Ohio Senate Passes Substitute Bill on Carbon Capture and Storage Activity

Legislation introduced over a year ago to allow for carbon capture and storage (CCS) activity in Ohio has progressed through the Senate, but in a different version than passed by the House.  Deliberation in the Senate Energy Committee led to a substitute bill that unanimously passed the Senate on May 20. We reported previously on the version of the bill the House passed on October 8, 2025.

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Like the House-passed version of the bill, Sub H.B. 170 authorizes CCS activity in Ohio, which is the process of injecting carbon dioxide into the “pore space” of a sub-surface storage facility through a permitted Class VI underground injection well.  Read more about CCS in our earlier article.  Sub-H.B.170 follows the House version by clarifying landowner rights in pore space, the right to separately convey pore space, and the relationship between pore space and other property interests.  It charges development of the regulatory program for CCS to the Ohio Department of Natural Resources Division of Oil and Gas Resources Management and provides guidelines for program regulations. The bill also authorizes statutory consolidation or “pooling” of pore space interests, sets fees and penalties, and addresses project closure and liability for injected carbon dioxide.   

The primary differences in the Senate’s Sub H.B. 170 passed on May 20 include:

Drainage systems.  Requires** **CCS project owners, when ground disturbance is necessary, to review rather than map field drainage systems and determine ways to mitigate or avoid drainage system damages and repair or restore drainage conditions.

Innovation with CO2.  Authorizes the Chief of ODNR to create a program to incentivize innovation for the use and reutilization of capture carbon dioxide.

Host community fund.  Establishes a three-cent per metric ton fee to support a fund directed to the treasurer of the host county, to be used by county commissioners or disbursed to townships, municipalities, schools, or other political subdivisions for use pertaining to infrastructure, parks and recreations, education, and public safety.

Statutory consolidation or “forced pooling” applications

• Requires  a CCS project operator to make three separate attempts to contact all known pore space owners, to engage in good faith negotiations to obtain pore space rights, to obtain the consent of at least 75% of pore space owners within a proposed project prior to applying for statutory consolidation of pore space interests.  The House version contains a lower requirement of 70%.
• States that an order approving a statutory consolidation application must ensure a fair and reasonable manner of compensation and equitable terms and conditions.
• Clarifies that a grant of statutory consolidation does not also grant rights to surface use or access absent a surface use agreement.
• A $50,000 fee for statutory consolidation applications.
• Allows drilling permit applications when a statutory consolidation application is pending.

Fees.  Reduces the injection fee a storage operator pays to the State from 5.25 cents per ton to 5 cents per ton.

Appeals.  Establishes a process for appealing any order under the CCS program to the oil and gas commission.

Financial assurance instruments.  Expands CCS project operator financial assurance instrument options beyond surety bonds, to also include letters of credit, insurance, escrow, or self-insurance.

Sub-H.B. 170, must now return to the House for concurrence with the Senate-approved language. Industry supporters behind the legislation are encouraging the legislature to act soon on reconciling the two different versions of the bill.  We'll keep an eye out for what happens next with CCS legislation.