The Canadian Steel Producers…

The Canadian Steel Producers Association (CSPA) hereby submits comments on Bill 228 Resource Management and Safety Act (Act).

While there remains substantial work to be done to advance carbon storage in Ontario, CSPA recognizes the Ontario government in its efforts to create enabling legislation to guide these efforts. The Ministry of Natural Resources has been working diligently and swiftly since 2022 to create the regulatory framework required in order for carbon storage to be one of a suite of viable options for industry to assist in achieving the provincial greenhouse gas emissions reduction goals.

We applaud the provincial government for providing clarity on long-term liability of a closed carbon storage site. CSPA is supportive of Bill 228’s proposal that storage permit holders would be able to request a closure certificate which, if used, would transfer liability and responsibility for the long-term monitoring and maintenance of carbon storage sites to the Crown after a site has been closed and all conditions and requirements associated with closing a carbon storage site have been met. This provides clarity on an important aspect of carbon storage required to make investment decisions.

However, we are concerned about the proposed approach for ownership of and rights to pore space. Bill 228 states that pore space rights form part of the surface rights estate, except where they have been reserved or separately granted or conveyed to another person. In order for a carbon storage project on private lands to obtain pore space rights, proponents would need to request a unitization order from the Ontario Land Tribunal (OLT). The OLT would consider whether the proponent has already obtained the consent from landowners owning the majority of the pore space right in a storage repository and has made a good faith effort to obtain the consent of all landowners with pore space rights. Pending these conditions being met, the OLT can provide access rights for the pore space to a proponent once all landowners who have not consented have been equitably compensated.

This provision fails to recognize the extensive number of potential landowners that would be required to consent – let alone be contacted and negotiated with – by any given proponent. It is simply untenable for proponents in Southwestern Ontario to seek consent from what could be thousands, if not tens of thousands, of individual landowners. This premise alone, effectively closes the door on the possibility of any stand-alone carbon storage projects in Ontario and will deter potentially billions of dollars of investment in green technology. that would assist the province in achieving its greenhouse gas reduction goals.

In contrast, Bill 228 proposes that the Lieutenant Governor in Council would have the authority to make regulations taking rights to pore space in storage repositories that straddle both public and private lands and vesting these rights in the Crown under certain conditions. If such a regulation is made, the Minister would be able to provide proponents with rights to use the pore space for the purposes of carbon storage, provided the Minister is satisfied that the pore space would be used to sore a minimum amount of CO2 from a minimum number of industrial emitters as prescribed by the regulations. Proponents who have been provided with these pore space rights would be required to compensate the private landowners in accordance with regulations.

By having two different approaches to treating pore space rights that have a great imbalance of responsibility on the proponent(s), the proposed legislation effectively confers that only carbon storage projects that would straddle both public and private lands will even be potentially viable, which may hinder the pace and timing of the implementation of carbon storage projects in the province.

The CSPA supports both hub and single proponent project models. However, requiring proponents seeking to utilize pore space under public lands to meet a yet-to-be-determined minimum volume of carbon storage and secure the commitment of multiple carbon emitters risks delaying project development. While a minimum carbon storage volume may be in the public interest to reduce overall provincial emissions, the number of emitters contributing to that volume is ultimately irrelevant, as the same environmental benefit is achieved regardless of the number of participants. At the same time, the Government of Ontario should ensure that future access to pore space remains available where it serves the public interest, enabling fair and efficient use of such space.

Further, the noted absence of any regulatory criteria for the transportation of carbon to a sequestration site is also a substantial barrier to many emitters who will not invest in capture technology without assurance that their captured carbon will be able to be transported and stored, safely and securely. The magnitude of the necessary capital investments is such that assurances must be in place before final investment decisions are likely to be made by any emitter committing to long-term participation in a carbon storage hub project.
The draft Act also describes that in the case of a storage permit, the applicant must also provide the Minister with confirmation of municipal endorsement of the proposed project. To CSPA’s knowledge, such a requirement is not in place in successful carbon storage implementation jurisdictions like Alberta. It is unclear why it would be required in Ontario as it effectively places a full veto on any project in the hands of a very select few. While CSPA support a full consultative approach, we believe that carbon storage is in the broader public interest and as such decisions on projects should rest in the hands of the Province with the full weight of all stakeholders being considered.

CSPA acknowledges the proposed Carbon Storage Stewardship Fund, where permit holders would make payments to the fund in accordance with the regulations. This concept seems to be appropriate to support the Crown for taking on long-term liability of carbon storage sites including monitoring and maintenance.

The draft Act also indicates that the Minister would be able to appoint inspectors and enforcement officers to be able to issue orders for non-compliance, require measures be taken to prevent a hazard to the public or environment, and require that a well or ancillary work not be used or be decommissioned. It is recommended that individuals who are given the authority to issue orders be at a Director level or higher, in order to ensure consistency in issuance of orders. This would help create public confidence in a level playing field.

The proposed framework would regulate all scales of projects that use wells to conduct activities related to geologic carbon storage, including testing, pilot and demonstration projects. CSPA also seeks clarity from the Ministry on how O. Reg. 425/23 Special Projects would be treated within The Act. For proponents that may be in the process, or are considering to apply for, a Special Project on private lands for the purpose of testing, assessing, piloting or demonstrating the permanent storage of CO2 in an underground geological formation, it is not clear how ‘early movers’ would be treated within the legislation.

CSPA appreciates the opportunity to provide feedback through the public consultation process of Bill 228. We welcome the opportunity to further discuss these comments with the Ministry of Natural Resource prior to the legislation receiving Royal Assent.