With the March passage of a tax cut for oil drilling, the prospect of further mineral removal in the State is increased. While there may be those who think nothing should be taken out of the ground, the reality is that Michigan is still in a position of cost competition with other jurisdictions.
Carbon dioxide is one of the alternatives in fracking. The downside of carbon dioxide is that the wells will no longer be available for gas storage in future years. However, the utilization of carbon dioxide removes the product as a negative force in the general environment.
“Under House Bill 4885, sponsored by state Rep. Aric Nesbitt, companies that use an enhanced method of extracting oil, also called enhanced oil recovery (EOR), will benefit from reduced taxes. Under this bill, EOR projects will be taxed at a 4% severance rate, rather than 6.6% for oil and 5% for natural gas, as has been the case under Michigan’s Severance Tax Act.
The method uses CO2, which is injected into depleted oil and natural gas wells to push the once-unattainable oil toward other wells where it may be pumped to the surface. It offers the environmental benefit of permanently trapping the CO2underground.”