6.3 Transfer of liability

Regulations typically consider the liability transfer of the site after safety of the wells and the CO2 plume is demonstrated. There is still a discussion about the transfer of liability, as it is suspected that operators may decide differently knowing they will not be responsible in the future. But it is also possible that without such a provision operators may not be interested in any investment concerning CO2 storage.

In general liability can be separated into four levels:

  • Operational liability deals with the remediation and monitoring;
  • Environmental liability is the part about negative effects of CO2 release on reduction agreements and global climate;
  • In-situ liability is about the effects on natural site-environment, drinking water, humans and endangerment of hydrocarbon reservoirs in the vicinity;
  • Trans-border liability concerns the effects on neighbouring countries.

If the safety of the site is provided thoroughly no issues of liability should arise. Nevertheless liability is a vital part of all regulations as to maintain mutual understanding of all involved parties.

The EU CCS Directive requires further monitoring after the transfer of site-responsibility, but other regulations do not. Generally the demonstration of safety is required in every regulation before any transfer of liability is possible, so the extra monitoring required by the EU CCS Directive can be seen as some backup measure.

Some regulations do not specify the financial contributions of the operator, for the understandable reason as that the true costs are not yet clear. But this course may also deter possible operators as they have no estimations on what costs to expect.

After the transfer of liability monitoring of the site is recommendable. The IEA model regulatory framework contains a clause that "the operator should provide suggestions for monitoring after the transfer". It also mentions a financial mechanism for operators to contribute to a collective fund for expected costs after the transfer.

European regulations

The EU CCS Directive 2009/31/EC says that a certificate for closure will be released after the cessation of injection and the demonstration that all relevant conditions of the permit have been fulfilled by the operator. Also an updated post-injection plan is required, which should be approved by the authorities. If 20 years after site-abandonment the well plugging has proven safe and financial obligations have been met, the transfer of responsibility to the authorities is possible. The kind of responsibility is not specified. So far the operator is obligated to cover any costs related to ensuring the safe containment and they should cover at least the costs of further monitoring for 30 years. After the change of responsibilities the authority will continue monitoring but on a reduced level to ensure no leakage is occurring and to detect any significant irregularities.

The Norwegian petroleum activities act states that authority will make a decision on long-term liability when "Sleipner" is decommissioning.

USA

In the EPA UIC regulations no transfer of liability is mentioned. After the demonstration of the safety of the CO2 plume and the well plugs a site closure certificate may be granted. As there are strict rules on the demonstration of the plume safety, no additional or further monitoring is required.

IOGCC guidance regulationsstate that ten years after plugging the wells the responsibility of the site shall be transferred to a designated federal agency and the operator shall be released from his liability. The federal agency will perform monitoring by using a shared fund paid into by the operators. There are no requirements on the safety of the CO2plume, but reporting of monitoring, well plugging and removal of installations is obligatory.

The WRI guidance regulations require that when the CO2 plume and well plugging are proven safe the operator shall no longer be responsible for the site and the future costs. Risk assessment should be updated and periodic monitoring maintained, but it is not yet decided who will be responsible and how to finance further monitoring.

Australia

OPA regulations require an application for closure, including the demonstration of safety and a further plan on long-term monitoring after closure was granted. If closure is granted then the liability is transferred to commonwealth.

The "Victoria Greenhouse Gas Geological Sequestration Act 2008" requires demonstration of safety and a risk management plan but does not specify general liability. The "New South Wales Greenhouse Gas Storage Bill" describes how to apply for site-closure and states that after closure certificate is granted the operator is released from liability.