97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1878

 

Introduced , by Rep. Thomas Holbrook

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the Clean Coal FutureGen for Illinois Act. Defines "operational phase". Provides that if the FutureGen Alliance selects as its location for CO2 storage a designated site or sites in the State of Illinois suitable for injection of captured CO2 into the Mount Simon Formation (rather than at the Tuscola or Mattoon site), then the Operator shall retain the rights, title, and interest in and to and any liabilities associated with the pre-injection CO2. Provides that the Operator shall retain all rights, title, and interest in the sequestered CO2 during the operational phase of the FutureGen Project. Provides that following the operational phase of the FutureGen Project, the Operator shall transfer and convey and the State of Illinois shall accept and receive, with no payment due from the State of Illinois, all rights, title and interest in and to and any liabilities associated with the sequestered CO2. Provides that the Operator (rather than the Department) shall procure a certain insurance policy that insures the Operator against any qualified loss stemming from a public liability action and with coverage limits of at least $15,000,000. Provides that the Operator shall establish and fund a newly-created CO2 Storage Trust Fund to complement commercially-available insurance products and to support the Operator's ability to satisfy financial assurance obligations that may be required by law or the terms of the Operator's permit issued by the Agency. Provides that the State shall indemnify and hold harmless the Operator against any qualified loss stemming from a public liability action to the extent that the qualified loss is not covered under the insurance policy required under the Act and to the extent that the CO2 Storage Trust Fund lacks adequate funds to cover the loss. Extends the repeal date from March 1, 2011 to March 1, 2015. Makes other changes. Effective immediately.


LRB097 09017 ASK 49151 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB1878LRB097 09017 ASK 49151 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Clean Coal FutureGen for Illinois Act is
5amended by changing Sections 15, 20, 25, 30, and 998 as
6follows:
 
7    (20 ILCS 1107/15)
8    (Section scheduled to be repealed on March 1, 2011)
9    Sec. 15. Definitions. For the purposes of this Act:
10    "Agency" means the Illinois Environmental Protection
11Agency.
12    "Captured CO2" means CO2 and other trace chemical
13constituents approved by the Agency for injection into the
14Mount Simon Formation.
15    "Carbon capture and storage" means the process of
16collecting captured CO2 from coal combustion by-products for
17the purpose of injecting and storing the captured CO2 for
18permanent storage.
19    "Carbon dioxide" or "CO2" means a colorless, odorless gas
20in the form of one carbon and 2 oxygen atoms that is the
21principal greenhouse gas.
22    "Department" means the Department of Commerce and Economic
23Opportunity.

 

 

HB1878- 2 -LRB097 09017 ASK 49151 b

1    "Director" means the Director of Commerce and Economic
2Opportunity.
3    "Federal Department" means the federal Department of
4Energy.
5    "FutureGen Alliance" is a 501(c)(3) non-profit consortium
6of coal and energy producers created to benefit the public
7interest and the interest of science through the research,
8development, and demonstration of near zero-emission coal
9technology, with the cooperation of the Federal Department.
10    "FutureGen Project" means the public-private partnership
11between the Federal Department and the FutureGen Alliance that
12will control captured CO2 and will construct and operate a
13pipeline and storage field for captured CO2.
14    "Mount Simon Formation" means the deep sandstone reservoir
15into which the sequestered CO2 is to be injected at a depth
16greater than 3,500 feet below ground surface and that is
17bounded by the granitic basement below and the Eau Claire Shale
18above.
19    "Operator" means the FutureGen Alliance and its member
20companies, including their parent companies, subsidiaries,
21affiliates, directors, officers, employees, and agents, or a
22not-for-profit successor-in-interest approved by the
23Department.
24    "Operational phase" means the period of time during which
25the Operator injects and monitors CO2 into the Mount Simon
26Formation in accordance with its permit approved by the Agency

 

 

HB1878- 3 -LRB097 09017 ASK 49151 b

1for the FutureGen Project.
2    "Post-injection" means after the captured CO2 has been
3successfully injected into the wellhead at the point at which
4the captured CO2 is transferred into the wellbore for carbon
5sequestration and storage into the Mount Simon Formation.
6    "Pre-injection" means all activities and occurrences prior
7to successful delivery into the wellhead at the point at which
8the captured CO2 is transferred into the wellbore for carbon
9sequestration and storage into the Mount Simon Formation,
10including but not limited to, the operation of the FutureGen
11Project.
12    "Public liability" means any civil legal liability arising
13out of or resulting from the storage, escape, release, or
14migration of the post-injection sequestered CO2 that was
15injected by the Operator and for which title is transferred to
16the State pursuant to Section 20 of this Act. The term "public
17liability", however, does not include any legal liability
18arising out of or resulting from the construction, operation,
19or other pre-injection activity of the Operator or any other
20third party.
21    "Public liability action" or "action" means a written
22demand, lawsuit, or claim from any third party received by the
23Operator seeking a remedy or alleging liability on behalf of
24Operator resulting from any public liability.
25    "Sequestered CO2" means the captured CO2 from the FutureGen
26Project operations that is injected into the Mount Simon

 

 

HB1878- 4 -LRB097 09017 ASK 49151 b

1Formation by the Operator.
2(Source: P.A. 95-18, eff. 7-30-07; 96-1491, eff. 12-30-10.)
 
3    (20 ILCS 1107/20)
4    (Section scheduled to be repealed on March 1, 2011)
5    Sec. 20. Title to sequestered CO2 gas. If the FutureGen
6Alliance selects as its location for CO2 storage a designated
7site or sites Project locates at either the Tuscola or Mattoon
8site in the State of Illinois suitable for injection of
9captured CO2 into the Mount Simon Formation, then the FutureGen
10Alliance agrees that the Operator shall transfer and convey and
11the State of Illinois shall accept and receive, with no payment
12due from the State of Illinois, all rights, title, and interest
13in and to and any liabilities associated with the sequestered
14gas, including any current or future environmental benefits,
15marketing claims, tradable credits, emissions allocations or
16offsets (voluntary or compliance based) associated therewith,
17upon such gas reaching the status of post-injection, which
18shall be verified by the Agency or other designated State of
19Illinois agency. The Operator shall retain all rights, title,
20and interest in and to and any liabilities associated with the
21pre-injection CO2 sequestered gas. The Operator shall retain
22all rights, title, and interest in the sequestered CO2 during
23the operational phase of the FutureGen Project. Following the
24operational phase of the FutureGen Project, the Operator shall
25transfer and convey and the State of Illinois shall accept and

 

 

HB1878- 5 -LRB097 09017 ASK 49151 b

1receive, with no payment due from the State of Illinois, all
2rights, title and interest in and to and any liabilities
3associated with the sequestered CO2. Illinois State Geological
4Survey of the University of Illinois shall monitor, measure,
5and verify the permanent status of sequestered carbon dioxide
6and co-sequestered gases in which the State has acquired the
7right, title, and interest under this Section.
8(Source: P.A. 95-18, eff. 7-30-07; 95-728, eff. 7-1-08 - See
9Sec. 999.)
 
10    (20 ILCS 1107/25)
11    (Section scheduled to be repealed on March 1, 2011)
12    Sec. 25. Insurance against qualified losses.
13    (a) The Operator Department shall procure an insurance
14policy from a private insurance carrier or carriers, if and to
15the extent that such a policy is available at a reasonable
16cost, that insures the Operator against any qualified loss
17stemming from a public liability action. The coverage limits
18for such an insurance policy shall be at least $15,000,000
19policy must be procured in accordance with the provisions of
20the Procurement Code.
21    (a-5) The Operator shall establish and fund a newly-created
22CO2 Storage Trust Fund.
23        (1) The purpose of the CO2 Storage Trust Fund shall be
24    to complement commercially-available insurance products
25    and to support the Operator's ability to satisfy financial

 

 

HB1878- 6 -LRB097 09017 ASK 49151 b

1    assurance obligations that may be required by law or the
2    terms of the Operator's permit issued by the Agency.
3        (2) The funds in the CO2 Storage Trust Fund may used to
4    satisfy any qualified loss stemming from a public liability
5    action to the extent that such loss is not otherwise
6    covered by an insurance policy. The funds may also be used
7    to pay reasonable administrative costs associated with
8    managing and resolving claims associated with the CO2
9    Storage Trust Fund. The funds may also be used for well
10    closure, post-injection monitoring, or other activities
11    for which a law or permit requires financial assurance.
12        (3) The CO2 Storage Trust Fund shall be funded in the
13    following manner, toward a maximum amount of $50,000,000
14    per 100 million metric tons of CO2 storage site design
15    capacity, unless the permit approved by the Agency requires
16    a higher maximum amount:
17            (A) The CO2 Storage Trust Fund shall be funded with
18        an initial payment of 20% of the total projected
19        maximum amount of the fund by the Operator at least 30
20        days prior to the first day of regular CO2 injection
21        operations are forecasted to begin into the Mount Simon
22        Formation in accordance with its permit approved by the
23        Agency.
24            (B) Subsequent future payments to the CO2 Storage
25        Trust Fund shall be made during the during the
26        Operational Phase of the Project according to the

 

 

HB1878- 7 -LRB097 09017 ASK 49151 b

1        following formula:
2        For each million metric tons of sequestered CO2, the
3    subsequent future payments to the CO2 Storage Trust Fund
4    shall be determined by taking the difference between the
5    trust fund maximum amount and the initial payment divided
6    by the CO2 storage site capacity, measured in million
7    metric tons, designated in the Operator's permit with the
8    Agency. If 100 million metric tons was the total design
9    capacity of the CO2 storage facility, then the subsequent
10    annual future payments to the CO2 Storage Trust Fund would
11    be $400,000 per million metric tons of CO2 injected.
12        (4) The Operator shall select, subject to the approval
13    of the Agency, an independent third-party trustee to
14    administer the CO2 Storage Trust Fund.
15    (b) Pursuant to Section 30 of this Act, the State shall
16indemnify and hold harmless the Operator against any qualified
17loss stemming from a public liability action to the extent that
18the qualified loss is not covered under an insurance policy
19under subsection (a) of this Section and to the extent that the
20CO2 Storage Trust Fund lacks adequate funds to cover the loss.
21    (c) The Department shall pay any insurance premium,
22deductible, or liability under subsections (a) or (b) from
23appropriations by the General Assembly for that purpose. It is
24the intent of this Act that, to the extent practical, any
25unexpended balance of the proceeds from the sale of emission
26reduction rights or tradable credits to which the State has

 

 

HB1878- 8 -LRB097 09017 ASK 49151 b

1title under Section 20 should be used for the purposes of this
2subsection (c).
3    (d) If the FutureGen Alliance identifies a designated site
4or sites in Illinois suitable for injection of captured CO2
5into the Mount Simon Formation, locates the FutureGen Project
6at either the Mattoon or Tuscola site in the State of Illinois,
7then the Department shall be authorized to contract with the
8FutureGen Alliance, under terms not inconsistent with this Act,
9in order to define the rights and obligations of the FutureGen
10Alliance and the Department, including but not limited to, the
11insurance and indemnification obligations under Sections 25
12and 30 of this Act.
13    (e) If federal indemnification covers all or a portion of
14the obligations assumed by the State under Section 25 of this
15Act, such State obligations shall be reduced in proportion to
16the federal indemnification and be considered subordinated to
17any federal indemnification.
18    (g) For the purpose of this Section, "qualified loss" means
19a loss by the Operator stemming from a public liability action
20other than those losses arising out of or relating to:
21        (1) the intentional or willful misconduct of the
22    Operator in its operation of the FutureGen Project;
23        (2) the failure of the Operator to comply with any
24    applicable law, rule, regulation, or other requirement
25    established by the Federal Department, Agency, or State of
26    Illinois for the carbon capture and storage of the

 

 

HB1878- 9 -LRB097 09017 ASK 49151 b

1    sequestered CO2 gas, including any limitations on the
2    chemical composition of any sequestered CO2 gas; or
3        (3) any the pre-injection activities operation of the
4    Operator FutureGen Project.
5(Source: P.A. 95-18, eff. 7-30-07.)
 
6    (20 ILCS 1107/30)
7    (Section scheduled to be repealed on March 1, 2011)
8    Sec. 30. Indemnification. Notwithstanding any law to the
9contrary, subject to and consistent with the conditions
10provided in Section 25 of this Act, the State of Illinois shall
11indemnify, hold harmless, defend, and release the Operator from
12and against any public liability action asserted against the
13Operator, subject to the following terms and conditions:
14    (a) The obligation of the State of Illinois to indemnify
15the Operator does not extend to any public liability arising
16out of or relating to:
17        (1) the intentional or willful misconduct of the
18    Operator in its operation of the FutureGen Project;
19        (2) the failure of the Operator to materially comply
20    with any applicable law, rule, regulation, or other
21    requirement established by the Federal Department, Agency,
22    or State of Illinois for the carbon capture and storage of
23    the sequestered gas, including any limitations on the
24    chemical composition of any sequestered CO2 gas;
25        (3) any the pre-injection activities of the Operator

 

 

HB1878- 10 -LRB097 09017 ASK 49151 b

1    operation of the FutureGen Project; or
2        (4) a qualified loss to the extent that it is paid
3    under an insurance policy under subsection (a) or from the
4    CO2 Storage Trust Fund under subsection (b) of Section 25
5    of this Act.
6    (b) The indemnification obligations of the State of
7Illinois assumed under Section 30 of this Act shall be reduced
8in proportion and be subordinated to any federal
9indemnification that covers all or a portion of the State's
10obligations.
11(Source: P.A. 95-18, eff. 7-30-07.)
 
12    (20 ILCS 1107/998)
13    (Section scheduled to be repealed on March 1, 2011)
14    Sec. 998. Repeal. This Act is repealed on March 1, 2015
152011.
16(Source: P.A. 95-18, eff. 7-30-07; 96-1491, eff. 12-30-10.)
 
17    (20 ILCS 1107/23 rep.)
18    (20 ILCS 1107/50 rep.)
19    Section 10. The Clean Coal FutureGen for Illinois Act is
20amended by repealing Sections 23 and 50.
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.

 

 

HB1878- 11 -LRB097 09017 ASK 49151 b

1 INDEX
2 Statutes amended in order of appearance
3    20 ILCS 1107/15
4    20 ILCS 1107/20
5    20 ILCS 1107/25
6    20 ILCS 1107/30
7    20 ILCS 1107/998
8    20 ILCS 1107/23 rep.
9    20 ILCS 1107/50 rep.