Committee backs carbon-dioxide stimulus to encourage enhanced oil recovery; $10/ton state top-up, $10M seed from LSRA

The Minerals, Business & Economic Development Committee on Friday recommended due pass for Senate File 17, a bill that would create a state stimulus to narrow the federal tax-credit gap between permanent CO2 sequestration and the use of captured CO2 for enhanced oil recovery (EOR).

Senate File 17 would direct the Wyoming Energy Authority (WEA) to administer a grant-style stimulus that adds $10 per ton to CO2 used for qualified EOR projects in Wyoming. The bill seeds an “enhanced oil recovery stimulus account” with a $10 million one-time transfer from the Land and Water/LSRA account and then directs that 3% of severance tax revenue produced by EOR projects be credited back into the account as projects begin producing, making the program self-funding over time, according to bill proponents.

Sponsor and purpose

Pete Obermueller, president of the Petroleum Association of Wyoming, told the committee the bill is designed to “equalize” a federal tax‑code incentive known as 45Q. Obermueller said Congress pays a higher per‑ton credit when CO2 is permanently sequestered than when it is used for EOR, and that difference discourages CO2 owners from selling CO2 for EOR. “The federal…