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SB 1500

DNR-PORE SPACE COMPENSATION

104th Regular Session Introduced by Graciela Guzmán and 1 co-sponsor

The bill changes nonconsenting pore-space compensation to be at least the average total payments to similarly situated consenting owners, replacing the prior rule.

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Bill Summary · SB 1500

SB 1500 — DNR — Pore Space Compensation (Illinois)

Status: Introduced (LRB104 09218 BDA 19275 b) — Sponsor: Sen. Michael W. Halpin
Related: HB 978 (companion)

Main purpose

SB 1500 amends the Safety and Aid for the Environment in Carbon Capture and Sequestration Act to change how “just compensation” is determined for nonconsenting pore‑space owners when a sequestration operator seeks to unitize or integrate pore space for a carbon‑dioxide sequestration facility. The bill revises the compensation standard and removes certain prior rules about which payments must be included or excluded in calculating compensation.

Key provisions

  • Compensation standard for nonconsenting owners:
    • Requires that just compensation be no less than the average total payment package paid to “similarly situated” consenting pore‑space owners. (This replaces a prior rule that referenced payments in agreements during the previous 365 days.)
  • Removes two prior directional rules:
    • Eliminates a provision that required compensation to exclude incentives paid to consenting pore‑space owners before start of injection.
    • Eliminates a provision that required compensation to include any operations‑term or injection‑term payments made on or after initiation of injection to consenting owners.
  • Retains (from existing statute / petition process) numerous unitization procedures the bill references, including:
    • A sequestration operator may petition the Department of Natural Resources (DNR) for an order to unitize pore space when some owners do not consent.
    • Petitioner must already have obtained pore‑space rights from owners representing at least 75% of the surface area above the proposed facility before a unitization order may issue.
    • Petition contents must list owners, consenting and nonconsenting parties, legal descriptions, proposed compensation method and include a copy of compensation agreements with consenting owners.
    • Nonrefundable application fee: $250,000 (deposited to the Oil and Gas Resource Management Fund) for DNR administration.
    • Notice and public‑hearing requirements for unknown/nonlocatable owners (publication once weekly for two weeks within 30 days prior to filing, certified mail to last known addresses, public hearing and opportunity for comment).
    • Unknown/nonlocatable owners who do not claim an interest by the DNR notice may be deemed to have consented.

Who is affected

  • Nonconsenting pore‑space owners (landowners whose subsurface pore space is sought for CO2 sequestration) — directly affects the baseline for their “just compensation.”
  • Consenting pore‑space owners — their payment packages will be used as the benchmark for calculating nonconsenting owners’ compensation.
  • Sequestration operators and permit holders — may face changed compensation liabilities and altered negotiation dynamics.
  • Illinois Department of Natural Resources — administers unitization petitions and hearings; will receive a $250,000 filing fee per petition for administration costs.

Potential impact and considerations

  • Calculation change likely alters the amount nonconsenting owners receive. Tying compensation to the “average total payment package” to similarly situated consenting owners may raise or lower awards depending on recent market payments and how “similarly situated” is defined and applied by DNR or courts.
  • Removing prior required inclusions/exclusions could increase ambiguity about what payment elements count (upfront incentives, operations/injection‑term payments), potentially raising litigation or administrative disputes over composition of the comparator payment package.
  • Increased compensation expectations could change project economics for sequestration operators and influence negotiations, project timing, and willingness to pursue unitization.
  • DNR’s $250,000 application fee is substantial and intended to cover administrative costs of evaluating unitization petitions.

Procedural notes

  • Introduced in the Illinois Senate on 02/04/2025 (Sen. Halpin). The version provided is the introduced text (companion HB 978 noted). The bill text included unitization petition requirements, fee, notice, and hearing protocols; the compensation revisions are the core substantive change.

(If you want, I can prepare a short plain‑language explainer showing how a hypothetical compensation calculation might change under the bill.)

Compiled from official sources — confirm details with the bill’s official record.

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