Today, Alaska Governor Mike Dunleavy introduced Senate Bill (SB) 48, SB 49, House Bill (HB) 49, and HB 50, his Carbon Management and Monetization Bill Package, creating statutory and regulatory structures needed to capitalize on carbon markets. The package consists of two pieces of legislation focusing on a carbon offset program; and carbon capture, utilization, and storage (CCUS) program.
“In Alaska, we are blessed with the resources of today, but we’re also blessed with the resources of tomorrow,” said Governor Dunleavy. “With support from the Legislature for our carbon management bill package, we’ll change the conversation about new revenue. We’ve been told by some that we can generate revenue in the billions over 20 years just from our forest lands. This represents the means to fund services, lower the cost of living and improve our quality of life, to create wealth and billions of dollars in economic activity without taxing Alaskans or eliminating the PFD.”
Carbon Offset Program
SB 48 and HB 49 will establish a statewide carbon offset program through forest sequestration within the Department of Natural Resources (DNR). The proposed carbon offset program has the potential to generate additional revenue for the State of Alaska through biologic carbon storage projects that can mitigate a portion of the carbon dioxide emitted into the atmosphere.
The carbon offset program bill seeks to grant DNR the ability to establish a carbon offset program and enable carbon offset projects on state lands. Current statutes do not allow for carbon offset projects. The carbon offset program will allow private parties to lease state land to undertake carbon offset programs and allow the State, through DNR, to implement its own carbon offset projects.
Carbon Capture, Utilization and Storage (CCUS)
SB 49 and HB 50 are key components of the state’s efforts to monetize its immense carbon storage potential and maximize the utilization of resources. CCUS projects capture carbon dioxide emitted and inject it deep underground into geologic formations for enhanced oil recovery or permanent sequestration.
Alaska’s older oil and gas basins, particularly in Cook Inlet, have the right geology to sequester carbon underground. Cook Inlet has been identified as one of the top spots on earth with the ability to sequester carbon underground — with at least 50 gigatons of capacity.
This bill specifically creates new authorities for State agencies to license, lease, and administer the State’s pore space for geological storage; administer pipeline infrastructure for transportation of captured carbon to geological storage facilities and administer injection wells and carbon storage facilities; and protect correlative rights of all subsurface owners.
Many Benefits to Existing Industries
“Carbon management will complement—and in some cases enhance—Alaska’s existing industries like forestry, oil and gas, mining, tourism, and outdoor recreation,” said DNR Commissioner-designee John Boyle. “These bills do not lock up State land, rather, they unleash new opportunities. Carbon offset projects will not prevent mineral development, timber harvests, new oil and gas exploration, or infrastructure development. Land within the carbon offset program area will still be available for hunting, fishing, camping and recreational activities for Alaskans and visitors.”
Conventional resource development companies operating in Alaska stand to benefit in multiple ways from a strong State carbon management regulatory framework. These companies can use carbon credits to offset their carbon emissions, creating new opportunities for financing. CCUS allows companies to use the carbon dioxide produced by their operations by capturing it and reinjecting it into oil wells to actually increase production.