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Study Pegs Potential $9 Billion Tax Impact for CO2 in North Dakota Oil Wells

By Jeff Beach/North Dakota Monitor Jan 29, 2025 | 6:25 AM

(Kyle Martin/For the North Dakota Monitor)

 

(Jeff Beach – North Dakota Monitor) – North Dakota could see another $9 billion in oil tax revenue over 10 years if oil companies begin injecting carbon dioxide into oil wells on a large scale, an analysis released Tuesday shows.

North Dakota Tax Commissioner Brian Kroshus on Tuesday outlined the potential of carbon dioxide on oil production and tax revenue for the state Industrial Commission.

Injecting a gas such as carbon dioxide into an oil well — a process called enhanced oil recovery — can increase the amount of oil the well will produce.

The technique has not yet been widely adopted in North Dakota, the nation’s No. 3 oil-producing state. One factor holding back enhanced oil recovery is federal tax incentives are higher for permanent underground storage for carbon dioxide than they are for enhanced oil recovery.

A news release from the three-member Industrial Commission, chaired by Gov. Kelly Armstrong, called on the federal government to enact tax parity for CO2 projects.

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