By Jonathan Fortner, LEC Director of Government Relations

Our top priority in the 2019 Legislative Session is House Bill 1439, which is an oil extraction tax exemption for enhanced oil recovery projects that utilize carbon dioxide from lignite power plants. Simply put, this financial incentive is a very important economic tool for the future of carbon capture in North Dakota.

The bill provides a critical mechanism that is necessary to overcome the economic and technological challenges that are unique to capturing and deploying CO2 from coal-based power plants to the oil field. This would help spur investments into carbon capture projects that would in turn create future markets and strengthen current contracts for coal, achieve more barrels of oil from nearly 2,000 existing traditional wells and increase tax revenue for the state through incremental oil production. This would be a win-win-win for the people of North Dakota as energy companies, oil producers and the state can work together to achieve a common goal. Once the bill is passed and signed into law, it could help put North Dakota at the forefront of new technology that could revolutionize the phrase “low-carbon energy.”

A recent study released by the Energy and Environmental Research Center projected that lignite-based carbon dioxide for enhanced oil recovery could double the current $3 billion in annual economic impact from our industry and create around 15,000 long term jobs. This bill would also provide little risk to the state as this bill focuses on incremental barrels of oil, not current production, which could lead to an annual overall increase of $300 million in additional revenue. In summary, the study shows that this bill would greatly benefit every citizen in North Dakota.

So far this session, the bill received a “Do Pass” recommendation from the House Energy and Natural Resources Committee on a vote of 13-0 on January 28, 2019. Two days later, the bill passed off the House floor on a vote of 92-0. The bill has been transferred to the Senate where it will receive a committee hearing and a floor vote, which will likely happen after the crossover date for bills on February 22, 2019.