Wyoming lawmakers have approved new measures aimed at supporting fossil fuel industries, including tax cuts for coal producers and financial incentives for carbon dioxide use in oil extraction, Wyo File reports.
These initiatives are expected to provide a combined $20 million in benefits annually.
House Bill 75, titled “Coal Severance Tax Rate,” reduces the severance tax on surface-mined coal from 6.5% to 6%. Supporters of the bill hope the tax cut will help coal producers remain competitive amid declining market conditions and encourage reinvestment in Wyoming mining operations. The reduction is projected to lower state revenue by approximately $10 million per year.
Senate File 17, known as the “Carbon Dioxide-Enhanced Oil Recovery Stimulus,” establishes a $10 million fund to assist companies using carbon dioxide injection to extract more oil and natural gas. Businesses eligible for the federal 45Q tax credit can apply for up to $10 per metric ton of carbon dioxide used in the process, with payments coming from the newly created state fund.
Additionally, lawmakers considered—but ultimately withdrew—an amendment that would have provided $10 million to support the development of a coal-fired power plant designed to capture carbon dioxide for use in oil recovery. The Wyoming Energy Authority instead committed to funding the effort through its Energy Matching Funds program.
Supporters of these measures argue that tax breaks and incentives will help sustain Wyoming’s fossil fuel industries, which have faced challenges from market shifts and environmental regulations. Some also view enhanced oil recovery as a means to utilize carbon dioxide in a way that could extend the lifespan of Wyoming’s oil fields.
However, opponents—including some lawmakers and conservation groups—question the effectiveness of these incentives. Critics argue that reducing coal severance taxes diverts revenue from essential public services such as schools and infrastructure. Others point out that tax policies have historically had little impact on coal production or employment, as market forces play a larger role in industry trends.
