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Carbon Capture

The number of companies committing to “net zero” emissions within the coming decades is growing rapidly. These commitments are in reaction to a number of factors—including ESG considerations, tax and other government incentives, carbon offset credits, grant programs, and broader climate concerns. For a number of industries, capturing and sequestering CO2 that otherwise would be emitted into the atmosphere is a necessary means for meeting these carbon reduction targets.

Traditional energy companies not only often generate significant volumes of CO2 emissions, but they also are well positioned to design, build, and operate the infrastructure necessary to capture, transport, and dispose of CO2.

As the “World’s Leading Energy Law Firm” (Euromoney, 1995–Present)*, V&E is well suited to guide traditional energy clients and new entrants in the burgeoning area of carbon capture projects. Our firm brings a multidisciplinary team with substantial experience in carbon capture and related projects to help clients implement these initiatives:

  • Project Structuring and Development
    • Agreements and market terms for project development (including EPC and O&M contracts, CO2 capture and sequestration agreements, and pipeline transportation), securing necessary reservoir and surface rights, and other infrastructure requirements
    • Ranked Band 1 by Chambers USA in Projects: Power & Renewables (2019–2021) and Projects: Oil & Gas (2014–2021)
  • Project Finance
    • All elements of project finance for any carbon capture and sequestration project facilities (such as pipelines) on both lender and creditor side (sponsors, developers, and lenders)
    • Ranked in Project Finance – Advice to Sponsors and Project Finance – Advice to Lenders by Legal 500 U.S. in 2021
  • Tax/Tax Equity/45Q
    • Utilization of Section 45Q income tax credits (see our summary of the final regulations governing the rules on Section 45Q credits)
    • Structuring tax equity investments for both tax equity investors and project sponsors
    • Ranked by Chambers USA in Projects: Renewables & Alternative Energy in 2021, recognizing our trail-blazing efforts with renewables tax equity financings
  • Permitting and Regulatory
    • Compliance with and permitting under the Safe Drinking Water Act’s Underground Injection Control (UIC) program, including for Class II (for EOR) and Class VI (for long-term sequestration) wells, and securing permits from USEPA as well as state regulatory authorities
    • Advice on other federal and state regulatory matters relating to pipelines, air emissions, and other energy infrastructure matters
    • Ranked nationwide by Chambers USA in Environment (2013–2021)
  • Energy
    • Named “Energy Group of the Year” in 2021 by Law360
    • Ranked Band 1 in Energy: Oil & Gas (Transactional) (2013–2021) and named “Energy & Projects Law Firm of the Year” in 2021, both by Chambers USA
    • Midstream
      • Broad client and deal list handling midstream activities also involved in carbon capture projects, including gathering, processing, treatment, transportation, and storage of hydrocarbons and other products (e.g., water and other byproducts)
      • Led nearly twice as many midstream energy M&A transactions as any other law firm in the last five years (according to Capital IQ)
    • Joint Ventures
      • Possess one of the strongest energy infrastructure joint venture resumes in the U.S., with experience on behalf of strategic investors, private equity funds and portfolio companies, preferred equity providers, infrastructure funds, and other investors
      • Advice on complex co-ownership issues, including decision-making, exit rights and limitations, distribution waterfalls, project expansions, and partnership tax matters
    • Upstream
      • Knowledgeable on state and federal statutes affecting upstream/sequestration aspects of carbon capture projects
      • Deep bench of lawyers whose core practice is dealing with surface and mineral ownership issues and associated agreements
  • ESG
    • Navigating carbon offset credits and emissions accounting
    • Advice on federal and state carbon capture incentives
    • Advice on management of risks related to net-zero targets, GHG emission reductions strategies, and public disclosure of same, including SEC oversight
  • Insurance Products
    • Collaborating with major insurers to develop insurance products addressing tax credit recapture and other risks inherent in carbon capture projects

*Based upon the number of lawyers named in the Guide to the World’s Leading Energy & Natural Resource Lawyers

Transactions

  • Continental Resources in its $250 million strategic investment in Summit Carbon Solutions to fund the development and construction of carbon capture, transportation and sequestration infrastructure located in the Midwestern United States with initial capacity of up to 12.0 MMtpa and expansion capabilities up to 20.0 MMtpa

  • LSB Industries in its agreement with Lapis Energy for the development of a project to capture and permanently sequester CO2 from ammonia production at LSB’s El Dorado, Arkansas facility

  • 8 Rivers Capital in its joint venture with ADM to develop the 280 MW Broadwing Clean Energy Complex in Illinois, one of the world’s first zero emissions Allam-Fetvedt cycle power plants, including CO2 storage capabilities

  • 8 Rivers Capital in its joint venture with The Southern Ute Indian Tribe Growth Fund to develop the 280 MW Coyote Clean Power Project in Colorado, one of the world’s first zero-emissions NET Power natural gas-fired power plants, including CO2 capture and storage capabilities

  • Earthly Labs, a leading provider of small-scale carbon capture systems, in an equity investment by Chart Industries (NYSE: GTLS), a global manufacturer of liquefaction and cryogenic equipment

  • A large international energy company in the formation of a joint venture with a carbon capture technology company for the development of a pilot project involving the capture, storage and transportation of carbon for use in enhanced oil recovery operations; representation included the structuring and negotiation of complex intellectual property ownership arrangements between the joint venture parties

  • Private equity fund in a joint venture with an international upstream operator to develop and operate permanent carbon sequestration facilities along the Gulf Coast (ongoing)

  • Private equity fund in the acquisition of a refining facility capable of producing 40 million gallons per year of ethanol and the development of carbon capture and sequestration facilities adjacent to such refining facility (ongoing)

  • An international investment bank in all aspects of its investment in a project to develop a small scale ammonia production facility that potentially includes the offtake of excess hydrogen for use in the transportation space and the sequestration of CO2

  • Project developer in connection with a proposed CO2 capture and sequestration project in Wyoming involving the supply of CO2 for enhanced oil recovery and possibly pure sequestration (ongoing)

  • Private equity fund in an investment in a late development stage industrial scale carbon capture pipeline system and sequestration facility designed to gather, transport and permanently store up to 5 million metric tons of carbon dioxide per year (ongoing)

  • UK-based investor in a joint venture exploring numerous CCS/CCUS projects on the Gulf Coast (ongoing)

  • Lead permitting counsel for Gulf Coast CCS project targeting sequestration in salt caverns (ongoing)

  • Midstream company in structuring a joint venture to gather high CO2 and otherwise nonconforming natural gas from multiple producers, treat the natural gas, and remove, capture, transport, and sequester the CO2 (ongoing)

  • Private equity portfolio company in advice on issues relating to the formation of a carbon management business

  • Client in the formulation of strategic greenhouse gas reduction goals, including reallocation of capital towards the development of a range of low-carbon energy technologies such as the production of hydrogen from natural gas, carbon capture and sequestration and renewables

  • Midstream company in advice regarding natural gas processing and satisfying requirements under 45Q, including possible tax equity structures, aggregation, and components constituting carbon capture equipment

  • Refinery in advice on tax and environmental issues regarding carbon capture projects

  • A large international energy company in advice related to the utilization of tax credits for potential carbon capture investments

  • Midstream company in counseling on a contemplated agreement for the capture and sale of CO2 at one of its processing plants, including an evaluation of how the installation of CO2 capture equipment may impact the facility’s status under EPA’s GHG regulations and whether the facility would be required to continue operating capture equipment at the end of the contract for sale of the CO2

  • Multiple midstream clients in potential carbon capture and sequestration projects and the development of reduced-burden permitting strategies and the mitigation of construction and operational-related environmental risks

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