Wyoming Cuts Taxes On Coal Production, Ponies Up $10 Million For "Carbon Capture" - That Is, For Producing More Oil
t was a good legislative session for fossil fuel producers in Wyoming, as well as those who want to produce carbon dioxide for enhanced oil recovery. Lawmakers passed House Bill 75, “Coal severance tax rate,” which reduces the severance tax rate for surface-mined coal from 6.5% to 6% — an effort that proponents hope will help coal producers weather declining markets and potentially reinvest in Wyoming mining operations.
Another measure, Senate File 17, “Carbon dioxide-enhanced oil recovery stimulus,” creates a $10 million fund to support enhanced oil recovery — the process of pumping carbon dioxide underground to produce more oil and natural gas. Companies that qualify for the federal 45Q tax credit can apply for up to $10 per metric ton — paid out of the Wyoming account — for carbon dioxide used in enhanced oil recovery.
Senate File 18, “Enhanced oil recovery-severance tax exemption,” would have reduced the severance tax rate on oil from 6% to 3% if tied to practices that capture, store or reuse carbon dioxide, reducing state revenue by $2.1 million in 2027, $4.5 million in 2028 and potentially more in following years, according to the bill’s fiscal note. But the committee-sponsored bill didn’t survive the Senate.
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Some lawmakers, fiscal hawks and conservation groups, however, mounted opposition to the measures, questioning the efficacy of giving handouts to industries that base production and jobs more on changing market conditions than taxes and incentives. Wyoming municipalities, some noted, will take a major revenue hit as a result of the 25% property tax reduction that was signed into law this month. Reducing the coal severance tax adds another $10 million revenue hit to accounts that support Wyoming schools, roads and other vital public services. “The reason that we do [mineral severance taxes] is because [coal, oil and natural gas are] a finite, one-time resource,” Baggs Republican Sen. Larry Hicks said regarding HB 75. “We have an obligation to future generations, that they should derive some of the benefits of the wealth we’re accumulating now.”
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https://wyofile.com/wyoming-slashes-taxes-for-coal-sets-up-a-co2-fund-to-boost-oil-and-gas/