Setting the Stage for Direct Air Capture in Wyoming

Both public and private sector actors are increasingly interested in direct air capture (DAC) and other carbon management technologies, driven in part by increased ambition of companies’ carbon management commitments and significantly increased federal incentives for deployment. This has significant implications for Wyoming, whose long history of energy development has produced a legacy of communities with deep expertise in underground resources and reservoir management. Regulatory expertise and conditions like Class VI primacy create a smoother path to project permitting, creating a tremendous opportunity to build the nation’s first generation of large-scale DAC facilities and lead the industry in its development. In May 2023, C2ES organized a roundtable bringing together policymakers, businesses, nonprofits, and other stakeholders in the region to explore this opportunity and the associated regulatory and technological challenges in Wyoming. This brief summarizes key takeaways from the discussion and offers recommendations for state and federal policymakers, to help grow this nascent industry in Wyoming and the nation.

A factsheet summarizing key takeaways and policy recommendations can be found here.

Policy Recommendations

Facilitate the geologic sequestration of carbon dioxide

• Wyoming’s Department of Environmental Quality (DEQ) and the Bureau of Land Management (BLM) should develop a memorandum of understanding (MOU) for geologic sequestration of carbon dioxide to prevent subsurface conflicts among owners and prospective developers and guarantee that access rights are consistent across state, private, and federal lands.
• Congress should create categorical exclusions for certain activities (e.g., small well design and injection modifications) under the National Environmental Policy Act (NEPA) that can streamline geologic storage projects without compromising the safety or environmental impacts of these projects.
• State and federal agencies, including the Wyoming DEQ and BLM, should establish plans for corrective action on existing and legacy wells that can be repurposed for safe carbon injection and storage.
• State and federal agencies, along with academic institutions, should establish educational campaigns to create awareness about the process that project developers must go through to ensure the safety and integrity of carbon injection and storage operations, as well as the rigorous process that project developers must go through to be granted permits.
• State and federal agencies should explore ways to address long-term liability for stored carbon using a shared liability model similar to Wyoming’s experience with the abandoned mine land (AML) program.

Support the expansion of a low-carbon energy system to ensure the integrity of DAC projects

• The Wyoming Energy Authority, working with utilities, should develop a plan for building an energy system that can respond to the increasing demand of low-carbon energy from major consumers, including DAC facilities.
• Wyoming should leverage existing infrastructure by adopting CCUS retrofits on existing fossil-based power plants to increase their competitiveness to export clean power to other states with net-zero targets and provide carbon-free power to DAC facilities in the state.
• Congress should enact permitting reform legislation that can enable expansion of power transmission and create economic opportunities for DAC developers instead of relying on developing “renewable islands” just to power these facilities.

Responsibly site DAC projects

• State agencies should identify low-impact sites, including previously industrially disturbed lands, and require project developers to prioritize these sites for their projects.
• Wyoming’s DEQ should develop guidance that provides detailed information about how new projects can be sited efficiently, including considerations for land use, capacity, and conservation.
• State agencies should require project developers to demonstrate specific community benefits—such as job creation, workforce development programs, improved transportation or housing infrastructure, or access to renewable energy—in their project proposals.

Maximize economic opportunities for developing a regional DAC hub in Wyoming

• The Wyoming Business Council should coordinate with the state’s community colleges to characterize the benefits and risks of DAC projects to local communities, estimate job opportunities for local workforces, and develop training programs necessary to build needed competencies for the carbon management sector.
• The White House Council on Environmental Quality (CEQ) should develop an outreach plan to introduce local communities to Justice40 initiative and available tools such as the Climate and Economic Justice Screening Tool (CEJST) that can clarify the geographic spread of “disadvantaged communities” and help local stakeholders better evaluate the value propositions of new projects.
• Companies and governments should consult tribal nations early in the project development process and work collaboratively to explore economic development opportunities for tribal communities along the carbon management value chain (e.g., equipment manufacturing, capture facilities, pipelines, storage sites).
• Wyoming—in partnership with project developers, labor organizations, and community colleges—should develop apprenticeship programs that can support the transition of traditional fossil energy workers to carbon management jobs to take advantage of the existing skills of fossil energy workers.
• To attract and retain talent, Wyoming should offer funding to help local governments and developers coordinate housing, transportation, childcare, and other wraparound support for workers on carbon management projects, especially those that will be sited in areas remote from population centers.

Conclusion

Wyoming’s legacy of leadership in the energy industry over the past century positions the state to also be a leader in the emerging carbon management sector, particularly by utilizing its existing natural resources for geologic storage and employing its skilled workforce in the development of direct air capture projects. Significant regulatory advantages over other states like Class VI primacy and transparent pore space ownership regulations, paired with recent federal incentives, can help Wyoming jumpstart its DAC industry in the coming years. However, in order to truly maximize this opportunity, state and federal policy must lend additional support for the build-out and integration of low-carbon energy generation, harmonization of pore space access rights, and integration of workforce and community development into all project development.

View more from the C2ES Regional Roundtable series here.