House OKs regulations for 'carbon sequestration'

HELENA – The Montana House today approved a heavily amended bill to regulate a fledgling industry that seeks to pump the carbon dioxide produced by coal-fired power plants into the ground. The vote was 77-23.

Senate Bill 498, sponsored by Sen. Keith Bales, R-Otter, would set up rules and regulations for “carbon sequestration,” the process of capturing the greenhouse gas carbon dioxide as it is emitted from a plant and storing it underground instead of releasing it into the atmosphere.

The version approved by the House came with 58 amendments from committee, changes Rep. Mike Phillips, D-Bozeman, said were necessary to get the bill out of the deadlocked Federal Relations, Energy and Telecommunications Committee.

“It represents a sufficient regulatory framework,” Phillips said.

Some of the most significant amendments give regulatory authority to the Board of Oil and Gas Conservation but also requires the board to consider comments from the Department of Environmental Quality before a CO2 injection certificate can be granted. Phillips also said the amended version of the bill left no role for the Board of Environmental Review.

The issue had been a sticking point for some Democrats and environmentalists who argued the DEQ would provide a more scientific review of permits than the Board of Oil and Gas Conservation, which they say tilts toward industry’s views.

Another point of contention was how long a sequester would be liable for any environmental problems associated with the practice. Lawmakers compromised at 30 years.

The bill also defines ownership of “pore space,” or the underground space where the gas will be stored. It now says that if the ownership cannot be determined by deeds through law, it will be assumed the surface owner owns the pore space.

Lawmakers on both sides of the aisle supported the bill. Rep. Art Noonan, D-Butte, touted the bill as essential for future coal development because coal companies, fearing future federal carbon regulations, will not build plants in the state if they do not have access to underground places where they can store CO2.

“There is no future in coal if we don’t get our hands around this,” Noonan said. “You don’t like coal? Vote against this.”

Noonan, who heads the House committee that forged the much-changed bill, predicted that the issue will need more work in future sessions. If the measure passes, Montana would be one of only a few states with such legislation.

“This is a scary proposition,” Noonan said. “This is a big deal.”

Many Republicans agreed with Noonan. Rep. Duane Ankney, R-Sidney, urged lawmakers to vote for the measure even if they do not believe in global warming.

“This bill is essential to any development going forward in coal,” Ankney said.

But opponents said the science of carbon sequestration has yet to be developed or tested. They argued that the Legislature would be acting prematurely if it passed such regulations.

“There is no such industry and there is no such technology,” Rep. Brady Wiseman, D-Bozeman, said. “None of this (legislation) advances the cause of carbon sequestration.”

Wiseman added that since the industry does not exist, SB 498 has become a political talking point to show support for coal development in general.

“If you want to pledge your allegiance to coal, let’s not do it with 30 pages of legislation,” he said.

Rep. Gordon Hendrick, R-Superior, also expressed concern about the lack of scientific study on carbon sequestration. He said the effects on Montanans and the environment should be carefully considered before passing any laws.

But Phillips disagreed, saying Montana could be a front-runner in the development of carbon sequestration, bringing in more business and responsible natural resource development.

“This is a most timely issue,” Phillips said.

The Senate will need to approve the House amendments before the bill can be sent to Gov. Brian Schweitzer, who must decide whether to sign it. Only four legislative days remain.

-by CNS correspondent Molly Priddy

Governor blasts GOP budget and stimulus plans

By MOLLY PRIDDY
Community News Service
UM School of Journalism

HELENA – As bills to spend billions of state and federal tax dollars work their way through Legislature’s final days, Gov. Brian Schweitzer is making it clear that he’s not pleased with what he sees heading his way.

“This session, if it ended today, would be less successful than the last legislative session,” Schweitzer said in an interview this week. “The major funding bills are not anywhere close to a condition where we could support them.”

The governor is especially miffed with Senate Republicans who reduced funding for a voter-approved program to expand health coverage for another 30,000 uninsured Montana children. Their plan would add cover about 15,000 additional children. Nor is he happy with the GOP plan to spend less ongoing state money on K-12 schools.

But if you really want to set him off, ask him what he thinks of GOP’s plan to dole out nearly $800 million in federal stimulus dollars provided in the Obama administration’s Recovery Act.

“The money that is contained in (that bill), violates the principal of the Recovery Act, and we would run a very high risk of being forced to send the money back to Washington, D.C.,” Schweitzer said. “There is an inadequate investment in education and health care.”

Senate Republicans fired back, saying the criticism comes from an absent governor who did not offer suggestions about how to solve problems earlier in the session. They also said their amendments to the bill fund both health care and education responsibly, given the recession.

“Education is funded at the level he funded it at in his budget,” said Senate President Bob Story, R-Park City.

That’s technically true, but the clash over of how Democrats and Republicans want to fund schools has implications for the future.

Schweitzer’s proposed budget would give school districts a 3 percent increase in ongoing state money for their base budgets and 3 percent increase for per student payments. That money would be a permanent increase, unless some future Legislature votes to cut it.

But Senate Republicans fear that if the economy doesn’t improve and state tax coffers shrink over the next two years, lawmakers could be forced to either slash school funding or raise taxes, something neither party wants to do.

The GOP solution is to give school districts the same amount as the governor proposed but with one important difference: The bulk of it would come from one-time federal stimulus money – money that won’t be there in two years.

That means that if the economy doesn’t improve, schools had better start looking for ways to cut their budgets. Senate Majority Leader Jim Peterson, R-Buffalo, said the GOP plan gives schools time to consider changes, if necessary.

“We’re not underfunding education,” Peterson said. “The only debated issue is where should the base (increases) be two years from now.”

Another simmering feud between Schweitzer and GOP leaders is over the doling out federal stimulus dollars to cities and counties for “shovel-ready” infrastructure projects, such as road and bridge work.

The governor wants legislation that spells out each single project. Senate Republican want to give local governments block grants so they can decide how to best spend the money.

Story said the change was made to protect the money so Schweitzer could not pick and choose which project to veto when it’s time to sign the stimulus bill.

That’s “ridiculous,” Schweitzer said during Wednesday’s interview. To make his point, he produced a 60-plus page copy of the main budget bill, tossed it on the table and began pointing out various line items and their costs. That system allows for transparency, Schweitzer said.

“This is the way we appropriate money in Montana,” Schweitzer said. “The Recovery Act is not going to allow states to just shovel money out of a window in the dark of night and I, as the governor who signed the letter accepting responsible for these recovery dollars, will not sign such a bill.”

As one of the few states in the country not facing billions in deficits, Schweitzer said mistreatment of federal dollars could put Montana’s relatively sound economy at risk.

“I’m not going to allow a few members of the Legislature to put Montana in a difficult situation,” he said.

But Peterson and Story said the governor is wrong in his concern about transparency. Any city or county applying for the money would have to go through the Department of Commerce, Peterson said, a function of the governor’s office.

“This is a better way,” Peterson said. “You can see that it’s even more transparent.”

Budget matters aren’t the governor’s only concerns as the Legislature heads down the homestretch. He’s also frustrated with Republicans who blocked his bill to set govern “carbon sequestration,” a fledgling technology to capture and store underground the carbon dioxide emitted by coal-fired power plants.

Republican Sen. Keith Bales, R-Otter, drew Schweitzer’s anger after Bales sponsored the GOP version of a carbon sequestration bill. Both bills were tabled amid partisan differences centering on who would authorize permits and the state’s ultimate liability for any environmental damage the process might cause.

“He couldn’t answer questions about his own bill,” Schweitzer said of Bales.

The governor accused Republicans of purposefully bringing forward a bad sequestration bill, knowing full well it would die but earning credit for proposing it.

“These are the same cats that voted against the ‘clean and green’ tax policy that we had in the last legislative session that’s already brought about $1 billion worth of investment to Montana,” Schweitzer said.

Peterson disagreed with Schweitzer’s assessment of the sequestration bill.

“There’s nothing wrong with that bill,” Peterson said. “Sen. Bales worked hard on that bill.”

Peterson said the governor’s criticism stems from partisan differences, not content.

“In my mind, it’s all politics,” Peterson said. “The governor needs to govern with a window, not just with a mirror.”

Schweitzer did have some plaudits for Republicans who insisted, as he does, that the budget include a $250 million contingency or “rain day” fund, in case state revenues continue to tumble. Members of the governor’s own party want to spend some of that money now for a variety of projects and causes.

“I’m glad I’ve got ‘em broke in,” Schweitzer said of the Republicans. “I had to veto 19 bills to get my ending fund balance at the end of the last legislative session.”

Peterson and Story said a keeping a reserve at the end of the session makes sense because the economy is still struggling.

“That’s just good business,” Peterson said. “That’s calling a spade a spade.”

Budget and stimulus bills are bound for House-Senate conference committees, whose members are charged with seeking compromises. Story and Peterson predicted reasonable outcomes.

“I think in the end the governor hopefully will be pleased with it,” Peterson said.

GOP bills would set rules for carbon sequestration

HELENA – Two Republican lawmakers said today they have bills to lay out the legal framework for carbon sequestration, the process of capturing the carbon dioxide produced by large fossil-fuel power plants and storing it underground.

Sen. Keith Bales, R-Otter, unveiled the details of his carbon sequestration bill today which would put the sequestration program under the state Board of Oil and Gas.

“They have the expertise to go on and monitor this program,” Bales said.

By assigning the program to the board now, the state could request primary policy authority for sequestration from the federal government, Bales said. The bill would require underground carbon dioxide reservoirs to be monitored to ensure against leaks and would establish a fee for each ton of the gas stored in those reservoirs. The money would be put in a special fund to cover unexpected costs.

The bill would also authorize the state to assume ownership and liability over the reservoirs after carbon-dioxide injection has stopped for 10 years. Bales said he expects the federal government will take over the reservoirs in the future and it will be easier for the state to transfer liability to them.

A similar bill, Senate Bill 66, sponsored by Sen. Ron Erickson, D-Missoula, was tabled in committee earlier this session by Republicans in a party-line vote. Bales said he is confident his bill will pass through committee with bipartisan support.

“I think my bill will make it through because it solves the problems that were in the other bills,” Bales said.

Erickson's bill would have put the program under the authority of Department of Environmental Quality and the Board of Environmental Review.

Meanwhile, Rep. Duane Ankney, R-Colstrip, also outlined his bill, House Bill 338, which would allow pipelines to carry carbon dioxide as a common carrier, meaning they have the same rules and regulations as oil and gas pipelines. HB 338 passed its first vote on the House floor on Tuesday, 93-7.

Ankney said it was time for Montana to get moving on carbon sequestration, to create jobs and so power plants can sell their carbon dioxide.

“I think we’re way beyond the argument, ‘Is there global warming, is there not global warming,’” Ankney said. “Let’s get on with it.”

-by CNS correspondent Molly Priddy