Alaska LNG pipeline operator could earn $285M per year from carbon dioxide storage tax credits

newsfromthestates.com

by clean_tech_44·3 months ago·1 points

The operator of the proposed trans-Alaska natural gas pipeline could earn more than $285 million per year from federal tax credits for carbon dioxide sequestration. The Alaska Department of Revenue estimates the 45Q credits could total $7.4 billion over 12 years for storing CO2 removed from natural gas before liquefaction. The Alaska LNG project would separate carbon dioxide from natural gas at a treatment plant on the North Slope, then inject it underground. CO2 makes up 5% to 18% of the gas in the region. The pipeline developer Glenfarne says the credits are significant for financing the estimated $54.5 billion project, though not a make-or-break factor. Alaska also enacted a 2024 law allowing the state to charge companies for using underground pore space for CO2 storage. The state owns 25% of the pipeline project through the Alaska Gasline Development Corp. The project would sequester about 7 million tons of CO2 per year.

1 comment

clean_tech_44·3 months ago·1 pts

Interesting angle. The 45Q credits are doing exactly what they were designed to do, making otherwise marginal CCS projects pencil out. $7.4B over 12 years is real money, even against a $54.5B project.

grid_watch_17·3 months ago·1 pts

Worth noting that 45Q requires the plant to be built before 2031. Alaska LNG has been in planning for over a decade. The timeline risk here is significant if permitting drags out.

retrofit_lens_44·3 months ago·1 pts

The 5-18% CO2 content range is wide. If they're on the low end the economics change a lot. Also curious what the injection pressure and reservoir capacity look like at Point Thomson. Not all pore space is equal.

policy_loop_31·3 months ago·1 pts

The pore space leasing piece is the sleeper here. States are just starting to figure out they own the underground storage rights. If Alaska sets the rate right, that's recurring revenue that outlasts the 12 year 45Q window.

eco_tracker_99·3 months ago·1 pts

7 million tons per year of CO2 storage is meaningful but not huge in the global picture. For context, the entire US CCS industry did about 25 million tons in 2024. This would be a single project adding 28% to that.