As the presence of carbon dioxide increases in the atmosphere, so does interest in ways to dispose of that carbon dioxide. One possibility is to store it in underground gaps, voids or pore space. This process is known as carbon sequestration.
Currently, real property is generally divided into a surface estate and a severable mineral estate. The mineral estate includes substances in the ground, such as coal, oil, gas and other hard minerals. It is not entirely clear, however, how existing case law and statutes would address underground pore space.
The Colorado Department of Natural Resources convened a panel, including Tom Ragonetti from our firm, to discuss legal issues surrounding the ownership of underground pore space and possible legislation. There are several options, including allocating ownership of the pore space to the surface estate, the mineral estate or the State of Colorado for the public’s benefit. Any resolution will have advantages and drawbacks. Here are a few questions to consider:
How will pre-existing severances of minerals be treated? Would the language of the severance make a difference? For instance, what if the severance or reservation was broad enough to include not just “minerals” but anything of value under the surface?
Would a void caused by the extraction of minerals, such as oil, gas or coal, be treated differently from a naturally occurring void?
How will owners deal with voids that cross property lines? Could an owner be required to accept carbon dioxide in a void he or she owns?
In any case, the ability to control the rights to store carbon dioxide underground could be a new source of value in real property.
Photo by eMaringolo (Flickr)