§1104.2. Unitization
A.In order to promote the orderly development of the state's geologic storage
resources, to ensure that these resources are developed in an efficient, fair, and equitable
manner, and to prevent waste thereof, upon the application of a storage operator, the
commissioner is authorized and empowered to enter an order requiring the unit operation of
a storage unit, as that term is defined in this Section, in addition to any reasonable and
necessary areal buffer and subsurface monitoring zones, and in connection with such an order
of unit operation, the commissioner shall have the right to unitize, pool, and consolidate all
separately owned tracts and other property interests within a storage unit for geologic storage.
B.An order for unit operation shall be issued only af
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§1104.2. Unitization
A. In order to promote the orderly development of the state's geologic storage
resources, to ensure that these resources are developed in an efficient, fair, and equitable
manner, and to prevent waste thereof, upon the application of a storage operator, the
commissioner is authorized and empowered to enter an order requiring the unit operation of
a storage unit, as that term is defined in this Section, in addition to any reasonable and
necessary areal buffer and subsurface monitoring zones, and in connection with such an order
of unit operation, the commissioner shall have the right to unitize, pool, and consolidate all
separately owned tracts and other property interests within a storage unit for geologic storage.
B. An order for unit operation shall be issued only after notice, public hearing, and
a finding by the commissioner that it is for a public and necessary purpose. In order to
consider a unit application, the commissioner shall find that at least eighty-five percent of
the owners in interest within the proposed storage unit have consented in writing to geologic
storage. The required eighty-five percent of the owners in interest shall be on the basis of,
and in proportion to, the surface acreage content of the entire storage unit and, if a tract
within the storage unit is subject to ownership in indivision, credited by multiplying the
acreage of the tract by the undivided ownership interest of the parties who have consented
in writing to geologic storage.
C. An order for unit operation shall provide for just and equitable sharing of the
benefits generated from use of such tracts for geologic storage and shall provide for just and
equitable compensation to all owners in interest, including the storage operator, other owners
in interest who consented in writing to geologic storage, and owners in interest who did not
consent in writing to geologic storage, except that the order shall not vary, alter, or otherwise
apply a standard of benefit sharing or compensation to the terms of any contracts between
the storage operator and any owner in interest. The order shall set forth the method, formula,
or other basis by which the just and equitable sharing of the benefits shall be determined,
including the timing of payments thereof. In determining the method, formula, or other basis,
the commissioner may take into consideration such factors that include but are not limited
to the computational modeling submitted by an existing or proposed storage operator,
whether there is an impact to a tract, the extent of any impact to a tract, each separately
owned tract's proportionate share of the total surface acreage contributed to the storage unit,
the costs required to perform the unit operation, and the viability of any third-party geologic
storage projects within the storage unit and any associated third-party contracts executed by
an owner in interest.
D. Judicial review of orders, rules, and regulations issued by the commissioner
pursuant to this Section shall be conducted pursuant to the provisions and requirements of
R.S. 30:12. Additionally, subject to timely filing for court review pursuant to R.S. 30:12, the
proposed storage unit operator or any owner in interest who has not entered into an
agreement for geologic storage with the proposed storage unit operator shall have the right
to have the reviewing court determine whether the purpose for the storage unit is public and
necessary, whether the compensation provided for is just, and, if not, the amount of just
compensation due. As to any owner in interest having the right to have a reviewing court
determine whether the compensation is just under this Subsection, the court's review in those
instances shall be limited to the compensation affecting that specific owner in interest. The
review of whether the compensation is just may be heard through a trial by jury if timely
requested by any party. Judicial reviews conducted under this Subsection shall be tried by
preference and shall be conducted with the greatest possible dispatch.
E. Upon application by the storage operator or at the commissioner's discretion and
after notice, public hearing, and consideration of available geological, engineering, and other
relevant evidence, the commissioner, to the extent required by such evidence, may by order
revise, amend, enlarge, reduce, confirm, or dissolve any storage unit provided for under this
Section or modify any provision of any order issued pursuant to this Section, without the
consent required by Subsection B of this Section. An order enlarging or reducing the areal
extent of an existing storage unit shall provide for just and equitable compensation to all
owners in interest as to any acreage added to the storage unit and may also provide for
adjustments to compensation and the sharing of benefits as are just and equitable for all
owners in interest as to the area encompassed by the enlarged or reduced storage unit. In any
order issued pursuant to this Subsection providing for compensation, the commissioner shall
use the same method, formula, or other basis used to determine the just and equitable share
pursuant to Subsection C of this Section. However, no order issued pursuant to this
Subsection shall vary, alter, or otherwise apply a standard of benefit sharing or compensation
to the terms of any contracts between the storage operator and any owner in interest.
F. Operations on or injection in the storage unit for geologic storage shall be
considered operations on or injection in each separate tract in the storage unit.
G. The commissioner shall prescribe, issue, amend, and rescind such orders, rules,
and regulations as the commissioner may find necessary or appropriate to carry out the
provisions of this Section, including establishing the methodology for determining or
adjusting just and equitable compensation to owners in interest that have not entered into a
contract with the storage operator, including the storage operator, other owners in interest
who consented in writing to geologic storage, and owners in interest who did not consent in
writing to geologic storage, including in the event that a storage unit is enlarged or reduced.
However, no order, rule, or regulation issued pursuant to this Subsection shall vary, alter, or
otherwise apply a standard of benefit sharing or compensation to the terms of any contracts
between the storage operator and any owner in interest. The same requirements and
procedures to challenge such an order, rule, or regulation that are stated in Subsection D of
this Section shall also apply to this Subsection.
H. For the purposes of this Section, the following terms shall have the following
meanings:
(1) "Owner in interest" shall mean any party who owns or otherwise has the right to
use the subsurface of a tract within the storage unit for geologic storage, regardless of
whether such party is the surface owner of the tract or has acquired the right from the surface
owner, or is a successor or assign of such right.
(2) "Storage unit" shall mean the area encompassing the underground reservoir or
portion thereof, and all associated top and bottom seals, which comprise the carbon dioxide
plume, as that term is defined in administrative rules and regulations providing for Class VI
injection wells, based on computational modeling submitted in the unit application by the
existing or proposed storage operator, as approved by the commissioner.
I. Except as provided in R.S. 30:1108(B)(2), nothing in this Section shall prevent
persons having the right to do so from drilling through the storage unit in such manner as
shall comply with the rules of the commissioner issued for the purpose of protecting the
storage unit or an associated storage facility against pollution or invasion and against the
escape or migration of carbon dioxide.
J. No Class VI injection wellhead shall be located within five hundred feet of any
inhabited dwelling not owned by the storage operator or any owner in interest bound by a
contract with the storage operator that allows for the location of a Class VI injection
wellhead within five hundred feet of an inhabited dwelling.
K. If this Section, or the application thereof to any person or circumstance, is finally
determined by a court of law to be unconstitutional or otherwise invalid, the right to exercise
the power of eminent domain and expropriate reservoir storage rights for geologic storage
shall be reinstated, subject to the storage operator obtaining a certificate of public
convenience and necessity from the commissioner pursuant to R.S. 30:1107(A).