Gorgon’s new model for liabilities of carbon capture and sequestration

The WSJ has an interesting blog uncovering an under-reported aspect of the $37-billion Gorgon natural gas project in Australia being developed by Chevron, ExxonMobil, and Shell.

Under the terms of the agreement, the companies will be responsible for the storage of the carbon-dioxide resulting from the natural-gas project during its operating lifetime and for 15 years afterward, Bloomberg reports. After that, the Australian national and state governments will be responsible.

A major legal hurdle in carbon capture and sequestration (CCS) projects is the ownership of liabilities.  Who should be liable for, say, potential leaks during the course or after developing a project?  Gorgon provides an interesting model.