News Releases for February 2005
February 01, 2005
For further information, please Contact the Governor's Office
Hoeven, Legislators Announce Expansion Of Oil And Gas Tax Incentive
BISMARCK, N.D. - Gov. John Hoeven, Sen. Rich Wardner and members of the state Senate and House today announced the introduction of SB2170, a new bill that would expand the tax incentive for tertiary, or third tier, recovery of oil and gas using CO2 gas. The bill would provide a use and sales tax exemption for carbon dioxide that is used for enhanced oil recovery, and make the oil extraction tax exemption for oil from CO2 recovery projects permanent.
“North Dakota is the sixth largest energy producing state in the nation, and the ninth largest petroleum producing state,” Hoeven said. “The technology that this bill encourages can help to substantially increase production in our state, generating good paying jobs for our citizens and added revenues for our rural communities.”
“By encouraging tertiary recovery - that is, third phase oil recovery - this bill can help us recover 25 to 40 percent more of North Dakota's oil reserves and extend the life of existing oil wells by 20 to 30 years,” said Wardner, the bill's primary sponsor. “To date, we have not used this technology in North Dakota.”
Joining the Governor and Wardner for the announcement were the bill's additional sponsors: Sens. Stanley Lyson and David O’Connell, and Reps. Glen Froseth, Earl Rennerfeldt and Dorvan Solberg.
Also joining were Bob Mau, president and owner of Eagle Operating of Kenmare and chairman of the North Dakota Petroleum Council; Ron Ness, president of the North Dakota Petroleum Council; Dr. Gerry Groenewold, Director of the Environmental and Energy Research Center (EERC) at the University of North Dakota; and Lynn Helms of the North Dakota Oil and Gas Division (NDOGD).
The CO2 technique the bill encourages would not only boost the productivity of oil wells, but also reduce the venting of greenhouse gases to the atmosphere by sequestering it underground. The EERC and the NDOGD estimate that there are 261 million barrels of oil in the ground that will be accessible using the new CO2 technology.
The technology has been used for some time in Canada using CO2 produced and piped across the border, in some cases running through North Dakota oil fields. There are currently no such CO2 projects in North Dakota. SB2170 would eliminate one more obstacle to additional recovery in North Dakota.
E-mail comments to the Governor
