The Infrastructure Investments and Jobs Act (the “Act”), which was passed into law on November 15, 2021, included key amendments to the Outer Continental Shelf Lands Act (“OCSLA”) that pave the way for carbon sequestration in offshore federal waters.

Prior to the Act’s passage, OCSLA (as amended by the Energy Policy Act of 2005) authorized the United States Department of Interior to issue leases in federal waters for certain types of renewable energy projects. However, these provisions did not directly address leasing for carbon sequestration. The Act amended OCSLA to expressly authorize Interior to issue leases, easements, and rights-of-way for activities that “provide for, support, or are directly related to the injection of a carbon dioxide stream into sub-seabed geologic formations for the purpose of long-term carbon sequestration.” The Act defines “carbon sequestration” as “the act of storing carbon dioxide that has been removed from the atmosphere or captured through physical, chemical, or biological processes that can prevent the carbon dioxide from reaching the atmosphere.”

These amendments come months after the Council on Environmental Quality issued a Report to Congress that addressed steps to advance the orderly development of carbon capture. The Report noted the need to clarify the process for offshore storage leasing and project implementation.

The Act requires that Interior promulgate regulations to carry out the amendments within one year of passage of the Act. Interior will likely engage with industry as it attempts to issue regulations that address the various technical and environmental issues associated with leasing and permitting carbon sequestration projects. Companies interested in such projects should closely monitor this rulemaking process.

If you have any questions regarding the amendments, please contact Steve Wiegand or Jana Grauberger.

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Photo of Stephen Wiegand Stephen Wiegand

Steve Wiegand’s practice focuses on complex regulatory issues impacting onshore and offshore energy and industrial operations.

In the offshore arena (including the Gulf of Mexico and the Pacific), he advises clients on a wide range of regulatory matters, including compliance with operational and…

Steve Wiegand’s practice focuses on complex regulatory issues impacting onshore and offshore energy and industrial operations.

In the offshore arena (including the Gulf of Mexico and the Pacific), he advises clients on a wide range of regulatory matters, including compliance with operational and safety requirements, appeals of Incidents of Non-Compliance and civil penalty assessments, incident response and associated agency investigations, lease suspensions, and National Pollutant Discharge Elimination System permit compliance.

Photo of Jana Grauberger Jana Grauberger

Jana Grauberger is an oil and gas lawyer with more than 20 years experience. Clients turn to her as a trusted advisor in connection with their contract negotiations, regulatory advice and appeals, litigation, and arbitration related to onshore and federal offshore upstream and…

Jana Grauberger is an oil and gas lawyer with more than 20 years experience. Clients turn to her as a trusted advisor in connection with their contract negotiations, regulatory advice and appeals, litigation, and arbitration related to onshore and federal offshore upstream and midstream projects and facilities. Jana has represented clients in negotiating a wide variety of onshore and offshore contracts, including purchase and sale agreements, farmouts, participation agreements, joint operating agreements, production handling agreements, platform use agreements, gathering agreements, connection agreements, construction contracts, transportation contracts, and decommissioning agreements. She also represents clients in connection with regulatory matters involving Department of Interior agencies, including the Bureau of Ocean Energy Management (BOEM), the Bureau of Safety and Environmental Enforcement (BSEE), and the Office of Natural Resources Revenue (ONRR).