01/26/2024 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB49 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 49 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
January 26, 2024
3:30 p.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Cathy Giessel, Co-Chair
Senator Bill Wielechowski, Vice Chair
Senator Scott Kawasaki
Senator James Kaufman
Senator Forrest Dunbar
Senator Matt Claman
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Tom McKay
COMMITTEE CALENDAR
SENATE BILL NO. 49
"An Act relating to the geologic storage of carbon dioxide; and
providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 49
SHORT TITLE: CARBON STORAGE
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/27/23 (S) READ THE FIRST TIME - REFERRALS
01/27/23 (S) RES, FIN
03/10/23 (S) RES AT 3:30 PM BUTROVICH 205
03/10/23 (S) Heard & Held
03/10/23 (S) MINUTE(RES)
03/13/23 (S) RES AT 3:30 PM BUTROVICH 205
03/13/23 (S) Heard & Held
03/13/23 (S) MINUTE(RES)
03/22/23 (S) RES AT 3:30 PM BUTROVICH 205
03/22/23 (S) Heard & Held
03/22/23 (S) MINUTE(RES)
01/26/24 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
COMMISSIONER JOHN BOYLE
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Presented an overview of SB 49.
JOHN CROWTHER, Deputy Commissioner
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Co-presented a presentation on carbon
storage and SB 49.
BRETT HUBER, Chair
Alaska Oil & Gas Conservation Commission (AOGCC)
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Co-presented a presentation on carbon
storage and SB 49.
HALEY PAINE, Deputy Director
Division of Oil & Gas (DOG)
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Provided updates on licensing from other
state jurisdictions.
ACTION NARRATIVE
3:30:18 PM
CO-CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:30 p.m. Present at the call to
order were Senators Kawasaki, Wielechowski, Dunbar, Co-Chair
Bishop, and Co-Chair Giessel. Senators Kaufman and Claman
arrived immediately thereafter.
SB 49-CARBON STORAGE
3:30:59 PM
CO-CHAIR GIESSEL announced the consideration of SENATE BILL NO.
49 "An Act relating to the geologic storage of carbon dioxide;
and providing for an effective date." She said that SB 49 was
heard several times last year and subsequently several members
traveled to Bizmark, North Dakota in December to participate in
a meeting with the Plains CO2 Reduction (PCOR) Partnership. PCOR
comprises 120 industry, government, and research organizations
that encourage the commercial deployment of Carbon Capture,
Utilization and Storage (CCUS), an essential technology to
manage carbon dioxide emissions.
Several PCOR members already operate or participate in
commercial CCUS projects across the region, including Alberta,
Saskatchewan, North Dakota, and Montana. Alaska is among ten
states and four Canadian provinces that belong to the PCOR
partnership.
3:33:23 PM
JOHN BOYLE, COMMISSIONER, Department of Natural Resources,
Anchorage, Alaska, presented an overview of SB 49. He said that
CCUS is an important, emerging technology. Several states have
progressed and taken advantage of the opportunities presented by
a proactive approach to creating the regulatory structure. The
state of Alaska is looking to join these efforts to create a
regulatory structure for CCUS. North Dakota has demonstrated
that carbon capture has the potential to supplement the state's
natural resource economy. SB 49 would enable Alaska to develop
natural resources for energy, exports, and other purposes.
Having a CCUS regime in place would provide state security to
enable licensure for development.
3:35:06 PM
COMMISSIONER BOYLE said CCUS provides substantial opportunities
for state monetization. He has had numerous conversations with
potential developers seeking to produce green hydrogen energy
and utilize renewable resources such as wind and solar power
generation or biomass. Developers expressed that having a steady
stream of carbon dioxide is an essential component to the
production of other products. Future opportunities center on the
ability to export hydrogen, ammonia, and liquefied natural gas
(LNG) to Asian countries and Alaska is strategically located on
the globe to provide these services. There is high confidence
geologically in Cook Inlet's ability to sequester carbon, which
could potentially capture all of Japan's carbon emissions for
the next 50 years.
3:37:20 PM
COMMISSIONER BOYLE noted that Japan and South Korea have set
ambitious renewable energy and carbon reduction goals, but rely
heavily on manufacturing for economic growth. Being able to
offer them opportunities to sequester their carbon is key.
Operators on the North Slope and in the state seek to utilize
carbon sequestration technology, so having a regulatory
structure in place is critical. He expressed his gratitude to
the legislature for considering this issue.
3:39:26 PM
JOHN CROWTHER, Deputy Commissioner, Department of Natural
Resources (DNR), provided an overview of a presentation on
carbon storage and SB 49. He spoke to slide 2 of the
presentation:
[Original punctuation provided.]
OUTLINE
1. Introduction
2. Alaska Oil & Gas Conservation Commission (AOGCC)
Underground Injection Control Class VI well primacy
updates
3. Carbon Capture Utilization & Storage (CCUS)
licensing updates from other state jurisdictions
4. CCUS project phases and the legislation
5. Sectional summary
MR. CROWTHER said last year's legislative action granted
authority for AOGCC to pursue primacy with the Environmental
Protection Agency (EPA). The enactment of this legislation has
allowed AOGCC to begin conversations with EPA. DNR has received
updates from state jurisdictions that are actively pursuing
licensing, so DNR is continuing to learn from and work with
regulators in other states.
3:41:05 PM
MR. CROWTHER moved to slide 3 and spoke to the purpose of SB 49:
[Original punctuation provided.]
RECAP: PURPOSE OF SB 49
Make Alaska's subsurface resources available for
maximum use
1. Enables the Department of Natural Resources to
lease state lands for geologic storage of carbon
dioxide and issue right-of-way leases for carbon
dioxide transportation pipelines
2. Empowers the Alaska Oil and Gas Conservation
Commission to regulate the geologic storage of carbon
dioxide on all lands in the state, including
protection of correlative rights
MR. CROWTHER added that SB 49 would enable a leasing framework
and provide a regulatory framework.
3:42:28 PM
MR. CROWTHER moved to slide 4 and outlined other states' carbon
storage initiatives.
[Original punctuation provided.]
Nationally
• North Dakota:
o Two facilities actively injecting CO2 Red
Trail Energy online June 2022 & Blue Flint
Ethanol online October 2023
o Six Class VI well applications approved
• Wyoming: Issued first Class VI well approval
December 2023
• Louisiana: Received Class VI well primacy from
EPA December 2023
Alaska
• Department of Energy grants:
o Department of Natural Resources $1 million
to develop CCUS database
o University of Alaska Fairbanks CarbonSAFE
Phase II
o Alaska CCUS Consortium of Santos, Repsol,
and ASRC Energy Services for Direct Air
Capture feasibility study
MR. CROWTHER indicated growth in corporate developments,
including major international oil and gas companies that are
actively pursuing and investing in CCUS projects. Other resource
states have begun to receive approval for primacy permits.
The U.S. Department of Energy has coordinated with the
University of Alaska to characterize resources in Cook Inlet and
companies are considering direct air capture opportunities in
the state. He opined that these steps forward focused interest
in Alaska.
3:44:56 PM
SENATOR CLAMAN recently encountered an article expressing that
carbon emissions prices would drop dramatically after 2022. He
asked if the drop in prices should be considered as the
committee reviews SB 49.
3:45:23 PM
MR. CROWTHER replied that carbon emissions prices should be
considered in the broader context of carbon management. Both
voluntary and compulsory carbon markets exist. Legislation
passed last year focuses on the voluntary market, so the program
and corresponding projects are price sensitive to what carbon
credits are trading at. One of the drivers is the 45Q tax credit
which is fixed in federal statute for the next decade, so
projects could continue despite variability in carbon markets.
3:46:38 PM
BRETT HUBER, Chair, Alaska Oil & Gas Conservation Commission
(AOGCC), Department of Commerce, Community and Economic
Development, Anchorage, Alaska, Co-presented a presentation on
carbon storage and SB 49. He spoke to slide 6:
[Original punctuation provided.]
AOGCC UPDATE
Authority to Pursue Class VI primacy from EPA granted
through passage of SB 48 Carbon Offset Program on
State Land (Ch.2 SLA 2023):
"The commission may take all actions necessary to
allow the state to acquire primary enforcement
responsibility under 42 U.S.C. 300h-1 and 42 U.S.C.
300h-4 (Safe Drinking Water Act of 1974, as amended,
42 U.S.C. 300f - 300j-26), for the control of
underground injection related to the recovery and
production of oil and natural gas and the control of
underground injection in Class I wells, as defined in
40 2 C.F.R. 144.6, as amended, and the control of
underground injection in Class VI wells, as defined in
40 C.F.R. 144.6, as amended."
Appropriation for 2 positions as well as contractual
and legal support
3:47:35 PM
MR. HUBER moved to slide 7 and spoke to the primacy process:
[Original punctuation provided.]
CLASS VI PRIMACY PROCESS
Multiyear process based on other states' experience:
AOGCC's aim is 2 years
During the process, AOGCC works with EPA to develop
and finalize:
• Governor's and Attorney General's statement
• Memorandum of Agreement with EPA
• Regulatory Crosswalk (a comparison between
federal and proposed state regulations)
• Program Description including the process for
application processing
o How will we implement Class VI?
o Includes general descriptions,
organizational structure,
modelling/simulations, consultancies that
may support the State, environmental
justice, and notice and public participation
processes
MR. HUBER added that the implementation of primacy is in EPA's
court.
3:49:01 PM
MR. HUBER moved to slide 8 and shared a brief history of AOGCC
and EPA interactions pertaining to CCUS:
[Original punctuation provided.]
EPA INTERACTIONS TO DATE
AOGCC and EPA have had a series of interactions over
the last year:
• EPA grant invitation and AOGCC's responsive letter
of interest submitted
• Introduction meetings and discussions with technical
staff
• Kick-off meeting with EPA Region 10 and Washington,
D.C. HQ
• EPA's initial review of Alaska CCUS legislation
• These discussions have highlighted technical changes
that the Administration will be bringing forward
amendments to address
EPA Grant AOGCC formally applied in December 2023
MR. HUBER stated that it took a while, from January 31 to
November 2, for the EPA to get the grant in place. A grant
webinar was attended, and the grant application was completed by
December of last year. Each applicant state is allocated 1.9
million dollars, and grants should come late spring or summer.
The grant term is five years indicating a protracted primacy
process that is still likely anticipated by the EPA. The first
meeting for primacy efforts involved the Region 10 URC Manager
and the DC Headquarters Program Manager. The review highlighted
several concerning areas, so AOGCC is working with DNR to
develop amendments.
3:50:37 PM
MR. HUBER moved to slide 9 and expanded on EPA's review of SB
49.
[Original punctuation provided.]
EPA'S REVIEW/POTENTIAL AMENDMENTS
As part of the primacy process, EPA and AOGCC will
engage in a "crosswalk" process that compare state
statute and regulation with federal code. EPA's intent
is to confirm that proposed state processes are as
stringent as federal requirements. EPA's initial
review of the CCUS legislation (August 2023)
identified:
1. Exceptions or waivers "for good cause" may lead to
stringency questions vs. federal code
2. Liability transfer process and post-closure trust
fund period could be inconsistent vs. federal code
as the EPA requires liability to remain with the
operator for the full, 50-year post-closure period
3. Penalty provisions AOGCC has since determined
proposed penalties should meet or exceed federal code
MR. HUBER added that EPA authority for the regulation of Class
VI of CCUS is the Clean Water Act and Safe Drinking Water Act to
ensure standards are met or exceeded in the state. The
preliminary review is expected to comprise several hundred pages
and is a fairly large regulatory lift. EPA has not granted cost
waivers and is unlikely to do so. AOGCC is working closely with
DNR to review successful applicant states' approaches to
recommend a path forward, including taking a modified Louisiana
approach. EPA review was noted to be precursory and preliminary
and other issues could arise, but AOGCC aims to request further
review from the EPA as the process moves forward.
3:52:28 PM
MR. HUBER moved to slide 10 and provided an overview of
staffing:
[Original punctuation provided.]
AOGCC STAFFING AND RESOURCES
AOGCC is well resourced to pursue the primacy effort:
• Legal Team Department of Law support, and
contracted services with Susan Pollard, former
Department of Law regulatory attorney. This team
is working on:
o Crosswalk + regulation package
o Memorandum of Agreement
• Commissioners and staff:
o Leading regulation package development,
outreach, and public participation efforts
o New Hire Carbon Reservoir Engineer
o New Hire Carbon Assistant
o
MR. HUBER said AOPCGG is currently scheduling interviews for
applicants and expects to have both positions filled soon.
3:53:33 PM
MR. HUBER moved to slide 11 and spoke to the following:
[Original punctuation provided.]
REQUESTS FOR SERVICES
• Request For Information for consultant services:
6 responses
Potential services include: reservoir
analysis, reservoir modelling and
simulations, project management,
environmental justice activities assessments
• Request For Proposals will be issued nearer to
the end of the primacy process in anticipation of
AOGCC receiving a Class VI storage facility
application to process. (estimated September
2025)
3:54:21 PM
HALEY PAINE, Deputy Director, Division of Oil & Gas (DOG),
Department of Natural Resources (DNR), Anchorage, Alaska,
provided updates on licensing from other state jurisdictions.
3:54:44 PM
MS. PAINE moved to slide 13 and spoke to state carbon storage
leasing frameworks which vary by state.
She said DOG has had the opportunity over the past year to learn
from other states that successfully passed extraction licensing
legislation. Some of the factors DOG considered are being
utilized by other states, but there are additional commercial
terms and a variety of mechanisms that have been put forward.
Wyoming issued two new carbon storage leases, but did not move
forward with a carbon storage program. Unlike DNR, Wyoming is
focused on a bonus bid payment or asking for lump sum payments
at different phases of the project.
3:56:49 PM
MS. PAINE stated that Texas passed carbon storage legislation in
2009. The Texas General Land Office was tasked with a five-year
site characterization study in the Gulf of Mexico to determine
carbon injection capability. The state also allows the ability
to capture additional revenue beyond the 45Q tax credit.
3:58:03 PM
MS. PAINE said Louisiana utilizes a general operating agreement
that is negotiated, similar to Wyoming. The state's lease terms
vary throughout the state, so negotiated agreements must be
approved by the Louisiana State Mineral and Energy Board before
taking effect. Louisiana tracks the 45Q tax credit, so the
state's leases would capture the ability to absorb 5-10 percent
of increased value. In summary, carbon storage leasing
approaches vary among the lower 48 states.
3:59:10 PM
SENATOR WIELECHOWSKI asked if commercial terms were developed
prior to the 45Q tax credit.
3:59:24 PM
MS. PAINE replied that the 45Q tax credit has been around for a
long time and was escalated under certain legislative bills in
Louisiana. As a result, the maximum tax credit for storage
increased from $55 to $85 per ton.
4:00:07 PM
MR. CROWTHER noted that several states enacted framework
legislation, but it did not set specific terms or minimum terms.
Consequently, agencies have adopted different terms in new
agreements.
4:00:38 PM
SENATOR WIELECHOWSKI asked if Alaska would acquire royalty
provisions given the difference in constitutionality among other
states.
4:01:24 PM
MS. PAINE replied that the injection charge is akin to a
"reverse royalty" provision in the CCUS context. Sections
highlighted in the sectional summary in SB 49 treat it as any
other mineral interest, but the term injection charge is used.
4:02:04 PM
SENATOR WIELECHOWSKI asked for confirmation of his understanding
that since Alaska incorporates the IRS code, the state would
have to pay tax credits.
4:02:21 PM
MS. PAINE responded that Section 41 in the House Resources
Committee's substitute version of SB 49 posed an amendment that
addresses concerns related to 45Q and tax credits.
4:02:45 PM
MR. CROWTHER added that the administration supported the House
Resource Committee's change in the committee substitute and
would support amendments to address concerns in SB 49.
4:03:05 PM
SENATOR KAWASAKI asked why the commercial term framework of the
45Q program has only recently been pushed forward.
4:03:37 PM
MR. CROWTHER replied that the 45Q program is meant to
incentivize carbon capture and sequestration. He believes the
U.S. Senator John Hoeven of North Dakota saw promise in the
ability to manage carbon resources. Initially, the program
started small and technology was novel, so careful steps were
taken in the early stages. As the carbon capture industry
evolved and stakeholders urged legislative movement, federal
policymakers enacted legislation, including the Bipartisan
Infrastructure Law, which recognized the advancement of ne
technologies and spurred them to increase the 45Q tax credit to
$85.
4:06:01 PM
SENATOR KAWASAKI asked if the current $85 credit is expected to
remain steady for a long period.
4:06:19 PM
MR. CROWTHER replied that he believes if a project begins
operation by 2033, it could claim the current tax credit rate
for a 12-year period under current law. He suggested that there
may be federal efforts to adjust it in the future.
4:07:11 PM
SENATOR KAWASAKI said Fairbanks is considering a wind and solar
project because a 40 percent credit makes it financially sound.
He asked if sequestration would be viable without the 45Q
credit.
4:07:43 PM
MR. CROWTHER replied that the 45Q credit is an effective
incentive in the U.S. However, there are other successful models
that do not use the 45Q tax credit.
4:09:10 PM
CO-CHAIR BISHOP mentioned the public process in Texas which
comprises final lease approval that occurs through the school
land board and funds the education system.
4:09:36 PM
MS. PAINE moved to slide 15 and spoke to CCUS phases and
legislation. She said the purpose of the slide is to showcase
different project phases. Section 14 for DNR and Section 31 for
AOGCC highlight a large portion of project operations. Some
sections are based on feedback from EPA.
4:11:18 PM
SENATOR CLAMAN asked whether EPA wants the state to amend
legislation to address its concerns or if it's a regulatory
framework.
4:11:27 PM
MS. PAINE said other states experienced challenges due to
unspecified bill language around meeting regulatory standards in
the primacy process. AOG believes there's an opportunity to
clarify language in statute ahead of time to streamline the
process.
4:12:14 PM
SENATOR CLAMAN asked for confirmation on his understanding that
the legislature could expect specific amendment requests from
the EPA for the committee to consider.
4:12:21 PM
MS. PAINE said EPA has communicated initial feedback to the
AOGCC. The committee could work with AOGCC and DNR to develop
bill language to address EPA's concerns.
4:12:46 PM
MS. PAINE moved to slide 16 and highlighted the four main
authorizations:
• Carbon Storage Exploration License
• Carbon Storage Facility Permit
• Carbon Storage Lease
• Closure Certificate
4:15:24 PM
SENATOR KAWASAKI asked if a company would receive the 45Q tax
credits if it transferred from a Class II to a Class VI well.
4:15:42 PM
MS. PAINE said there are different credit amounts for the 45Q
credit based on the activity involved. The federal government
allocates a set amount for enhanced oil recovery and a higher
credit amount is provided for sequestration on its own.
4:16:29 PM
SENATOR KAWASAKI asked if the state could anticipate Class II
wells quickly transitioning to Class VI wells in light of the
45Q tax credit incentive.
4:17:02 PM
MS. PAINE said no other states have demonstrated a complete well
conversion. EPA provides Class VI transition requirements but
given that the different well classifications have different
goals the full transition is not greatly anticipated.
4:17:55 PM
MR. HUBER agreed with Ms. Paine about the differing risk
profiles. He stated that they view these as entirely different
regimes with entirely different risk profiles. He added that the
idea of simple well conversion is not feasible, and most areas
are finding that it is more difficult repurposing a hydrocarbon
well.
4:18:48 PM
SENATOR KAWASAKI asked if there are concerns with oil production
and carbon sequestration being at odds with each other, as one
approach is notably more profitable for the state.
4:19:20 PM
MR. HUBER suggested that oil production is more profitable for
the company. Most costs associated with carbon storage are from
carbon capture and transportation.
4:19:57 PM
MS. PAINE continued on slide 16 and spoke to closure certificate
2
requirements. She said once CO injection is stopped, there's a
2
period in which monitoring plume of subsurface CO is required.
Also included is that a trust fund for the State would be
established, so even after the closure, the State has a fund
somewhat like an insurance policy fund to have on file.
4:21:22 PM
2
CO-CHAIR BISHOP asked for an explanation on the mechanics of CO
tonnage and plume leakage.
4:22:03 PM
MR. HUBER stated his belief that similar to North Dakota, plume
leakage measurements are based on the metering and monitoring of
the rate of flow and pressure.
4:22:54 PM
CO-CHAIR GIESSEL asked if the process is similar to LNG storage
and CINGSA (Cook Inlet Natural Gas Storage Alaska).
4:23:09 PM
MR. HUBER said it is the same principle, but the amount of gas
that rises upward is also monitored.
4:23:26 PM
MS. PAINE moved to slide 17 showcasing a CCUS project timeline,
and the relationship between the DNR carbon storage license and
lease processes. The timeline was developed based on North
Dakota's model, but due to the nature of doing business in
Alaska, the process could take longer.
4:24:47 PM
MR. CROWTHER referenced Texas operations, which invested more
into the earlier stages to support the long-term value of
subsurface resources. AOGCC is working with the Department of
Energy (DOE) to develop a more specific characterization for
Alaska and affirmed the necessity of significant investment
before any returns are realized.
4:26:12 PM
MS. PAINE moved to slide 19 and provided the sectional summary
of SB 49. She noted that AOGCC is working to remove Sections 2-
3. Section 4 establishes the post-closure trust fund for the
State. Sections 5-12 aim to align carbon storage with the rest
of the mineral estate procedures. Section 13 aims for
consistency with standard oil and gas operations.
4:27:29 PM
SENATOR BISHOP asked if carbon storage leasing would be possible
on a non-mineable coal seam, including in the Healy area, under
section 12.
4:28:25 PM
MS. PAINE responded that she would return to the committee with
further information.
4:28:56 PM
MS. PAINE moved to slide 20, the primary section for DNR
detailing leasing provisions and the work process for carbon
storage licensing.
4:30:25 PM
MS. PAINE moved to slide 21 which is specific to authority under
DNR and pipeline categories. She noted that carbon
transportation was added to Sections 18-20. Sections 22-30
include conforming amendments.
4:31:42 PM
MS. PAINE moved to slide 22 and briefly spoke to Section 31 on
general authorizing provisions.
4:32:23 PM
MS. PAINE moved to slide 23 and provided a brief outline of the
14 carbon storage facility requirements.
4:33:24 PM
CO-CHAIR GIESSEL asked how the subsections under Section 31 on
slide 23 differ from statutes pertaining to gas storage and
natural gas import.
4:33:52 PM
MS. PAINE stated her belief that the subsections listed are
similar to current statute and invited Mr. Huber to provide
input.
4:34:07 PM
MR. HUBER added that the storage and materials used are
different. However, the operations of using a preexisting
structure to pump the material is very similar.
SENATOR WIELECHOWSKI asked if the geographical formation of Cook
Inlet is susceptible to earthquakes with increased
2
pressurization from CO.
4:35:19 PM
MR. HUBER responded that specific guidelines exist. He said he
has not heard of other areas experiencing induced seismicity,
but Cook Inlet has not demonstrated problems despite major
earthquakes. He opined that seismicity is not something to be
overly concerned about and a robust monitoring plan exists.
4:36:19 PM
MS. PAINE moved to slide 24 which expands on the carbon storage
facility injection surcharge under Section 31. She said EPA
would like certain pieces clarified under this section. The
subsections were modeled after existing oil & gas provisions,
but EPA is seeking consistency with the Class VI rule.
4:37:35 PM
SENATOR WIELECHOWSKI asked if the administration has discussed
restructuring bill language so the fund is non-sweepable.
4:37:48 PM
MS. PAINE said there have been some amendments recommended by
the House Resources Committee to change bill language so it is
non-sweepable and separate from the general fund.
4:38:16 PM
SENATOR WIELECHOWSKI inquired on the amount of profit expected
from the 45Q tax credit.
4:38:52 PM
MS. PAINE replied that profit margin is closely tied to the
2
source of CO in the beginning stages and the carbon capture
process itself. An ethanol facility with a higher concentration
2
of CO could be perceived as more profitable than a post-
combustion setting with a lower concentration of CO2. The
distance of transportation and geologic storage formation also
impact profitability, but she said she believes it depends on
several factors.
4:40:02 PM
SENATOR WIELECHOWSKI asked if the Department of Revenue has
analyzed the impacts of SB 49 to the corporate tax structure.
4:40:16 PM
MS. PAINE conveyed that she is unaware of that type of modeling,
but could confirm with the Department of Revenue.
4:40:35 PM
MS. PAINE moved to slide 25 and highlighted conforming language
and general provisions.
4:41:09 PM
CO-CHAIR GIESSEL asked how the removal of citizens advisory
committees under current executive orders relates to the
conforming amendments to parks and recreational facilities
listed under Sections 32-39.
4:41:47 PM
MR. CROWTHER replied that the state park facilities and assets
noted in SB 49 were dedicated through legislative action. The
bill language explores the underlying statutory management of
the four areas, so the executive orders would not impact the
underlying statutory direction. He offered to provide further
details.
4:43:08 PM
CO-CHAIR GIESSEL said that would be great.
4:43:12 PM
SENATOR DUNBAR asked for the reasoning for selecting the four
state lands under Sections 32-39.
4:43:38 PM
MR. CROWTHER replied that these units have a statutory
designation for permitted subsurface activities which differ
from other general use lands. Carbon sequestration is generally
available on state lands, but the four locations listed are
unique. The aim was to mirror provisions the legislature
enacted.
4:44:32 PM
SENATOR CLAMAN expressed concerns that two of the four parks
listed would remove committee advisory authority under current
executive order proposals. He opined that citizens commissions
may recognize components that administration does not, and it is
difficult to believe this is coincidental.
4:45:58 PM
SENATOR WIELECHOWSKI asked what the boundaries are for carbon
storage in the Kenai River Special Management Area.
4:46:18 PM
MR. CROWTHER replied that he is uncertain on the bounds of that
unit but offered to get back to the committee with additional
information.
4:46:34 PM
CO-CHAIR GIESSEL shared that the presentation was helpful as a
refresher. She requested that the administration bring forth
recommended EPA amendments at a future date.
4:47:43 PM
There being no further business to come before the Senate
Resources Committee, Co-Chair Giessel adjourned the meeting at
4:47 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 49 Carbon Storage Refresher Presentation DNR 01.26.24.pdf |
SRES 1/26/2024 3:30:00 PM |
SB 49 |
| SB 49 Fiscal Note DNR 1.19.24.pdf |
SRES 1/26/2024 3:30:00 PM |
SB 49 |
| SB 49 Fiscal Note DEC 1.15.24.pdf |
SRES 1/26/2024 3:30:00 PM |
SB 49 |
| SB 49 Fiscal Note AOGCC 1.19.24.pdf |
SRES 1/26/2024 3:30:00 PM |
SB 49 |
| SB 49 Fiscal Note DOR 1.15.24.pdf |
SRES 1/26/2024 3:30:00 PM |
SB 49 |
| SB 49 Bill Packet 1.25.24.pdf |
SRES 1/26/2024 3:30:00 PM |
SB 49 |
| SB 49 DNR Response to SRES 01.26.24.pdf |
SRES 1/26/2024 3:30:00 PM |
SB 49 |