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Published June 03, 2020
During her final year of law school, recent graduate Amy Pettit teamed up with researchers at the School of Energy Resources to co-author an article examining Section 45Q, a federal tax credit for carbon oxide sequestration. The paper was written in anticipation of the Treasury Department’s draft guidance. It highlights Wyoming’s comprehensive system of laws and regulations and argues pathways for state certification. The article was published in the Institute for Energy Law’s Online Newsletter, the Energy Law Advisor.
Under the supervision of Professor Tara Righetti of the College of Law, Pettit did extensive the research on the topic for an independent study and wrote the article as an extension of her work. The paper was produced with the support of a private foundation and in collaboration with co-authors, Kipp Coddington, the director of the University of Wyoming Carbon Management Institute and Center for Energy Regulation and Policy in the School of Energy Resources, and Kris Koski, a Professional Lecturer at the University of Wyoming School of Energy Resources and of counsel attorney at Long Reimer Winegar in Cheyenne, Wyoming.
In an effort to reduce carbon emissions, Congress has encouraged the capture of carbon dioxide for Enhanced Oil Recovery (CO2– EOR). This market-driven climate policy is further incentivized through the Section 45Q tax credit, though federal guidance had yet to be offered on its implementation and verification.
Recently, the Internal Revenue Service (IRS) issued a draft of newly updated regulatory guidance related to the 45Q tax credit for carbon capture, utilization, and storage. The much anticipated regulation guidance and implementation of the tax credit comes after the Furthering Carbon Capture, Utilization, Technology, Underground Storage, and Reduced Emissions (FUTURE) Act legislation, co-authored by Wyoming Senator John Barrasso, was signed into law in 2018.
The draft treasury regulations suggest that in order to qualify for the tax credit, a standard developed by the International Organization for Standardization (ISO) could be used to demonstrate proper secure geological storage, and are supportive of third-party verification entities.
Pettit’s paper is at the forefront of the discussion, and suggests that Wyoming is prepared to fill that role.
In her paper, Pettit advocates that as a leader in CO2– EOR, Wyoming and select other state conservation agencies are already equipped and competent to verify secure geological storage. Wyoming has already implemented rules and an infrastructure that would allow governmental agencies like the Wyoming Oil & Gas Conservation Commission to verify compliance of secure geological storage in a manner that is consistent with the ISO standards to quantify and demonstrate safe, long-term storage of CO2.
The article is an excellent resource that maps Wyoming’s regulations of secured geological storage to the ISO, and is a useful asset for those looking to comment on the rules.
Professor Righetti comments on the importance of student-led research and collaborative projects such as these.
“My interest in working on this project is that it continues to explore opportunities for collaboration and partnership between industry and conservation interests around climate and environmental problems,” she says. “Amy has done an excellent job engaging multiple entities on a really important and timely topic.”
Raised in Sheridan, Wyo., Pettit graduated from the University of Wyoming in 2017 with a degree in Political Science. During her law school career, she was heavily involved in the EENR curriculum and was engaged in various clubs and organizations including Phi Alpha Delta, Equal Justice Works, and the Women’s Law Forum. Following graduation, Pettit is utilizing her legal education in the oil and gas industry at the law firm of Simmons Olsen Law Firm, P.C. in Scotts Bluff, Neb.