In Montana State, a new law was introduced affecting underground sequestration wells. The new law is labeled SB 498 and controls the storage of carbon dioxide in underground sequestration wells. SB 498 allows the Environmental Review Board to implement rules for the operators of these wells, as well as provisions for the requirement of a surety bond. The surety bond is conditioned on the fulfillment of the new law and the regulations adopted to apply it. The surety bond must be adequate enough to guarantee the efficiency of the well and the site, and to cover the expenses to counterbalance emissions ensuing from failure of a well to enclose the carbon dioxide. The new law also states that the surety bond will be terminated for failures to appropriately supervise and operate a well, reservoir, and stored carbon dioxide or to plug a well. Additionally, SB 498 prohibits the surety bond from being terminated or absolved. The new authorizing law for the said wells became active upon enactment. The substantive requirements, including bonding, will not become active until the U.S. Environmental Protection Agency permits the Montana Board of Oil and Gas Conservation primacy to administer procedures at carbon dioxide sequestration wells.
Eric is the Chief Marketing Officer of JW Surety Bonds. With years of experience in the surety industry, he is also a contributing author to the surety bond blog.