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Capturing Carbon at Scale: Exploring Carbon Capture and Geologic Storage

Welcome!

June 11, 2026

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All Materials

Where can I find all previous slides and policy summaries from all previous classes?

Cute photos?

Class recordings?

powerhousetexas.org/energy-academy

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Final Feedback Form!

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POP QUIZ

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Q1: What percentage of total geothermal project capital does drilling typically represent?

A

10-20%

B

20-30%

C

40-60%

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Q1: What percentage of total geothermal project capital does drilling typically represent?

C

40-60%

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Q2: What did SB 1210 (2023) allow geothermal operators to do?

A

Adopt abandoned oil and gas wells for geothermal use

B

Export geothermal activity across state lines

C

Override local zoning for geothermal wells

D

Combine environmental permits across wells

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Q2: What did SB 1210 (2023) allow geothermal operators to do?

A

Adopt abandoned oil and gas wells for geothermal use

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Emma Thomley

State and Regional Policy Specialist, Carbon Management

Great Plains Institute

Susan Hovorka

Bureau of Economic Geology

University of Texas at Austin

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What is CCUS?

Carbon from burning fossil fuel is put back underground rather than emitting it through smokestacks.

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Misconception #1: CCS is new

CCS new purpose – to capture and permanently remove CO₂ from building up the atmosphere by storing in the deep subsurface

We’ve been doing all the processes:

1930: Amine capture - separate CO₂ from gas
1930: Deep well injection of fluids for oilfield brine disposal
1972: CO₂ pipeline and injection SACROC field EOR
1974 Modern permitting deep well injection – Safe Drinking Water Act
1996 CO₂ injection for disposal - Sleipner, Norway since 1996 and continuing
2004 US test – Frio Pilot 2004
2010 Underground injection Control Class VI rule for deep well injection of CO₂

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Misconception #2: CCS is risky

Subsurface storage is permanent
Researchers have extensively assessed risk. This is sometimes misunderstood as implying high risk.
Extensive experiences with components – some things have gone wrong – this predicts the low impact and low frequency at large scale deployment.
Risk from CO₂ injection are not zero but are similar to other activities and managed by well known risk management techniques.
CO₂ pipelines have long and strong safety recor d

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Texas today

Before Sue walks through the different capture technologies in more detail, I want to take a step back and talk about why so many companies are looking at Texas for carbon management.

Texas has all of the factors needed for large-scale carbon capture and storage deployment. The state has a large concentration of power plants and industrial facilities that could potentially capture CO₂, extensive geologic formations suitable for long-term storage, and the largest CO₂ pipeline network in the country.

Texas also has a highly skilled energy workforce, established industrial hubs along the Gulf Coast and in other regions, and decades of experience developing and regulating large-scale energy infrastructure. The state's electric grid, energy resources, and existing industrial base also position it well for emerging technologies like hydrogen production and direct air capture.

When you put all of those pieces together, it's not surprising that Texas has become one of the leading states for carbon capture, removal, transportation, storage,

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Why CCS in Texas?

Nearly 700 Texas facilities are eligible for the Section 45Q tax credit
Existing federal incentives and emerging markets (e.g., tax credits, low-carbon fuel markets)
Keeps energy and industrial products competitive in global markets (LNG, ammonia, fertilizers)
Enables producers to meet buyer and investor expectations on emissions

Section 45Q Tax Credit
Facility Type	Credit for permanent storage in saline or other geologic formations OR Utilization & storage in oil and gas fields
Industrial or Power Facilities	$85
Direct Air Capture	$180

Why CCS in Texas?

So now we know the main factors that make Texas suitable it’s important to explore why else developers and state stakeholders are interested. At a high level, CCS can help Texas leverage its existing energy, industrial, and geologic advantages while creating new economic opportunities. At a high level it can help support industrial growth, attract investment, maintain competitiveness in global markets, and create new revenue streams for Texas businesses and communities.
One of the main reason operators and states are interested is because of the 45Q tax credit -The main incentive is the federal 45Q tax credit shown on this table to the right. 700 facilities in Texas are eligible for this credit which provides a financial incentive for projects that capture and permanently store CO₂. Industrial facilities and power plants can receive up to $85 per ton of CO₂ stored in geologic formations, while direct air capture projects can receive up to $180 per ton.
In addition to federal tax incentives, projects may benefit from emerging low-carbon fuel and carbon markets. For example, California's Low Carbon Fuel Standard, or LCFS, allows regulated fuel providers, including those out of state, to purchase credits from projects that reduce emissions. While it is a California policy, eligible CCS and DAC projects located outside California, including in Texas, can generate credits if they meet program requirements. Those credits can then be sold, creating an additional revenue stream for Texas projects paid for by Califronia.
Projects may also generate revenue through voluntary carbon markets, where companies purchase carbon credits to help meet corporate climate and sustainability goals. Depending on the project type and market requirements, CCS and carbon removal projects may be able to earn and sell credits based on verified emissions reductions or removals.
Another reason folks are looking at CCS for Texas is that can also help keep Texas energy and industrial products competitive in global markets. As customers increasingly seek lower-emissions products, carbon management can help Texas producers maintain and expand market access. Given its abundant natural gas resources, existing industrial base, and growing hydrogen infrastructure, Texas is particularly well setup to produce low-emissions hydrogen and hydrogen-derived products such as ammonia. Growing global demand for low-emissions ammonia, including for fertilizer, shipping fuel, and industrial applications, could create additional economic opportunities for the state.
Finally, carbon management can be used as a tool help producers meet evolving buyer and investor expectations. Many companies, investors, and downstream customers have adopted emissions reduction goals and are increasingly looking for lower-carbon products and services. CCS can help Texas businesses demonstrate emissions reductions, satisfy customer requirements, and remain competitive as these market expectations continue to evolve.

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Why CCS pt:2

Creates new revenue streams for landowners, the state, and local tax bases
Supports continued leadership in energy production while adapting to shifting demand

Clear policy framework needed to avoid past setbacks and unlock investment

Retrofitting 93 industrial and power facilities across TX could create an annual average of over 28,000 direct jobs over a 15-year period and up to $62 billion in private investment for the state.

Rhodium Group

Analysis of potential economic outcomes of four different CCUS projects in 12 TX counties showed creation of 7,500 jobs & $1.8 billion in state-level impact.

Angelou Economics

Why CCS in Texas? (Part 2)

Beyond emissions reductions, CCS can create economic opportunities for landowners, local communities, and the state. Storage projects may generate revenue through pore space agreements, lease payments, property taxes, severance taxes, and other economic activity associated with project development and operation. As investment flows into a region, local governments can also benefit from an expanded tax base and increased economic activity.

Several studies have attempted to quantify these potential impacts. For example, an analysis by Angelou Economics found that four different CCUS projects across 12 Texas counties could support approximately 7,500 jobs and generate $1.8 billion in statewide economic impact. Similarly, the Rhodium Group estimated that retrofitting 93 industrial and power facilities across Texas with carbon capture technology could support an average of more than 28,000 direct jobs annually over a 15-year period and attract up to $62 billion in private investment.

CCS may also help Texas maintain its leadership in energy production as markets evolve. Texas has long been a leader in oil, natural gas, refining, petrochemicals, and energy infrastructure. Carbon management provides one pathway for preserving and strengthening these industries by helping facilities reduce emissions while continuing to produce the energy and products that customers rely on today.

At the same time, realizing these opportunities will require a clear and predictable policy framework. Past challenges, including uncertainty around permitting, liability, pore space ownership, and project development requirements, have slowed investment in some states. Establishing clear rules and processes can help provide certainty for landowners, communities, regulators, and developers, reducing risk and encouraging investment in Texas projects.

The full economic impact of large-scale carbon management in Texas has not been comprehensively quantified, yet early indications suggest it could be substantial. Some preliminary work has begun to estimate this potential, including a 2024 analysis commissioned by the Texas Association of Business, which estimated that a single large-scale CCUS project could generate $1.8 billion in total economic activity, support 7,500 full-time equivalent jobs at an average wage of $45 per hour, and provide more than $33 million annually in local and state tax revenue. County-level impacts ranged from $317 million to $3.7 billion. However, the study modeled generic project scenarios in only 12 Southeast Texas counties, excluding other areas with a high potential for carbon management in the state. The study also did not distinguish between retrofit and new-build opportunities.

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Why CCS in Texas? (Part 2)

Beyond emissions reductions and benefits for operators, CCS can also create economic opportunities for landowners, local communities, and the state. Storage projects can generate revenue through pore space agreements, lease payments, taxes, and other economic activity associated with project development and operation.

Interest in carbon management extends beyond project developers. Communities, ports, and regional economic development organizations across Texas increasingly view carbon storage and related infrastructure as an opportunity to attract investment, support existing industries, and create new revenue streams.

For some regions, particularly those facing changes in traditional oil and gas activity, carbon storage could provide a new economic development pathway. Concepts such as carbon management hubs or "carbon parks" can allow multiple industrial facilities to share transportation and storage infrastructure, reducing costs and making participation more accessible.

We've already seen interest emerge in places like Corpus Christi and Port Arthur, where local leaders have explored carbon management as part of broader industrial growth and decarbonization strategies. In addition to direct project investment, communities may benefit through land leasing revenues, expanded tax bases, and the attraction of new industries seeking access to carbon management infrastructure.

Several studies have attempted to quantify these impacts for Texas. For example, an analysis by Angelou Economics found that four CCUS projects across 12 Texas counties could support approximately 7,500 jobs and generate $1.8 billion in statewide economic impact. Similarly, the Rhodium Group estimated that retrofitting 93 industrial and power facilities across Texas with carbon capture technology could support more than 28,000 direct jobs annually over a 15-year period and attract up to $62 billion in private investment.

CCS may also help Texas maintain its leadership in energy production as markets evolve. Texas has long been a leader in oil and gas, refining, petrochemicals, and energy infrastructure. Carbon management provides one pathway for reducing emissions while continuing to produce the energy and industrial products that we all rely on today.

Of course, realizing these opportunities depends on more than just geology and infrastructure. It also requires a clear and predictable policy framework, which is what I'll focus on after Sue’s portion of the presentation.

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Texas today

19 total Class VI projects proposed as of June 3, 2026

1 project withdraw
1 project approved

67 proposed Class VI injection wells
0 wells currently injecting
Excludes proposed or currently injecting Class II (EOR) wells

And we've already started to see developers respond to this opportunity.

Today, Texas has 19 proposed storage projects. One project has already received a Class VI permit, and collectively these projects include plans for 67 proposed injection wells. It's worth noting that none of these Class VI wells are currently injecting CO₂, and these numbers do not include Class II wells used for enhanced oil recovery, where CO₂ injection has been occurring for decades. Most of these permits started with the EPA and were transferred over to TX once the state received primacy, which I’ll mention more about later.

While many of these projects are still moving through the permitting process, the level of activity demonstrates the strong interest developers have in deploying carbon storage projects in Texas.

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Why CCS pt. 3

Supports regional economic development and industrial growth
Creates opportunities for shared carbon storage infrastructure
Generates revenue through land leasing and new business investment
Cities and regions are interested in carbon storage and revenue

Interest in carbon management extends beyond project developers. Communities, ports, and regional economic development organizations across Texas increasingly view carbon storage and related infrastructure as an opportunity to attract investment, support existing industries, and create new revenue streams.

For some regions, particularly those facing changes in traditional oil and gas activity, carbon storage could provide a new economic development pathway. Concepts such as carbon management hubs or "carbon parks" can allow multiple industrial facilities to share transportation and storage infrastructure, reducing costs and making participation more accessible.

We've already seen interest emerge in places like Corpus Christi and Port Arthur, where local leaders have explored carbon management as part of broader industrial growth and decarbonization strategies. In addition to direct project investment, communities may benefit through land leasing revenues, expanded tax bases, and the attraction of new industries seeking access to carbon management infrastructure.

BF
Declining oil & GAs
Put aside a track carbon parK (hub)
Opportunity for storage where multiple industries can participate
Port Arthur offering decarbonization
Profits include leasing the land and attracting industry

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CCS Projects

50+ years commercial experience
33 U.S. projects operating, 150+ in development
77 global projects, 650+ in development
Over 5,000 miles of CO₂ pipelines

Finally one last note, As Sue mentioned, CCS is not a new technology. The U.S. has more than 50 years of commercial experience with carbon capture and CO₂ transport, including over 5,000 miles of CO₂ pipelines and dozens of operating projects today.

What is new is the pace of growth. As of this past October, there are currently 33 operating CCS projects in the United States and more than 150 in development. Globally, there are 77 operating projects and more than 650 in development.

The chart on the right shows how quickly the project pipeline has expanded over the last several years. This growth reflects increasing policy support, investment, and interest from industries looking for ways to reduce emissions while continuing to produce energy and industrial products.

With that I’ll turn it back to Sue

8:30 minutes

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How is CO₂ captured? Post Combustion

Carbon fuel

Air with O₂

CO₂ +air + impurities +H₂O

+

Compress gas to dense liquid

Post-combustion capture

Pollution control

Energy out

Petra Nova

Mature
Retrofit on existing facilities

CO₂ out

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How is CO₂ captured? Direct Air Capture (DAC)

+

Compress gas to dense liquid

CO₂ released to air

Direct air capture units

Membrane or solid sorbents

Not linked

Needed in 1.5° temperature rise models
High energy demand (~cost + need carbon-free energy)
Attracting private venture capital and voluntary markets investment

Carbon fuel

Air with O₂

+

CO₂ +air + impurities +H₂O

CO₂ out

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How is CO₂ captured? Oyx-fired

Carbon fuel

Pure O₂

+

Compress gas to dense liquid

Pollution control

Energy out

Air

separation

Air

Already commercial – used for glass etc.
Generating pure O2 is energy intensive ~ cost

CO₂ +air + impurities +H₂O

CO₂ out

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How is CO₂ captured?

Precombustion = hydrogen

Carbon fuel

H₂

CO₂

+

To next slides

Compress gas to dense liquid

Air

Hydrogen manufacture mature – used in gasoline and other products

Hydrogen as fuel may expand

CO₂ out

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How is CO₂ transported?

CO₂ transport is mature
Transported

As dense fluid
By pipeline at ambient temperature and high pressure (2200 psi)
In tank (on truck, ship, barge) cold and at some pressure

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Dense fluid at high pressure
Down a steel-cased well constructed to underground injection control standards
Below many rock layers

and into a porous rock,

isolated from the

surface and resources

(esp. fresh water)

How is CO₂ injected?

Capture

Fresh water

>800m

Grains

Brine

CO₂

Injection

1 mm

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Permanence of Storage in Porous Media

Dense fluid
In small spaces capillary forces are very important.
Hysteresis – means that what goes in does not all come out
Residual saturation

Grains

Brine

CO₂

CO₂ saturation

log CO₂ permeability

0

100

During injection

After injection ends

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Where injection intersects property law

Subsurface storage commodity is “pressure space”

CO₂

Brine is displaced to make room for CO₂

Plume

Leased

“Area of Review” in UIC parlance

Elevated pressure to “endangerment” standard

Legal and property

Subsurface behavior

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Implications of pressure space

Storage rights belong to surface owner

What does owner own?
Most states: analogy with hydrocarbons the CO₂ plume area is compensated for use of pores

Does pressure space have value?

AoR – required pressure space
Needed to avoid encroachment – existing and new projects
Combined AoR from adjacent projects using same subsurface zones

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CO₂ Enhanced Oil Recovery (EOR)

Dense CO₂ is used as a solvent
Solvent removes oil that is residually trapped
Oil, CO₂, and brine can then be produced at the surface
These phases are separated, oil sent to market, and CO₂ reinjected
Because CO₂ is recycled EOR also works as storage

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CO₂ EOR Details

EOR uses an older (UIC Class II) permit

Additional accounting reporting is required to document that storage is occurring to be eligible for tax credits

Transitioning

Mixing storage and EOR is possible but the pathway has not been demonstrated

Ownership

Note in particular that the oil belongs to mineral owner but storage rights to the surface owner

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Risks from deep CO₂ injection

Physical leakage of CO₂ from the subsurface

To groundwater
To atmosphere
Health impacts

Induced seismicity

Local, not widespread
Manageable by standard techniques

Take away message: risks are not zero but not large

Well known
Mature management techniques are successful

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POLICY

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Texas & CCS Policy

What projects need to succeed

Clear permitting pathways (addressed)
Viable project economics and market opportunities (partially addressed)
Predictable permitting timelines (partially addressed)
Available geologic storage (addressed)
Access to pore space (partially addressed)
Long-term risk management & liability clarity (partially addressed)
Public confidence and stakeholder coordination & support (partially addressed)

Hi all - me again, I’ll be covering some of the policy side of carbon capture and storage, including what projects need to succeed, where Texas stands today, the state's regulatory structure, and some of the policy opportunities and gaps stakeholders across the state have been discussing over the past couple of years.

To start, I find it helpful to think about CCS projects as needing a few key ingredients to succeed. They need a clear way to permit projects and reliable permitting timelines, economics that work, access to storage and pore space, an understanding of long term risk management, and public support and stakeholder coordination on policy for when gaps appear. Texas has already checked off most of those boxes, but some continue to be active areas of discussion and policy development.

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CLEAR PERMITTING PATHWAYS

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Regulatory structure

Class VI primacy secured

Storage permitting moved from EPA to RRC
More state control & expected faster timelines

Multiple agencies involved:

RRC leads injection and storage permitting
TCEQ handles air and water permits (for capture facilities)
GLO manages leasing of state lands and pore space
Intrastate pipeline safety under RRC

Let's start with clear permitting pathways, which is one area where Texas has made significant progress in recent years.

In 2025, Texas received Class VI primacy from EPA. In practice, that means permitting authority for Class VI wells, which are used for geologic CO₂ storage, shifted from EPA to the Railroad Commission of Texas after Texas showed it could meet or exceed EPA’s standards for permitting. Supporters of primacy argued that it would give Texas more direct control over permitting decisions, that Texas agencies are most familiar with Texas geology, and help provide greater certainty and potentially faster timelines for project developers.

Multiple state agencies play a role in regulating carbon capture & storage. The Railroad Commission of Texas leads permitting for CO₂ injection and geologic storage projects, the Texas Commission on Environmental Quality oversees air and water permits (think approval of the capture facility itself), the General Land Office manages leasing of state-owned lands & pore space, and the Railroad Commission is also responsible for intrastate CO₂ pipeline safety. As a result, project developers often work with several agencies throughout the life of a project. However, when we're talking about geologic storage and many of the policy issues we'll cover today, the Railroad Commission is typically the primary agency involved.

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VIABLE PROJECT ECONOMICS & MARKET OPPORTUNITIES

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Texas today

Incentives:

In the past, Texas has explored several statutory incentives supporting carbon capture and storage.
Most are narrow in scope or no longer active in practice (read more in the Texas Carbon Management Roadmap on page 21).
Federal 45Q remains the primary economic driver for deployment but it does not make all projects feasible

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Incentives

Policy options:

Proposed during the 2023 legislative session (read TXOGA’s article)

Creating credits for carbon sequestration on Texas Parks and Wildlife-controlled land
Establishing a tax exemption for property used for carbon capture
Adding carbon capture to the “clean energy project” franchise tax credit
Exempting carbon capture from the tangible personal property tax

Review more policy options for state incentives starting on pg. 21 of the Texas Carbon Management Roadmap

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Texas Energy Attribute Certificates (EACs)

Texas Context:

In June 2026, ERCOT approved a voluntary EAC program
EACs could help validate customer investments and create additional revenue opportunities for emerging technologies, including CCS

What are EACs?

Energy Attribute Certificates (EACs) are voluntary tracking instruments that verify when, where, and how electricity is generated.

Unlike Renewable Energy Credits (RECs), EACs can be issued for any participating generating resource, not just renewables.

I did want to flag one recent development in Texas in case it pops up in discussion. ERCOT's approval of a new Energy Attribute Certificate, or EAC, program that happened two weeks ago. EACs are voluntary, market-based certificates that provide more detailed information about how, when, and where electricity is generated, including hourly tracking of energy attributes.

Unlike traditional Renewable Energy Credits, which are limited to renewable generation, EACs can apply to any participating generation resource. That means technologies such as carbon capture-equipped power generation, direct air capture, advanced nuclear, energy storage, and demand response could potentially participate.

From a carbon management perspective, the significance is that EACs may create a new mechanism for customers to support and validate investments in emerging low-carbon technologies. By providing more transparent information and an additional revenue opportunity, the program could help improve financing and deployment prospects for technologies that will be needed to meet Texas' growing electricity demand while supporting emissions reductions.

13-Stakeholder-Education-Understanding-NPRR1264-Creation-of-a-New-Energy-Attribute-Certificate-Program.pdf

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PREDICTABLE PERMITTING TIMELINES

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Project permitting timelines

Status

Recent acquisition of primacy
Project permitting timelines still emerging (view current projects)

Context and potential area of concern

Predictable permitting timelines support investment and project development.
Growing application volumes may increase demands on agency capacity.
Permitting delays can increase costs and project risk.

Predictable permitting timelines are important because they support investment and project development. Companies making large investment decisions want to understand how long permitting is likely to take and when projects can move forward. As application volumes grow, agency workload may also increase, making permitting capacity and timelines important considerations moving forward.

Permitting delays can increase project costs, create uncertainty, and affect project schedules, which is why many states evaluate permitting timelines and agency resources as deployment increases.

As we discussed, Texas recently received Class VI primacy, giving the Railroad Commission authority over Class VI storage permitting. While this was an important milestone, the state's Class VI program is still relatively new and permitting timelines are continuing to emerge as applications move through the process.

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Project permitting timelines

Policy options:

Legislative appropriation for dedicated carbon management permitting staff and technical resources at the Railroad Commission.
Request enhanced permit tracking and public reporting at Railroad Commission

See EPA's permit tracker

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ACCESSIBLE PORE SPACE

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Amalgamation of pore space

What is pore space amalgamation?

Combines multiple pore space parcels into a single storage unit.
Used for large-scale CO₂ storage projects.
Prevents individual landowners from blocking development after a consent threshold is met.
Depending on the state, also referred to as pore space unitization

Current Texas Framework

All landowners must agree, with mechanisms available for missing or unknown owners.
No statutory amalgamation/unitizatio process for CO₂ storage.

Potential Implications

A single holdout can prevent development of an otherwise viable storage project.
Increases project uncertainty, negotiation costs, and development timelines.
May become a larger challenge as project size and storage demand increase.

Next is access to pore space. As we discussed earlier, Texas has significant geologic storage resources, but developers also need access to the pore space where CO₂ will be stored.

For large-scale storage projects, that can mean assembling pore space rights from many different landowners. Some states have adopted processes known as pore space amalgamation or unitization, which allow multiple pore space parcels to be combined into a single storage unit once a specified landowner consent threshold has been met.

Texas currently does not have a statutory pore space amalgamation or unitization process for CO₂ storage. Instead, developers generally need to secure agreements from all affected landowners, although mechanisms exist to address certain missing or unknown owners.

As projects grow larger, this approach can present challenges. A single holdout can potentially prevent development of an otherwise viable storage project, increasing project uncertainty, negotiation costs, and development timelines.

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Amalgamation of pore space

Policy option:

Consider majority-based amalgamation/unitization (65-90% consent)
Ensure landowners receive proper compensation for pore space

Texas consideration:

Monitor emerging unitization challenges
Evaluate impacts as projects scale
Stay informed on other state approaches
Learn more and evaluate considerations

State example: Wyoming

Allows compulsory unitization for CCS projects
Requires 75–80% landowner consent threshold
Shares revenue based on storage contribution
Requires notice and commission approval

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Pressure space

Status

Texas has many existing and proposed uses of the subsurface.
Pressure effects can extend beyond the CO₂ plume and project boundary.
As deployment grows, overlapping AoRs and pressure interference may create coordination challenges between projects.

Potential Implications

May affect storage capacity, project siting, permitting, and compensation discussions over time.

Policy option:

Study emerging issues related to pressure space and potential management approaches
Learn more and evaluate considerations

Next is pressure space, which Sue touched on earlier. This is a related but distinct issue from pore space ownership.

Texas has many existing and proposed uses of the subsurface, including oil and gas production, natural gas storage, wastewater disposal, and now geologic CO₂ storage. When CO₂ is injected underground, the pressure effects can extend beyond the CO₂ plume itself and, in some cases, beyond the project boundary.

As deployment grows, overlapping areas of review and pressure interference between projects using the same geologic formations may create new coordination considerations. Over time, these interactions could influence storage capacity, project siting decisions, permitting, and discussions around compensation or resource management.

At this stage, one option is simply to continue studying how pressure space issues develop as deployment increases, evaluate approaches being considered elsewhere, and build a better understanding of potential implications

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LIABILITY & LONG TERM RISK MANAGEMENT

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What is it?

Defines responsibility for a storage site after closure.
Covers long-term monitoring, stewardship, and liability.

Why does it matter?

CO₂ is intended to remain stored for the long term.
Clarifies who is responsible after site closure and can provide investors and project developers greater certainty regarding long-term obligations.

What other states have done

Transfer liability to the state after 10-40+ years.
Require demonstrated site stability and regulatory compliance.
Use industry-funded trust funds for stewardship.
Preserve liability for fraud, negligence, and noncompliance.

Long-term risk management

Next is long-term stewardship and liability. This isn't necessarily one of the most immediate policy considerations for Texas today, but it's a topic that comes up frequently in discussions so I want to make sure you’re aware of what it means if it comes up. Storage projects are designed to retain CO₂ for the long term, so states have developed frameworks that define responsibility for monitoring, stewardship, and liability after injection ends. As projects move through their full lifecycle, questions can arise about how long-term obligations should be managed. While traditional insurance products and other risk management tools are available, some states have also established statutory frameworks that provide additional clarity around long-term responsibility.

States have taken different approaches. Several states allow liability to transfer to the state after a period of demonstrated site stability and regulatory compliance, often 10 to 20 years or more after injection ends. These frameworks are typically supported by operator-funded trust funds that help cover long-term monitoring and stewardship costs, while preserving liability in cases involving fraud, negligence, or regulatory noncompliance.

First draft: Next is long-term stewardship and liability. Storage projects are designed to retain CO₂ for thousands of years so states have developed frameworks that define responsibility for monitoring, stewardship, and liability after injection ends. While approaches vary, several states allow liability to transfer to the state after a period of demonstrated site stability and regulatory compliance, typically supported by industry-funded trust funds.

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Texas Risk Management Context

Texas Today

Anthropogenic Carbon Dioxide Storage Trust Fund supports long-term stewardship activities.
Onshore operators retain ownership and long-term responsibility for stored CO₂ while limited transfer provisions exist for CO₂ stored in a state-designated offshore repository.
Traditional insurance is also available to manage risk

Potential Considerations

Monitor operator and investor experience as projects mature.
Evaluate whether additional liability clarity is needed over time.

Recent proposed legislative activity: : HB 4557 (2023) and HB 2790 (2025) proposed limits on certain lawsuits and damages related to CO₂ storage while preserving liability for misconduct and regulatory violations.

Looking specifically at Texas, the state has already established a framework for long-term stewardship through the Anthropogenic Carbon Dioxide Storage Trust Fund, which supports activities such as monitoring, maintenance, enforcement, and response actions associated with geologic storage sites.

A related but separate question is long-term liability. For onshore storage projects, operators generally retain ownership and long-term responsibility for stored CO₂. Texas does have limited transfer provisions for CO₂ stored in a state-designated offshore repository, but there is currently no comparable onshore liability transfer framework.

It's worth noting that liability has been the subject of legislative discussion in Texas over the past few years. Recent bills have focused on limiting certain categories of lawsuits and damages related to CCS projects, rather than establishing a long-term liability transfer framework, however, none of them have passed.

As projects progress in Texas in the future policymakers may choose to monitor operator and investor experiences and evaluate whether additional clarity around long-term liability is needed. If such a framework were ever considered, key questions would include eligibility criteria, timing, and how accountability for negligence or noncompliance would be maintained.

BILL TEXT

stablishes limited liability protections for carbon capture and storage (CCS) operators in Texas, reducing legal risks for companies engaged in capturing, transporting, and storing carbon dioxide. It prevents lawsuits that claim captured or stored CO₂ constitutes a nuisance or pollutant, protecting CCS projects from common law nuisance claims. Additionally, it limits civil liability for damages related to the injection, migration, or release of stored CO₂, including trespass, conversion, and environmental damage claims—except in cases where a company knowingly misrepresented information, violated legal requirements, or disregarded industry standards for economic gain.The bill also restricts legal claims related to interference with underground mineral or water access due to CO₂ storage, ensuring that compensation agreements, such as lease payments or easements, prevent further legal action. Claimants can only seek damages for increased costs of accessing or producing minerals or water, rather than broader economic or exemplary damages. The bill allows contractual waivers of liability and ensures it does not override existing agreements. If passed with a three-fifths legislative vote, the law will take effect on September 1, 2025, and apply only to future legal actions.

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PUBLIC CONFIDENCE AND STAKEHOLDER COORDINATION & SUPPORT

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Stakeholder coordination:

Issue:

Stakeholder efforts are fragmented
Policy is not centrally coordinated
Implementation may slow

Policy option

Carbon storage/sequestration policy council or task force

Texas is a large state, and carbon management discussions often occur within individual regions, industries, and stakeholder groups. While Texas has tremendous potential for carbon capture and storage, there is currently no single forum dedicated to coordinating stakeholders and identifying shared policy priorities.

Other states have addressed this challenge through carbon storage or sequestration task forces that bring together regulators, industry, researchers, landowners, and community representatives to evaluate issues and develop recommendations.

Texas has successfully used this model before. The Hydrogen Production Policy Council, established by the Legislature, provides one example of how a dedicated forum can help coordinate stakeholders, identify opportunities, and inform future policy development.

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Public confidence & engagement

Issue

Carbon management information is spread across multiple agencies and sources
Permitting processes can be difficult to navigate and understand
Stakeholders and communities may have questions about projects, permitting, and opportunities for participation

Policy options

Develop a centralized carbon management information hub
Improve public communication on permitting and regulatory processes

Carbon management projects often involve multiple permits, agencies, and regulatory processes. In Texas, information is available, but it's often spread across different agency websites, permit filings, project materials, and public notices.

As deployment grows, stakeholders may have questions about how projects are regulated, which agencies are responsible for oversight, what opportunities exist for public participation, and how they can access project information.

One option is to develop a plain-language guide that explains the permitting process and the respective roles of state and federal regulators. Another is to create a centralized carbon management hub that brings together permitting resources, project information, public engagement opportunities, and other relevant materials in a single location.

The goal isn't to advocate for or against projects, but to make information easier to access and improve transparency for stakeholders interested in carbon management activities in Texas.

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Texas Roadmap (link)

Grounded in TX Context:

50+ recommendations across carbon capture, transport, unitization, storage, direct air capture

Developed through extensive engagement:

100+ organizations contacted
50 participated in roundtables
20 one-on-one meetings
60 contributing organizations

Before I start by highlighting the Texas Carbon Management Roadmap as a resource.

The roadmap was developed by the Great Plains Institute through an extensive stakeholder engagement process. Over the course of the project in late 2024 and throughout 2025, we contacted more than 100 organizations, convened seven stakeholder roundtables with roughly 50 participants, conducted more than 20 one-on-one interviews, and incorporated input from approximately 60 contributing organizations representing industry, academia, NGOs, communities, and government.

The roadmap is grounded in Texas's unique energy, industrial, and regulatory context and includes more than 50 recommendations spanning carbon capture, transportation, storage, direct air capture, workforce development, community engagement, and other related topics.

If any of the topics we discuss today are relevant to your work, I'd encourage you to take a look at the roadmap. I was involved in developing it and am always happy to answer questions or help connect you with additional resources.

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Energy Policy Advisory Council

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RSVP TODAY for the PowerPlayer Awards!

Details:

When: June 17th, 2026
Time: 5:30 - 8:30 PM
Where: The Pershing (2415B E 5th St. Unit B)

Use the code ENERGYACADEMY2026

to reserve your ticket!

2026 Energy Academy Graduates can attend for free if you RSVP before the deadline of Friday, June 12

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The PowerPlayer Awards just got better…

Prizes on the line:

Electric Scooter
Yeti Cooler + $100 HEB Gift Card
Texas State Parks Pass + Portable Speaker

Raffle tickets will be available for purchase at the event.

Awards aren’t the only thing on the line. You’ll have a chance to enter and win exciting prizes in the PowerPlayer Raffle!

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August

27-28

ANNUAL MEMBERS RETREAT

Join us for the inaugural Caucus Members Retreat — an exclusive two-day convening designed to align priorities ahead of the 90th Legislative Session while providing time to connect and recharge.

Omni Barton Creek Resort & Spa, Austin

Hill Country setting just minutes from the Capitol

Member spouses and partners are welcome. Full agenda and RSVP details to be shared soon.

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OUR DEMO GROUPS

Exxon

Ashling Drew

CCS Strategy Execution Lead

Heirloom

Vikrum Aiyer

Head of Global Public Policy & External Affairs

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Advancing American energy security through Direct Air Capture: Project Cypress

Notice of Restriction on Disclosure and Use of Data:

This document may contain trade secrets, confidential, proprietary, or privileged information that is exempt from public disclosure. Such information shall be used or disclosed only for evaluation purposes or in accordance with a financial assistance or loan agreement between the submitter and the Government. The Government may use or disclose any information that is not appropriately marked or otherwise restricted, regardless of source. [End of Notice]

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“Blue Tag” LNG �and other exports

AI Data Centers

Synthetic

Aviation Fuels

Advanced Materials

& Manufacturing

Enhanced Oil Recovery

(Haynesville Shale)

Direct Air Capture (DAC) provides a limitless, high-purity stream of CO₂ that fuels new energy production and enhances US competitiveness

Energy Inputs System:

Geothermal

LNG

Powers an oxy-combustion vertical calciner

Nuclear

Energy Inputs Kiln:

Electric

A lot of people think about DAC as offsets and environmental output.

That’s wrong, CO2 is a commodity. Let me tell you what I mean––it can be used to make synthetic fuels, we have a deal with United,

On LNG side, VG one of the largest LNG exporters, when they export LNG to Asia or Europe, those markets request a carbon intensity receipt. DAC helps meet that requirement. DAC provides another solution to facilitate LNG,

And the AI hyperscalers are buying to get their systems going––they are our customers.

At the Port of Caddo-Bossier, directly above the prolific Haynesville Shale formation that powers Gulf Coast LNG exports, Heirloom’s DAC facility will deliver a virtually limitless supply of high-purity CO₂ on demand—unlocking new opportunities for enhanced oil recovery (EOR). The One Big Beautiful Bill Act leveled the playing field by equalizing the 45Q tax credit for CO₂ used in EOR and for permanent underground storage, ensuring every ton captured has equal value and making DAC a reliable partner in America’s long-term energy security….. ��Oxy…

Located next to Barksdale Air Force Base, Heirloom’s facility gives the U.S. military a domestic, on-demand source of high-purity CO₂—an essential feedstock for synthetic fuels now validated by the Department of Defense for land vehicles, marine vessels, and unmanned aircraft. By delivering a scalable, U.S.-made supply chain for military-grade fuels, Heirloom’s DAC hub can strengthen operational readiness, fortifies logistics resilience, and reduces reliance on foreign petroleum in times of global conflict. This investment transforms federal dollars into permanent national security infrastructure—directly supporting the warfighter, safeguarding supply chains, and embedding energy independence into America’s defense posture.

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We’re in a race to lead the world in carbon management — without continued DOE support the U.S. will lose its competitive edge

	China is aggressively scaling carbon management technology with 37 domestic projects planned by 2030 & Private sector funded opportunities for CCUS (Tencent)
	Canada is offering a 60% refundable tax credit on eligible capital expenditures for DAC equipment.
	Japan is funding domestic CCS projects, with a goal to store up to 20 million tons of CO₂ annually by 2030.
	Europe is planning to store and utilize 50 million tons of CO₂ annually by 2030 while European buyers are prioritizing lower carbon LNG.
	Norway is launching the world’s first liquified CO₂ shipping fleet, in partnership with Shell, enabling global transport and utilization of captured carbon.

CCUS projects in China

Source >

The United States CANNOT AFFORD to cede its lead in carbon management to global adversaries if we intend to dominate global trade, shape industrial investment, and capture the high-value jobs of tomorrow.
It’s happening everywhere. We can either invest in it here, or let the rest of the world win the race
China - not doing this for some weak NetZero goal…doing it for Energy goals …
Tencent China
(2) China - China = Commodify CO2 = Energy Production. A whole slate of technological advances ... the US is in the lead...but China is trying to catch up...
Global competition

Dominate on AI globally
Dominate on energy - LNG, emethane, synthetic fuels
Consumer facing product, branding themselves in the US and globally
All of the above energy strategy to power AI

The number and scale of demonstration projects have significantly enhanced in 2022. As of November 2022, there are around 100 CCUS demonstration projects with various scales in operation or in planning in China (Figure 2-2). Among them, nearly half of the projects have been put into operation, with CO2 capture capacity of more than 4 Mt per year and CO2 injection capacity of more than 2 Mt per year, an increase of about 33% and 65%, respectively, compared with 2021.

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The Louisiana DAC hubs are an engine for regional jobs and growth

2,300

The full DAC hub development plan will generate 2,300 jobs across both Northwest and Southwest Louisiana. A phased development will create 1,100 jobs beginning in 2026.

$1.2B

$600M in DOE support across the DAC Hub:

Climeworks: $400M
Heirloom: $200M

Overwhelming support from Louisiana business development

This page contains Trade Secrets, Confidential, Proprietary, or Privileged Information Exempt from Public Disclosure. (See Highlights.)

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Private buyers will support the development of Project Cypress, with over $300M in contracts signed by some of the world’s largest companies

This page contains Trade Secrets, Confidential, Proprietary, or Privileged Information Exempt from Public Disclosure. (See Highlights.)

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DAC to EOR will be profitable across nearly all oil price environments at scale

100

50

0

250

200

150

400

350

300

450

Value per tCO₂ ($)

$220–260

$240–300

$260–380

$280–410

Oil revenue uplift �per tCO₂

Oil Price ($bbl)

Heirloom projected cost per tCO₂

$40

$60

$80

$100

DAC in EOR with $180 tCO₂ 45Q Incentive

Oil uplift: Each ton of CO₂ yields 2–3 incremental barrels, worth $40–170/t depending on oil price and reservoir efficiency
45Q: $180/t credit on top, with total revenue per ton CO₂ is $220–410/t
Competitiveness: At <$200/t DAC cost, projects are profitable across nearly all oil price environments

This page contains Trade Secrets, Confidential, Proprietary, or Privileged Information Exempt from Public Disclosure. (See Highlights.)

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