS requires land and can reduce the “carbon index” of products like ethanol, the technology has implications for Ohio agriculture.
In this first post on CCS, we’ll lay out the background of CCS and what’s driving interest in it. Future posts will explain legal hurdles for bringing CCS to Ohio, how CCS relates to ethanol and the potential growth of the sustainable aviation fuels market, and how Ohio landowners could be affected by CCS.
What is Carbon Capture and Storage?
CCS is a process that captures carbon dioxide from an emitting source and permanently stores it underground in geologic formations referred to as “pore space.” Though some are hearing of CCS for the first time, CCS technology has existed for decades, as have many studies on its safety, sustainability, and the amount of carbon that can be stored in different formations and regions. The Environmental Protection Agency (“EPA”) finalized a rule regulating geologic sequestration in 2010 pursuant to the agency’s authority under the Safe Drinking Water Act.
CCS involves three separate steps – capture, transport, and storage. CO2 is captured and separated from other gases at industrial facilities or directly from the atmosphere. After captured, the CO2 is then compressed for transportation. The compression forces the CO2 to act like a liquid. CO2 is most commonly transported via pipelines but can also be moved by ship to offshore wells. Once the CO2 arrives at the intended destination, it is injected into rock formations, often a mile or more underground, where it spreads throughout the pore space of the formation in a plume. The CO2 is then permanently stored in the geological formation. CCS technology is also used for “enhanced oil recovery,” because CO2 injection can recover untapped oil reserves in a partially-depleted oil field. When used for enhanced oil recovery and storage, the technology is referred to as “carbon capture utilization and storage” or CCUS. The image below illustrates different types of CCS.
Source: Congressional Budget Office
Regulation of CCS wells
CO2 injection wells are regulated under the federal Safe Drinking Water Act by the EPA through the Underground Injection Control (UIC) Program. The category of wells relevant to CO2 for geological storage is “Class VI” wells. The primary purpose of the Class VI regulations is to protect underground sources of drinking water and prevent leakage, explosions, and contamination. Much attention is currently focused on CCS technology due to a recent Archer Daniels Midland (ADM) suspended the injection of CO2 at a site in Illinois after discovering a potential leak due to corrosion in a monitoring well. While there is no report of water contamination, the EPA found ADM violated federal safe drinking water rules by failing to follow an emergency response plan after detecting the leak.
Why so much interest in CCS?
CCS is expected to be an important strategy of industries that struggle with decarbonization or net-zero greenhouse gas emission goals. CCS can reduce CO2 emissions for hard-to-abate sectors that don’t have other methods for reducing their emissions, such as refineries and cement, steel, and chemical manufacturing
A more recent (and arguably more prominent) factor driving CCS is the current federal tax incentive. The 2022 Inflation Reduction Act (IRA) expanded the tax credit known as “Section 45Q,” first enacted in 2008 and extended in 2018. A company that captures and stores a certain threshold of CO2 every year is eligible for the tax credit. The IRA made several changes to the Section 45Q tax credit to further promote CCS and make it more lucrative and accessible, such as increasing the value of the credit by 70% to $85 per metric ton; lowering the annual capture amount required for eligibility by at least 50% for most facilities; and allowing transferability of the tax credit. With the significant changes in the IRA, researchers expect an increase in CCS projects across the United States.
Can we do CCS in Ohio?
No, not without legislation. Two legal changes are necessary to enable CCS technology in Ohio. (1) Ohio law must define and clarify property rights to the pore space in geological formations beneath land surfaces, and (2) the state must allow the establishment of CCS injection wells in Ohio. We explain these two requirements in our second post in this series on CCS, available at https://farmoffice.osu.edu/blog/carbon-capture-and-storage-legal-issues-pore-space.
For more background information on CCS and Section 45Q, see:
- Congressional Research Service, Carbon Capture and Sequestration (CCS) in the United States, https://crsreports.congress.gov/product/pdf/R/R44902
- Congressional Budget Office, Carbon Capture and Storage in the United States, https://www.cbo.gov/publication/59832#_idTextAnchor007
- Ohio Department of Natural Resources, Carbon Capture, Utilization, & Storage, https://ohiodnr.gov/discover-and-learn/safety-conservation/about-odnr/geologic-survey/energy-resources/carbon-capture-utilization-storage
- Congressional Research Service, The Section 45Q Tax Credit for Carbon Sequestration, https://crsreports.congress.gov/product/pdf/IF/IF11455
Tags: carbon capture, CCS, sequestration, 45Q, pore space, carbon injection, carbon storage
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