Alaska LNG pipeline could earn $285 million per year from carbon dioxide tax credits

The proposed Alaska LNG pipeline project could generate over $285 million annually in federal 45Q tax credits by capturing and storing carbon dioxide removed from natural gas. The Alaska Department of Revenue estimates the credits could total $7.4 billion over 12 years, significantly reducing the project's $54.5 billion cost. Carbon dioxide makes up 5 to 18 percent of North Slope natural gas and must be removed before liquefaction. Beyond tax credits, the stored CO2 could later be used for enhanced oil recovery on the North Slope, potentially producing 3 to 5 barrels of oil per ton of CO2 injected. The state of Alaska may also earn revenue by leasing underground pore space for carbon storage under a 2024 law. The project is led by Glenfarne with 75 percent ownership, while the state-owned Alaska Gasline Development Corp. holds 25 percent.