The Department of Natural Resources proposes to amend and adopt regulations in Title 11, Natural Resources, of the Alaska Administrative Code, dealing with Carbon Storage Licensing and Leasing, including the following:

1. Proposed amendments:

1. 11 AAC 05.110. Leasable minerals. Includes carbon storage exploration license and lease application and administration fees, simplifies the section title, and adds a definition for leasable minerals.
2. 11 AAC 80.045. Field gathering lines exempt. Adds definition of “carbon dioxide” and amends definition of “field gathering line” to add new classification to transport carbon dioxide.
3. 11 AAC 80.055. Field gathering lines defined. Repeals definition and readopts it as subsection (b) to 11 AAC 80.045 with added classification for transport of carbon dioxide.

1. Proposed new Title 11, Chapter 84, Article 9, Carbon Storage Licensing and Leasing, to be adopted:

1. 11 AAC 84.1000. Minimum qualifications. Establishes minimum qualifications for who may apply for, obtain, or transfer interest in carbon storage exploration licenses and leases.
2. 11 AAC 84.1005. Carbon storage exploration license applications. Establishes what must be included in an application for an exploration license.
3. 11 AAC 84.1010. Call for competing proposals. Establishes the procedure for calls for competing proposals after an exploration license application is received.
4. 11 AAC 84.1015. Best interest findings. Establishes the procedure and criteria for issuance of a best interest finding before determining whether to issue a carbon storage exploration license or lease.
5. 11 AAC 84.1020. Competitive bidding procedure; assessment criteria. Establishes competitive bidding procedures and assessment criteria if competing proposals are accepted.
6. 11 AAC 84.1025. License administration. Establishes reporting and payment requirements for licensees.
7. 11 AAC 84.1030. Default by licensee; termination, revocation, and surrender of a license. Establishes procedures, rights, and responsibilities for default, termination, revocation, and surrender of a license.
8. 11 AAC 84.1035. Conversion of carbon storage exploration license to storage lease; lease provisions. Establishes the procedure and requirements for converting a license to a lease.
9. 11 AAC 84.1040. Transition from enhanced oil recovery operations to carbon storage operations; lease provisions. Establishes the procedure and requirements for issuing a carbon storage lease to an oil and gas lessee upon transitioning from enhanced oil recovery to permanent carbon storage operations.
10. 11 AAC 84.1045. Default by lessee, termination and surrender of a carbon storage lease. Establishes procedures, rights, and responsibilities for default, termination, and surrender of a carbon storage lease.
11. 11 AAC 84.1050. Carbon storage lease unitization. Establishes procedures and requirements for unitizing carbon storage leases.
12. 11 AAC 84.1055. Assignments. Establishes procedures and requirements for assigning an interest in carbon storage exploration licenses and leases, which must be approved by the commissioner.
13. 11 AAC 84.1060. Application for approval of assignment. Establishes the requirements for approval of an application of an assignment of interest in a carbon storage license or lease.
14. 11 AAC 84.1065. Plan of development; application requirements. Establishes requirements for a plan of development for carbon storage leases, which will be subject to regular review.
15. 11 AAC 84.1070. Plan of operations; application requirements; completion reports. Establishes requirements for a plan of operations to permit on-the-ground activities.
16. 11 AAC 84.1075. Surety requirements. Establishes requirements for bonding or other acceptable forms of surety of performance under the conditions of a carbon storage license or lease.
17. 11 AAC 84.1080. Damages. Requires a licensee or lessee to pay damages and indemnify the state in the case of claims made by surface owners in accordance with AS 38.05.130.
18. 11 AAC 84.1085. Long-term monitoring and maintenance of leased area. Establishes procedures for the Department of Natural Resources to assume long-term monitoring and maintenance of a storage facility after closure, including the use of the carbon storage closure trust fund established by AS 37.14.850.
19. 11 AAC 84.1090. Definitions. Defines terms used in the adopted regulations in 11 AAC 84.

You may comment on the proposed regulation changes, including the potential costs to private persons of complying with the proposed changes, by submitting written comments to Department of Natural Resources, Division of Oil & Gas, at 550 W. 7th Ave, Suite 1100, Anchorage, AK 99501-3563. Additionally, the Division of Oil & Gas will accept comments by facsimile at (907) 269-8939 and by electronic mail at ccus.dog@alaska.gov. The comments must be received not later than 5:00 p.m. on December 2, 2024.

You may submit written questions relevant to the proposed action to the Division of Oil and Gas email or physical address above. The questions must be received at least 10 days before the end of the public comment period. The Division of Oil & Gas will aggregate its response to substantially similar questions and make the questions and responses available on the Alaska Online Public Notice System and https://dog.dnr.alaska.gov/.

If you are a person with a disability who needs a special accommodation to participate in this process, please contact Sean Clifton at sean.clifton@alaska.gov or (907) 269-8786 not later than November 18, 2024, to ensure that any necessary accommodation can be provided.

A copy of the proposed regulation changes is available on the Alaska Online Public Notice System and by contacting Sean Clifton at sean.clifton@alaska.gov or (907) 269-8786.

After the public comment period ends, the Department of Natural Resources will either adopt the proposed regulation changes or other provisions dealing with the same subject, without further notice, or decide to take no action. The language of the final regulation may be different from that of the proposed regulation. You should comment during the time allowed if your interests could be affected.

Statutory authority: AS 38.05.020; AS 38.05.700; AS 41.06.305

Statutes being implemented, interpreted, or made specific: SLA 2024, ch. 23, § 6 (AS 37.14.850); AS 38.05.035; SLA 2024, ch. 23, § 9 (AS 38.05.130); SLA 2024, ch.23, § 10 (AS 38.05.135); AS 38.05.350; SLA 2024, ch. 23, § 21 (AS 38.05.700 – 38.05.795); AS 38.05.860; SLA 2024, ch. 23, § 23, 24 (AS 38.35.020); SLA 2024, ch. 23, § 39 (AS 41.06.120; AS 41.06.170; AS 41.06.210; AS 41.06.305)

Fiscal information: The proposed regulation changes are not expected to require an increased appropriation.

The Department of Natural Resources, Division of Oil & Gas, keeps a list of individuals and organizations interested in its regulations. Those on the list will automatically be sent a copy of all the Department of Natural Resources, Division of Oil & Gas notices of proposed regulation changes. To be added to or removed from the list, visit https://list.state.ak.us/mailman/listinfo/dog.leasing. If you wish to be added or removed from the list to receive physical notices by mail, send a request to the Department of Natural Resources, Division of Oil & Gas, at 550 W. 7th Ave, Suite 1100, Anchorage, AK 99501-3563, giving your name, and either your e-mail address or mailing address, as you prefer for receiving notices.

Individuals can also signup to receive automated notifications of all State of Alaska notices, including public notice for regulation changes, by subscribing to the Alaska Online Public Notices System: https://aws.state.ak.us/OnlinePublicNotices/Default.aspx.

Date: October 23, 2024

Derek Nottingham

Director, Division of Oil & Gas

Alaska Department of Natural Resources