Last month saw several developments in the U.S. Environmental Protection Agency’s (EPA) ongoing efforts to authorize states to implement Class VI of the federal Underground Injection Control (UIC) program under the Safe Drinking Water Act (SDWA) for geologic sequestration of carbon. This push toward state primacy is an important development for the rapidly growing carbon capture and sequestration (CCS) industry, for which Class VI permits are the critical construction and operating permit. Currently, there are 62 CCS projects - including many with multiple wells - with permit applications pending with EPA. Project proponents anticipate that permitting will be faster if administered by the state instead of EPA. The latest developments last month include: (1) EPA’s proposal to grant primacy to Arizona; (2) EPA’s proposal to grant primacy to Texas; (3) a federal court decision rejecting a challenge to EPA’s earlier grant of primacy to Louisiana; and (4) an ongoing challenge to West Virginia’s recently granted primacy.

Arizona

On May 19, 2025, the US Environmental Protection Agency (EPA) published a federal notice of proposed rulemaking (NPRM) to grant primacy to Arizona for all well classes under the federal UIC program, including Class VI. 90 Fed. Reg. 21264 (May 19, 2025). Unlike other states that have sought Class VI primacy thus far, Arizona is unique in not currently having primacy over any UIC well classes. If finalized, EPA’s proposal would give Arizona Department of Environmental Quality (ADEQ) authority to regulate all underground injection of carbon dioxide for long-term geological sequestration within Arizona’s jurisdiction, excluding Indian lands. There has never been a Class VI permit issued in Arizona, and there are no pending Class VI permit applications in the state at this time. EPA will hold one virtual public hearing on June 25, 2025, on the proposed grant of primacy to Arizona during the comment period, which ends on July 3, 2025. Based on recent precedent from West Virginia’s Class VI primacy, we expect the final grant of primacy to be issued within a few months.

Texas

As we previously reported, on June 9, 2025, EPA issued a proposal to give Texas primacy over the Class VI program. EPA is taking public comment on the proposal through July 31, 2025, and will hold a public hearing on July 24, 2025. A final rule granting Class VI primacy for Texas is expected in Fall 2025.

When EPA issues final rules, Arizona and Texas would become the fifth and sixth states with primacy over Class VI wells, joining North Dakota (granted primacy in 2018), Wyoming (2020), Louisiana (2023), and West Virginia (2025). Meanwhile, other states’ Class VI primacy grants are facing lawsuits, including Louisiana and West Virginia.

Louisiana

On May 21, 2025, the United States Court of Appeals for the Fifth Circuit rejected the petition for review of the final rule granting Louisiana Class VI authorization by three environmental organizations, who asserted that EPA’s approval of Louisiana’s primacy did not follow proper procedure and that the transfer liability could potentially lead to environmental harm. Deep South Center for Environmental Justice v. EPA, No. 24-60084, 2025 WL 1452098 (5th Cir. 2025). The Fifth Circuit found that the ENGOs did not have standing to challenge the final rule granting primacy for Louisiana. This decision may signal that it will be challenging for opponents to successfully challenge EPA’s decision to grant Class VI primacy.

West Virginia

EPA is also currently facing a challenge to its Class VI primacy grant to West Virginia in the Fourth Circuit Court of Appeals. Petition for Review, West Virginia Surface Owners’ Rights Organization v. Zeldin, No. 25-1384 (4th Cir. filed Apr. 11, 2025). The challenge is based on concerns that there may not be sufficient resources or expertise available to properly regulate the wells. Briefing on the case is scheduled to begin next month.

Ultimately, EPA’s Class VI primacy grants to both Louisiana and West Virginia are likely to be upheld. This marks a continuation of the administration’s cooperative federalism approach to accelerating grants of primacy. As more states take primacy in issuing Class VI permits, project proponents anticipate that the Class VI permitting process will move more quickly, allowing more projects to move forward.

*Manasvini Venkatesh is not a lawyer.