Bill
SF 18
SF 18 would exempt 3 of the 6% severance tax on oil and gas produced using Wyoming-origin CO2 in CCUS-driven enhanced oil recovery, incentivizing CCUS EOR.
Status and sponsorship
- Bill number: SF 18 (Introduced Jan 14, 2025). Primary sponsor: Sinclair; sponsored by the Joint Minerals, Business & Economic Development Interim Committee.
- Committee actions: S09 (Minerals) recommended do pass (4–1). S02 (Appropriations) recommended do pass (5–0). Placed on General File. Final action: Senate Committee of the Whole (S COW) — Failed (Ayes 9, Nays 22) on 1/27/2025.
- Effective date (as drafted): July 1, 2025 (if enacted).
Purpose and intent
- To incentivize enhanced oil recovery (EOR) projects that use Wyoming-sourced carbon dioxide by exempting a portion of severance tax on crude oil and natural gas produced through such methods. The bill aims to promote carbon capture, utilization and storage (CCUS) paired with EOR.
Key provisions
- Severance tax exemption: Qualifying crude oil and natural gas produced by EOR using CCUS would be exempt from one-half of the severance taxes imposed under specified subsections (effectively described in the fiscal note as a 3 percentage-point exemption of the total 6% severance tax).
- Eligibility conditions:
- Production must result from enhanced oil and gas recovery using CCUS technology.
- The CO2 captured and used in the EOR process must originate within Wyoming.
- Applicants must complete a Department of Revenue application in the prescribed form and manner.
- Administration and oversight:
- The Department of Revenue may consult with the Oil & Gas Conservation Commission and the Enhanced Oil and Gas Public Service entities before approving exemptions.
- The Department may promulgate implementing rules.
- Annual reporting: Department must report to the Joint Minerals, Business & Economic Development Interim Committee by November 1 each year on exemption use and revenue impacts.
- Definitions: The bill defines “carbon capture, utilization and storage technology” and “enhanced oil and gas recovery” to include existing and future recovery technologies beyond primary and secondary methods.
Fiscal impact (per fiscal note)
- State revenue decreases (estimated):
- FY2026: $0
- FY2027: General Fund $(700,000); Budget Reserve Account $(1,400,000)
- FY2028: General Fund $(1,500,000); Budget Reserve Account $(3,000,000)
- Basis: LSO / EORI estimates that 1,801,837 incremental barrels (FY2027) and 2,501,304 barrels (FY2028) of incremental oil would qualify under the exemption; estimates use the Jan 2025 CREG oil forecast.
- The fiscal note explicitly excludes potential additional severance and ad valorem tax revenues that could result from increased production stimulated by the incentive — those increases are not quantified.
Who would be affected
- Beneficiaries: Oil and gas producers conducting EOR projects that use Wyoming-origin CO2 and meet the application and reporting conditions.
- State finances: General Fund and Budget Reserve Account would incur the estimated reductions above (with potential offsetting but unquantified increases if the exemption spurs additional production).
- State agencies: Department of Revenue (rulemaking, application review, reporting) and oil and gas regulatory bodies (consultation role) would see increased administrative responsibilities.
Notes
- The bill includes standard rulemaking and reporting language and was drafted to take effect July 1, 2025, though it failed to advance from the Senate Committee of the Whole on Jan 27, 2025.
Compiled from official sources — confirm details with the bill’s official record.
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