Bakken, Three Forks exempt from taxes from CO2 EOR production

By Luke Geiver | April 29, 2019

Future carbon dioxide-infused enhanced oil recovery efforts in the Bakken and Three Forks shale plays of the greater Williston Basin will be incentived by the state of North Dakota. Gov. Doug Burgum signed legislation during the state’s current biennium session that will exempt oil produced from CO2-EOR methods targeting the Bakken or Three Forks formations from a percentage of oil production taxes.

For a decade, any oil produced from CO2-EOR methods will not be taxed if it comes from the Bakken or Three Forks. Other formations will be given a 20-year exemption. The goal of the state was to utilize a new research and commercialization effort linked to capturing CO2 emissions from a major coal-powered power plant in the middle of the state.

In the past year, the state has entertained a new, multi-industry effort known as Project Tundra. The project is based on carbon capture technology developed by the state’s leading energy research arm, the Energy & Environmental Research Center in Grand Forks, North Dakota. The technology, once deployed could capture up to 95 percent of the CO2 emitted at the Milton R. Young power plant. According to the Project Tundra team, the gas would be used to extract oil. The EERC believes such use could aid in the recovery of an additional one billion barrels from legacy fields outside the Bakken.

“This is a win-win for North Dakotans,” Burgum said. “Our coal industry, partnering with the EERC, has been leading the change in capturing carbon dioxide emissions. By providing the economic incentive needed to transform these emissions into a valuable commodity, we will continue to be a nationwide leader in environmental stewardship while simultaneously increasing our energy production and strengthening our economy.”