RE: Funding17 May 2024 17:19
08:41
With gas producers in Cook Inlet warning that production is dwindling, energy — both from fossil fuels and renewable energy — was a key policy priority for members in both bodies this session. And in the end, the Legislature passed several proposals aimed at lowering costs, expanding gas supplies and boosting renewable energy.
House Bill 50: Carbon Storage
House Bill 50 would authorize the storage of carbon dioxide deep underground in what’s known as “pore space,” including things like depleted oil and gas reservoirs, salty aquifers and unmineable coal seams.
Backers, including Gov. Mike Dunleavy, have pitched it as a source of state revenue. The state would charge a minimum royalty of $2.50 for each ton of carbon dioxide injected underground, plus $20 per acre of land leased from the Department of Natural Resources. The Alaska Oil and Gas Conservation Commission would be tasked with coming up with regulations.
“Carbon capture, utilization and storage is an expanding industry that companies are beginning to commit billions of dollars to invest in,” Sen. Bert Stedman, R-Sitka, said. “HB 50 will allow Alaska to take part in that.”
Part of the reason for the investment Stedman mentioned is the Inflation Reduction Act’s inclusion of significant tax credits for geologic carbon storage.
That carbon could come from abroad and be stored in depleted gas fields in Cook Inlet — the Biden administration is studying whether Japanese carbon emissions could be liquefied and shipped to Alaska. But that’s likely a ways off.
It could also come from within Alaska. Maybe from a regional power plant on the Railbelt, or perhaps from operations on the North Slope, which comprise 62% of the state’s total carbon emissions, according to Nicholas Fulford, a consultant with GaffneyCline who evaluated the proposal for the Legislature.
That could mean using carbon dioxide injection to squeeze more oil out of existing wells, a practice known as “enhanced oil recovery” incentivized by the Inflation Reduction Act. Decarbonizing North Slope production could also make Alaska oil more competitive on the global market, the state Department of Natural Resources said.
But as the bill worked its way through the Legislature, lawmakers added several other proposals to it. One would create a reserve-based lending program for Cook Inlet oil and gas within the Alaska Industrial Development and Export Authority. That’d allow AIDEA to loan money to gas producers struggling to find investors.
Another provision would allow the Regulatory Commission of Alaska to regulate the price of natural gas storage in an effort to expand storage capacity and keep costs down.
https://alaskapublic.org/2024/05/16/state-lawmakers-wrapped-up-their-four-month-session-last-night-heres-what-they-did/
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