# 45Q Tax Credits and Mineral Owners

**TL;DR:** The federal 45Q tax credit provides $60–$180 per metric ton for captured CO2 depending on storage type. By default, the credit goes to the project developer, not mineral or pore space owners. Whether mineral owners share in 45Q value depends entirely on CCS lease language negotiated with the developer, and most pre-2020 oil and gas leases do not address sequestration rights.

## Key Takeaways

- **45Q credits range from $60 to $180 per metric ton of CO2**: permanent geologic sequestration earns $85/ton, enhanced oil recovery use earns $60/ton, and direct air capture with permanent storage earns $180/ton.
- **The credit accrues to the carbon capture project developer by default**, not to mineral owners, surface owners, or pore space owners unless contractually specified.
- **Pore space ownership determines negotiating leverage**: CO2 is sequestered in pore space, which is typically owned by the surface owner under most state laws, not the mineral owner.
- **Existing oil and gas leases rarely address 45Q**: pre-2020 lease forms predate the modern CCS framework and typically do not contemplate sequestration rights or credit sharing.
- **EOR overlap creates royalty opportunities**: when CO2 is used for enhanced oil recovery on producing wells, incremental oil production generates incremental royalty income for mineral owners.
- **New CCS leases may include credit-sharing provisions**: project developers negotiating new pore-space or CCS leases sometimes share 45Q value as part of deal terms.
- **Active 45Q projects concentrate in the Illinois Basin, Mississippi EOR fields, Permian Basin, and Gulf Coast**: mineral owners in these regions are most likely to encounter CCS lease proposals.
- **Legal review is essential before signing any CCS-related document**: mineral owners should consult qualified professionals before signing CCS leases, pore-space leases, or surface-use agreements.

## Page Highlights

**What Is the 45Q Tax Credit?** — Section 45Q is a federal tax credit for capturing and sequestering CO2, expanded by the Inflation Reduction Act of 2022, with rates ranging from $60/ton for EOR use to $180/ton for direct air capture with permanent storage.

**Who Collects the 45Q Credit?** — The credit goes to the party owning the carbon capture equipment and contractually responsible for sequestration (typically the project developer), not automatically to mineral or pore space owners.

**Mineral Owner Implications** — Existing oil and gas leases typically do not address 45Q; pore space ownership matters for negotiating leverage; EOR overlap creates royalty opportunities; new CCS leases may include credit-sharing provisions; mineral owners should consult professionals before signing sequestration-related documents.

**Where 45Q Activity Is Concentrated** — Active projects concentrate in the Illinois Basin (Wabash Valley Resources), Mississippi EOR/CCUS fields (ExxonMobil's Tinsley, Heidelberg, Little Creek, Cranfield), Permian Basin EOR projects, and Gulf Coast permitted Class VI projects in Louisiana and East Texas.

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