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The trans-Alaska pipeline extends from Pump Station 1 in Prudhoe Bay on June 2, 2025. (Marc Lester \/ ADN) <\/p>\nThe trans-Alaska pipeline extends from Pump Station 1 in Prudhoe Bay on June 2, 2025. (Marc Lester \/ ADN) <\/p>\n
Carbon dioxide, a byproduct of the proposed trans-Alaska natural gas pipeline project, could net the pipeline\u2019s operators more than $285 million per year from the federal government, the Alaska Department of Revenue estimated in a forecast released this month<\/a>. <\/p>\n \u201cIt\u2019s a benefit to the project and to whatever investors there are in the project,\u201d said Dan Stickel, chief economist for the Department of Revenue, on June 2.<\/p>\n The proposed project, known as Alaska LNG, envisions an 807-mile pipeline from the North Slope to Cook Inlet. At the southern end would be an export terminal that would put gas on tankers bound for Asia. <\/p>\n On the North Slope would be a gas treatment plant that takes in gas from production wells, then splits the gas into what\u2019s burnable and what\u2019s not \u2014 mostly carbon dioxide.<\/p>\n Burnable gas would go down the pipeline and onward to Asia after being liquefied. The carbon dioxide would be injected deep underground.<\/p>\n \u201cCarbon dioxide in the gas to be liquefied can\u2019t be tolerated, even down to a few parts per million, so one of the key prerequisites for the LNG is to remove the CO2,\u201d said Nick Fulford, a consultant hired by the Legislature to advise it on oil and gas issues.<\/p>\n Under current federal law<\/a>, a carbon dioxide injection plant built before 2031 can receive a tax credit of up to $85 for each ton of carbon dioxide it stores underground in the first 12 years of the plant\u2019s operation.<\/p>\n Those credits, known as 45Q for the relevant section of the federal tax code, can be used directly by the pipeline operator, or they can be sold to other companies. Fulford estimated they could be worth \u201c80-90 cents on the dollar.\u201d<\/p>\n Altogether, the Department of Revenue estimates those tax credits will be worth a combined $7.4 billion. Glenfarne, the pipeline project\u2019s lead developer, has said the pipeline project could cost as much as $54.5 billion.<\/p>\n Asked about the credits after a legislative hearing on Tuesday, Glenfarne Alaska President Adam Prestidge said only that the credits are \u201csignificant\u201d for the project\u2019s financing. <\/p>\n In addition to the federal tax incentive, the state of Alaska may earn money from carbon dioxide being injected underground. <\/p>\n Just as the state rents land to people who want to use it, a law enacted in 2024<\/a> allows the Alaska Department of Natural Resources to charge companies for the use of underground \u201cpore space\u201d to store carbon dioxide. <\/p>\n The commissioner of the department would set the rental rate, and the Alaska Department of Revenue has not estimated how much money the state would earn.<\/p>\n Glenfarne owns 75% of the gas pipeline project. The state-owned Alaska Gasline Development Corp. owns the remaining 25%.<\/p>\n Adam Kissinger, a consultant for AGDC, told lawmakers on May 29 that the federal tax credits \u201care a great benefit to the project, but they certainly aren\u2019t the make or break for this project.\u201d<\/p>\n Carbon dioxide makes up between 5% and 18% of the natural gas beneath the North Slope, the U.S. Geological Survey has estimated<\/a>. <\/p>\n There are many reasons to separate the carbon dioxide out of the natural gas. When carbon dioxide reacts with water, it can create carbolic acid, a substance that can damage oil and gas equipment. <\/p>\n In addition, mixed natural gases are less efficient when burned, and carbon dioxide would take up space in the pipeline that could be filled with usable, burnable gas instead. <\/p>\n