§15910 Enhanced oil and natural gas production through carbon dioxide injection

Summary

Promotes using captured carbon dioxide (CO2) and similar gases to get more oil and gas from wells by offering royalty breaks and federal grants. It says much of the oil in the ground has not been produced and that injecting CO2 can help produce more while storing CO2 and lowering the economy’s carbon intensity. The Secretary in charge of Federal oil and gas leases must start a rulemaking to allow reduced royalties for eligible offshore and onshore Federal leases if it is in the public interest. A lease is eligible if CO2 or similar gases are injected to boost recovery and the Secretary believes the oil or gas likely would not be produced without the royalty cut. The rule must set a suspension volume up to 5,000,000 barrels of oil equivalent per eligible lease, apply to production after the notice is published, may limit reductions based on market price, and covers leases issued before, on, or after August 8, 2005. The Secretary must publish an advanced notice within 180 days after August 8, 2005, and finish the rulemaking within 365 days after that date. The Secretary of Energy must run a competitive grant program to pay for CO2 injection projects that boost recovery and store CO2. The demo program can fund up to 10 projects in the Williston Basin (North Dakota and Montana) and 1 project in the Cook Inlet Basin (Alaska). Applications must describe the project, estimated production gains vs. normal methods (including water flooding), CO2 to be stored over the project life, data plans, costs, which costs federal money will cover, and how the project will continue without federal help. Partners are allowed. Grants will be judged on experience, cost-effective production, CO2 from human sources, financial commitment, and minimizing environmental harm. No applicant may get more than $3,000,000, cost-sharing is required, projects must start construction within 2 years of the grant (and no later than December 31, 2010), and grant funds may not be provided for more than 5 years. The Energy Secretary must publish a request for applications within 180 days after August 8, 2005, and select projects after peer review. The Interior Department, through BLM, must keep records of CO2 stored on Federal leaseholds. Funds as needed are authorized.