Carbon dioxide-enhanced oil recovery
stimulus.
25LSO-0042, 1.0
SF0017
FISCAL NOTE
This bill contains an appropriation of $10,000,000 from the LEGISLATIVE
STABILIZATION RESERVE ACCOUNT (LSRA) to the proposed Enhanced Oil Recovery
Stimulus Account (EORSA) for the purpose of providing stimulus payments for
enhanced oil recovery stimulus established in the bill. If there is no
expenditure of any funds from the proposed EORSA before July 1, 2034, then all
funds in the proposed EORSA shall revert to the to the LSRA on July 1, 2034.
Any carbon dioxide provider may apply for and receive an enhanced oil recovery
stimulus for carbon dioxide used in the enhanced oil and gas recovery production
of crude oil and natural gas, subject to the following qualifications:
•
utilization and storage technology.
•
carbon dioxide for use in enhanced oil and gas recovery projects in Wyoming.
•
shall be produced using carbon dioxide originating in Wyoming.
•
dioxide used in the enhanced oil and gas recovery production shall qualify
for the federal tax credit available for carbon oxide sequestration under 26
U.S.C. 45Q, as amended as of January 1, 2023.
•
credit under 26 U.S.C. 45Q before receiving the stimulus.
•
dioxide that the carbon dioxide provider sells, delivers or provides for use
in enhanced oil and gas recovery, and is stored through the enhanced oil and
gas recovery production.
•
that the carbon dioxide provider is no longer eligible for the federal tax
credit under 26 U.S.C. 45Q.
•
available funds within the proposed account.
By August 1, 2025 and each August 1 thereafter, the Department of Revenue (DOR)
shall report on the severance taxes remitted under W.S. 39-14-204(a)(iv), plus
one-half of the severance tax remitted under W.S. 39 14 204(a)(iii) (3 percent of
the total 6 percent severance tax), as a result of crude oil and natural gas
produced using enhanced oil and gas recovery techniques and using captured carbon
dioxide for which the stimulus is provided. Not later than September 1, 2025 and
each September 1 thereafter, the State Auditor’s Office (SAO) shall transfer the
amount of funds reported by the DOR for the immediately preceding fiscal year
from the General Fund to the proposed EORSA until the proposed EORSA has a
balance of $10 million. After the proposed EORSA has a balance of $10 million,
any remaining funds shall be transferred to the LSRA. Transfers shall be made to
the LSRA until a total of $10 million is transferred to the LSRA.
[Page 1 of 2] Carbon dioxide-enhanced oil recovery
stimulus.
25LSO-0042, 1.0
SF0017
According to the Enhanced Oil Recovery Institute, it is very difficult to
estimate potential future carbon capture volumes at this time, and it is too
early to reasonably estimate volumes for specific projects that are yet to be
confirmed. Current information indicates that carbon capture projects that would
qualify for the proposed stimulus payments would begin five years in the future
at minimum.
The fiscal impacts, in the form of stimulus payments from the proposed EORSA and
increased expenditures from the General Fund to the proposed EORSA and to the
LSRA are indeterminable, as the timing and quantity of future carbon capture
volumes cannot be reasonably estimated at this time. The potential revenue
increases in severance taxes and ad valorem taxes collected on increased oil and
gas production resulting from future qualifying enhanced oil and gas recovery
projects are also indeterminable at this time.
Prepared by: Dean Temte, LSO Phone: 777-7881
(Information provided by Lon D. Whitman, Enhanced Oil Recovery Commission,
307-315-6450; Kyle Wendtland, Energy Authority, 307-286-1007; Kristi Racines,
State Auditor's Office, 777-7831; Matt Sachse, Department of Revenue, 777-5310;
Rory L. Horsley, Governor's Office, 777-5010)
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