MIDLAND, Texas — Back in September, Milestone Carbon acquired rights to over 10,000 acres of land and pore space in Midland and Upton counties for permanent CO2 sequestration. That future carbon capture and storage hub might just be the start of similar units in the Permian Basin, which has some mineral rights owners concerned.
Those concerns stem from simply the uncertainty around this development, and those mineral owners could be negatively impacted. Secondary recovery puts CO2 in the ground to help improve oilfield production, whereas permanent sequestration will put CO2 in the ground forever.
For mineral rights owners in the Permian Basin, there are questions about the ability for permanent CO2 sequestration and oil and gas production to co-exist.
“There is a concern about the impact on mineral owners because if we’re going to form carbon sequestration units and pump CO2 under the ground, what happens to the oil and gas that’s under the ground that those mineral owners own?," said Wade Caldwell, a mineral owner attorney. "Are they going to be able to continue to produce it? Are they going to be able to drill underneath the unit to produce oil and gas that may be underneath or above it?”
Caldwell wants responsible development of minerals.
“We’re in favor of CO2 sequestration to the extent that it can help get CO2 out of the atmosphere, but we also know that America needs oil and gas – and will continue to need oil and gas for many, many, many years – and by taking a large portion of that oil and gas off the market, we have concerns about that," Caldwell said.
Transparency is key for mineral owners to understand what’s happening with these emerging units.
“Obviously we don’t want to lose our rights to produce our minerals by the formation of some unit that we don’t have any notice of, and third we want to be able to – if a technology comes along that allows us to produce minerals that we didn’t think we could produce – we want to be able to do that," Caldwell said.
While there are concerns over the potential loss of mineral rights through the implementation of these units, there is hope for the future.
“We believe the technology is there, or will be there, to allow them to work side-by-side," Caldwell said. "In other words -- you can have CO2 sequestered under ground and still have oil and gas production in the area.”
Caldwell mentioned that there is a big push with federal tax credits to form these units. He added that while there is opportunity for Texas to be involved in permanent CO2 sequestration, it has to be balanced with oil and gas.