Don't know if I am at the right site. I have a friend doing seismic permitting in the Hammond area. He is telling me they are looking for pockets to store Hydra Carbons.
My question is : Is that considered a mineral, and will it be considered in my lease? I know the royalties are based on minerals coming out, But how about going in.
I know this may br a stupid question, but was concerned.
It's a good question, Steve. We don't have much interest currently here in north Louisiana for carbon storage but there are several projects in south Louisiana. I suspect that we will see more detailed information in the near future. Injection of carbon will be materially different from the production of oil and gas in the way that mineral owners are compensated. What I suspect will happen is similar to what Louisiana refers to as a Voluntary Unit (VUA for example). That is an agreement among a relatively small number of mineral owners who represent a limited footprint land-wise. There will be a lease agreement that covers the depths/formations where the carbon dioxide will be sequestered. Beyond an initial bonus payment, it is unclear how compensation might be compensated regarding the amount of carbon dioxide that is injected.
Thanks So much for your answer. Makes more sense rhan the cotton picker HA
Steve, from what I have read recently CLECO is in the process of of spending around a billion dollars to clean the emissions coming out of the power plant at Boyce. They claim that the CO2 will be removed and be injected underground below the plant. It is my understanding that these types of injection wells are very hard to get permits for, maybe taking 2 to 3 years with lots of planning going into the permit process for a class 6 drilling permit. I have heard that it may be easier to get a permit for a nuclear power plant than a CO2 sequestration site.
Thanks so much., Back to my question is CO2 considered a mineral according to lease agreement? If it is then they can put it where they want and the landowner has no say so, solei on the conditions of the lease.
Here is the USGS definition of a mineral. A mineral is a naturally occurring inorganic element or compound having an orderly internal structure and characteristic chemical composition, crystal form, and physical properties. Common minerals include quartz, feldspar, mica, amphibole, olivine, and calcite.
So no, CO2 is not a mineral based on that definition. However I don't think that is the crux of the question. The CO2 has no value from a sequestration stand point although there are uses for it in certain applications such as enhanced oil recovery. The land or mineral rights required for storage (injection) would have a value. I would think a lease or agreement for storage would have some similarities to an O&G lease only from the stand point of compensation: acres of surface and use of the surface. I could see a lease agreement including a bonus per acre and possibly some continuing compensation for the quantity and value of the CO2 sequestered based on an owners acreage position. I feel sure that companies looking to establish sequestration projects have created lease agreements but I haven't seen any articles that address the terms.
Here are links to articles that discuss the process for those that are interested. I haven't found one that speaks to a lease form or value for land/mineral owners.
Can you clarify your question? Are you wanting to get paid for the Oink of the Pig along with the Pig?
If you have had production, they have paid you for that production. Are you now wanting to get paid for the "byproduct" of that production?
Are you wanting a piece of the CO2 sequestration that is produced from the production of the minerals that you have already been paid for?