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Urban Oil & Gas outlines plan for large carbon-sequestration hub in central Utah; lawmakers press safety, economics and ownership questions
Summary
Representatives of Urban Oil & Gas and partners told the committee that central Utah's geology and nearby large emitters make the area a promising carbon capture and storage hub, but lawmakers asked how groundwater, water injection history, long-term economics and pore-space ownership would be protected and structured.
Matt Kirby, president of Urban Oil & Gas, and Michael (last name provided in introduction as Michael Schneider) briefed the Energy and Technology Interim Committee on the Utah Carbon Sequestration Initiative and a large pore‑space lease Urban has negotiated with the School and Institutional Trust Lands Administration (SITLA). Kirby said Utah has a geology and nearby emitters that make a large sequestration hub commercially and scientifically plausible. "We're on the doorsteps of creating the premier regional solution for carbon management," Kirby said.
Urban representatives said the proposed target — deep Navajo formation at roughly 4,000–5,000 feet — has porosity and permeability favorable for storage, is seismically stable and has nearby natural analogues where CO2 has been trapped for geologic time. "To our east of our proposed hub, we see evidence where the same formation has securely held CO2 for millions of years," Michael said during technical slides. Urban estimated the hub could store hundreds of millions of tons of CO2 over decades and pointed to federal and university research, including a previously awarded DOE Rocky Mountain Phase 2 CarbonSAFE grant that the presenters said had been placed on hold and should be disbursed in the coming months.
Lawmakers pressed on several topics. Senator Owens asked about historical water injection practices and whether injected water recharged aquifers. Urban staff said water removed from shallower coal‑bed methane production was safely injected into deeper formations (the Navajo) and that decades of injection have not produced pressure build-up — arguing this history supports safe deep injection of CO2. "It's been able to to take all of the injection over the last 30 years, safely," a technical presenter said.
Senator Kwan and others asked about groundwater protection and leak risk; Urban pointed to the thick sealing units above the Navajo and the natural occurrence of CO2 in the formation as evidence the system can safely contain injected CO2 over geologic time. "We have demonstrated, naturally that the Navajo formation ... has trapped naturally occurring CO2 from the subsurface," the presenter said.
Several lawmakers asked about project economics and incentives. Senator Bridal asked whether the hub is commercially viable without government incentives; Urban said current economics are being evaluated against existing federal incentives (noted to run on a roughly 12‑year horizon under current law), that much of the near‑term investment relies on 45Q tax credits and other federal supplements, and recommended state-level support to match federal resources, expedite permitting (Class VI wells) and create CCUS cost‑matching or R&D funds to attract private capital. "The major domino that needs to fall right now is the federal funding that has been allocated and chosen to be released," Kirby said, asking for legislative champions to advocate at DOE for the Rocky Mountain CarbonSAFE grant release.
Representatives and senators also asked about land and pore-space ownership in split-estate areas. Committee members and Urban staff agreed that, under current understanding, pore space that is not used for enhanced oil recovery (EOR) typically vests with surface owners; Urban urged coordination with state agencies to clarify lease protocols and revenue-sharing mechanics (Urban noted the SITLA pore-space lease as a model to monetize state-held pore space).
Urban and its university and industry partners (University of Utah, Enchanted Energy and others) asked the committee to consider policy steps: expedite federal grant coordination, align state permitting to enable Class VI regulation and consider state CCUS incentives and 45Q supplements to keep Utah competitive with other regional hubs. "We did enter into that large pore space lease with Sitla, to allow this sequestration hub to come to fruition," Kirby said.
Ending: The presenters said they are available for follow-up briefings and urged lawmakers to coordinate with the Department of Natural Resources, the University of Utah and federal agencies to ensure rapid access to federal grant funds so Urban can drill a first well and demonstrate storage in-state.
