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EPA and Texas Railroad Commission Sign Memorandum of Agreement for Permitting Geologic Storage of Carbon Dioxide

LCG, April 29, 2025--Officials from the U.S. Environmental Protection Agency (EPA) and Texas Railroad Commission (RRC) signed a memorandum of agreement (MOA) today outlining the state’s plans to administer programs related to carbon storage wells, known as Class VI wells. The MOA signing is a required step in the RRC’s application to be granted authority to permit Class VI wells in the state of Texas. EPA is currently preparing a proposed approval of RRC’s primacy application.

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Calpine and ExxonMobil Sign CO2 Transportation and Storage Agreement for CCS Project in Texas

LCG, April 24, 2025--Exxon Mobil Corporation (ExxonMobil) announced yesterday an agreement with Calpine Corporation (Calpine) to transport and permanently store up to 2 million metric tons per annum (MTA) of CO2 from Calpine’s Baytown Energy Center, a natural gas-fired facility located near Houston, Texas. This is part of Calpine’s Baytown Carbon Capture and Storage (CCS) Project that is designed to add CCS for the facility’s CO2 emissions. The Calpine facility could then provide a 24/7 supply of low-carbon electricity to the Texas grid plus steam to nearby industrial facilities.

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Industry News

California PUC Adopts GHG Emission Performance Standards

LCG, January 26, 2007--The California Public Utilities Commission (PUC) yesterday voted unanimously to adopt an interim Greenhouse Gas (GHG) Emissions Performance Standard in order to reduce emissions believed to cause global warming. The new standard is designed to block California utilities from importing power from coal-fired power plants located out-of-state.

The Emissions Performance Standard was set in motion by the passage last fall of Senate Bill (SB) 1368, which prohibits load-serving entities (investor-owned utilities, energy service providers, and community choice aggregators) from executing new, long-term agreements for baseload generation unless they complies with a GHG emissions performance standard (EPS).

Specifically, the emission level of the baseload generation facility must be no greater than that of a combined cycle gas turbine plant, and that level is established at 1,100 pounds of CO2 per MWH. The long-term agreement refers to (a) new construction, (b) new (or renewal) contracts with a term greater than or equal to five years, or (c) major investments by the utility in its existing baseload power plants.

The PUC's new, interim standard is applicable to Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric. It is expected that the California Energy Commission will define an EPS for municipal utilities in California.

Last September, California Governor Arnold Schwarzenegger approved Assembly Bill 32, or the "Global Warming Solutions Act of 2006," which includes a statewide cap on GHG emissions from electric utilities, refineries, and other selected industries. The goal is to reduce GHG emissions 25% by 2020 in order to alleviate concerns of global warming that may be caused by such emissions. The legislation is scheduled to be implemented in 2012. The PUC's standard adopted yesterday will serve as an interim measure prior to the development and implementation of the rules envisioned in the Global Warming Solutions Act of 2006.
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