Oil-for-Carbon Bills Signed

Apr 1, 2014

State Rep. Aric Nesbitt speaks during the bill signing ceremony at WMU's Geological Repository.
Credit Sehvilla Mann / WMUK

State Representative Aric Nesbitt says new laws on oil drilling will benefit Michigan’s economy and its environment. That’s because they promote carbon sequestration as a way to squeeze oil from underused wells.

Lieutenant Governor Brian Calley signed House Bills 4885, 5254, 5255 and 5274 at the Western Michigan University Geological Repository Tuesday morning.

Operators pump carbon dioixde gas down a well to force oil to rise to the surface. The gas is meant to stay underground indefinitely, out of the atmosphere where it would contribute to the greenhouse effect.

"For every two and a half barrels of oil produced, one metric ton of CO2 is actually stored underground, long-term, permanently," says Nesbitt.

He says the method maximizes production from existing wells, reducing the need for new ones. That makes it a boon for the environment even as it promotes continued fossil fuel production, he says.

He added that he'd rather the U.S. produce oil than import it.

"Do you want that next barrel of oil that we're going to burn to come from Vladimir Putin in Russia, or do you want it to come from right here in Michigan and North America?" he asks.

Among other things, the bills lower the severance tax oil producers pay to run such wells. Nesbitt says the new rate is competitive with other states.

But the Sierra Club's Mike Berkowitz says in a statement that the cuts amount to a "handout" to companies who are already making "record profits."