Alaska state lawmakers have begun examining a plan to set regulations and fees for companies that collect carbon dioxide and inject it deep underground.

The governor has touted the potential for the state to make hundreds of millions of dollars over the years by leasing state lands to hold carbon deep underground and out of the atmosphere where it is blamed for worsening climate change.

Members of the House Resources Committee held their first hearing on the proposal from Gov. Mike Dunleavy on Feb. 10. A leading member of the House’s majority caucus said he expects lawmakers to move swiftly in hiring consultants to help lawmakers analyze the idea.

“You clearly have done a lot of work on this bill, and we will work hard to further evaluate the proposal,” said Anchorage Rep. Tom McKay, the committee chair, speaking to officials testifying on behalf of the Alaska Department of Natural Resources.

More hearings are scheduled this week.

With climate change an increasingly important global issue, companies are facing market and governmental pressure to reduce greenhouse gas emissions. Many companies — including oil and gas firms — have made pledges to reach “net-zero” emissions by 2050 or sooner.

There are two main ways to do that: Preserving enough forest to balance a company’s own emissions, or reducing those emissions in the first place, such as storing the carbon underground.

The governor’s bill involves what’s called “carbon capture utilization and storage” — collecting emissions, then injecting them underground. It’s already done on a limited basis elsewhere in the United States and has been tried on Alaska’s North Slope.

The federal Inflation Reduction Act includes a generous system of tax credits for underground injection, which has encouraged further work.

House Bill 50 and Senate Bill 49 — the identical Senate companion legislation — would set up a system of regulations for collecting and injecting carbon, and establish lease rates for state land used for injection.

“We’ve got a lot of work ahead of us,” said Anchorage Rep. Donna Mears, a member of the resources committee.

The Legislature’s normal consultant on oil and gas issues has been hired by the Dunleavy administration, so lawmakers are searching for new independent advice.

Nikiski Rep. Ben Carpenter is the chair of the Legislative Budget and Audit Committee, a joint House-Senate panel in charge of hiring legislative advisers. He said he expects to interview several potential consulting firms, then present options to the committee.

He sees it as an “urgent matter,” and lawmakers could bypass normal procurement procedures.

The carbon bill is one of two proposed by Dunleavy to capitalize on global interest for ways to remove carbon dioxide from the atmosphere in order to fight climate change.

Carpenter said he’s heard from some constituents who worry that the proposals could lead to a tax on carbon in Alaska, but that idea isn’t being considered by the governor or legislators.

Carpenter said that given legislators’ experience with oil and gas drilling, “there’s probably not as large a hurdle to understand” underground carbon sequestration, and he speculated that the legislation could move quickly once vetted.

“Alaska has a lot of experience in how to poke a hole in the ground for the areas we want to explore,” said Sutton Rep. George Rauscher, a member of the House Resources Committee.

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