Enhanced oil recovery-severance tax
exemption.
25LSO-0043, 1.0
SF0018
FISCAL NOTE
FY 2026FY 2027FY 2028NON-ADMINISTRATIVE IMPACTAnticipated Revenue (decrease)GENERAL FUND($0)($700,000)($1,500,000)BUDGET RESERVE ACCOUNT($0)($1,400,000)($3,000,000)
Source of revenue (decrease):
Crude oil and natural gas produced by means of enhanced oil and gas recovery, as
defined in the bill, would be exempt from 3 percent of the total 6 percent
severance tax. To qualify for the exemption, the crude oil and natural gas shall
be produced by means of enhanced oil and gas recovery from projects using carbon
capture, utilization and storage (CCUS) technology. The carbon dioxide captured
and used in the enhanced oil and gas recovery to produce crude oil and natural
gas shall be from a carbon dioxide source originating within Wyoming.
Assumptions:
The Enhanced Oil Recovery Institute (EORI) estimates 1,801,837 barrels of
incremental oil produced in FY 2026 and 2,501,304 barrels of incremental oil
produced in FY 2027 would qualify for the proposed exemption. The revenue
decrease in the table above is based oil projections in the October 2024
Consensus Revenue Estimating Group (CREG) forecast.
The fiscal impact described above does not include the potential revenue increase
in severance taxes and ad valorem taxes on potential increased production that
would not otherwise take place without the proposed exemption. The potential
increased production resulting from the proposed exemption cannot be determined
at this time.
NOTICE-AGENCY ESTIMATE OF ADMINISTRATIVE IMPACT REQUESTED
This bill has administrative impact that appears to increase duties or
responsibilities of one or more state agencies and may impact agency spending or
staffing requirements. As introduced, the bill does not modify any state agency
budget or current personnel authorizations.
The following state agencies will be asked to provide their estimate of the
administrative fiscal impact prior to the first committee meeting held to
consider the bill:
Department of Revenue
Prepared by: Dean Temte, LSO Phone: 777-7881
(Information provided by Lon D. Whitman, Enhanced Oil Recovery Comm., 307-315-
6450; Matt Sachse, Department of Revenue, 777-5310; Tom Kropatsch, Oil & Gas
Commission, 307-234-7147; John Burbidge, Public Service Commission, 777-7429;
Erin Campbell, Geological Survey, 307-745-2250)