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House Committee advances CO2 enhanced‑oil‑recovery stimulus; bill seeds projects with $10 million loan and redirects severance tax to repay program
Summary
The House Committee of the Whole reported Senate File 17 do pass after debate on a proposed state stimulus to encourage carbon dioxide‑based enhanced oil recovery (EOR); the measure seeds projects with $10 million in loan funds and pays $10 per tonne of CO2 delivered to in‑state EOR projects, to be repaid from severance taxes on the new production.
The Wyoming House Committee of the Whole recommended Senate File 17 do pass after debate focused on how a state stimulus could encourage CO2‑based enhanced oil recovery (EOR) in legacy fields.
Representative Knapp, explaining the bill, said federal tax incentives (the 45Q tax credit) created an uneven market that favored permanent sequestration over EOR because permanent sequestration carries a higher federal tax credit. SF17 aims to level the playing field so CO2 remains available for Wyoming EOR projects: the state stimulus would pay $10 per metric ton of CO2 delivered to an in‑state EOR project and provide $10,000,000 in seed funding as a loan. That seed fund would be repaid from severance taxes when projects begin producing oil: “Under this bill, a CO2 producer would receive a $10 per tonne for every CO2 tonne sold or delivered to a Wyoming EOR project,” Knapp said.
Supporters argued the measure would generate additional oil production and state revenue. Committee testimony cited estimates of large additional recoverable oil in 75 Wyoming fields and projected long‑term revenue potential for the state. Representative Knapp said some legacy fields dramatically increased production after CO2 injection, describing field examples where production rose from tens of barrels a day to thousands.
Opponents questioned whether $10 per ton is sufficient to change behavior and warned the program depends on federal 45Q incentives; the bill explicitly ties eligibility to qualification for the federal 45Q tax credit and would become inapplicable if those federal credits were repealed. Representative Eklund asked whether $10 million is just a pilot or sufficient to spur many projects; Knapp described the $10 million as seed money intended to help smaller producers begin EOR work.
Outcome: The Committee of the Whole reported the bill do pass with an amendment to reporting requirements. The bill remains conditional on the federal 45Q program and includes an “off‑ramp” provision that would end the state program if federal incentives change.
