Kentucky requires carbon storage permits and allows combining underground rights

Carbon storage operators must obtain injection and drilling permits, provide financial guarantees, and pay oversight fees. These rules cover underground carbon dioxide storage in Kentucky. Permitted injection to help recover oil or gas is exempt, but conversion to long-term storage falls under these rules. The U.S. Environmental Protection Agency issues injection permits until it grants Kentucky’s Energy and Environment Cabinet primary enforcement authority. Approval requires legal rights to the entire storage area and needed surface land, protection of water and public health, monitoring, and financial backing for cleanup and closure. Operators pay application, annual oversight, completion review, and per-ton injection fees. The fees fund state oversight and long-term care. Carbon dioxide stored under a cabinet permit in compliance with the law is not considered a pollutant. The compliant facility is not considered a public nuisance; other state and federal agency powers remain intact. Permits are required before construction or operation. Operators pay the per-ton fee when they inject carbon dioxide.

The Energy and Environment Cabinet can order underground storage space to be combined into a project without every owner’s consent. These rules cover pore space—the underground gaps used for storage—including space owned by people who cannot be identified or located. Operators must negotiate in good faith and obtain written consent covering at least 75% of the proposed reservoir’s storage acreage. The cabinet must find that legal requirements are met, notify affected owners, and set compensation for nonconsenting, unknown, and missing owners. The order does not allow surface entry or disturbance above those owners’ storage space, except temporary emergency access. For required underground mapping surveys, the cabinet may allow surveying from outside a nonconsenting owner’s land after negotiations fail. The operator must pay compensation first and keep the survey data confidential. Money owed to unknown or missing owners goes into an interest-bearing account. Seven years after first injection, it goes to the surface owner, or to the state storage trust fund if that owner also remains unknown or missing.

Kentucky takes ownership of stored carbon dioxide and responsibility for monitoring when a completion certificate takes effect. Until certification, operators own the stored carbon dioxide and are liable for damage it causes. Afterward, state monitoring uses the storage trust fund unless the federal government takes responsibility. A certificate requires public notice and a hearing, full compliance, resolution of pending operating claims, and evidence that the carbon dioxide has stabilized and is expected to stay stored. Operators, generators, and transporters are released from regulatory duties and liability associated with the facility. Operators retain regulatory liability for fraud or misrepresentation and liability under court-made law. Kentucky defends covered landowners against storage damage claims, but damage payments cannot exceed the storage trust fund’s balance. Owners may remain liable if they cause or contribute to movement or release of stored carbon dioxide. The cabinet may issue a certificate 50 years after injection ends or at another site-specific time set by regulations. Ownership transfers when the certificate takes effect.

Covered power developers must meet siting rules and financially guarantee plans to dismantle facilities and restore land. These provisions cover projects under Kentucky’s merchant power plant approval rules. Solar and wind site-compatibility approvals also carry distance rules. Specified exceptions apply to waste-coal projects at former coal-processing sites. State rules generally require 1,000 feet between turbines and adjoining property boundaries and 2,000 feet between generation or storage facilities and neighborhoods or sensitive sites such as schools. Local planning and zoning rules take priority over state height, distance, and dismantling rules, but cannot undercut the state minimum cleanup guarantee. The state board cannot waive local rules and may approve specified state distance exceptions. Wind applicants must certify that turbines have no artificial lighting unless legally required and that siting or other measures prevent significant harmful shadow flicker on neighboring property. Dismantling plans require full removal of underground equipment unless the current landowner requests otherwise or agrees to a different depth. Plans must restore similar soil quality. Financial backing must cover the greater of estimated dismantling costs without deducting salvage value or the applicable local guarantee. Dismantling applies when a facility’s useful life ends. Plans and financial guarantees are reviewed at least every five years. Discarded wind components and solar panels must leave within 90 days after replacement work ends, unless the cabinet extends that period.

Carbon dioxide pipeline developers must obtain state construction approval, and qualifying residents can require a local information meeting. At least three interested people who live in counties along the proposed pipeline can require a local information meeting where the public can question the developer. Applications must describe the route, identify crossed properties, and map nearby neighborhoods, schools, and parks. Developers must publish notice and send the application to local officials. Approval requires a route that minimizes significant harm to Kentucky’s scenery and compliance with legal requirements. The board may deny approval or require a different route. The board must grant or deny an application within 120 days of receipt, or within 180 days if a local information meeting is held.